120 million People on the Front Line – Military Spending Tops the Agenda The Currency Weakens; Middle Class Shrinks, Services Strain, and Capital Flows Out This article explores a hypothetical scenario grounded in Egypt's current economic and political landscape. It examines what could happen if the country were drawn into a direct military confrontation. This is not a report on actual events, but an analytical exercise aimed at assessing the potential costs of a war economy for both the state and society. Gaza has been under continuous bombardment for weeks, while humanitarian convoys have queued on the roads into Sinai. Debate over the Rafah crossing has intensified: some view it as a matter of sovereignty and security, while others insist it must remain a humanitarian gateway. Cairo is caught between external pressure from major powers pushing for stricter security arrangements and internal calls to preserve national dignity. With each new incident on the border, room for manoeuvre narrows and the country edges closer to open confrontation. If war breaks out, the first economic decision would be to reshape the budget. Under normal conditions, governments allocate roughly 5–10% of expenditure to defence, 15–20% to education, and 10–15% to health, with the remainder devoted to infrastructure, social support programmes, and debt servicing. In wartime, this balance changes dramatically. Defence spending could rise to nearly half of total expenditure, while education and health could be reduced to minimal levels to maintain essential services. Major national projects would be halted. Social support might be expanded slightly to offset rising costs, but not enough to meet all needs. The priority would be to secure the basic food supply. Pressure on the currency would emerge immediately, with demand for dollars rising to cover imports of fuel, wheat, and medicines. Meanwhile, foreign exchange earnings from tourism and the Suez Canal could fall if shipping is disrupted and insurance costs increase. The pound would weaken, and the gap between official and parallel market exchange rates would widen. Families would feel the impact quickly as salaries lost value, savings eroded, and prices rose across everyday life. Energy would become a matter of hard choices. The army, hospitals, water plants, and communications would receive priority access to fuel and electricity. The remainder would be rationed to residential areas according to published schedules. Petrol queues would lengthen, while power cuts would become part of daily life. Factories would reduce output or close production lines altogether due to shortages of gas or delays in receiving imported raw materials. The war would also hit the Red Sea and the Suez Canal. Higher shipping risks and insurance premiums, or rerouting via the Cape of Good Hope, would reduce canal revenues and deepen the foreign currency crisis. Ports would experience congestion, and customs would impose stricter limits on non-essential goods. Priority imports would be limited to food, fuel, medicines, and spare parts for key facilities. At the household level, the effects of a war economy would be felt most directly at the dinner table. Ration cards would become stricter with technology used to track entitlements. But rations themselves would shrink and waiting times would grow. A parallel market would flourish, selling basics at multiples of official prices. Community kitchens would spread in cities, while rural families would turn to small-scale farming to cover some needs. The labour market would face significant disruption. With many men called to the front, women and young people would take on more roles in factories and fields. Nevertheless, unemployment would rise as the economy slows and small businesses shutter. Precarious and temporary work would increase, and households would depend on multiple sources of income. The younger generation would lose opportunities for proper education and training, creating a long-term gap in skills needed for the future economy. The health sector would face growing strain. Hospitals would allocate entire wards to the wounded and postpone non-urgent operations. Supplies of imported medicines would decline, forcing reliance on uneven local substitutes. In education, digital learning could serve as a partial solution, reducing the need to use schools as shelters or storage facilities, keeping students at home and safe, and alleviating pressure on daily transport. However, power cuts, weak internet, and the high cost of devices would limit its reach. The financial system would enter an emergency phase. Banks could be required to purchase government debt linked to the war effort, with stricter controls imposed on money transfers. Small and medium enterprises would struggle to access finance or raw materials. Private sector activity would decline, and some firms could face bankruptcy. Socially, the picture would be mixed. Acts of solidarity would appear — neighbourhood kitchens, donation drives, and mutual support — but quiet resentment would also grow as inequality widened between those with connections or money and those left in the queues. Words like "priority," "rationing," and "mobilisation" would become part of everyday speech. Saving and re-use would become everyday habits, while consumption would be reduced to necessities. Over time, the burden would grow heavier. Public debt would expand through emergency borrowing and new debt instruments. Lenders' conditions would shape the economic and political landscape for years. Reconstruction needs would arise even before fighting stopped: roads, utilities, schools, and hospitals would need repair. Restoring investor confidence would be a slow process, requiring stability, transparency, and credibility in public finances. Amid all this, a silent battle for finance would play out. Investment certificates for Egyptians at home and abroad could be issued to attract hard-currency savings. National savings products would be promoted as patriotic contributions. International institutions would be approached for emergency loans tied to tough reforms. Regional allies might step in with deposits or emergency food and fuel aid, though often with political strings attached. Foreign investment would shrink, except in vital sectors such as food, pharmaceuticals, and logistics, where investors would seek quick returns under strong guarantees. Even within this bleak scenario, there would be space to soften the blow. Better-targeted social support could reduce waste and reach those most in need. The middle class, which anchors social stability, would need measures to protect its ability to cope, even in limited form. The private sector could contribute through small, quick-impact projects that boost food security and essential health and energy services, helping to plug urgent gaps and prevent total collapse. The conclusion is that a potential Egyptian–Israeli confrontation would not just be a military clash on the border. It would be a comprehensive test for the economy and society. A war economy is measured not only by what the state spends on weapons and fuel, but also by what citizens lose in food security, services, and savings. Success would not be judged only on the battlefield, but also in the state's ability to manage money and resources with fairness and transparency, and in society's capacity to endure without breaking apart. The real challenge would be to prevent a border war from spilling into Egyptian homes.
