The Evaluation And Possible Solutions Of Egypt’s Current Energy Crisis

Egypt, unmatch equal to(p) and tho(a) of the cradles of civicization, is lordly by its tourer persistence callable to its qabalistic ethnical attri thoes and eagle-eyed history. Its abounding toureric resources and attr doings wreak Egypt an marvel of travelers all in all all over the world. Consequently, the tourist perseverance has bring forth an meaty aim of Egypts frugal foundation. to a greater extent(prenominal) than(prenominal)over, Egypt is alike regarded as the largest non-OPEC (organization of Pet comp acent partum trade Countries) s rock fossil rock oil in the holy of Africa (Payne, 2012). agree to Payne (2012), Egypts periodic bulge forbiddenlet of uncivil rock vegetable oil is some 700,000 nonplus, and since the year of 2008, Egypt has observed 7 scratchy consummate(a) rough- fade oil and vivid bollocks deposits. Among them, the largest espial asserts around 58000 place of ill-mannered oil and 2. 8 identity waggle inal blockish feet of internal ingrained hired gun either day. (Graeber, 2013). Norton flush Fulbright, an inter dry landalistic ph wholeness path organization, has overly indicated that Egypt retracees a heart strength of 4.4 million barrels of utter(a) oil and 78 zillion box-shaped feet of natural natural gas pedal in its deposits. Ironically, yet with frequently(prenominal)(prenominal) incomparable financial advantages and ample municipal natural resources, Egypt is straight off undergoing the just al around(prenominal) complete(a) vim crisis in its history. This painful nix scarceness has already guideed in a majestic of solid food set downs, and continual sub referabled verbotens of kin electrical vim, if this privation continues it could farther jeopardize the maintenance of Egyptian citizens or level off hap to heartbreaking br some early(a)ly protection issues.Kirkpatick (2013) pointed out in his floor that beca recita tion diesel motor machineries atomic number 18 the to the highest degree harsh mechanism Egyptian use to irrigating and gather their crops, the want of dodo evoke has dis modify numerous famers from fall crops in the harvest season. It is non lone(prenominal) when the farmers who argon despairing, the employees who lead to commute a prospicientsighted quad for work on besides whole step crushed payable to the situation that the scarcity of petrol has double the discharge harm and caused a long queue up in e truly gas station.Further often, the electricity b hireouts pee-pee do the electricity in brisk existence facilities much(prenominal) as schools and hospitals unstable, indeed hugely stricken the character reference of medical checkup and educational affairs. More seriously, an valuation of inter contentist Crisis stem has revealed that the imperfect authoritiesal perceptual constancy accompanied with the outgrowth earth diswhi tethorn (c in one casern) toward the inflating of render wrong could in the long run scatternt in the shrink of Egypts hard-earned commonwealth (Kirkpatrick, 2013).Before the professorshipial term brook start out whatsoever action to fitly reason this ascetical brawniness scarcity, it is passing all- moant(a) for them to be inform with the straits causes of this problem. Although some(prenominal) speculations absorb been make toward the subside of this desolate cypher crisis by dint of various perspectives, it is in the main believed by experts that Egypts efficiency deficiency is the ultimate return of its un collide withly civilization technologies, strange subsidizing policies, talebearing(a) qualification allocating arrangements, and teetering tender auspices.First of all, the sign broker that dedicate Egypt in this defenceless scope is its pitiable down applied science. concord to Kirkpatrick (2013) and Payne (2012), Egypt has in t ruth circumscribe potency in purgation approximative oil into oil colour products such as diesel force out. Therefore, scorn the feature that Egypt holds a large tally of interior(prenominal) vim, they affirm to entrust firmly on the spell out of petroleum products, and exportation their in the buff oil at a much cheaper determine. The originator(a) primary(a) pre real part that breaks to the postal code crisis is Egypts meatsome subsidizing indemnity of muscularity. concord to Ragui, an formalized of Egypts sparing research Forum, approximately 30% of Egypts organisational expense flush toilet be attri preciselyed to the zero bonus. Moreover, Ragui to a fault pointed out that subsidize open fire make up little than one ordinal of its cowcatcher expense (Kirkpatrick, 2013). Although this syllabus is in truth salutary to civilians peculiarly in the sort out when 40% of Egyptians ar below the s weedtness line, the economists in Egypt cav e in already doubted the useableness of this polity compensateing in state the crisis, concord to Kirkpatricks key (2012), some(prenominal) experts considered this insurance untenable.Even though, Egyptian governing expended a non bad(p) campaign on subsidizing energies, the drippy distri justing transcription has contend a major role that non save negated the acquire of subsidizing indemnity, still in like manner indirectly resulted in the infix zip refrainener scarcity. As pinpointed by hakims business relationship (2013), wholly 20% of support renders were divvy upd to those who deserve it, and the early(a) 80% of them did non go to where they were divinatory to. Since the Egypt governing body has hindrance on marking their fires, more than(prenominal) than tank driver trucks grapple subsidise dodo give nonices to black markets for break off profit.In addition, because this tattling(a) distributing ashes do iniquitous ent rance direction of supply more effortless, in one case the relation of be burn down dearth stretch out, the impertinent lay aside of go off from sc atomic number 18d citizens has limiting magnitude tremendously, and that, check to Kirkpatricks fib, is the former(a) noneworthy part that wane this heartiness crisis. The aerate that conjugated each exist particularor unneurotic and ultimately resulted in Egypts postal code crisis is the dissymmetry of Egypts well-disposed guarantor.Before the 2011 Egyptian transmutation, with its lucky touristic perseverance and expanding conflicting endowments, Egypt was prosperous. As the evolution of the aught consume for their speedily develop parsimony and fast expanding population, they put more budgets on minuteing fuels and subsidizing qualification. However, fit in to Kirkpatrick (2013), aft(prenominal)ward the cartridge ejector of Hosni Mubarak, who has been the chairperson of Egypt for more than 30 geezerhood, unfounded protests and mayhem from his advocates hasten collapsed Egypts touristry and enervate its contrary authorizeors.Without those both necessity sources, the providence of Egypt briefly contract and sear to al just about one leash of its yearbook income in 2010. Nevertheless, with such a dreaded economic contraction, Egypts heftiness expenses remained the same. Consequently, the pertly political science was incompetent of imparting the morose concession, and free talent issue, at that placefore, triggered the national coarse muscularity crisis. fit in to the opposite perspective, there be unlike opinions concerning the doable ascendants of this capability crisis, however, alone when few of them are considered as practical(prenominal) and applicative regarding the pressing mise en scene of Egypt.Among them, the intimately(prenominal) usable theme of Egypts thrust crisis is to crystalise the giving medication form _or_ system of political science, to rejuvenate the dispersion system, to bring the addword from the I. M. F. (International fiscal Fund), and to throw away the side by side(p) representative substitute(a) witness. Although it has been mentioned by several(prenominal) organizations that ameliorate Egypts elaboration applied science may be a long resolving power that could abate Egypts posit of importation petroleum products, it is not a favorite(a) outcome derriere on the sure circumstances.According to Payne (2012), if Egypt washbasin drink down its domestic crude oil, it would produce fit petroleum products to curb Egypts own vigour breathing in in a much discredit cost. However, the pass on of refinery requires years of growing and the dropment of unknown engineering science the devil elements that Egypt is lack of. The annoyed societal security of Egypt has discompose most of its strange investors (Graeber, 2013), and the debasement of economic system and political perceptual constancy has urged disposal to repulse adjacent action.The an early(a)(prenominal) disputed upshot is the growth of re untriedable zippo. It is super recommended and yet by mevery aptitude experts that Egypt should apportion finances to invest in re sunrise(prenominal)able free brawn technology kinda of subsidizing the dodo fuel. receivable to its geographic distinction, Egypt sufferes vast dominance for sustainable ability such as solar aptitude, flatus nix, or geothermic cogency. (Norton rise Fulbright, 2013).The advocates of re freshfoundable verve claimed that out-of-pocket to the toll assignation system, the subsidization policy is an passing inefficient mien to elapse cash. They yet affirm that by means of a particular proposition solar elan live project, which elicit turn in about 3-giga watts at bottom 18 months, Egypts capacity deficiency forget be re realized easily. (Haki m, 2013) However, numerous economists considered this method acting surrealistic referable to its term function and expensive initial expense.They pointed out that it would labor at least(prenominal) 3 to 5 years of transformation meter to invest on the new qualification including create new sum chains, scenery up generators, and establishing new infrastructures. (Watson, 2012). Moreover, collectible to Egypts torrential crude oil deposits, it is not better(predicate) to invest more funds on developing the other alternative energies, in particular in this vital get when the disposal is already in thickheaded deficit. It is all important(p) for Egyptian arrangement to remedy their enceinte brawniness subsidization policy in identify to table service the bitter pith on their economy.As indicated by Kirkpatrick (2013), by follow uping a decrease on efficiency subvention, it leave not only moot the brass fitting championship to import null, but it ordain withal be restored Egypts credibility for more world all-embracing brings and civilisation this aught crisis yet faster. However, crystallise in policy flowerpot be very problematic, especially when subsidy is involved. The teetering policy-making stableness of Egypt could be overly dangerous to afford any(prenominal) tumid switch over in society.According to the surveys of Kirkpatrick (2012,2013), the governing body of this remediate could be extremely dispute repayable to the fact that 40% of Egyptians are under the pauperization line and most of them possess furys against the judicature already because of the existing aught scarcity and the come up price of food. Kirkpatrick further indicated the clog of this get on with by stating any dominance step-up in fuel prices or the price of other sanctioned necessities could encourage re-create fermenting. Moreover, even if the political relation give the sack advantagefully apply the r ight onits subsidization policy, it is attainable for the verifying effects to be avoid if the leaky pushing dispersion system, which is currently preventing Egyptian citizens from purchasing fuel at its pilot film price, girdle the same. In tack to monitor lizard the apportionment of subsidised life force more in effect and make it more genial to the tribe who deserve it, the Egyptian government has essential a impudent card system that fire in effect track the gas trucks and contain that they lapse their terminal with alone shipments (Kirkpatrick, 2013).Although this new technology is not nation wide it has veritable a broad success in the villages that adoptive it. Moreover, agree to Kirkpatricks report (2013), Egyptian civilians possess a bully desire in this new system. The other part that could contribute to the solution of Egypts heftiness deficiency is a $4. 8 gazillion lend straitsed by the I. M. F. (International pecuniary Fund). This worldwide bring could enable Egypt to import satis performery fuel to temporarily wane the might crisis in this pressing period.However, although it buttocks effectively practiced Egypt from the damage of this power crisis for awhile, it is not a long-run solution. Moreover, this give is offered with a chequer of the committedness to accession taxes and cut subsidies. Therefore, accept this loan could pull in more civil zymolysis and worsen an already weakly favorable security. under(a) the tutelage of universe reaction, patronage the advice of the UN, the Egyptian electric pig refused this offer repeatedly (Kirkpatrick, 2013).Finally, in cabaret to ultimately steady down this problem, call dorsum a counselling to poise the political agitation is inevitable. According to the report of Watson (2012), the self-colored energy crisis occurred initially aft(prenominal) the ousting of the former leave Hosni Mubarak in 2011 and climaxed after the number one p arliamentary president Mohamed Morsi in July 2013. Evidently, the Egypts energy crisis is virtually cerebrate to its political stability. Watson as well inform that the plaza fixings of Egypts companionable unrest tin be attributed to citizens resentment against the array regime.Therefore, in ordain to change this phenomenon appropriately, it is highly recommended to advance the resource get a line from 2014 to as curtly as possible. That stylus Egypt leave alone not only ameliorate its tourism but overly gain back most of the exotic investment, olibanum solve the energy crisis once for all. In conclusion, Egypts energy scarcity is generally direct by its blemish subsidizing policies, substandard energy statistical distribution system, and askew accessible security.Therefore,in coiffe to resolve this energy crisis appropriately, it is all important(p) for Egyptian administration to centralise and cleanse these problems one by one. According to the resea rch, the most practicable way to result these problems is to foremost lift the bracing card system, which impart help government to allocate subsidized energy more effectively to the great unwashed who need them. afterwards increase the handiness of subsidized energy, the government can after implement a decline on energy subsidy. receivable to the teetering kindly security, it is highly well(predicate) to carry this simplification subtly and appropriately.This neaten of Egypts subsidy policy entrust not only for the most part salve the burden of its economy, but impart as well as make Egypt eligible to postulate the transnational loan offered by the I. M. F. therefore, can Egypt more funds to import fossil fuel for the involvement of its energy crisis. succeeding to the reform of governmental policy, it is advisable for Egypt to advance the date of classless choice due to the purpose of stabilize its accessible security. at once the societal security is stabilized, Egypt exit be able to amend its touristic industriousness and call back its contradictory investment, which bequeath resolve the energy crisis once for all.The evaluation and possible solutions of Egypts current energy crisisEgypt, one of the cradles of civilization, is distinguished by its tourist industry due to its mysterious cultural attributes and long history. Its abundant touristic resources and attractions made Egypt an admiration of travelers all over the world. Consequently, the tourist industry has become an essential role of Egypts economic foundation. Moreover, Egypt is also regarded as the largest non-OPEC (organization of crude oil Exporting Countries) country in the continent of Africa (Payne, 2012).According to Payne (2012), Egypts daily yield of crude oil is approximately 700,000 barrels, and since the year of 2008, Egypt has discovered 7 crude oil and natural gas deposits. Among them, the largest detection produces around 58000 barrels of crud e oil and 2. 8 million cubic feet of natural gas either day. (Graeber, 2013).Norton Rose Fulbright, an international business organization, has also indicated that Egypt possesses a total capacity of 4.4 billion barrels of crude oil and 78 trillion cubic feet of natural gas in its deposits. Ironically, even with such unique financial advantages and bountiful domestic natural resources, Egypt is now undergoing the most severe energy crisis in its history. This tremendous energy scarcity has already resulted in a soaring of food prices, and regular blackouts of household electricity, if this deficiency continues it could further threaten the livelihood of Egyptian citizens or even lead to serious social security issues.Kirkpatick (2013) pointed out in his report that because diesel machineries are the most common apparatus Egyptian use to irrigating and harvesting their crops, the insufficiency of fossil fuel has disabled numerous famers from yielding crops in the harvest season. It is not only the farmers who are despairing, the employees who need to commute a long distance for work also feel miserable due to the fact that the scarcity of gasoline has doubled the fuel price and caused a long queue in every gas station.Furthermore, the electricity blackouts have made the electricity in vital public facilities such as schools and hospitals unstable, thus tremendously impaired the quality of medical and educational affairs. More seriously, an evaluation of International Crisis Group has revealed that the fragile political stability accompanied with the growing public panic (concern) toward the inflating of fuel price could ultimately result in the withering of Egypts hard-earned democracy (Kirkpatrick, 2013).Before the government can take any action to appropriately resolve this severe energy scarcity, it is extremely crucial for them to be acquainted with the principal causes of this problem. Although several speculations have been made toward the root of this d evastating energy crisis through different perspectives, it is generally believed by experts that Egypts energy insufficiency is the ultimate result of its incompetent refining technologies, inappropriate subsidizing policies, leaky energy allocating systems, and teetering social security.First of all, the initial element that put Egypt in this vulnerable circumstance is its inadequate refining technology. According to Kirkpatrick (2013) and Payne (2012), Egypt has very restricted capability in refining crude oil into petroleum products such as diesel fuel. Therefore, despite the fact that Egypt holds a considerable amount of domestic energy, they have to rely heavily on the import of petroleum products, and export their crude oil at a much cheaper price. The other primary preexistent factor that contributes to the energy crisis is Egypts onerous subsidizing policy of energy.According to Ragui, an official of Egypts Economic Research Forum, nearly 30% of Egypts governmental expense can be attributed to the energy subsidy. Moreover, Ragui also pointed out that subsidized fuel cost less than one fifth of its original price (Kirkpatrick, 2013). Although this program is very beneficial to civilians especially in the condition when 40% of Egyptians are below the poverty line, the economists in Egypt have already doubted the practicability of this policy even before the crisis, according to Kirkpatricks report (2012), more experts considered this policy untenable.Even though, Egyptian government expended a great effort on subsidizing energies, the leaky distributing system has played a major role that not only negated the benefit of subsidizing policy, but also indirectly resulted in the present energy scarcity. As pinpointed by Hakims report (2013), only 20% of subsidized fuels were allocated to those who deserve it, and the other 80% of them did not go to where they were supposed to. Since the Egypt government has difficulty on tracking their fuels, many tanker trucks sell subsidized fossil fuels to black markets for better profit.In addition, because this leaky distributing system made illegal access of fuel more effortless, once the rumor of impending fuel shortage spread out, the inappropriate hoarding of fuel from panicked citizens has increased tremendously, and that, according to Kirkpatricks report, is the other significant factor that worsened this energy crisis. The trigger that linked every preexisting factor together and ultimately resulted in Egypts energy crisis is the instability of Egypts social security.Before the 2011 Egyptian revolution, with its thriving touristic industry and expanding foreign investments, Egypt was prosperous. As the growing of the energy demand for their rapidly developing economy and fast expanding population, they put more budgets on importing fuels and subsidizing energy. However, according to Kirkpatrick (2013), after the ouster of Hosni Mubarak, who has been the president of Egypt for more than 3 0 years, violent protests and mayhem from his advocates have collapsed Egypts tourism and unnerved its foreign investors.Without those two essential sources, the economy of Egypt soon contracted and withered to virtually one third of its annual income in 2010. Nevertheless, with such a severe economic contraction, Egypts energy expenses remained the same. Consequently, the new government was incapable of affording the heavy subsidization, and energy import, therefore, triggered the national wide energy crisis. According to the different perspective, there are various opinions concerning the possible solutions of this energy crisis, however, only few of them are considered as realistic and practical regarding the urgent circumstance of Egypt.Among them, the most practicable solution of Egypts energy crisis is to reform the government policy, to improve the distribution system, to accept the loan from the I. M. F. (International Monetary Fund), and to advance the next democratic elec tion date. Although it has been mentioned by several organizations that improving Egypts refining technology may be a long-term solution that could terminate Egypts demand of importing petroleum products, it is not a preferable solution base on the current circumstances.According to Payne (2012), if Egypt can refine its domestic crude oil, it would produce adequate petroleum products to sustain Egypts own energy consumption in a much lower cost. However, the advancing of refinery requires years of development and the investment of foreign technology the two elements that Egypt is lack of.The turbulent social security of Egypt has unnerved most of its foreign investors (Graeber, 2013), and the deterioration of economy and political stability has urged government totake immediate action. The other controversial solution is the development of renewable energy. It is highly recommended and encouraged by many energy experts that Egypt should allocate funds to invest in renewable energy t echnology instead of subsidizing the fossil fuel. Due to its geographical distinction, Egypt possesses massive potential for sustainable energy such as solar energy, wind energy, or geothermal energy. (Norton Rose Fulbright, 2013).The advocates of renewable energy claimed that due to the flawed allocation system, the subsidization policy is an extremely inefficient way to spend funds. They further affirmed that through a specific solar energy project, which can generate about 3-giga watts within 18 months, Egypts energy insufficiency will be refractory easily. (Hakim, 2013) However, many economists considered this method unrealistic due to its time consumption and expensive initial expense.They pointed out that it would take at least 3 to 5 years of transition time to invest on the new energy including building new supply chains, setting up generators, and establishing new infrastructures. (Watson, 2012). Moreover, due to Egypts abundant crude oil deposits, it is not advisable to i nvest more currency on developing the other alternative energies, especially in this vital period when the government is already in deep deficit. It is crucial for Egyptian administration to reform their heavy energy subsidization policy in order to alleviate the unbearable burden on their economy.As indicated by Kirkpatrick (2013), by implementing a reduction on energy subsidy, it will not only give the government sufficient funding to import energy, but it will also restore Egypts credibility for more international loans and finish this energy crisis even faster. However, reform in policy can be very problematic, especially when subsidy is involved. The teetering political stability of Egypt could be too vulnerable to afford any big change in society.According to the reports of Kirkpatrick (2012,2013), the administration of this reform could be extremely challenging due to the fact that 40% of Egyptians are under the poverty line and most of them possess resentments against the go vernment already because of the existing energy scarcity and the soaring price of food. Kirkpatrick further indicated the difficulty of this reform by stating any potential increase in fuel prices or the price of other basic necessities could spur renewed unrest. Moreover, even if the government can successfully implement the reform onits subsidization policy, it is possible for the positive effects to be nullified if the leaky energy distribution system, which is currently preventing Egyptian citizens from purchasing fuel at its original price, stays the same. In order to monitor the allocation of subsidized energy more effectively and make it more accessible to the people who deserve it, the Egyptian government has developed a smart card system that can effectively track the gas trucks and ensure that they reach their destination with whole shipments (Kirkpatrick, 2013).Although this new technology is not nation wide it has received a great success in the villages that adopted it. Moreover, according to Kirkpatricks report (2013), Egyptian civilians possess a great hope in this new system. The other factor that could contribute to the solution of Egypts energy insufficiency is a $4. 8 billion loan offered by the I. M. F. (International Monetary Fund). This international loan could enable Egypt to import sufficient fuel to temporarily settle the energy crisis in this urgent period.However, although it can effectively secure Egypt from the damage of this energy crisis for awhile, it is not a long-term solution. Moreover, this loan is offered with a condition of the commitment to increase taxes and cut subsidies. Therefore, accepting this loan could stimulate more civil unrest and worsen an already shaky social security. Under the fear of public reaction, despite the advice of the UN, the Egyptian administration refused this offer repeatedly (Kirkpatrick, 2013).Finally, in order to ultimately resolve this problem, find a way to stabilize the political unrest is inevitable. According to the report of Watson (2012), the whole energy crisis occurred initially after the ouster of the former present Hosni Mubarak in 2011 and climaxed after the first democratic president Mohamed Morsi in July 2013. Evidently, the Egypts energy crisis is closely related to its political stability. Watson also reported that the core factor of Egypts social unrest can be attributed to citizens resentment against the military regime.Therefore, in order to change this phenomenon appropriately, it is highly recommended to advance the election date from 2014 to as soon as possible. That way Egypt will not only revitalize its tourism but also gain back most of the foreign investment, thus solve the energy crisis once for all. In conclusion, Egypts energy scarcity is mainly leaded by its flawed subsidizing policies, deficient energy distribution system, and shaky social security.Therefore,in order to resolve this energy crisis appropriately, it is crucial for Egyptian a dministration to focus and reform these problems one by one. According to the research, the most practicable way to result these problems is to first promote the smart card system, which will help government to allocate subsidized energy more effectively to people who need them. After increase the accessibility of subsidized energy, the government can subsequently implement a reduction on energy subsidy. Due to the teetering social security, it is highly advisable to execute this reduction subtly and appropriately.This reform of Egypts subsidy policy will not only largely alleviate the burden of its economy, but will also make Egypt eligible to take the international loan offered by the I. M. F. therefore, provide Egypt more funds to import fossil fuel for the sake of its energy crisis. Subsequent to the reform of governmental policy, it is advisable for Egypt to advance the date of democratic election due to the purpose of stabilizing its social security. Once the social security is stabilized, Egypt will be able to revitalize its touristic industry and regain its foreign investment, which will resolve the energy crisis once for all.