Egypt is a country that permeates energy, whether it’s through its songs, its traffic, its football culture, or even its revolutions. This energy exists thanks to the spirit of the Egyptians. This spirit sets a standard of living in which there is always power and positivity in everything Egyptians do or say. The country’s culture cannot help but communicate power and positivity, be it through its government or its citizens.
But that all took a turn for the worse following the 2011 Revolution. In the years following the revolution, citizens who had hoped for a prosperous transition to a democratic and non-security-led regime soon saw the opposite. Tourism, one of Egypt’s vital sectors, was virtually destroyed as developed states red-listed the country due to political instability. Furthermore, the years of political instability led to a loss in foreign reserves and a weakening Egyptian Pound.
Two years into President Al-Sisi’s election victory in 2016, Egypt’s Central Bank took a necessary yet consequential step toward saving its economy from collapse when it allowed its currency to float freely, thus paving the way for a $12 billion loan from the International Monetary Fund (IMF) on November 11 – a loan that would inject life once more into the country’s foreign reserves.
Still, while it may have saved the economy, it created a ripple effect of consequences for millions of Egyptians. Don’t get me wrong, the free floatation of the Egyptian Pound was bound to happen. In fact, it should have happened earlier to lessen the economic impact. But oh well, what happened happened.
Fast forward to October 27, 2022, and the country agreed to another IMF loan deal – followed by another currency freefall.
THEORIZING EGYPT’S CRISIS COMMUNICATION STRATEGY
Now let’s pause the context right here. 2016 was precisely when the Al-Sisi administration launched its new crisis communication strategy, best explained through William Benoit’s image restoration theory.
But what even constitutes a crisis? Well, W. Timothy Coombs, a renowned scholar in crisis communication, defines a crisis as the “perception of an unpredictable event that threatens important expectancies of stakeholders, and can seriously impact an organization’s performance and generate negative outcomes.”
Benoit’s theory is based on two fundamental assumptions in crisis communication strategy. The first is that communication is a goal-driven activity. The second is recognizing that maintaining a good image is an essential goal of communication.
“The key point here is not whether the actor caused the damage, but whether the relevant audience believes the actor to be the source of the reprehensible act,” explains Benoit in a 2009 academic article.
No matter the situation, no matter the crisis, Egypt’s government must always maintain a good image. The concept of prioritizing public image – this idea of “what would the people say” – is engraved in Egyptian culture. As an Egyptian journalist for an independent media company, I can confidently confirm that Egypt’s government and crisis communication go hand-in-hand.
In both 2016 and 2022, the government introduced differing strategies for image restoration. The former focused more on ‘denial’ and ‘shifting the blame’ – one of Benoit’s five strategies for image restoration. The latter year took on the evasion of responsibility strategy, using Benoit’s ‘accident’ and ‘good intentions’ strategies.
Now back to 2016.
SIGNS OF A CRISIS ON THE WAY
With the Egyptian Pound in freefall, Egyptians began to feel the impact of rising costs harshly for the first time in decades. A decade earlier, in 2006, the Egyptian Pound stood at around 5 against the US Dollar. Following the devaluation of the Egyptian Pound in 2016, that number stood at 19 against the US Dollar.
That fall in currency strength made life all the more difficult for post-revolution Egypt. Soon after the loan agreement with the IMF, Egypt’s energy sector couldn’t continue subsidizing items such as petroleum, gas, and electricity, as it had been for decades. Those decades of subsidization were one of the reasons why the economy gradually weakened.
Inflation was on every citizen’s radar. Rent, groceries, education tuition, and more – everything got more expensive. The cost of living truly meant the cost of living. With an average salary of nearly 4,000 Egyptian Pounds – the equivalent of $215 – and an apparent disparity between rising costs and income standards, many Egyptians suffered.
Still, millions of Egyptians depended greatly on subsidies. In an attempt to alleviate the shock, the government imposed a quarterly decrease on certain subsidies like petrol and gas in a bid to have its citizens slowly adapt to new prices.
The Al-Sisi administration’s response to the economic shock was to shift the blame to the Muslim Brotherhood and former president Hosni Mubarak’s policies.
“The country was too negligent in the past, especially the past seven years,” explained Al-Sisi in 2017 when asked about the country’s increasing informal settlements and struggling lower class, hinting at the Mubarak regime’s ineptitude.
For the most part, Al-Sisi was not wrong, and the use of denial and shifting the blame during the 2016 crisis worked in his favor in due time. The government’s IMF-backed reforms and policies were needed to steer the ship away from the economic iceberg ahead. A few years after, incomes caught up with the rise in costs. The inflation rate dropped to 2.4% in 2019, according to the country’s Center Agency for Public Mobilization and Statistics. Even the Egyptian Pound decreased from its all-time high of 19 to 15.8 at one point in 2020. Yet the crisis still loomed, waiting for an economic hit to rattle Egypt’s insecure economy once more.
“ARE WE THERE YET,” ASKED THE CRISIS
Just when Egyptians and their government thought their economy was finally looking brighter, the COVID-19 pandemic locked the global economy down. Egypt’s stock market nosedived, and practically every economic sector suffered significant losses. The government’s reputation was hit further by soaring infection numbers and a lack of medical infrastructure to prevent infections. Nevertheless, the Egyptian Pound remained at a robust 15.6 against the US Dollar.
When Russia invaded Ukraine in February of 2022, that is when Egypt’s economy fell once more. This time, far worse than in 2016. It started with wheat. Egyptians heavily depend on wheat for their daily diet and sustenance. To the point that the country ranks as the largest wheat importer, mainly importing from Ukraine and Russia. When the war occurred, the country’s wheat reserves dwindled to 2.6 months of inventory.
Foreign reserves also dwindled once more, as citizens with dollars or foreign currencies withdrew their cash out of fear of a Central Bank decision to limit foreign currency withdrawals. Commodity prices skyrocketed once more. Egypt experienced a record high of 15 percent in consumer inflation. A year before that, in 2021, that number stood at 6.4 percent.
The most recognizable damage to the government’s reputation during this time was the import embargo placed on businesses and citizens to prevent foreign reserves from being spent on imports: this impacted retail fashion, foods and beverages, entertainment centers, and even energy.
Energy subsidies also took a huge hit. Electricity bills increased by 30 percent. 95 octane fuel broke the 10EGP mark in 2022 this year as well. A further import of automobiles, exacerbated by high customs costs on cars, also caused vehicle prices to skyrocket.
The crescendo of this surmounting crisis came in the form of the second IMF loan agreement worth a total of $6 billion. The consequence of that agreement was the Egyptian Pound plummeting to an all-time low of 24 against the US Dollar.
In a matter of months, the government’s decision-making and handling of the global economic situation turned into a full-fledged crisis communication campaign. Signs of potential protests on November 11 and a warning from the United States Embassy in Cairo further showcased the potential crisis. Heightened security measures ensured dissent never materialized.
Communication-wise, the Egyptian government began 2022 with Benoit’s ‘accident strategy’ in evading responsibility.
“This [global economic situation] is a huge burden on any economy in the world, not only the emerging economies,” affirmed Al-Sisi in March 2022, during the start of the Russia-Ukraine conflict. “Yet [Egypt] has no problem with the availability of basic commodities,” he added.
An emphasis on ‘good intentions’ after the IMF-loan freefall followed.
“Countries like Egypt require one of three directions to solving its problems: patience and hard work, which is a long investment with a return we will not see. The other solution is leaving everything as is. The last solution is waiting on God to intervene and steer us away from danger. We follow the first solution,” proclaimed Al-Sisi a few weeks after the IMF-loan agreement.
GROWING UP WITH THE CRISIS, A CONCLUSION
When I was 18 years old back in 2016, the cost of a Big Mac in Egypt at $1.46. In 2022, now a young adult, that number is up to $4.65. For that value, I could have ordered three Big Macs back during my senior year of high school. Today, for myself and a few Egyptians, going to McDonald’s or other fast food places is a clear sign of privilege.
Still young and unaware in 2016, today I stand as an adult who is intensely aware of the rising cost of living. To this day, I am still trying to process the rapidly increasing difficulty inflicted on my life and my family’s lives due to the country’s damaged economy. And I come from a place of privilege. I can access an international postgraduate education. I can own a mid-range car. I can own a high-end phone and laptop. But none of this would have been possible without my parents’ finances. With each year passing, as I grow older in age, and more independent – and as my parents grow old and tired – I quickly realize that the challenge will only continue to increase.
Egypt is a country full of energy and spirit. But as the economy falls, so does that spirit.