TEXT OF STORY
Bob Moon: It’s the 2nd of February and the fourth straight day that banks in Egypt have been shut. ATMs there have been running dry, and then there’s this financial obstacle: Family and friends outside Egypt — a significant source of capital for the economy there — have no way to send money back home.
Here’s Marketplace’s Alisa Roth.
Alisa Roth: Mohammed El Harairy just wants to be a good son. He’s a Western Union agent in a Middle Eastern neighborhood in New York. And like a lot of his customers, he sends money to his family in Egypt. But for the last couple of days, he hasn’t been able to.
Mohammed El Harairy: Now, there is no way to send. Banks closed. Western Union closed. There is no communication between United States and Egypt.
That’s because in Egypt, money transmitters like Western Union work through local banks. And those are shut down for the moment.
The World Bank estimates that last year, Egyptians sent about $7.7 billion home. That’s only about 4 percent of Egypt’s GDP, but remittances rank as one of the country’s biggest sources of foreign capital. Much bigger, for example, than U.S. aid to Egypt. And that money from abroad is obviously important to the individual families lucky enough to get it.
Ragui Assaad is a professor at the University of Minnesota’s school of public affairs. He estimates that remittances account for a quarter of the household income for families that receive the money. He says right now, though, Egypt’s money troubles extend far beyond remittances.
Ragui Assaad: The serious problem right now for people is that they have money in the bank and they’re not able to access it to get cash. And that, whether they receive remittances or not, they’re all, everybody is having the same problem.
El Harairy, the Western Union worker, says his mother is doing OK without his cash.
El Harairy: You know, maybe she gets from a friend or something, until I will be able to send back the money.
The banks will reportedly re-open Sunday. The bigger concern then may be that wealthier Egyptians want to send their money out of the country.
I’m Alisa Roth for Marketplace.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?