In his budget speech tonight Treasurer Josh Frydenberg announced that under a Coalition government we will see a decade of surpluses that will “continue to build toward 1% of GDP within a decade”.
He went on: “we climb the mountain and reach our goal of eliminating Commonwealth net debt by 2030 or sooner.”
But a funny thing happened on the way to paying off the debt.
As the budget papers point out, net debt as a proportion of Gross Domestic Product (GDP) is predicted in the budget to peak at 19.2%.
You might ask, then, how do we get from 19% to 0% debt/GDP in ten years if we’re generating a surplus of 1% per annum?
A small part of the answer is that with the economy forecast to grow at 3% a year, GDP is a fair bit bigger 10 years from now. And a 1% surplus of a bigger GDP number is a bigger dollar surplus. This has a larger impact on net debt.
That’s part of the story, but not much of it. If we make the most generous assumptions in favour of the treasurer and his surpluses (even if you believe them), they’re only paying down about two-thirds of the debt.
The case of the vanishing debt
So how does the treasurer get the rest of the debt to disappear?
The budget documents, voluminous though they are, don’t have the answers. But there are only a handful of logical possibilities.
First, let’s unpack what net debt is. Net debt is basically the gross debt issued by the government (for example, by issuing government bonds) minus the assets the government holds.
The surpluses Frydenberg announced help reduce gross debt. So, the debt-disappearing act has to involve some assets getting bigger.
The leading possibility concerns the Future Fund (Australia’s sovereign wealth fund). Simply put, if the Future Fund earns, say, 8% per annum, then those assets are going to be growing a lot faster than GDP. This reduces debt to GDP quite apart from anything else.
Another way to think about it is that the Australian government is running a big hedge fund with a lucrative profit opportunity. If it can earn 8% per annum while the government is funding this with debt that costs less than 2% (as is the case currently, given yields on 10-year Australian government bonds), then that’s a great deal.
Don’t get me wrong, I’m fine with that. But to the extent that debt reduction is coming from the Future Fund, it has nothing to do with fiscal rectitude.
An even more obscure possibility is that asset values are being hypothetically affected by assumptions about the interest rate the government will pay on its debt. Currently, it is about 1.72%, but the budget documents suggest a return to long-run historical levels of around 5
First, that seems very unlikely to happen in a post-GFC world. Second, it’s unclear that it’s of a sufficient magnitude to explain away the vanishing debt. And third, it’s an accounting artefact, not a matter of economic substance. Again, whatever it is, it’s not fiscal rectitude.
The only other possibilities are even more remote. A massive increase in the value of the essentially defective National Broadband Network? A colossal spike in student loan repayments while future students pay their own way? Nope and nope.
Should we be aiming for zero net debt?
Another question altogether is whether it is wise to reduce government debt to zero in the coming decade.
Fiscal discipline is good and avoiding structural budget deficits is important.
But as I’ve written before, we live in an age of “secular stagnation”, where there is a glut of global savings chasing too few productive investment opportunities and where economic growth is permanently lower than in previous decades.
As former US Treasury Secretary Larry Summers has pointed out, in a secular-stagnation world it will likely take a lot more government spending to sustain full employment and reasonable wages growth without financial bubbles.
Or, to put it another way, if the Australian government can borrow at less than 2%, there are a lot of attractive public investments in physical and social infrastructure that should be made. The idea of “Social Return Accounting”, which the UNSW Grand Challenge on Inequality launched last year and I wrote about here, offers a framework for thinking about this.
The live hand of Peter Costello
The treasurer presumably didn’t mean to be ironic when he said of the down-to-zero debt paydown:
Only one side of politics can do this… John Howard and Peter Costello paid off Labor’s debt.
But it is ironic that Peter Costello’s Future Fund is doing a good deal of the heavy lifting in paying off Josh Frydenberg’s debt.
In distinguishing between “good” and “bad” debt, federal Treasurer Scott Morrison equates good debt with infrastructure investment. However, not all infrastructure investment announced in the budget is necessarily “good”.
We are now in the Anthropocene – a new geological age defined by the global scale of humanity’s impact on the Earth – which places new requirements on our infrastructures. We need to move beyond the AAA ratings mindset, and instead aim for net-positive outcomes in social, economic and ecological terms from the outset.
Infrastructure (such as transport, water, energy, communications) underpins our ability to live in cities and our quality of life. And most infrastructure is very, very long-lived. Therefore, our infrastructure investment decisions matter enormously, especially for tomorrow.
More than half of the world’s people live in cities, and have just one planet’s worth of material resources to share around. This means we must define a new set of expectations and performance criteria for infrastructure.
Rather than settling for doing less bad, such as less environmental destruction or social disruption, we must aim from the outset to do more good. This net-positive approach requires us to restore, regenerate and increase social, cultural, natural and economic capital.
What sort of change is needed?
Examples of this kind of thinking are, as yet, rare or small.
Bishan Park on the Kallang River in Singapore gets close. Formerly a channelled stormwater drain, this collaboration between the national parks and public utility agencies has recreated significant habitat while providing flood protection and an exceptional recreational space. All this has been done in an extremely dense city.
Looking further into the future, in transport, a net-positive motorway might prioritise active transport and make public transport central by design. It might send price signals based on the number of passengers, vehicle type (such as autonomous) and vehicle ownership (shared, for instance).
Net-positive thinking aligns with a groundbreaking speech by Geoff Summerhayes, executive board member of Australia’s Prudential Regulation Authority (APRA), earlier this year. He identified climate change risk as a core fiduciary concern, and therefore central to directors’ duties.
This shift raises significant questions for the financial and operational validity of major infrastructure projects.
A core part of the switch to net-positive infrastructure is the realisation that resilience and robustness are different things. Historically, robustness has been central to infrastructure planning. However, robustness relies on assuming that the future is more or less predictable. In the Anthropocene, that assumption no longer holds.
This could include, for example, phasing infrastructure investment and development over time. Current analysis is biased toward building big projects because we assume our projected demand is correct. Therefore, we expect to reduce the overall cost by building the big project now.
However, in a more uncertain future, investing incrementally reduces risk and builds resilience, while spreading the cost and impact over time. This approach allows us to monitor and amend our planning as appropriate. It has been shown to save water utilities in Melbourne as much as A$2 billion.
Maybe the fact that we can be criticised for not having enough capacity ready in time has influenced our decision-making. We should really be challenged over investing too much, too soon, thereby eliminating the opportunity to adapt our thinking.
Or maybe we are so concerned about the need to build certainty into our planning that we are missing the opportunity to build learning through feedback loops into our strategies.
Surely there is a balance to be struck between providing enough certainty for investment without pretending we know with absolute certainty what we need to invest for the next 30 years.
major unregulated growth in interdependencies between infrastructures;
lack of systems thinking in planning and design;
radical shifts in the structure of cities and how we live and work;
increasingly fragmented provision;
no central governance of infrastructure as a system; and
much existing infrastructure approaching or past its end of life.
Regulatory reform is part of what’s required to enable public and private investment in better outcomes. Here too we need to learn our way forward.
Sydney’s emerging, world-leading market in recycled water is an example of a successful niche development that delivers more liveable and productive pockets in our cities through innovative integrated infrastructure.
Ultimately, doing infrastructure differently will also require investment in research on infrastructure. The UK is investing £280 million in this through the Collaboratium for Research on Infrastructure and Cities. But in Australia’s recent draft roadmap for major research investment, infrastructure is largely absent. We overlook infrastructure research at our peril.
The government is committing to more than A$70 billion in new infrastructure spending to 2020-21. This includes up to A$5.3 billion for the Western Sydney Airport, and A$8.4 billion towards the Melbourne to Brisbane inland rail link. Another A$500 million will be put towards passenger rail in regional Victoria, A$844 million for upgrades to the Bruce Highway in Queensland, and A$1.6 billion for road and rail in Western Australia.
A A$1.5 billion Skilling Australians Fund will be created to fund apprenticeships and traineeships. The fund will be supported by a levy on businesses with turnover greater than A$10 million that employ foreign workers.
The $20,000 instant asset write-off for small businesses has been extended to June 30, 2018.
The government has also committed to provide $101.5 million over five years to create an Advanced Manufacturing Fund, to promoted high-technology manufacturing.
To alleviate increasing energy costs, a one-off Energy Assistance payment will be will be given to pensioners and disability support recipients over two years. Single recipients will receive A$75 and couples A$125, at a cost of A$286.9 million. The government will also remove the capital gains tax exemption for foreign and temporary tax residents, and allow prospective first home buyers to make voluntary contributions to superannuation that can be withdrawn for a first home deposit.
The budget won’t fix the cost of living
Phil Lewis, Professor of Economics, University of Canberra
The budget contained several measures supposedly intended to “ease the cost of living”. Notably a one-off “energy assistance” payment to pensioners and those on disability support, and measures to address housing supply and affordability. But these will do little, if anything, to ease the cost of living of most Australians. On other aspects of the cost of living, such as health and education, the budget measures will make the cost of living worse for some groups.
A rise in the cost of living is usually represented by an increase in the Consumer Price Index (CPI) over a quarter, year or decade depending on the issue of interest. The CPI is designed to measure changes in the cost of a “basket of goods and services” that a “typical” Australian household might buy.
Almost half of the current basket is made up of housing, transport and food costs. So movements in these prices have a relatively big impact on the cost of living. But the ability of the federal government to control house prices or the other major component of housing costs – electricity and gas – is very limited. And petrol and food prices are determined by national and international market forces.
The above figure shows how the prices of components of the CPI changed over the year to March. The greatest price increases have been for alcohol and tobacco, which are largely due to government “sin taxes”. One of the easiest ways to ease cost-of-living pressure on the poorest households would be to reverse these tax rises, but this is not on the agenda.
The government also has great potential to influence costs in areas for which it is a major funder such as in health and education. These are also areas where prices have been rising faster than the CPI.
In education, the additional A$18.6 billion over the next decade for schools funding, which is needs-based, should reduce cost of living for more disadvantaged households, although some middle-income households might be worse off.
But the cost of living will rise for university students, as fees rise by 1.82% per year over the next four years. Those with HELP debt on lower incomes will also come under pressure, as the threshold to pay off their loans is reduced to A$42,000 per year.
In health, the re-indexation of the Medicare rebates from this July for regular GP visits, the further reduction in the price of prescription drugs, and scrapping of the 2014 proposal to raise prescription charges by A$5 will all help with the cost of living for those on lower incomes.
Although really a tax increase, the increase in the Medicare levy, by 0.5% from 2019, will nevertheless reduce the standard of living of households on middle to high income.
Big dollars for infrastructure, little transparency
Phillip O’Neill, Director, Centre for Western Sydney, Western Sydney University
Decision-making about infrastructure in Australia reached a new level of incompetence on budget night. Much public money has been committed, and the list of projects is long. Yet the planning and evaluation process for identifying what assets should be built and how their roll-out should be staged remains dreadfully inadequate.
Infrastructure is expensive and imposing. Governments need to select projects well, because when we select a project to build we also decide not to build a competing project. Construction then needs to proceed efficiently and with minimal impact.
Good infrastructure delivers benefits over many decades. Some infrastructure assets – like those for the delivery of water, energy and telecommunications – deliver direct benefits to consumers so they can be funded by user charging, which in turn means some degree of commercialisation of the asset is possible.
Infrastructure also makes our cities more productive and better, safer places to live. These positive externalities are not easily commercialised; but when a project is a good one because there is widespread benefit we are happy for governments to borrow and our taxes to be used to pay down the debt. The presence of good public infrastructure, like good public health and education, marks us as a civilised people.
Getting the right balance of commercial benefits and positive externalities isn’t easy. Infrastructure roll-out needs informed choice and, therefore, engaged public debate. But infrastructure decision-making in Australia lacks both information and debate. The secrecy in Australia surrounding infrastructure – be it for new construction or the sale of brownfields assets – is appalling. Business cases are rarely made public. The claimed benefit-cost ratios are not able to be scrutinised. Project financing and construction schedules are never revealed. Construction contracts are deemed “commercial-in-confidence”, as are the complex sale contracts of existing public assets.
Sadly, the budget gives little hope that any of this will change.
Marion Terrill, Transport Program Director, Grattan Institute
There’s more than a touch of back to the future about this budget: we’ve got so-called nation-building projects and the usual cries of “What about me?” from various state premiers. But in the current world of “good debt” and “bad debt”, the infrastructure choices of Budget 2017 look more defensible than usual.
For a start, there’s plenty to like about the $5.3 billion commitment to Western Sydney airport: the project has bipartisan support; it’s been assessed as having benefits of $1.90 for every dollar it costs; Infrastructure Australia thinks it’s a high priority; and, after 30 years on the drawing board, nobody could say it’s a thought bubble.
Inland Rail may squeak over the line. Despite an equity investment of $8.4 billion, the project has a marginal business case at best, with benefits of just $1.10 for every dollar spent and all the risks on the downside. Indeed, plenty of experts are dubious about the merits of this project.
Don’t listen too much to the political theatre about which states have been dudded in the carve-up of infrastructure dollars. In the end, more than half of what the Commonwealth grants for transport infrastructure is effectively neutralised when the winning states end up with a lower GST share. WA has been singled out for a particularly large $1.6 billion package in this budget, but that will only matter if the Grants Commission is asked to quarantine it from affecting WA’s GST share. New South Wales and Queensland – as usual – get a bigger share of the infrastructure pie than the commission says they need, but their lower GST share in subsequent years unravels more than half of their ostensible advantage.
So, on infrastructure spending, Scott “Good Debt” Morrison’s 2017 budget probably rates a pass.
The lost innovation agenda for industry
Beth Webster, Director, Centre for Transformative Innovation, Swinburne University of Technology
Wealth has to be created before it can be distributed. Unfortunately, this message has not been heeded but the current government.
The budget is high on rhetoric about deficits and the importance of runways, roads and rail but still low on supporting the innovation ecosystem that is needed to transform Australian industry. The government should be playing a role to stimulate the transition to new technologies. It should provide industry with the confidence to launch new products and technologies.
Overall, there has been a reduction in spending on programs dubbed in the budget “Growing Business Investment and Improving Business Capability” by A$93 million. The government has missed the most important form of investment – the networks of people and institutions that drive innovation.
There is funding for Industry Growth Centres (from A$37 million to A$61 million) and the Entrepreneurs’ Programme (A$79 million to A$106 million) but these measures have been matched by cuts. Two measures stand out in these cuts. First is assistance to pivot businesses out of car and clothing to other manufacturing sectors (down by A$84 million) into other sectors. And once again, the budget for Australia’s premier research and development organisation, CSIRO, is down by 4%.
On the plus side, spending on business research, development and commercialisation has increased by 4%. Not large, but it is a win. However all this has come at the expense of programs to inspire Australians to study science and engineering.
Overall, it’s fair to say industry programs have been savaged with programs to support business investment and improving business capability falling by 15%.
The articles linked to above are by Compass Direct News and relate to persecution of Christians around the world. Please keep in mind that the definition of ‘Christian’ used by Compass Direct News is inclusive of some that would not be included in a definition of Christian that I would use or would be used by other Reformed Christians. The articles do however present an indication of persecution being faced by Christians around the world.
Land owner falsely charges young man with illicit sex, calls villagers to beat, burn him.
SARGODHA, Pakistan, October 29 (CDN) — A Muslim land owner in Pakistan this month subjected a 25-year-old Christian to burns and a series of humiliations, including falsely charging him with having sex with his own niece, because the Christian refused to work for him without pay.
Fayaz Masih is in jail with burns on his body after No. 115 Chitraan Wala village head Zafar Iqbal Ghuman and other villagers punished Masih for refusing to work as a slave in his fields, said the Rev. Yaqub Masih, a Pentecostal evangelist. The village is located in Nankana Sahib district, Punjab Province.
Sources said neither Fayaz Masih nor his family had taken any loans from Ghuman, and that they had no obligations to work off any debt for Ghuman as bonded laborers.
Yaqub Masih said the young man’s refusal to work in Ghuman’s fields infuriated the Muslim, who was accustomed to forcing Christians into slavery. He said Ghuman considered Masih’s refusal an act of disobedience by a “choohra,” the pejorative word for Christians in Pakistan.
On Oct. 3 Ghuman and 11 of his men abducted Masih from his home at gun-point and brought him to Ghuman’s farmhouse, according to Yaqub Masih and Yousaf Gill, both of nearby village No. 118 Chour Muslim. Gill is a former councilor of Union Council No. 30, and Yaqub Masih is an ordained pastor waiting for his denomination to assign him a church.
Fayaz Masih’s family members told Yaqub Masih that Ghuman was carrying a pistol, and that the 11 other men were brandishing rifles or carrying clubs, axes and bamboo sticks. They began beating Masih as they carried him away, calling him a choohra, Yaqub Masih said.
Gill said that Ghuman’s farmhands tied Fayaz Masih’s hands and legs and asked him once more if he would work in Ghuman’s fields. When he again refused, Gill said, Ghuman summoned four barbers; three ran away, but he forced one, Muhammad Pervaiz, to shave Masih’s head, eyebrows, half of his mustache and half of his beard.
After they had rubbed charcoal on Masih’s face, Ghuman then announced that Masih had had relations with Masih’s 18-year-old niece, Sumeera, and called for everyone in the village to punish him. He and his men placed Masih on a frail, one-eyed donkey, Yaqub Masih and Gill said, and a mob of Muslim men and children surrounded him – beating tins, dancing and singing door-to-door while shouting anti-Christian slogans, yelling obscenities at him and other Christians, and encouraging villagers to beat him with their shoes and fill his mouth with human waste, Yaqub Masih said.
Some threw kerosene on Masih and alternately set him on fire and extinguished the flames, Gill said. He added that Muslims made a garland of old shoes from a pile of garbage and put it around Masih’s neck.
Yaqub Masih said the abuse became unbearable for the young man, and he collapsed and fell off the donkey.
Police Ignore Court
Masih’s sister, Seema Bibi, told Compass that the accusation that Masih had had sex with her daughter Sumeera was utterly false. She said Ghuman made the allegation only to vent his fury at Masih for refusing to work for him.
Seema Bibi said that Ghuman told her daughter at gun-point to testify against Masih in court on Oct. 4. Sumeera surprised the Muslim land owner, however, saying under oath that Masih was innocent and that Ghuman had tried to force her to testify against her uncle. A judge ruled that Sumeera had not had illicit relations with Masih, and that therefore she was free to go home.
Her mother told Compass, however, that since then Ghuman has been issuing daily death threats to her family.
After Masih collapsed from the abuse, Yaqub Masih and Gill called local police. Police did not arrive until three hours later, at 3:30 p.m., they said, led by Deputy Superintendent of Police Shoiab Ahmed Kamboh and Inspector Muhammad Yaqub.
“They rebuked the Muslim villagers that they could have killed this Christian youth, and they told them to give him a bath at once and change his clothes, in order to reduce the evidence against them,” Gill said.
Family members of Masih said Kamboh and Inspector Yaqub arrested some of the leading figures within the mob, but soon thereafter they received a call to release every Muslim.
“Instead of taking the Muslim men into custody, they detained my brother, and he was taken to the police station,” Seema Bibi said.
On Oct. 4 police sent Masih to District Headquarters Hospital Nankana Sahib for examination, where Dr. Naseer Ahmed directed Dr. Muhammad Shakeel to mention in the medical report how severely Ghuman and his farmhands had beaten him, Gill said. He said the medical report also stated that Masih had sustained burns and that his head, mustache, eyebrows and beard were shaved.
In spite of the court ruling that Masih had not had sex with his niece, police were coerced into registering a false charge of adultery under Article 376 of the Islamic statutes of the Pakistan Penal Code, First Information Report No. 361/10, at the Sangla Hill police station.
At press time Masih remained in Shiekhupura District Jail, said Gill. Gill also has received death threats from Ghuman, he said.
The 11 men who along with Ghuman abducted Masih and brought him to Ghuman’s farmhouse, according to Masih’s family, were Mehdi Hussain Shah and Maqsood Shah, armed with rifles; Muhammad Amin, Rana Saeed, Muhammad Osama and four others unidentified, all of them brandishing clubs; Muhammad Waqas, with an axe; and Ali Raza, bearing a bamboo stick and a club.
Employer charges non-Muslims at least 400 percent interest.
LAHORE, Pakistan, May 14 (CDN) — A low-wage Pakistani Christian said his Muslim employer last week forced him to sell his kidney in an effort to pay off a loan his boss made at exorbitant interest rates charged only to non-Muslims.
John Gill, a molding machine operator at Shah Plastic Manufacturers in the Youhanabad area of Lahore, said he took a loan of 150,000 rupees (US$1,766) – at 400 percent interest – from employer Ghulam Mustafa in 2007 in order to send his 17-year-old daughter to college.
“I kept paying the installments every month from my salary, but after three years I got tired of paying the huge interest on the loan,” Gill told Compass.
The employer denied that he had received payment installments from his Christian worker, although Gill said he had receipts for monthly payments.
Mustafa confirmed that he took over Gill’s home last week after giving the Christian two weeks to pay off the outstanding interest on the loan. Then, on May 6, Mustafa came to Gill’s home with “about five armed men” and transported him to Ganga Ram hospital, where they forced him to sell his kidney against his will, the Christian said.
“They sold my kidney and said that they will come next month for the rest of the money,” Gill said.
The value of the kidney was estimated at around 200,000 rupees (US$2,380), leaving Gill with outstanding debt of about 250,000 rupees (US$2,976), he said. Recovering at home, Gill said he did not know he would repay the rest of the debt.
Mustafa told Compass that Gill owed him 400 percent interest on the loan.
“I only offer 50 percent interest to Muslim employees,” he said, adding that he refused to take less than 400 percent interest from any non-Muslim.
There was no immediate confirmation from Ganga Ram hospital. Rights groups, however, have complained that hundreds of rich foreigners come to Pakistan every year to buy kidneys from live, impoverished donors.
Kidney failure is increasingly common in rich countries, often because of obesity or hypertension, but a growing shortage of transplant organs has fueled a black market that exploits needy donors such as Gill and risks undermining voluntary donation schemes, according to Pakistan’s Kidney Foundation.
Pakistani legislation aimed at curbing trafficking in human kidneys has not ended a business that has turned the country into the world’s “kidney bazaar,” critics say.
Gill said he is trying to contact local Christian advocacy groups to help him recover and overcome his financial and spiritual difficulties. Christians are a minority in heavily Islamic Pakistan, where rights groups have lamented discrimination against Christian workers.
A growing number of Christian churches are joining forces with a grass-roots movement known as the Advent Conspiracy, which is seeking to "do away with the frenzied activity and extravagant gift-giving of a commercial Christmas," reports Thaddeus M. Baklinski, LifeSiteNews.com.
The group was founded by Portland pastor Rick McKinley, who with a group of fellow pastors realized that their own, and their congregations’, focus during the time of Advent revolved more around secular consumerism than preparing to celebrate the birth of Christ.
"What was once a time to celebrate the birth of a savior has somehow turned into a season of stress, traffic jams, and shopping lists," McKinley observed.
"And when it’s all over, many of us are left with presents to return, looming debt that will take months to pay off, and this empty feeling of missed purpose. Is this what we really want out of Christmas?"
"None of us like Christmas," McKinley said in a Time.com report, adding, "That’s sort of bad if you’re a pastor. It’s the shopping, the going into debt, the worrying that if I don’t spend enough money, someone will think I don’t love them."
McKinley, whose church donates money to dig wells in developing countries through Living Water International and other organizations, saw that a fraction of the money Americans spend at retailers in the month of December could supply the entire world with clean water.
As a result he and his friends embarked on a plan to urge their congregations to spend less on presents for friends and family, and to consider donating the money they saved to support practical and tangible charitable works.
"If more Christians changed how they thought about giving at Christmas," he argued, "the holiday could be transformative in a religious and practical sense."
McKinley observed that at first church members were uncertain. "Some people were terrified," McKinley recalled. "They said, ‘My gosh, you’re ruining Christmas. What do we tell our kids?’"
Soon though, the idea caught on and McKinley found that not only were people "relieved to be given permission to slow down and buy less" but were "expressing their love through something more meaningful than a gift card. Once church members adjusted to this new conception of Christmas, they found that they loved it."
According to the Time.com report the Advent Conspiracy movement has exploded, counting hundreds of churches on four continents and in at least 17 countries as participants.
The Advent Conspiracy video has been viewed more than a million times on YouTube and the movement boasts nearly 45,000 fans on Facebook.
To find out more about the Advent Conspiracy, click here.
Security forces fail to avert attacks on Christians in separate cases.
ISTANBUL, July 7 (Compass Direct News) – Separate cases of sectarian violence in two villages erupted in Egypt last week, shaking the country’s Coptic Christian community as Muslims attacked their homes and security forces imposed curfews in an effort to maintain peace.
Last Wednesday (July 1) in the village of Kafr El Barbari in Mit Ghamr, Dakahlia, north of Cairo, Muslim villagers mourning the death of 18-year-old Mohamed Ramadan Ezzat, an Al Azhar University student stabbed to death by a Coptic grocer, attacked Christian homes with stones, breaking their windows.
During post-funeral violence, 25 people were injured as hundreds of angry Muslims attacked Coptic homes. Some sources claimed that those who attacked the Christian houses were Muslims from surrounding villages. Reports varied on extent of damage to houses.
Many of the 1,000 Christian Copts who live in the village of 4,000 inhabitants fled or remained indoors out of fear that tensions may escalate. A non-profit organization that visited Kafr El Barbari on Sunday reported that it was unable to make contact with Christians.
On June 29, Ezzat had gone to the family grocery store of 50-year-old Emil Gerges to buy soft drinks. A dispute about an alleged debt Ezzat had with the store ended when Gerges’ son John, 20, stabbed the young Muslim. Ezzat died in the hospital that evening, after which his family members attacked and burned the Gerges’ store as well as two of the family apartments.
Gerges, his two sons and wife were arrested on June 29, and while his wife was released for health reasons, the men of the family remain in prison under charges of manslaughter. Security forces ordered a curfew in the village and placed a cordon around it to prohibit movement into and out of it.
Although the conflict in Kafr El Barbari was seen as a family dispute, sources say it quickly escalated into sectarian violence, heightening tensions throughout the country.
“The event could have passed as an individual fight, only there is so much tension now that if any individual fight happens between a Muslim and Christian, the whole village erupts and fights,” said Samia Sidhom, news editor of Egyptian Coptic weekly Watani.
So far there has been no official reconciliation meeting between the village’s Christians and Muslims, although leaders have met. Ezzat’s father, in a statement this week to online news agency Youm 7, said that his family has conflict only with the Gerges family and asked Christians who had fled to return to their homes. He did, however, imply that if the courts did not vindicate his son’s death, he would.
Sidhom of Watani said that overall there is an increase in sectarian tensions in the country because Islamic elements see a benefit to dissension rising.
“It destabilizes the country, and it puts security authorities at a weak point,” she said.
Other Coptic experts, however, believe that security forces have a hand in most cases of sectarian violence across the nation.
“The police are more than capable of controlling any situation if they want to,” said Ibrahim Habib, chairman of U.K.-based United Copts, of the apparent lack of control during Ezzat’s funeral. “This is deliberate I think. Some authority in the police feels that this is a time to teach Christians a lesson, to humiliate them according to sharia [Islamic law], to treat them as dhimmi, to treat them as second class citizens. If the government is serious, it is more than capable of controlling things.”
Rumors Lead to More Violence
On the heels of violence in Ezbet Boshra-East last month that left Christian villagers imprisoned and hiding in their houses on suspicion of holding a prayer meeting without permission, just five kilometers away in Ezbet Guirgis on Friday (July 3) Christians faced a similar fate.
After rumors spread among Ezbet Guirgis’s 400 Muslims that the majority Christians were planning to use a four-story building as a church, early in the morning the Muslims set fire to a warehouse adjacent to the building.
The village priest, the Rev. Saman Shehata, had applied for permission to use the building for worship last year, but authorities had rejected it.
The village’s 1,400 Coptic Christians have not used the building due to lack of official permission even though they have owned it for three years. Instead, the Christians have been using an old 35-square-meter building that has association status, allowing them to pray in it.
Shehata told Compass he believed that local police authorities who resented the application for permission to use the newer building as a church, which he filed eight months ago, spread the rumor that Copts would worship there in spite the denial of his request.
“These rumors are most likely spread by the lower ranking people from the police themselves,” Shehata said. “They incite the Muslims to show that they don’t want the building.”
The priest, who has been working in Ezbet Guirgis for 12 years, said his application for church use was rejected due to its proximity to the village’s only mosque.
The fire damaged two buildings, and Muslims also tried to burn cars belonging to the church and priest. Fire brigades arrived at the scene 90 minutes later. Shehata said that after morning prayers, when he went to file a complaint about the fires, he received a phone call informing him that Muslims were attacking Christians.
Few Christians were injured. Authorities arrested 11 Christian Copts and five Muslims in connection with the fires and ensuing violence. Security forces also placed a temporary curfew on the village of Ezbet Guirgis and are monitoring the village.
On his way to visit the Christian prisoners and to give them food today, Shehata said that security forces had detained and were trying to blame Safuat Atalla, a 28-year-old Copt, for the fires, which also destroyed some of the villagers’ stored crop harvest. Atalla used to work as the Shehata’s driver and had resigned on friendly terms after he found a better job to support his new wife and ailing parents.
Shehata, however, fears that the police may be torturing Atalla to extract a false confession that he set the fires out of anger toward the priest. Shehata said it was impossible to know how the prisoners are being treated as police have heavily supervised his visits.
“The greatest difficulty is that the prayer space is very limited, and it can only accommodate 1 percent of the Christian villagers,” said Shehata of the community’s older, smaller building. “People have to stand outside the building whenever they come for mass.”
The priest said the excuse authorities give for not allowing them to use or build a church is to maintain the village’s harmony.
“Christians are forced to pray in the street, and other villagers pass through them with their cattle, and this also leads to friction,” said Shehata. “So isn’t it better to pray within four walls than in the streets, humiliated?”
Shehata said this was the first time the two communities clashed in the village.
The case of Ezbet Guirgis is similar to that of Ezbet Boshra-East, said an Egyptian human rights expert, as in both villages violence erupted on rumors about the use of church-owned buildings.
Reconciliation meetings are expected to take place in Ezbet Guirgis soon, but the expert said it was likely that in order to maintain peace, Shehata may have to leave the village as did the Rev. Isaak Castor from Ezbet Boshra-East after last month’s clashes.
“It’s expected that Father Saman must leave, because they accepted that solution in Boshra so it will be hard to accept anything else,” said the expert.
Rumors have already started circulating that Muslims are demanding that Shehata leave.
“Father Isaac is already out of the village,” said the expert, who recently spoke with Castor. “He left before the reconciliation meeting that happened on Wednesday [July 1].”
Castor moved to Minya at the request of his superiors.
Commenting on the three cases of sectarian violence within two weeks, Habib of United Copts expressed worry about the negative role security forces have played in the events and the lack of equality for Coptic Christians seeking their rights based on the Constitution, which in theory grants them religious freedom.
“The national security force is a danger, and the police are not even-handed,” he said. “Even when it comes to court, they do not supply enough evidence, the Islamists have infiltrated the courts, and this is a bad recipe for Egypt. We are really worried about what will happen in the future to the Christians.”