The Egyptian Conundrum

Published Mon Jun 23 2014 in Ahram Online .Click here for link

The Egyptian Conundrum

 

Amr Khalifa , Monday 23 Jun 2014

Only one thing is bigger than the Pyramids of Egypt: its problems. Last week those problems became the purview of, newly elected, president Sissi. When millions of Egyptian citizens gushed into her streets 11 months ago none, but a foreseer, could have forecast the intertwining list of problems that would await Sissi at the presidency’s door step. It matters not your political stripe, the fact remains the road ahead can grow highly unstable if there is a lack of recognition by Egypt’s leadership of the issues plaguing the Egyptian realpolitik. Naturally, one article cannot hope to tackle the entirety of the Egyptian dilemma in both its long term and short term causes.

Though human rights, education, sectarianism, women’s rights, children’s rights are of mammoth importance to advancement of any modern nation state they are, for the most part, long term domestic files. To survive, and possibly thrive, in his first year, Abdel Fattah el Sissi, the former defense minister, must carefully choose short term agenda items that most affect the day to day existence of the average Egyptian. The ability to tick off success markers on the following issues will provide Sissi with the necessary political capital to move on to more ambitious long term goals. Chief among those agenda items will be security. Also atop the long list must be the flailing economy, with a particular focus on the devastated tourism sector. Naturally, you cannot hope to revive any economy without solving the puzzle of supply and demand of energy; as such, the energy crisis places highly on Sissi’s ‘to do’ list. Yet if Sissi were to, miraculously, resolve these central issues and fail to significantly impact the unemployment and the Muslim Brotherhood fronts Egypt could be confronted by a continuation of the instability and the polarization that have plagued the domestic scene since the January 25 revolution.

Tourism and security are, forever, interlinked. Tourism without security is a zero end game. While the Pyramids, Valley of the Kings and the Nile remain, the tourists do not. Tourism dropped a mammoth 43%, according to a recent Reuters news report, said Adela Ragab, economic advisor to the minister of tourism. This drop followed an equally monumental one in the preceding year to $5.9 billion after the Rabaa dispersal. Statistical drops are one thing and the murder of innocent of two Korean tourists and an Egyptian driver in February in Sinai are entirely another. These kind of attacks have analysts sounding the alarm. ‘Without confidence building measures and a visible national reconciliation’ of some kind, says Dr. Nael Shama, political researcher and writer, tourism may see spurts of improvement but no ‘recovery’. Indeed, the sector was in desperate need of recovery even before the Rabaa dispersal last year. Occupancy rates in Cairo were a reported 15%, and in the ever popular Luxor the figure was a more decrepit 5%. For Sissi to regain necessary hard currency reserves for crucial imports of gas, oil and wheat, Egypt, in the coming months, will need to target two key tourist markets. That currency will need to come from the European/American branch coupled with the cash-rich Arab market, particularly with Eed Al Fitr, a mere seven weeks away. This will not happen without Egypt ability to project an image of stability to the outside world.

But stability cannot come without a strong security apparatus, led by a resurgent ministry of the interior (MOI), in full control of restive domestic scene. But while some analysts view a MOI returned to its former glory as necessary lever for the state to return to full control which will kick start economic recovery, others recognize it is a political liability for the Sissi regime. Since the July 3 ouster of Mohamed Morsi, reports have been rampant about police abuses becoming common place again. To be specific, WikiThawara, the independent human rights watchdog, states that from July 2013 to February 2014, eighty Egyptians have lost their lives in police custody. It would stand to reason, that in an effort to decrease polarization, and to a degree, to appease the small revolutionary minority, that Sissi might begin to undertake a reshaping of MOI. But that will not be the case argues Dr. Shama ‘I don’t believe Sissi feels MOI needs reforming…he is a man of the state, he grew up in its arms’ as part of the military. Indeed, continues the political researcher ‘there is not a speech that goes without Sissi being complimentary’ of the efforts of the police. For many months, however, the police and army have, both, been under attack from various Jihadist groups in multiple governates spanning from Sinai to Cairo. While Dr. Shama believes ‘the offensive in Sinai has undermined Jihadist capabilities’, the situation is a far more dire than its counterpart in the 1990’s. Back then ‘Qadafi was in firm control of Egypt’s western borders’ and Syria and Iraq weren’t ‘playgrounds for several militias’ and a spawning ground for jihadist elements.

Furthermore, the Muslim brotherhood, now again a banned group, has been submerged beneath the political landscape. The events of the past ten months are likely to have multiple effects on its members-not the least of which is the radicalization of some of its youth who see no hope in a political solution. This can only further muddy a complex security picture-especially since Sissi is showing no inclination towards a political solution. Couple that with weapon smuggling from the Lybian border, interject the crisis in Sinai and you have a venomous security mix that is sure to test Sissi.

Think for a moment of the importance of economic empowerment of nations and the multiple aspects of life it impacts. One of the most important facets of daily impacted by this all important engine is the degree of satisfaction of citizens with their life; hence, it is a strong predictor of oncoming instability. In Egypt’s case, it is an understatement, to state that Egyptian self-perception is bleak. Egypt ranks, stunningly, below, the strife torn nations of, Palestine and Yemen, suggests the latest Gallup poll in looking back at pre-revolutionary Egypt http://www.gallup.com/poll/157043/egypt-arithmetic-revolution.aspx . While Palestine and Yemen scored 11% and 13% respectively as citizens who are ‘thriving’, Egyptians are self-scored at a measly 9%. Even more troublingly, 91% of Egyptians identified themselves as ‘suffering’ or ‘struggling’. The pointed question is: if Egypt has suffered economically even more since Jan 25 2011, due to the inherent instability in the many transitional phases the country has experienced since, where do you think these percentages are now? To understand where the dissatisfaction emanates from one need look no further than the plight of the unemployed in Egypt. As of last year, Hafez Ghanem, Sr. fellow at Brookings institute reported, 95% of the unemployed have above a secondary education level and of those ‘only 28% find formal sector jobs’ while ‘72 percent, end up working in the informal micro and small enterprise sector’ http://www.brookings.edu/blogs/up-front/posts/2013/01/25-egypt-inclusive-growth-ghanem . The numbers for women are even more telling of an unemployment epidemic: women are ‘3.8 times more likely to be unemployed than young men’ reports Brookings. ‘Egypt has no idea how to deal with the informality… besides regularly asking informal businesses to register’ emphasizes Mohamed El Dahshan, development economist and fellow at the Atlantic Council. But Sissi has no choice points out Dr. El Dahshan: ‘a coherent plan needs to be devised’. The economic quagmire is further compounded by inflationary rates which have only escalated in the three years following the revolution. ‘The weakening of the pound vis-à-vis foreign currencies means that the cost of imported goods is increasing’, says the economist. This dynamic is, to a degree, currently diffused by cash injections from the Gulf States who have supported Sissi from the get go but this won’t last explains Dr. Dahshan. This can only be ‘temporary’ as the well will run dry; ‘I doubt gulf countries would be willing to keep injecting cash for long’. No matter how you slice it Sissi may be in for an arduous summer.

Even if Sissi is able to press all the right buttons on his ministerial announcements and tamp down on the economic implosion, how will he deal with an energy crisis that plagued his predecessor’s tenure? Multiple news reports estimate that the country owes various energy consortiums nearly $6 billion and, put in the simplest terms: Egypt’s demands far outpace its supply of energy. Millions, on a daily basis, experience multiple blackouts throughout Egypt. You don’t need a degree in rocket science to understand that if you take Cairo July heat, mix in Ramadan, stir in blackouts that the new regime can a have a quickly combustible situation on its hands. So what is the solution Sissi proposes for the 1000 megawatt shortage in Egypt’s electrical grid? A change from old lamps to an energy saving version potentially saves 4000 megawatts stated Sissi in multiple TV interviews. Coal is the other energy alternative being floated but it has met stiff opposition due to its damaging environmental effects. It is an expected reaction when you consider coal’s many adverse effects. The thinking of coal’s opponents is: you don’t solve one problem by creating a larger and health damaging one. No matter the avenue Sissi chooses on this front, blackouts have become a fact of life for all Egyptians and unless that changes, it will not bode well for a man attempting to deliver on the uber high expectations of his followers.

In the end, whether you are pro or anti Sissi, if you are an analyst or a layman, one thing is clear: the tasks that lay ahead will test Sissi’s popularity. For a nation in desperate need for stability, Egypt must hope that the faith of Sissi’s supporters is well placed. The fear here is that where reality meets those expectations, the wrong kind of sparks may fly.

 

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About Amr Khalifa

An analyst, a political comentator on the uber complex Egyptian and MENA scene. I may not have every answer but I know the questions to ask. When not publishing in Ahram Online, Mada Masr, Daily News Egypt and Muftah I love the dynamic of the short story. If you adore the written word you have come to the right place. Pull up a chair and join me for a cup of literary tea.
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