CAIRO (AP) – The closure of Egypt’s banks for two of the past three weeks has added strain on an economy already reeling from the evaporation of tourism and a prolonged stock market closure caused by the political upheaval that ousted longtime leader Hosni Mubarak.
The closures were ordered after protests and strikes by poorly paid bank workers, some of them demanding a purge of executives they accused of corruption. Concerns over a lack of security also factored into the decision. Most police disappeared from the streets a few days after the revolt began on Jan. 25 and many have not returned.
The bank shutdown and the draining of ATM machines have paralyzed businesses and left ordinary people scrambling for cash. The economy has been crippled by the unrest, which has forced many businesses to shut and factories to halt production. More than 150,000 tourists fled, dealing a blow to one of Egypt’s top sources of foreign revenue.
The stock market is not set to open again at least until Sunday, which would make it a three-week shutdown. The benchmark stock index fell about 17 percent in two sessions before it closed on Jan. 28. Initially, trade was halted while authorities put in place measures to curb any more sharp and sudden drops amid the instability. Then the strikes and bank closures prolonged the shutdown.
“We are in an environment of a revolution,” said Tarek Amer, board chairman of the National Bank of Egypt, the country’s largest public sector bank. “Companies are not able to conduct their business in the best manner,” added Amer, who is also on the Central Bank’s board. “If this continues, it could affect investor confidence.”
The protests by bank workers are just a small slice of the labor unrest rekindled by the uprising against Mubarak’s regime. Virtually every sector has seen stoppages or protests, from the airlines to textiles and steel to ship repair services along the Suez Canal.
The ruling military council that took power from Mubarak on Friday has issued two statements in the past three days calling for all labor unrest to end immediately. That has raised expectations that the council may soon ban all protests and strikes, something that would almost certainly raise tensions at a time when many are already feeling anxious about Egypt’s uncertain future.
“If, of course, workers demand more and, as a result, they strike and these strikes continue over a period of time, this will have a destabilizing factor,” said John Sfakianakis, chief economist with Banque Saudi-Fransi in Saudi Arabia. “It will impact on the confidence and reputation of the Egyptian banking sector,” he added. “It could have ripple effects for … the private and public economy.”
Banks remained open the first few days of the 18-day democracy uprising. But after a weekend of looting, arson and lawlessness on Jan. 28-29, they closed for a week and many ATMs were damaged or ran out of cash. The following week, the banks closed. They reopened the week of Feb. 6-10 and…