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Egyptians Defy Curfew to Battle Police in Challenge to Mubarak

Posted by vmsalama on January 28, 2011

crazy days!!!!!!!!!!!!!!!!!!!!! so honored to be witnessing history in a country that is so close to my heart.


By Vivian Salama, Ola Galal and Caroline Alexander

Bloomberg (Click here for original story)

Jan. 28 (Bloomberg) — Egyptian protesters clashed with police throughout the country and into the night, defying a curfew and setting fire to some buildings, in the biggest challenge to President Hosni Mubarak’s 30-year rule.

Mubarak, in his role as military leader, ordered the army to help police implement a curfew from 6 p.m. to 7 a.m. in Cairo, Alexandria and Suez, state television said. The restrictions were later applied nationwide with armored vehicles and tanks in the streets.

Tens of thousands of marchers in the capital chanted “liberty” and “change” at demonstration points across the city of 17 million, many of them intending to rally in Tahrir Square. Smoke rose from downtown as Al Jazeera said the ruling party’s offices were on fire. Egypt’s benchmark EGX30 stock index plunged 11 percent on Jan. 27, the most since October 2008.

After nightfall, police and demonstrators fought running battles along the Corniche, the road on the east bank of the River Nile. Fires burned along the route, including a blaze in a restaurant in front of the Conrad Hotel.

Photo by Vivian Salama

Photo by Vivian Salama

“If they fail to clear the streets today, the momentum for political transition and the prospects for it will be greatly enhanced,” J. Scott Carpenter, a fellow at the Washington Institute and a former U.S. State Department official, said in a phone interview. “Protests will not go away. There will have to be some sort of accommodation to the demands.”

Rubber Bullets

The protesters want an end to corruption, repression and an improvement in living standards in the nation that relies on tourism, revenue from the Suez Canal and overseas investors for foreign currency. The demonstrations started on Jan. 25, when thousands took to the streets, inspired by an uprising that ousted Tunisian President Zine El Abidine Ben Ali on Jan. 14.

Crude surged the most since September 2009, rising 4.8 percent, as unrest in Egypt raised concern that protests would spread to major oil-producing parts of the Middle East.

Anger has also erupted in recent months in Algeria and Yemen, which all face spiraling food prices. Nine people died in the Egyptian unrest, Human Rights Watch said.

“They used water cannons and rubber bullets against us,” said Serif Amin, 31, an information technology consultant. “I saw people getting rubber bullets in their heads and faces.”

The government restricted Internet and mobile-phone access and detained senior leaders of the Muslim Brotherhood, the main opposition group. The four main Internet service providers in Egypt were cut off, Renesys, an Internet-analysis company based in Manchester, New Hampshire, said on its website.

Fitch Revision

Fitch Ratings today revised the rating outlook on Egypt to “negative” from “stable.”

Photo by Vivian Salama

Photo by Vivian Salama

Mubarak hasn’t publicly said whether he’ll run for re- election. The 82-year-old, a U.S. ally, has been in power since 1981. Opposition campaigner Mohamed ElBaradei, 68, former head of the United Nations nuclear agency, returned to Egypt and said he would take part in the protest.

ElBaradei was put under house arrest today, the Associated Press said, citing security officials. There was no connection to the mobile phone of his spokeswoman, who traveled with him.

ElBaradei helped set up the National Association for Change in 2010 to campaign for democracy and against corruption. He said in February he would run for president if the government removed constitutional restrictions on independents. The Muslim Brotherhood is barred from entering elections as a party, though some of its candidates have been allowed to run as independents.

‘Very Quickly’

Mubarak has no vice president or designated successor. The Brotherhood is among groups that say he is grooming his son Gamal to succeed him, a claim both men deny.

Mubarak could be forced to relinquish his rule “very quickly,” ElBaradei, who won the Nobel Peace Prize in 2005, told Vienna’s Profil magazine. “Nobody thought that in Tunisia things would change overnight,” he said in the interview.

Ayman Nour, a former candidate for the presidency who was jailed by authorities, was injured during the protests in Cairo, Al Jazeera reported.

U.S. Secretary of State Hillary Clinton called on the Egyptian government “to do everything in its power” to refrain from violence against demonstrators. Protesters should avoid using violence, she said.

The protests “underscore there are deep grievances” among the population, she said. “Violence will not make these grievances go away.”

U.S. Interests

The country’s bourse, where companies including Orascom Construction Industries, Talaat Moustafa Group Holding and Orascom Telecom are listed, is the biggest in North Africa by market capitalization.

Trading didn’t take place yesterday and further losses are likely when it resumes, said Win Thin, global head of emerging- markets strategy at Brown Brothers Harriman.

It is in the U.S.’s interest to see a negotiated solution, Thin said, citing Egypt’s geopolitical importance. The country is only one of two Arab countries that have signed peace treaties with Israel and controls the Suez Canal, through which an estimated 8 percent of global sea trade travels.

“Mubarak hanging on to power by force would be the worst outcome, as tensions and protests would likely continue and risks seeing more extremist elements in Egypt gain support,” Thin said.

About 1 million barrels a day of oil and refined products flowed northbound through the canal in 2009, according to the U.S. Department of Energy. The canal and an adjacent pipeline carry more than 4 million barrels a day of crude, or 4.7 percent of global output, according to New York-based McQuilling Services LLC.

Oil Watch

The U.S. will watch “very closely” for oil disruptions from Egypt, said Energy Secretary Steven Chu.

“Any disruptions in the Middle East means a partial disruption of the oil we import,” Chu said on a Jan. 28 conference call with reporters. “More importantly, any serious disruptions in the Middle East will mean that, even though we don’t get a lot of our oil, it’s a world market and that could actually bring real harm.”

The Egyptian government’s dollar bonds due April 2020 fell, sending yields to a record high. Yields on the debt rose 47 basis points to 6.78 percent at 5:19 p.m. in London, extending this week’s increase to 106 basis points, according to data compiled by Bloomberg.

The cost to insure the country’s debt against default for five years rose 15 basis points from yesterday, to 391, CMA prices showed. Egypt is rated the highest non-investment grade level at Moody’s Investors Service, Standard & Poor’s and Fitch Ratings. The Egyptian pound weakened, losing 0.4 percent to trade at 5.858 per pounds per dollar on Jan. 27.

Phones Down

Vodafone Group Plc is among the phone networks cut off in Egypt, where some landlines also were down. The company said in an e-mailed statement that its operators in Egypt have been told to suspend services “in selected areas” in compliance with local laws. France Telecom said its Egyptian Mobinil service was blocked.

Clashes in cities including Suez and Ismailia continued. Riot police have been deployed in central Cairo and other urban areas since the Jan. 25 demonstrations.

Low wages and rising prices have sparked protests in Egypt since 2004. About 1.7 million workers engaged in 1,900 strikes and other forms of protest between 2004 and 2008, the Solidarity Center, a U.S. labor-rights group, said in a study last year.

‘No Hope’

Egypt, the world’s biggest wheat importer, announced additional spending of as much as 3.5 billion pounds in October to cover the country’s rising food bill, increasing the strain on a budget deficit that widened to 8.1 percent of gross domestic product in the fiscal year that ended in June. Wheat futures in Chicago, the global benchmark, have surged 74 percent in the past 12 months.

The economy in the country of 80 million people, the most populous in the Arab region, probably grew 6.2 percent in the last quarter of 2010, compared with 5.5 percent in the previous three months, according to official estimates. The government says it needs growth of about 7 percent to create enough jobs every year for a growing working-age population.

Delta Air Lines Inc. today canceled its flight tonight to Cairo from New York’s Kennedy airport. The return leg also has been scrubbed, said spokesman Anthony Black.

Among the Egyptians on the streets of Cairo was Mona Abdelaziz, 30, who holds a journalism degree and works selling tissues by the roadside. “The country has gone to ruin,” she said in an interview. “Everything is expensive. How will my son marry, get an education, set up a household? There are no jobs, only for a select few. We have no hope.”

–With assistance from Mahmoud Kassem, Digby Lidstone and Ahmed A Namatalla in Cairo, Alaa Shahine in Dubai, Jonathan Browning, Stephen Voss and Michael Patterson in London, Massoud A. Derhally in Beirut, Dahlia Kholaif in Kuwait, Flavia Krause- Jackson and Roger Runningen in Washington, Jonathan Tirone in Vienna, Margot Habiby in Dallas and Rudy Ruitenberg in Paris. Editors: Heather Langan, Andrew J. Barden, Paul Badertscher


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