The last weeks have brought welcome news to Egypt. The fight against Islamic terror appears to be going well, and social and economic reforms are beginning to get results though the president’s high-handed rule has drawn critics. In a televised speech on June 30 to mark the fifth anniversary of the 2013 events that led to the downfall of the regime of the Muslim Brothers, Egyptian President Abdel Fattah El-Sisi stated that it had been the “right revolution,” as opposed to the January-February 2011 demonstrations that brought down former President Hosni Mubarak in the course of the so-called Arab Spring.
Those demonstrations had endangered political stability and personal safety, and led to the rise of terrorism and the collapse of the economy, he said, but he was successfully working at correcting those ills with the help of the security forces and the support of the people. The president claims that he saved his country from the establishment of an Islamic dictatorship and restored stability, but it came at a steep price. Hundreds of supporters of the Muslim Brotherhood were killed during violent protests. Nevertheless, he never lost sight of his goal of developing the economy and did not hesitate to tackle painful but necessary reforms.
Islamic terror in the Sinai Peninsula is still the main stumbling block after four years of fierce fighting against militants of the “Sinai district of the Islamic state.” Last February, the president launched “Operation Sinai 2018” to eradicate the organization and sent reinforcements to the detachments of his second and third army already there. Hundreds of terrorists were killed. Communication and command posts were destroyed, caches of explosives were discovered, and hundreds of vehicles and motorcycles seized. This led to a drastic drop in terror activities but did not eradicate the Islamic state.
El-Sisi cannot afford to dial down his troops, whose continuous presence in the peninsula is a severe drain on the defense budget, while preventing a return to normal life in the area. A five-kilometer-wide buffer zone has been established along the border to isolate Sinai from the Gaza Strip, and hundreds of families had to leave. A night curfew is in force in parts of Northern Sinai, hampering the delivery of necessary supply of goods and medicine to civilians. Schools and institutes of higher education were shut down to prevent terror attacks.
Still, there has been a shift in the attitude of the mostly Bedouin population, traditionally suspicious of the central government, who are now joining the fight against jihadi militants following the deadly attack on the Rawda mosque last November that killed 311 men and women at prayers. Bedouin tribes are now cooperating with the army. Early this month, two high-ranking leaders of the Sinai district surrendered after a lengthy battle in the town of Rafah. This was apparently brokered by the Union of Sinai Tribes, which had called on the Jihadis to surrender, following their failures. Some of the strict security measures are now being lifted, and some normalcy is returning to the region.
The Muslim Brotherhood remains a low-level threat. Five years after their ouster from power and the violent repression of their demonstrations, Muslim Brothers still refuse to accept their defeat and demand the release of Mohamed Morsi as a precondition to start talks with the new regime. The events of 2011 had propelled them to power after 80 long years during which they had twice been outlawed, their leaders executed, and their militants arrested by the thousands. In 2012, their first political party “Freedom and Justice” won the parliamentary elections and Morsi, their candidate, was elected president. Barely a year later, the parliament was dissolved for technical reasons, and Morsi was ousted and arrested following massive popular protests with millions of Egyptians taking to the streets with the support of the army led by general El-Sisi, who served as minister of defense at the time.
Today, the Brotherhood is in dire straits. It has been outlawed as a terror organization and thousands of its members arrested; its political party and affiliate organizations were dissolved, and all activity forbidden. Its offices and assets were seized, and a recent presidential decree allows the confiscation of the private assets of members who have been arrested and sentenced as soon as their sentence becomes final. Most of their leaders are in jail, facing charges of treason and violence against citizens. Such is the case for former President Morsi; for the supreme leader of the movement, Mohamad mad Bad’ie; for his deputies, Khairat el Shater and Rashid el Bayomi; as well as other prominent personalities well-known in the Arab world. Morsi and Badi’e have already been sentenced to several life terms and even to death, but their appeals are still pending. Some low-ranking members try to generate a minimum of activities, but are under close watch and their temporary offices are often shut down while they are arrested.
The few leaders who have managed to flee are alternatively seeking refuge in Turkey and in Qatar, countries which support the Brotherhood. At this stage, for all intents and purposes, the organization has collapsed. Mahmoud Ezzat, one of the deputies of the Supreme Leader, avoided arrest and is reputedly hiding in Egypt, where he is attempting to assume the mantle of leader and keep the Brotherhood alive until better times—without notable success because the chaotic situation has led to a de facto split. The younger generations looking for revenge found their leader in the person of Mohammad Kamal, one of the veterans who had tried to reorganize the Brotherhood institutions, but failed and instead formed two violent groups: Liwa al Thawra (“Banner of the Revolution”) and Hism (“Decision”). These entities targeted security forces and public figures, and carried out terrorist operations in Cairo and elsewhere in the Egyptian mainland. Kamal was killed in October 2016 in a police raid in Cairo; however, the Hism group is still active.
The organization has trouble recruiting new members; it is no longer able to launch protests as it did in the years 2015-16. Attempts at reconciliation have failed because though President El-Sisi is ready to talk—probably because he no longer sees the Brotherhood as an immediate threat—he refuses all preconditions, such as releasing Morsi from jail. It would, however, be a mistake to dismiss a movement that has in the past shown remarkable recovery powers. It ultimate goal is a return to the sources of Islam, and the establishment of the caliphate still exerts a powerful appeal in Egypt and in other Arab countries where political parties affiliated with the Muslim Brotherhood are having significant success.
The president is well-aware that it will be on his economic and social achievements that he will be judged. There are already 100 million Egyptians, with 1 million being added every six months; at 3.3 percent, the birth rate remains high. A majority of the people earns less than $2 a day, which puts them below the poverty line as defined by the United Nations. A growth of 7 percent to 8 percent a year over several years would be needed to make up for the high birth rate and the damages caused to the economy by previous governments.
Al-Sisi’s first strategy was to launch mega infrastructure projects to encourage investments and lead to significant economic growth. He discovered quickly that though it was indeed the right thing to do, it would take too long to be implemented, and for its effects to be felt by the people who would keep on suffering and losing their trust in their president. Meanwhile, tourism, long the major currency earner—bringing in some $12 billion a year—had been badly hurt by a series of terror attacks. The president reluctantly turned to the International Monetary Fund for an intermediate loan until his projects came to fruition. He may have had the additional objective of showing that he has no choice but to comply with the demands made by the fund, even though he knew that they would cause hardship in the beginning to wide segments of the population.
The $12 billion loan, at a very low interest rate, was dependent on the implementation of far-reaching reforms; in the past, Mubarak had refused to accept similar conditions that he thought would endanger his regime as well as “insult national honor.” El-Sisi executed them to the letter: floating the Egyptian pound, introducing VAT, gradually reducing subsidies of the price of natural gas and petrol. He promoted legislation to liberalize trade and investments, and put an end to cumbersome bureaucratic processes born of former Egyptian leader Gamel Abdel Nasser’s policy of nationalizations that deterred potential investors. As a result, inflation reached 30 percent, and the rising prices caused unrest that so far has not led to popular protests.
Egyptians are grumbling, but ready to wait it out. Painful as they were, reforms did have positive results relatively fast. Over the course of the last two years, foreign investments grew, and the GNP rose by an impressive 4 percent. The government confidently expects that it will get to 5 percent in 2019 and ultimately reach 8 percent. Inflation has decreased a little, and unemployment is slowly going down. Egypt has so far successfully passed three mandated surveys carried out by the fund—the last one in May. According to a recently released IMF report, the implementation of the reforms has been satisfactory, and has led to economic growth, lowering unemployment and decreasing external and internal deficit.
Mega-projects are also beginning to bear fruit. As a result of the doubling of the Suez Canal—the flagship of the president’s reforms—transit revenues have reached unprecedented heights in the past six months. Construction of “New Cairo”—the future political and administrative capital of the country—between historic Cairo and the Suez Canal is proceeding apace. Completion of the first district, where ministries will be housed, is scheduled for the second half of 2019. No less than 57,000 civil servants are expected then to leave Cairo and move to the new capital, an embodiment of modern urbanism using renewable energies that is expected to serve as a model for the rest of the country.
Liberalizing granting concessions to search for natural gas and oil has led to remarkable results such as the discovery of “Zohr”—the largest offshore natural gas field in East Mediterranean—by Italian ENI; it is already in production and supplies much-needed gas to the citizens of Egypt. Dozens of lesser projects are underway, such as paving thousands of kilometers of new roads, bonifying a million-and-a-half feddan to make them suitable for agriculture, cleaning huge grain silos so badly maintained that nearly 30 percent of its wheat were lost; encouraging small and medium factories and even building universities. Mustafa Madbouli, who was appointed head of government last month following the re-election of El-Sisi announced that 85 percent of economic reforms had already been implemented and that the people of Egypt would soon see their situation improve. He added that other far-reaching reforms are being planned concerning social security, health, scientific research, and the construction of sport and leisure infrastructures.
Altogether an ambitious program that will demand time, a lot of work and considerable amounts of investments. Will Egypt be able to see it through? What has been achieved so far is encouraging, though is yet to be felt by a population hard hit by rising prices who, perhaps through lack of choice, is keeping faith with its ruler.
Yet this huge effort has been accompanied by an even greater role of the army, which today probably controls one-third of the economy. More worrying still is El-Sisi’s record on human rights. Will it get better with the improvement of the security situation and of the economy?
The construction of the “renaissance dam” by Ethiopia on one of the tributaries of the Blue Nile will have to be watched closely for its destructive potential on the Egyptian economy. It presents a direct threat to the supply of water of the country, which draws 95 percent of its needs from that river. Discussions between the two countries have been ongoing for a number of years with no breakthrough so far, and the completion of the mega-dam is scheduled for next year. Will filling it mean a huge loss of water for Egypt, with catastrophic results on the production of electricity and on agriculture? Russia has pledged to finance the construction of four nuclear plants to produce electricity, lessening the impact of the diminished amount of water expected to reach the Aswan dam, principal supplier of the country’s electricity, but what about agriculture? If no solution is found, there is a very real risk of confrontation since for Egypt, cutting off water supply would be a casus belli.
It is worth mentioning that El-Sisi is refraining for intervening in the many conflicts of the region. Though a partner in the American coalition against the Islamic State and in the Arab coalition led by Saudi Arabia fighting in Yemen, Egypt is not actively participating, devoting its energies to its own security and economic problems. Still, since his taking office the general turned president has been busy acquiring vast quantities of weapons, warplanes and warships, probably because he believes that Egypt could be drawn into a war in an increasingly volatile Middle East and wants to make sure that it is ready.
To sum up, though economic problems have not yet gone away, President El-Sisi appears to have won half the battle and carried out successfully painful reforms. What remains to be seen if they will bring about a new and modern Egyptian economy.
Zvi Mazel, the former Israeli ambassador to Egypt, Romania and Sweden, is a senior analyst at the Jerusalem Center for Public Affairs.
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