Fear in Egypt: A gloomy sunset on the Nile

The largest Arab country has become a source of fear: For itself, its neighbors, even more distant countries. Dizzied by rallies, a coup, and agitation for civil war, Egypt craves leaders of a kind it hasn't had since antiquity.

July 13, 2013 07:53
Protesters against Egyptian President Mohamed Morsi wave national flags

Protesters against Egyptian President Mohamed Morsi wave 370. (photo credit: REUTERS)

Shaken by the unfamiliar rhetoric, gunshots, and bloodstains of civil war, Egypt is searching its soul – in vain. Once a symbol of stability, prosperity and tolerance, the largest Arab country has now become a source of fear: Fear for Egypt, for its neighbors, even for more distant countries as well.

Egypt’s golden age of centrality, prosperity and enlightenment was brought not by the pharaohs who built the pyramids, but by their Greek successors who built Alexandria, linking Egypt to Europe and turning it into a tri-continental civilization’s heartbeat. With its fertile land feeding much of the known world while Greek, Roman and Jewish scholars exchanged ideas at Alexandria’s library, Egypt was an international breadbasket and a cultural inspiration, the lynchpin of history’s first experiment in globalization.

This week, as soldiers were cleaning their rifles after killing more than 50 mostly Islamist demonstrators in Cairo, Egypt loomed as the perfect opposite of its glorious past: an impoverished, intolerant and wrathful flashpoint in the global clash of civilizations.

The sequence and intensity of events over the past two weeks would be hard to digest anywhere, but even more so in a country where during the three decades of the Hosni Mubarak era, entire years could elapse without anything Egyptian making a headline abroad.

Now, within several days, Egypt saw millions pour into the streets, a military coup, a constitution’s abolition, an early-dawn massacre and open calls for civil war. Where, then, is all this coming from, and where is it headed? At the heart of Egypt’s crisis lies an economic patient in need of a triple bypass.

The country that once was the world’s largest wheat exporter is now its largest wheat importer – ousted president Mohamed Morsi’s supply minister Bassem Ouda said on Thursday that Egypt has less than two months’ supply of imported wheat left in its stocks.

Whereas the region’s other two historic powers, Iran and Turkey, have found alternatives to their agrarian eras, the former by selling oil and the latter by eradicating illiteracy and undergoing an industrial revolution, Egypt remains predominantly agrarian and more than 50-percent illiterate.

Worse, while the population has more than doubled during the Mubarak years, some 40% of its GDP is now gobbled by a hopelessly bloated public sector’s salaries and benefits, and an annual $15 billion – a full 3% of GDP – goes to food and energy subsidies.

This is no way to run anything, but no one so far has had the guts to bring any of this under the knife, because all feared that the price hikes and job losses that spending cuts would inevitable entail, would result in major rioting. That is why when the Islamists rose to power, there was hope that they would use their clout with the poor to force on the Egyptian economy the medicine it cannot escape. Yet Morsi had nothing like that in mind.

Whether he did not care to cure the economy or just did not understand the gravity of its condition, Morsi did nothing to cut Egypt’s spending, and thought he could keep the economy limping along by borrowing.

That is why Morsi kept discussing a loan from the International Monetary Fund, and at the same time failed to deliver its price, a $2.5b. cut in his $15b.

subsidies. And when he saw the IMF would not budge, he did not start to plan an economic rehabilitation, but instead went hat in hand to Germany and then Russia, only to learn they too will not lend to Egypt as long as its economy was run the way he ran it. So disconnected was Morsi’s economic conduct that while he refused to heed the IMF’s demands, he raised the previous government’s loan request from $3.2b. to $4.8b.

The result of all this macroeconomic dereliction was that rating agencies downgraded once attractive Egyptian government bonds to junk level, thus further weighing on Cairo’s ability to finance its overspending.

Meanwhile, street safety deteriorated to near lawlessness, thus chasing away not only capital but also the tourists who used to generate more than a tenth of Egypt’s GDP, as well as some 3 million jobs.

The combination of a wasteful budget and plunging revenues was catastrophic. Of the $36b. in foreign currency reserves that Mubarak left in its coffers, Egypt now has hardly $12b., and if nothing is done drastically and urgently, fuel and food shortages might soon result in a wave of factory closures and then in creeping famine.

Egypt, in short, needs not only an Alexander the Great, but also a biblical Joseph, an economic leader who will take it from destitution to prosperity.

Instead, it had until last week a fundamentalist cast for which prosperity was not even a goal, and may well have constituted a threat – as wealth breeds openness, liberalism, mobility and unruliness.

Whatever their motivations, the Islamists bankrupted Egypt and have brought it to the brink of civil war.

THE MASS RALLIES against the government that has led Egypt to economic ruin can be a major turning point not only for Egypt, but for the Middle East in general and in fact for Islamism’s sway in the entire world.

The pouring of millions into the streets in multiple cities may be the beginning of Islamism’s global decline. Never, since its political eruption 34 years ago in Iran, has Muslim fundamentalism been confronted by so many, so bluntly, so spontaneously, and in the place where Islamism has always been most powerful and felt most comfortable: the street.

If Egyptian Islamism’s current setback proves over time to be a deep and lasting defeat, then it will surely weaken that cause elsewhere.

Alas, at this stage declaring Egyptian Islamism’s defeat would be very premature.

Yes, the Egyptian public’s statement is indeed a grand failure for Egypt’s Islamists, reflecting their astonishing lack of preparation for their arrival to power. Morsi’s mishandling of the economy will remain etched in the minds of millions as proof that the Islamists can perhaps do charity, but they can’t run a country, let alone fix it.

However, the Muslim Brotherhood’s forced removal from power, coupled with Monday’s bloodshed in Cairo, has damaged the anti-Islamist cause.

The arrests in recent days of several hundred Islamist leaders will make it more difficult for the fundamentalists to organize, but it won’t prevent the restoration of their image as martyrs, a status they have been cultivating since Morsi’s removal. Having been deposed by military bayonets rather than a democratic process, the Islamists are now returning to their favored position: minimum responsibility, maximum authority. Had they lost power without the military’s mediation, they would have been far more disgraced.

Meanwhile, people on all sides of the arena, both within and beyond Egypt, see Gen. Abdel Fattah al-Sisi as its real leader, and the military’s conduct a restoration of the regime that reigned during the six decades between the overthrows of King Farouk and Mubarak.

Set against this backdrop, things now will rise or fall on the interim government’s delivery. Since the army’s so-called roadmap leads to parliamentary and presidential elections in February ’14, and to the adoption this year of a new constitution, there is plenty of time for things to deteriorate further, or somehow improve.

THE BEST-CASE scenario is that the interim government, lacking political ambitions, will prove gutsy and business-minded, and do the dirty work for the government that will emerge from the approaching election.

A serious spending cut coupled with a restoration of street safety and capital inflows may rebuild the public’s trust in its leaders’ merit and their country’s future.

For that to happen, however, Supreme Court head and interim President Adly Mansour, a lifelong jurist with no political experience, will have to demonstrate exceptional vision and resolve while digesting his arrival in a chair where he never expected to land.

Resolve is necessary not only for challenging the working class by retreating from subsidies, but also in clashing with parts of the middle class, which must lose millions of state-funded jobs. It is also needed in standing up to his appointer, the military, whose size is beyond Egypt’s needs and whose costs are beyond its means.

If the interim government charts such a path and begins treading it, and then passes the baton to a newly elected secular government that will pick up from where it will leave off, then the recent days’ dramas may be recalled as the beginning of a big salvation.

Sadly, chances of any of this transpiring are at best slim.

The interim government will face a beleaguered Brotherhood that will incite the rural masses against anything positive Cairo’s politicians try to do. Monday’s bloodshed in Cairo will be cast as a local version of Ireland’s Bloody Sunday, and Morsi’s removal will be equated with that of Salvador Allende (the first Marxist to become president of a Latin American country through open elections).

The terrorists who in the past attacked Egypt’s woefully vulnerable metropolises, tourist sites and resorts, will return, and with a vengeance.

The government, at the same time, will arrest, jail and also kill many people, while mosque preachers will attack the ideas in which Egypt’s other side believes.

The military showdown has in fact begun, though outside the Egyptian mainland.

In Sinai, Islamists have attacked Egyptian military outposts and a general’s convoy, and also killed a Christian priest in El-Arish. In response, the army this week reportedly killed several dozen Islamists and arrested hundreds, as a prelude to a large offensive that will involve thousands of troops and require Israeli approval in accordance with the peace agreement.

Fed by Hamas, whose ties to the Brotherhood are intimate, the commotion in Sinai is but a sideshow in the broader struggle for Egypt’s soul.

To win, the coalition of liberals, Christians, and generals that has effectively declared war on Egyptian Islamism will have to do more than fight guerrillas; it will have to produce food, create jobs and restore the tolerance for which Egyptian society was once famous.

It is a task worthy of great leaders, leaders on the scale of Alexander the Great. Unfortunately, in today’s explosive Nile Delta, Alexander and his legacy of multiculturalism and enlightenment are a dim recollection from a distant past. Indeed, as it seeks Morsi’s successor, Egypt would do well to focus the search on a new Joseph. If that economic redeemer is found, empowered, and allowed to act – Alexander will follow by himself.

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