The Economist Asia - February 10, 2018

44 Middle East and Africa The EconomistFebruary 10th 2018

2 financial year to 1.9% in this one. On the

plus side, the increase ismostly in cash for

foodstuffs that are not price-controlled.

Previous governments have tried to cut

subsidies but backed down at the first

bread riot. Gradual reforms are easier to re-

verse, argues Dalibor Rohac, the author of

the Cato study. He recommends abolishing

all commoditysubsidies quickly, along

with the bureaucracies that administer

them, and replacing them with cash trans-

fers. Mr Sisi will surely not do anything so

radical before the election. Afterwards, his

commitment to reform may depend partly

on how much he needsIMFcash.

Water is probably the mostsensitive

commodity of all. Ever larger numbers of

Egyptians cluster around the Nile, tapping

its waters for their crops, factories and

homes. The country’s population is ex-

pected to grow from 99m to 120m by 2030.

Pricing water properly would encourage

conservation. Instead, Egypt allows farm-

ers to take water for nothing, paying only

the cost of pumping it. Urbanites are sup-

posed to pay small fees, but these often go

uncollected. As a result, Egyptians waste

torrents of water growing rice, hosing

down pavements and failing to recycle.

“We have to dig deeper and deeper to get

water,” says Abdel-Fattah, a farmer. “I’m

worried, and anyone who says he’s not

worried about water is lying.”

More dam problems

Climate change could make Egypt even

drier. More immediately, Ethiopia is build-

ing a huge dam on the Blue Nile, upstream

from Egypt. Ethiopia, Egypt and Sudan

have yet to agree how much water each

should take. Mr Sisi met the other two

countries’ leaders on January 29th and in-

sisted thatthere was no crisis. Others are

not so sure. “There’s a real possibility Egypt

may seriously escalate over the dam,” says

H.A. Hellyer of the Royal United Services

Institute, a think-tank in London. He does

not think military options are off the table.

Others doubt that Egypt would be so rash

as to bomb the dam. Still, a strongman like

Mr Sisi cannot afford to appear weak, espe-

cially since it emerged this week that his re-

gime has been relying on Israel to bomb ji-

hadists on Egyptian soil.

Tough economic reforms might be easi-

er if the government enjoyed the legitima-

cy of having been freely elected. That clear-

ly will not happen this year. Although Mr

Sisi deserves credit for floating the pound

and starting to tackle subsidies, Egypt will

struggle to prosper so long as it is run by

soldiers. Their instinct is to give orders and

expect market forces to salute. Some turn

power into rents. For example: the army is

buildinglots of new roads, often without

open tenders. For 21 of them, it has claimed

the land for 2km on either side. Anyone

who wants to open a shop by a new high-

way will have to pay the men in khaki. 7

T

HINGS are eerily quiet outside the

caged walkway that cuts through the

no-man’s-land separating Israel from

Gaza. But there is increasing talk of war on

both sides of the expanse, and elsewhere

around Israel. “Everyday there is aggres-

sion and terror [by Israel],” says Daoud Shi-

hab of Islamic Jihad, a Palestinian armed

group that has fired rockets into Israel. “The

situation could explode at any moment.”

Some of Gaza’s leaders believe Israel will

use a coming military exercise with Ameri-

ca as cover for an attack. They put the

chances of a new war at 95%, according to

Al Hayat, an Arabic newspaper.

The Israelis see things differently. Gadi

Eisenkot, the chief of staff of the Israel De-

fence Forces (IDF), reportedly told the cabi-

net that Hamas, the Islamist group that

runs Gaza, might start a war if life in the

coastal enclave does not improve. It has

been under siege by Israel and Egypt for

over a decade. Tensions increased after Do-

nald Trump, America’s president, recog-

nised Jerusalem as Israel’s capital on De-

cember 6th. The IDFhas responded to

rocket fire from Gaza with air strikes.

There is talk of impending conflicts on

Israel’s northern borders, too. On January

28th the IDF’s spokesman, Ronen Manelis,

wrote an op-ed, published by Lebanese

websites, in which he warned Lebanon

not to allow Iran to produce precision mis-

siles in the country. Israel has repeatedly

struck Iranian arms convoys bound for

Lebanon. The IDFhas been training on the

northern front. “As we have proven in re-

cent years...our security red lines are clear-

ly demarcated,” wrote General Manelis.

“The choice is yours, people of Lebanon.”

The Lebanese government opposes Is-

raeli plans to build a wall along the border,

claiming it will encroach on Lebanese terri-

tory. It saysit will pursue the issue in inter-

national forums, but Hizbullah, which is

part of the government, has reportedly

threatened to attack Israeli soldiers on the

frontier. All of Lebanon will pay if Hizbul-

lah goes to war with Israel, warns Avigdor

Lieberman, the Israeli defence minister.

The winds blowing across Mount Avi-

tal, in the Golan Heights, carry yet more

talk of war. Israeli soldiers look down into

Syria, where Bashar al-Assad’s forces sit

one town away from rebels in old Qunei-

tra. Bled by seven years of fighting, the Syri-

an army is not seen as a threat, but Israel is

concerned that the forces which propped

up the Assad regime are establishing

strongholds in Syria. It has told Hizbullah

and Iran to stay out of the area. On Febru-

ary 6th Binyamin Netanyahu, the Israeli

prime minister, toured Mount Avital,

warning Israel’s enemies “not to test us”.

For all the bluster, no one seems eager to

start shooting. Israel and Hamas have

fought three wars since the group took

over Gaza in 2006. To avoid a fourth, Gen-

eral Eisenkot is said to have told the cabinet

to do more to ease the suffering in Gaza.

Hamas may merely be using its war talk

to draw attention to Gaza’s misery. The

siege and sanctions imposed by the Pales-

tinian Authority (PA), which runs the West

Bank, has left the enclave short of electric-

ity, drinking water and food. A deal be-

tween Hamas and the PAwas meant to

hand administrative control of Gaza to the

PA, which in turn would lift the sanctions.

But officials in Gaza say Mahmoud Abbas,

who heads the PA, is dragging his feet. (The

PAsees it the other way around.)

In the north Hizbullah would probably

like to regroup, after nearly seven years of

fighting in Syria. Lebanon was so badly

damaged during the group’s previous war

with Israel, in 2006, that Hizbullah’s lead-

ers regret provoking it. Hizbullah is not

ready for another conflict, but it is adding

to its arsenal of guided missiles. The IDF

may feel forced to forestall this build-up.

Mr Assad also seems more interested in

consolidating his position at home than

starting a new war (which he would lose).

And the Iranian public is already pressing

the regime in Tehran to end its foreign ad-

ventures. Israel says it will hit Iranian

bases if Iran tries to entrench itself in Syria.

However, with everyone on edge, it

may not take much to start a conflict. A

rocket from Gaza, an air strike by Israel, a

bullet from Hizbullah—any of these could

ignite the next one. Bismarck famously pre-

dicted that “some damned foolish thing in

the Balkans” would start a European war

(he was eventually proved right in 1914). In

the Levant it may be some damned foolish

thing on the border. 7

Israel and its neighbours

The guns of

February

GAZA AND THE GOLAN HEIGHTS

There is increasing talk of war all

around Israel

Gas fields GOLAN

HEIGHTS

WEST

BANK

GAZA

STRIP

EGYPT

LEBANON

ISRAEL

SYRIA

Gaza City JORDAN

Quneitra

Mount Avital

Mediterranean

Sea

Jerusalem

Amman

Dead

Sea

Sea of

Galilee

Haifa

Tel Aviv

50 km