Some of the country's most important money managers have just been given a dose of aminous news by one of the most sophisticated Mideast watchers around. The ill tidings (which could play havoc with the world's financial markets):
Big trouble could be brewing in Egypt, dwarfing -- if you can believe -- the turmoil in Iran. A concerted move to bring down Sadat by a combination of left wing and right wing elements in Egypt could come as early as February. That's where Israel and Egypt are expected to establish formal diplomatic relations. Whether Sadat can survive remains to be seen.
At its meeting in Caracas, Venezuela, on Dec. 16, the Organization of Petroleum Exporting Countries could push for a sharply higher official price ceiling on its oil of $30 a barrel. That's nearly 28 percent higher than the current ceiling of $23.50. If it happens, our car and home-heating bills will balloon even more.
Both of these unsettling possibilities -- which obviously have far-reaching international political and economic ramifications -- come at a time when the Iranian crisis is so overshadowing other developments in the Middle East the another potential explosion there is totally being overlooked. Significantly, the man hoisting the warning flags -- international affairs expert Bill Mazzocco -- thinks there's distinct possibility each could occur. And he's so informing the institutional clients of the Washington Forum, the Capital eyes and ears of brokerage biggie Drexel Burnham Lambert.
Mazzocco, who about 10 months ago warned of potential uprisings in Saudi Arabia -- the recent attack on Mecca tends to bear him out -- said the wave of Islamic militancy sweeping the Moslem world is beginning to gain some hold in Egypt. His Mideast sources advise him that an alliance is being formed in Egypt of Socialists and Marxists on one hand and the right wing Muslem Brotherhood on the other in pretty much the same way the left wing groups in Iran joined forces with Khomeini and the clergy to bring down the shah.
Here's the thrust of Sadat's problems, as spelled out by Mazzocco:
Economic. Egyptians face continued food shortages, high unemployment, growing poverty and a wide disparity of income among the classes. For example, 321 Egyptian families made more than $1.5 million each last year and about 2,000 families averaged $82,000, while more than 4.5 million families averaged less than $180.
Corruption. Reports of widespread graft in Sadat's inner circle, including his family, are considered at least partly true. Many top government officials are believed to be involved, through Sadat himself has not been named in the allegations.
Israel. Sadat's dealings with Israel were greeted initially with enthusiasm, but some army officers are complaining that relations will be accelerated before the entire Sinai is recovered in 1983. The step-up in relations early next year between the two former foes may fuel even more dissent.
Mazzocco said opposition to Sadat is being organized by Islamic militants who reportedly have made inroads in universities, the slums of Cairo and in poor towns in upper Egypt. They are preaching the Moslem doctrine against Western corruption, and they're complaining that the Sadat Westernization program is incompatible with the religious values and traditions of the country.
Can Sadat hold control?
"Noboby knows how successful he will be in either pacifying the masses or putting down attempts to overthrow him," responded Mazzocco. "But what's important to understand is that we could have another Mideast explosion and not too far off. . . .""
Addressing himself to the Iranian problem, Mazzocco said one worrisome consideration is the impact it may be having on the royal family in Saudi Arabia (which provides 17 percent of the free world's oil and about 10 percent of the United States' energy needs).
"If what's happening in Iran goes unanswered -- and so far the United States has not shown a willingness to tell the militants there to go to hell -- then the royal family has got to be seriously rethinking its relationship with the West," he said.
In fact, as Mazzocco sees it, we're likely to see very shortly bolder and more costly pricing policies on Saudi oil. Of the roughly 9.4 million barrels of oil a day produced by the Saudis, 7.5 million barrels are marketed through Aramco (a consortium of American oil companies) at $18 a barrel. According to Mazzocco's calculations, the Saudis should raise the price to the $25 to $27 range at next month's meeting; the rest of the OPEC members, as noted earlier, are seen boosting their oil to about the $30 level.
If Mazzocco is right, oil imports next year will top $100 billion. That's up from an estimated $65 billion this year, in 1978, the figure was $41 billion.