Desperate Act

Cairo is catholic in its debts: it owes money to, among others, the Soviet Union, the U.S., Britain, France, Italy, West Germany and Japan. In all, Egypt is in hock for more than $1 billion in long-term debts, more than half of which must be repaid in hard currencies. Just to service his short-term debts of more than $250 million in hard currency, President Gamal Abdel Nasser was recently forced to sell off a third of Egypt's gold, leaving his country with a dangerously low hard-currency reserve of $108 million. Nasser has also been desperately trying to get his creditors to extend repayment deadlines.

Such a man might be expected to tread lightly, but that is not Nasser's style. Last week, in his most anti-American speech since 1964--when he told Washington to "go drink the Red Sea" --Nasser accused the U.S. (to which he owes $169.2 million), and the CIA in particular, of "supporting those Arab prostitutes," King Hussein of Jordan and King Feisal of Saudi Arabia, "in a conspiracy against Arab progress." Speaking for two hours at Cairo University, he also excoriated the U.S. for selling arms to Israel and accused Washington of "waging a war of starvation against the Egyptian people" by withholding shipments of surplus American wheat. What is more, he hinted broadly that Egypt henceforth might refuse to pay its foreign-aid debts to "those who exert economic pressure on us"--meaning the U.S. "Those who want to collect their loans will have to run after us, asking for payment."

This is a way to make friends? Jordan immediately withdrew its ambassador in protest. Nasser's speech cinched the fact--which was already evident--that he will not be getting any more wheat from the U.S. As for his threat to welsh on debt payments, most of his debtors considered it a desperate act of bravado, designed to let his creditors know that he cannot pay them all off --and that he will give first priority to those who bother him least about the delay. The plain fact is that Nasser could not pay even if he wanted to. His country is nearly bankrupt, and he hopes to distract his people from that looming fact by blaming Egypt's troubles on others.

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