Thousands of demonstrators began gathering from early on Tuesday morning in Cairo's Tahrir Square, which has been the focal point of protests in the capital and served as the meeting area for the march to begin on the eighth day of an uprising that has so far claimed more than 125 lives. Another "million-strong" march is planned in the Mediterranean port city of Alexandria, as national train services were cancelled in an apparent bid to stymie protests. Protest organisers have also called for an indefinite strike to be observed across the country. Reporting from Cairo, an Al Jazeera correspondent reported that tens of thousands of people were gathering in Tahrir Square on Tuesday morning. "The square is absolutely packed, there is hardly standing room for people. Tens of thousands of people are still streaming towards the square," she said.
Soldiers at Tahrir Square have formed a human chain around protesters, and are checking people as they enter for weapons. Tanks have been positioned near the square, and officers have been checking identity papers. "There was a long queue, but it was extremely orderly," reported Al Jazeera's online producer, who was in Tahrir Square. "After the army checkpoint there was a civilian checkpoint", manned by ordinary people who were checking bags, he said. He said there were no indications that anyone had attempted to disrupt the protests. "You certainly get the feeling that the organisers will get the numbers that they want. The word is out there, despite the fact that the internet is still down," our correspondent said. "But all groups, young, old, rich, poor, Christians, Muslims they are all heading [to Tahrir Square]." 'Gaining momentum' Our correspondent said that there were reports that "thugs in certain parts of the city have been trying to stop people from driving into Cairo". She said that "increasingly large pockets of pro-government protests" are also taking place at various locations in the city. There are fears that if the two sets of protesters meet, a violent clash could erupt. Gigi Ibrahim, a political activist who planned to attend the rally, told Al Jazeera the protesters will not be satisfied until Mubarak steps down. "I think today there will be great numbers on the street ... every day there are more numbers on the street than the day before. I think the protests are gaining momentum. The people ... will literally not leave until Mubarak steps down," she said. On the increasing clampdown on the internet, Al Jazeera's online producer reported: "For the most part, the internet is irrelevant to the protesters. It's just been mobile phones since the mobile phone blackout stopped a couple of days ago. "The thrust of the [protesters'] message is: 'Mubarak still has to go' ... that's the bottom line from everyone we've spoken to.
Egyptian state television has asked people to stay at home, warning of possible violence. Our producer said that if today's protest does not go as planned, similar protests could be planned for Friday. The new protests will come as the police have returned to the streets. But while the police's posture to be adopted in the face of the strike and marches remains unknown, the Egyptian army stated clearly on Monday that it would not stop protests Faced with the prospect of massive numbers trying to converge on the capital, Egyptian authorities stopped all train traffic with immediate effect on Monday afternoon, and the state-owned national carrier EgyptAir said it was cancelling all international and domestic flights during curfew hours (3.00pm to 8.00am local time). Army promise In a statement on Monday, the army said "freedom of expression" was guaranteed to all citizens using peaceful means. "To the great people of Egypt, your armed forces, acknowledging the legitimate rights of the people," stress that "they have not and will not use force against the Egyptian people," said the statement. It was the first such explicit confirmation by the army that it would not fire at demonstrators who have taken to the streets of Egypt and comes a day before Tuesday's "march of millions". "The presence of the army in the streets is for your sake and to ensure your safety and well-being. The armed forces will not resort to use of force against our great people.
It urged people not to resort to acts of sabotage that violate security and destroy public and private property. It warned that it would not allow outlaws to loot, attack and "terrorise citizens". The call for the "million-man-march" from the so-called April 6 movement has come as Mubarak swore in a new cabinet on Monday, in an attempt to defuse ongoing demonstrations across the country. The opposition parties have called for Mubarak to delegate responsibilities to newly appointed vice-president Omar Suleiman, who they are prepared to negotiate with. Panic and chaos On Tuesday, even as Egypt continued to face economic turmoil as a result of protests, the International Monetary Fund said it was ready to put in a place an economic rebuilding policy for the country. "The IMF is ready to help in defining the kind of economic policy that could be put in place," IMF chief Dominique Strauss-Kahn said. Meanwhile, chaos has been reported at Cairo's international airport, where thousands of foreigners are attempting to be evacuated by their home countries. Our correspondent reported on Tuesday that about 1,000 US citizens have been evacuated to Cyprus or Turkey, from where they are expected to make their own way home. She also said that China is sending two additional planes to evacuate its citizens. | |||||||||||||||||||||
Investors nervous about instability gripping Egypt drove Middle Eastern stocks down sharply Sunday as markets reopened following a weekend of violent protests.
The losses, led by a drop of more than 4 percent in the regional business hub Dubai, reflect concerns the unrest that has roiled the Arab world's most populous country and nearby Tunisia could spread, jeopardizing an economic recovery across the region. "There's this contagion effect, where investors are thinking: 'Well, is this going to spread out across the Arab world?'" said Haissam Arabi, chief executive of Gulfmena Alternative Investments, a fund management firm in Dubai.
Egypt's market remained closed because of the protests, leaving investors to pull money off the table elsewhere.
The benchmark index for the Dubai Financial Market tumbled 4.3 percent to close at 1,543.02.
Among the biggest losers in Dubai were real estate developer Emaar Properties, the builder of the world's tallest tower, which sank 8.3 percent to 3.11 dirhams (85 cents). Shares of discount carrier Air Arabia, which is growing its operations in Egypt, dropped 6.1 percent to 0.79 dirhams (22 cents).
DP World, the global port operator, tumbled 6.2 percent to close at 62 cents on the Nasdaq Dubai exchange. The Dubai World subsidiary is heavily dependent on shipping in the Middle East and Africa, including at the Egyptian Red Sea port of Sokhna, which it manages near the southern entrance to the Suez Canal.
Ann Wyman, head of emerging market research at Nomura in London, said protests in the city of Suez at the mouth of the strategic waterway – a key chokepoint for cargo ships and oil tankers – are making investors nervous.
"You can imagine that it is a top priority in Egypt to keep the canal open, safe and well-protected," Wyman said. "Disruption in the flow of oil is one thing that people worry about."
Other Mideast markets also suffered losses.
Abu Dhabi's main index sank 3.7 percent to close at 2,561.06. Shares of the exchange's biggest loser, Emirati natural gas producer Dana Gas, plunged 9.9 percent to finish at 0.64 dirhams (17 cents) despite assurances that its Egyptian operations haven't stopped amid the protests.
"Dana Gas Egypt is continuing with routine operations, and the production has not been affected by the current events in Egypt," CEO Ahmed al-Arbeed said in a statement.
Kuwait shares dropped 1.8 percent to close at 6,822. Qatar's benchmark index slumped 3 percent to 8,709.77.
Shares in the Jordanian capital Amman also fell, including the blue chip Arab Bank, which is based in Jordan and has branches in nearby Egypt. It fell 3.6 percent to 9.45 dinars ($13.34), outpacing the broader market decline of 2.3 percent.
A broker at the Amman Stock Exchange said the slide is "linked to the unrest in Egypt."
"It's natural that investors will be frightened by such events," he said, insisting on anonymity because he is not allowed to make statements to the media.
Saudi Arabia was the only major market to post gains, but they fell short of offsetting steep losses the previous day. The kingdom's Tadawul All Shares Index climbed 2.5 percent to 6,421.97.
Saudi shares fell 6.4 percent on Saturday, when it became the first major Arab market to reopen for business following widespread Egyptian protests that intensified Friday.
While the protests in Egypt are politically motivated, there is also little doubt that the rage of the populace there, as well as in Tunisia, Yemen, Algeria and elsewhere, is being inflamed by the huge and volatile increases in basic food prices.
While the seeds for huge percentage increases in corn, wheat, sugar, coffee and of course oil are based in some fundamental supply shortages, they have been unnecessarily hypercharged by the influx of investor money, speculative energy and the panic of governments trying to stockpile basic foods and quench the growing hostility of its people.
We've seen this movie before, in 2007-2008, but it hasn't looked nearly as bad as this. Massively spiking commodity price inflation, before the global financial collapse, was a far easier problem to find solutions for and contain. Now, with practically all Western governments in the midst of austerity budgeting, less money is available to help Middle Eastern and other emerging nations find adequate and subsidized supplies.
But this movie rerun is in widescreen Technicolor: the across-the-board food price increases have never seen this kind of spike before, ever.
Wheat is up 75% in the last 12 months, corn up a little more. Coffee is up 85% and cotton a spectacular 140%.
While flooding in Australia, a drought in Russia and weak harvests in India and China are the fundamental drivers for this upwards trend, there is little doubt that investors and traders looking to diversify and capitalize on the supply shortages are moving these prices much more significantly and faster. Commodity index investment increased an estimated and whopping $80B dollars last year, bringing total long-only commodity index investment to $350B, according to Barclays. Another $30B of commodity ETF investment is also overwhelmingly long-only, as short commitment in these instruments is normally well under 5% of float.
Financial buying of commodities in indexes and ETF's, with the speed that these instruments operate, overwhelm the futures mechanisms and cause much greater volatility and overall higher prices. We've seen this roller coaster ride play itself out once already in oil, moving from 2005-2008 to $147 a barrel, only to collapse to $32 dollars in March of 2009, before re-initiating its upwards trajectory.
Whether financial investment in commodities can be absorbed by a free market or not, this kind of boom/bust cycle, now playing itself out again in other critical foodstuffs, is intensely destabilizing and threatens the order in brittle governments around the globe.
And governments have been forced to play into this struggle. Increased stockpiling of basic commodities has added to the frenzy of price increases: Algeria and Saudi Arabia have doubled their usual stockpile of wheat, Bangladesh and Indonesia have tripled orders for rice.
The mechanism for halting, or even slowing down the massive money flows into financialized commodities is lacking. Small steps on position limits and transparent clearing, mandated under Dodd-Frank legislation, have seen widespread pushback from industry advocates and trading companies. Rules for the energy markets, mandated by Dodd-Frank to be in place and operating today under the Commodity Futures Trading Commission (CFTC), are at least another year away, if they are coming at all. Very little looks to be changing.
And with very little changing, we might have to get used to these street scenes in Egypt and other emerging nations elsewhere, as rage from native populations spills over from the spiking prices of simple food basics.
Jamal Halaby in Amman, Jordan, contributed reporting.
Prices of oil and other commodities are rising, buoyed by fears that the unrest in Egypt could affect trade.
With the global economy still struggling to recover from a recession, international trade is a key source of growth. While there's been no significant interruption in the trade of oil since the unrest began early last week, purchasers fear that a major change in the Egyptian government could affect access to the commodity.
Egypt, the largest country by population in the oil-producing Middle East, is a crucial link in the oil trade. Although Egypt isn't a major U.S. trading partner, its key role in the international oil trade means that an interruption would affect the U.S. directly. In 2009, 2.9 million barrels of crude oil passed every day through Egypt's Suez Canal and SUMED pipeline, according to theEnergy Department.
If the canal and pipeline were closed, ships transporting oil would be forced to add 6,000 miles to their journey, the Energy Department notes, in a document that describes "World Oil Transit Chokepoints." The Egyptian protests have evidently stoked fears of an interruption.
"It's moved oil prices up and it's likely to do that for at least a little while," said Mark Weisbrot, co-director of the Center for Economic Policy and Research, in Washington. "Some movement is kind of rational, and reflects the actual probability of an oil supply interruption."
Brent crude, which helps determine the price of two-third of the world's oil, traded at a 28-month high on Friday, Reuters notes.
The prices of other commodities have also risen sharply in the past year, and the situation in Egypt seems likely to exacerbate that rise. Egypt is a major exporter of cotton, and trade with the U.S. accounted for more than 30 percent of the cotton export business during the first half of last year, according to Egypt's records.
The price of cotton more than doubled last year, according to the International Monetary Fund. While adverse weather has affected production of the crop, some producers have also been hoarding cotton, in the hope that the price will rise further. This limited supply has boosted prices.
The affect of the Egyptian unrest on prices is, as of now, based on speculation, since the movement of goods hasn't been significantly impaired. And so far, the price of oil has been more affected than the prices of agricultural products.
"It doesn't necessary affect commodity prices immediately," Weisbrot said. But he added, "I don't think its going to be resolved that quickly."
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