Resilience in complex emerging markets
Harmattan Associates
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General Introduction
Harmattan Associates has a fluid and mutually informative relationship with an Egyptian consultancy, Buhaisi Consulting International (http://www.bpc-egypt.
com/index.php), who specialise in strategic marketing and international business in the Middle East. Together we have learned from each other, but
recognise that we have distinct perspectives. We have combined forces to provide two assessments of the situation in Egypt. Harmattan's can be
regarded as the Western perspective (i.e. Western European / North American), while Buhaisi Consulting's point of view is based on the direct
experience of living in Egypt through recent changes. Both sides recognise that we do not speak for some archetypal mainstream view in our respective
regions, and our ideas here are our own interpretations, but we will inevitably have a different cultural lens deriving from our regional point of view.
These two pieces are not counter-arguments, and indeed both participants would be hard pressed to forget what we have learned from each other. They
are rather complementary points of view, with an interesting divergence in focus and of course in detail, starting with the basic question, what do
changes imply and where might they lead to. This is hopefully a useful introduction to some of the main issues that could be on the table in Egypt for
the foreseeable future, and to the different points of view depending on where one sits.
1. London Perspective - Egypt’s Ongoing Transition: Questions and Hypotheses (27 June 2012)
In recent weeks we have seen:
• the first run of presidential elections, indicating a standoff between two parties which represented very divergent elements and visions of Egyptian society
• then very close to the run-off elections we saw the military, the SCAF, impose a variety of strictures on the presidency and ascribe itself additional
powers
• the Electoral Commission dissolve the parliament (elections to which were a very complex and costly affair)
• and finally the run-off election, with a rather delayed publication of final results which put the Muslim Brotherhood FJP’s candidate, Mohamed Morsi,
into the presidential seat
The situation is confusing even to the direct participants, yet Egypt remains a hub of political and economic influence in the Middle East and Arab World
generally, and what happens there will have tremendous significance for the region and even beyond. It is worth taking the time for an initial
consideration of the situation.
This situation warrants intensive research and indeed whole books will likely derive from events of recent months and weeks. We are not so ambitious in
the top-level glance that we present here. First we pose some elementary questions about the situation and its evolution – there is considerable
ambiguity, but by defining questions we at least know what to examine later on. Next we ask about the underlying positions and motives of the key
actors in the current equation, by way of getting closer to an indication of how events might evolve from here. Then we examine three scenarios of how
the situation might unfold, all of them messy, but only one seems particularly bleak.
Some Questions
We can posit several questions about how things have gone in Egypt. It is far from straightforward, and the best we can do is clarify the salients of
ambiguity in the situation.
Strange Voting Behaviour?
The parliamentary and first run of presidential elections had a reasonable turnout, while the run-off received only moderate attention. It is interesting that
in the parliamentary elections, Islamists (combining all sub-stripes) took the clear majority, while the subsequent presidential vote was almost evenly split
between moderate Islamists and a representative of the old regime playing on the security / stability card. Why the discrepancy between parliamentary
and presidential voting tendencies? Did people really vote against their preferred parliamentary positions in the presidential elections? Were there a new
set voters? Did people willingly seek a balance of powers between parliament and presidency (rather sophisticated by any standard, but not unfeasible)?
The outcome of the first presidential vote seemed to deflate popular democratic enthusiasm in the next round, perhaps because just prior to the next
round the SCAF reduced the relevance of any future president, and perhaps because the two best available choices were only between the frying pan
and the stew pot, i.e. highly divergent visions each with its own risks. Observers have assessed the rise of the two extremes as a result of people not
voting for whom they would like to see in power, but as voting for the best bet against whom they did not want to see in power. In other words, people
voted for Morsi because he was the most likely bet against the old regime, and for Shafiq because he was the most likely non-Islamist candidate.
Now Egyptian liberals and many non-ideological youth who took to streets and to Tahrir Square to enable change in the first place are left
disenfranchised, unwilling to support either side, yet they were probably more willing to see Morsi take the seat, since his win at least demonstrates
room for change.
Initial explanations aside, the situation begs the questions: Why were more mid-stream alternatives to either Morsi or Shafiq so sidelined in the
presidential runs? Were they politically and organisationally inept, did they lack funding, did they seem unable to bear the inevitable pressure? What
would have happened if El Baradei had run? Why did voters seem to contradict their earlier parliamentary choices?
SCAF’s Last Minute Power Grab and Parliamentary Dissolution
It is highly unusual, to say the least, for an interim government in a post-revolutionary situation to fundamentally adjust the rules of the game on the cusp
of long foreseen elections. Yet the SCAF did just that, claiming legislative powers for itself, restricting presidential powers, and with the Judiciary’s
support (the courts say at their own urging) dissolving the old parliament.
Why the sudden move? Did SCAF foresee an ultimate Islamist win and move to ensure that the country did not fall fully under an Islamist government’s
dictates? Were their moves motivated by purely nationalistic concerns, ensuring that the bigger questions for long-term resolution resided within a stable
institution and clearer heads? Or was it more of gut reaction to the possibility of losing influence?
If the elected parliament was so flawed in the first place, why was it allowed to form as it did several months ago? Why did the Judiciary find the flaws
in the original voting process (parties were allowed to bid for many seats assigned to independents) now, and not prior to the last parliamentary
elections (which were a very complex and costly affair and which went a long way towards shaping popular expectations)? Was the first round just a
white wash to buy time for power consolidation? Questions, not assertions, but the issue begs scrutiny.
A Nearly 50-50 Vote but FJP Comes Out on Top, by a Hair’s Width
In fact, the Muslim Brotherhood’s early estimates of the vote were nearly equal to the official outcome, even before counting had finished in both the first
round and run-offs. Yet there were over 400 complaints about election rigging (combined from both sides), a number which was parsed down by the
Electoral Commission to a more manageable set, apparently discarding the more dubious complaints. Even then, the time between the run-off voting and
declaration of the winner was scant considering the remaining questions on fairness to be resolved. If the long-sought past parliament was disbanded
(with SCAF taking control of legislative powers) on a technicality one would assume that the hunt for irregularities would be quite thorough and that the
powers that be would not hesitate to put the results of the presidential elections to the test.
Why was the FJP pronounced winner by a very small margin when so many doubts about electoral fairness persisted? In the ambiguity of the situation,
one might have expected that small margin to have been more heavily challenged and scrutinised. Was this just pragmatism and resignation to the
numbers as they appeared to be, i.e. an effort to get it over with and get on with it?
There are some definite oddities in the way that the Egyptian political transition has proceeded in recent weeks. We cannot offer answers, and the
element of “muddling through” might well account for some of the stranger aspects. Nonetheless, those with an investigative bent might be inclined to
follow up on some of these questions, and indeed this was just a sample.
Players and Thinking
The Silent Majority
When a revolution occurs, the most audible voices arising from the affected society position the old regime as the “bad guys” and the winners as “good
guys” (this is harder in Egypt, because only the pinnacle of the old regime was removed, not the sub-structure). Mubarak and his cliques were bad,
those pushing for his ouster and change were good, as at least the Western media has it. Most other Egyptians were absorbed with necessary day to
day issues and watched from a distance when they had a chance to put their feet up.
In seeking the perspective of the silent majority, we have to ask though, was Mubarak so bad? Like in Tunisia with Ben Ali, the real track record of the
last dictator remains an open question for observers with no real stake in the situation. Was Mubarak corrupt? Sure, very, but so are many others across
the world who have the opportunity for illicit gain. Was he lacking commitment to national progress or a national vision? Unsure. And many Egyptians felt
that his government provided a bulwark against instability and extremism, and a degree of economic predictability, that would otherwise have been
tenuous. He was also a consistent face, and was at least the devil people knew. Even the thousands in Tahrir Square or other hubs of protest would
only amount to a very small fraction of the Egyptian population. Those who were organised, who had an acute grudge (personal or ideological), and
who could sustain themselves in central Cairo and other urban hubs pushed the initial change. What about the rest?
While energetic, technologically savvy and idealistic (and mainly young) people might have been responsible for the initial revolution, many more just
wanted to get on with life and resented the mayhem, especially the economic decline, that resulted from the contest of wills. Maybe they explain some of
the voting behaviour: the more traditional underclass and rural elements, being in a situation where they had to choose, either went for Morsi because
religion is a big aspect in their lives and the Muslim Brotherhood is a trusted “brand”, or they voted for calm and continuity, i.e. Shafiq. The urban
middle class who had already found their niche in the old patronage system went mainly for Shafiq, though those few experimenters who sought to see
a first step to democracy and wanted to see if change could happen at all, went for the best bet against the old regime, Morsi.
Hence, while many original protesters might now feel left out in the cold, we might be able to interpret the nearly split results of the election as the
general will of the silent majority, most of whom watched or listened to the revolution unfold on the TV or radio, with only a sense of mild trepidation
balanced by mild hope. Most had livelihoods to sustain and activism and ideological theorising were a luxury. This is only a hypothesis, but it might
explain something if we can assume that the presidential votes were more or less legitimate - people, those who bothered at least, had to throw their
vote somewhere, and went either for social tradition or political continuity (and by voting the FJP they in fact went for a long established Egyptian
institution, arguably a choice for continuity with a different face).
Another element to this could be the disorganisation of alternative parties. The old regime and the Muslim Brotherhood have been the two main
contestants for decades, and no one else had the experience to be able to present a credible face when push came to shove. It is still surprising that
the vote nearly discounted all alternatives, but maybe other choices were seen as nearly defunct to start with. This is worth further investigation.
Sideline: A Judgement on Mubarak?
A look at Mubarak's legacy might help in understanding voting behaviour of the silent majority. Mubarak shuffling off, whether to intensive care or the
morgue (the latter an absurd episode that was sidelined by more serious issues - whether or not he has passed away his status is more or less the
same from a political point of view, and one can only die once - whoever engineered that ambiguity hopefully sees that it was interpreted, appropriately,
with cynicism and scant concern by most Egyptians and much of he international audience) is probably of little consequence now. But we take a brief
tangent here to consider what he did mean. The inclination of most people (who seldom check their own moral bearings) is to dismiss deposed dictators
as a joke of history and getting their just desserts, but in so doing we sometimes forget why they were there for so long in the first place, and forget all
that they have shaped, and that they might have done some good here and there (few readers are dictators, so it is hard for us to understand the
complex mix of ideological and "clan" imperatives, strategic visions, fears / survivalism, anxieties and social values that motivate dictators, few of whom
have been psychopaths and only some of whom have been narcissists, at least based on a general knowledge of the issue). Mubarak was a dictator,
he was known as corrupt (by what standards? His Western supporters kept the money flowing knowing full well that he took his cut) and probably he
did have a direct hand in some human rights abuses (he surely had an indirect hand, knowing how extensively torture and arbitrary detainment were
used by all levels of security forces before the revolution, but ironically he was only charged with deaths during the revolution, the results of immediate
tactical "street level" decisions taken in the heat of the moment over which he probably had scant control).
While it is hard to argue in favour of deposed dictators, history might eventually afford Mubarak some credit for pushing a vision of a regionally
significant Egypt and for economic experimentation that went between Pan-Arab leftist dependency theory and Sadat's unqualified leap into free
marketeering. His economic solution was perhaps an ad hoc acquiescence to internal pressures - state and rentier capitalism with targeted handouts, in
addition to making Egypt look like a Western-friendly recipient of foreign investment and tourism. He managed to prolong some balance between
traditional and grass-roots values and evolving socio-economic expectations, and had a vision (maybe a wrong vision) of a modern and internationally
relevant country, not to mention he avoided regional war and averted a serious Al Qaeda challenge. It is unfair to judge those who have few left to
speak for them, and Mubarak's case is not so clear cut that we can discount him entirely or vilify his legacy without some qualification. Could someone
else have done better? Maybe so, if his clique had let them try. Or maybe anyone dealt the same cards would have played the same game, being
under the same constraints. Emergency law for decades indicates severe insecurity, and must posit the question that the regime recognised a
misalignment between society and the regime, but we cannot be sure at this point. Records from deposed regimes usually leak out years later (unlike in
Libya where the trashed files afforded a glimpse), and in Egypt's case we still have the military guarding access to historical insight. If we take note of
his achievements, it might be easier to see why an ex-regime figure did well in the elections, and why Morsi needs to tread carefully. .
The Activists
It is hard to portray average early protesters: They came from the educated middle class and the poor, and sought human dignity and fairness in striving
for opportunity, and cross-cut class, ideology and sect. It is probably fair to say, however, given the lack of Islamist and other ideological sloganeering in
the initial uprising, that most were young, non-aligned in ideological terms and had a at least a vague hope for a new future. Some core and many
fringes were internet-savvy, and they had no other pressing obligations, not surprising given the real youth unemployment rate. The same can be said of
other Arab countries’ initial protest movements, with variations.
Have they been left out in the cold? Were they are minority? We can look back to Iran in 1978-79 as an example of a “hijacked revolution”, where
young leftists and “liberals” took the upfront risks and then the clerics stepped in seemingly at the last minute and took over the resulting vacuum. A
more in depth analysis might reveal that it was not that simple, and that the politicised clerics had paved the way for outrage and protest long before it
reached its crescendo. In any case, what now with the Egyptian democratic activists? They wanted choice, dignity, freedom, and fairness. They have
proven once that they can be a severe pain in the neck and were willing to risk everything for change, and yet voting results, if we can trust them,
seem to portray them as a minority voice.
If one were to guesstimate, it is probably a safe bet that most democratic activists voted for either an alternative party, or for Morsi in the belief that any
change was better than being linked to Egypt’s “emergency laws” past, and that he was the most likely non-regime contender. Many will be disappointed
by the elections results, and they will keep up their scrutiny of the fairness and openness of any subsequent government(s). Once the dust has settled
from Morsi’s win, we might expect to hear more from the original activists, who will hold both the SCAF and the FJP to account for indications of self-
interest or regression in terms of inclusiveness and democratic evolution. For now they have been somewhat sidelined, but the means for their renewed
activism remain in place, and only the motive is yet to be decided, on the basis of how the subsequent political situation evolves.
Perhaps the revolution tired out this segment of the population, and they need to get back to their daily concerns and chock up their wins as better
than nothing. Perhaps not. Much depends on at least small steps towards further progressive political evolution, and on the current and emerging leaders
avoiding significant public outrages and self-interested rule-changing.
The Muslim Brotherhood (MB) and FJP
The Egyptian MB is a long-time player in Egyptian politics, and indeed one of the original hubs of political Islam (i.e. the thinking that there is no
necessary separation between religion and politics, and indeed that Islam has solid political prescriptions) in the Muslim world. It has given rise to off-
shoots much more radical that the MB itself, including extremist factions responsible for killing Sadat, and for terrorist attacks on other state symbols and
Western tourists. But the MB for most part had kept its head down, making the most of its truces with the government, and quietly maintaining its
networks and influence when it was too dangerous to be visible. It has endured outright repression and more subtle regime efforts to marginalise it,
including through the appointment and control of high profile Muslim clerics and institutions (few of whom were really stooges – many state-sanctioned
clerics saw any opportunity to spread Islamic influence as worth taking, even if the occasion came from the hand of an “apostate” regime). The MB has
also not been averse to truces with old regimes, which recognised that eradicating the MB was probably never going to work.
There are several tendencies within the MB (and by extension probably also the FJP, although it represents the most centrist bandwidth), ranging from
quietist (i.e. subtle influence and social engagement) to nearly Salafist (i.e. we need to fight for the re-attainment of our pious Islamic roots). But the
mainstream MB has mainly sought political relevance through legitimate means. It does have an Islamist agenda, but historically has been adaptive to
socio-cultural trends and the mainstream within the MB would likely see the outright imposition of conservative Islamist values as political suicide in today’
s context, not to mention perhaps irrelevant to the wider, softer, aim of imbuing core Islamic tenets into mainstream life, business, and politics.
The MB was a refuge and a channel for people frustrated with corrupt regimes that ate out of foreign hands and neglected all that traditional Arab and
Muslim society had to offer as an organising blueprint. Leftist Arab nationalism under Nasser had failed to deliver, and the Soviets (the ally with which
he is most closely associated, though originally he was hoping for positive Western perceptions) were cynical atheists. Sadat’s “Open Door” economic
policy aligned well with the Western globalist agenda – it perked up trade, at least imports, but without delivering anything for most Egyptians (the rich,
who could buy foreign goods with little taxation to sell domestically at inflated prices, got richer; the poor were just mystified), and many saw Sadat’s
peace treaty with Israel as a capitulation. Mubarak took a more even keel economically, but also ramped up internal security. In MB eyes he was a
corrupt apostate, a lackey of the US and by extension an apologist for Israel’s transgressions. And the repressive apparatus under Mubarak was both
nasty and arbitrary, with even ordinary police using torture on a routine basis, and this further fuelled the MB’s distaste for his regime.
The MB kept its head down during the initial revolution. It was worried that if it did actively partake, one of two things would happen. One, the
revolution succeeds but is rejected by the international community dominated by the West because of its Islamophobia and the perception that the MB
was driving change. Two, the revolution fails and the MB has exposed its networks to arrest and dismantlement. Many recent observers saw this stance
as cowardly and cynical, but looking back a while, the MB has been the main risk-taker in face-offs with the regime, and its members the ones
undergoing the bulk of the torture and disappearances under past regimes.
What does the MB want? Though pragmatic on the whole, they are still driven by a vision of a melding of Islamic precepts with civil society, economic
interaction and politics. They see a path by which Egypt and other Muslim countries can establish a “Third Way” (i.e. not socialism or liberal capitalism)
most suitable for their society. They resent vestiges of colonialism but recognise that they need to play ball with global powers, at least as on a tactical
level. And they resent Israeli transgressions against the Palestinians and the unquestioning Western support for Israel (the oft cited past MB’s calls for
Israel’s dissolution and that it is “evil”, etc, can be taken with a grain of salt – any Arab politico needs to say that now and then or they lose credibility
with the “street”, who watch the Israeli-Arab equation as many fans watch football), but the FJP at least knows that Israel is here to stay and that the
relationship with it needs to be managed as a fundamental reality, not as an annoying blip on the radar).
Undoubtedly, the core cliques within the MB, as with any long-standing revolutionary organisation, have acquired some self-interest in their positions – the
Brotherhood is their fiefdom, and they see the benefits accruing from their positions as natural and normal. But this tendency is only a fraction of their
wider organisational interests, unlike with the cliques supporting the old regime, for whom wealth and aggrandisement were paramount. The MB is
constrained by the need to remain credibly affiliated with core Islamic ethics, or it loses its raison d’être and appeal altogether.
The MB / FJP will probably give it their best and most pragmatic shot. They have not howled over the dissolution of parliament and have not boycotted
the game altogether. They have said that they will abide by the treaty with Israel. Morsi has not yet publicly condemned the SCAF’s recent shenanigans,
at least not in absolutist terms. He has also pledged to respect and uphold the rights of the diversity of Egyptians, and his choice of VPs seems to
support this pledge. One of his, and the MB’s, main problems will be trying to provide credible governance under the severe (ideally temporary)
constraints imposed by the SCAF. The MB will have to balance whittling away at SCAF control without inciting a hard line military reaction. Indeed, if the
SCAF remains in the picture for long, it might just find itself the scapegoat for the FJP whenever the party fails to deliver on specific socio-economic or
democratic promises, an unenviable position for the SCAF.
The other issue is whether or not the MB has the capacity to take on Egypt’s complex socio-economic issues. Even in the absence of the SCAF’s ball
and chain, does the MB know how to govern? We have the Turkish example of the Islamist AKP making considerable inroads in terms of socio-economic
development (even while indulging in the usual dirty tricks which brings it back to a degree of “Third World-ism”). We have Hamas, the Palestinian MB,
doing a credible job in Gaza despite the immense challenges. Although Hezbollah is not an MB element, it too has demonstrated the ability of a political
Islamist group to organise and provide a degree of reasonable governance (actually better than their main backers, Iran). Does the MB have the
expertise, or could they co-opt it when necessary to bridge the gaps? Will they make the most of the better technocrats or replace them with their own
motivated but less experienced people? The MB has shown a capability for self-organisation and resilience, a certain political cunning, and basic skills
in addressing some of the local social issues in areas where it has had a strong presence. It remains to be seen if this can be translated into
addressing the considerable woes of the most populous Arab country.
SCAF / Military
The SCAF is the essentially the representative of the higher echelons of the military and the core security and intelligence services. As in Iraq or Syria
(to name but two of dozens of cases worldwide), the military has been an important political actor since decolonisation (or in Egypt's case the easing of
European control), and Nasser, Sadat and Mubarak were all ex-military officers, each maintaining close ties to the defence establishment. The Egyptian
military has followed a common pattern of becoming one of the more institutionalised and modernised bureaucracies in a developing country, thereby
seeing itself as the guardian of progress and rationalism, and entitled to a considerable stake in the gains afforded by development.
In Egypt, the military’s standing was boosted considerably after the 1973 war with Israel, which achieved at least the limited aim of giving the Arab side
some bargaining power in its dealings with Israel (which for a little while in the war was really concerned about its own survival). Since then it has
become an entrenched part of the Egyptian political scene.
The military has three main aims, or drivers of its behaviour.
One is nationalist. The military has fought Egypt’s wars and has stood up for socio-economic progress, under a thin veneer of political disinterest. It
does not really trust a democratic government and the messy post-revolutionary process to yield the best decisions for the country’s long-term strategic
interests. It especially does not trust the MB, with whom its security (and the police) have periodically waged a quiet war over the last several decades,
albeit with periods of collusion against common opponents. It sees itself as the philosopher king, able to grasp and contemplate big ideas for the greater
good, make the necessary sacrifices, and maintain stability and order. It sees these as essential perquisites to Egypt’s further development, a large part
of which lies in adaptation to inevitable globalisation as driven by the Western “international community”. As such it is wary of attaching the label of
“Islamist” to Egypt, and would seek to maintain Western defence and economic ties even as it makes the odd bow to Egyptian sovereignty (such as
hassling NGOs sponsored by foreign political parties – this move was probably also partly designed to reduce foreign ethical scrutiny of the military’s
dubious commitment to democracy).
The other interest is linked to the one above: Economic. By various estimates the military controls between five and 30 percent of the economy, either
through direct control, or more often by business ownership by ex-military officers with close ties to the military establishment. Getting the capital for
company ownership and control in the first place indicates what Westerners would call grand corruption, as no military salary would add up to much and
there is no strong correlation between military officers and wealthy family backgrounds. In Egypt’s context, however, the military would see the corruption
enabling commercial control as the price to pay for the necessary imposition of the best organisational and management practices that the country has to
offer onto an otherwise discordant and weak private sector. State capitalism prevails in Egypt and is dominated by the military, but it is often concealed.
Finally, there is pure self interest. There is no more advantageous position in a country than to have and wield power, and it carries a variety of perks
and personal / economic security. Given the national level of poverty, and the risk that an ordinary citizen has carried in terms of police abuse, this
status is worth hanging onto. There is night and day between being an ordinary Egyptian and a member of the military power clique, who keep the
night clubs and luxury property developers and car salesmen in business. This is a regrettable fact, but it should not be overplayed – the military is
probably on the whole more nationalistic than self-interested.
Letting the democratic process proceed on its own might be inviting mayhem, and the military certainly sees that process as risky, and they want a
smooth transition that does not disrupt their own channels for influence and status, and which does not result in Egypt becoming an international pariah
or inadvertently stepping into a conflict with Israel. The continuation of US and Western defence and economic support / investment is critical to the
generals and colonels – it helps them to fulfil their remit of keeping Egypt secure and stable, boosts the public perception of the military’s relevance, and
it is likely that some of the kickbacks contribute to the unofficial perks. The military would be horrified by an inept civilian regime treading on its delicate
networks of mutual domestic and international interests, playing havoc with diplomacy and catering to the mood on the ever-messy “street”.
One hypothesis is that the elections were somewhat manipulated by the security services tied to the SCAF, but that despite this Morsi still appeared to
come out on top after round one. The SCAF played to get Shafiq into power, but it became an untenable gamble – if they had pushed it too hard, the
backlash from foreign allies and the “street” would have been unmanageable. Therefore, as this hypothesis goes, before the run-off elections the SCAF
made sure that whatever happened on the electoral front, it still preserved its power, hence the last ditch scramble to undo and revise.
The military will need to learn to live with the MB and the activist fringe, and if the FJP seem to govern well, it would be the military’s interest to back
off, otherwise it will seem like the military is main constraint on progress. But it is highly unlikely that it will relegate itself to the barracks anytime soon.
It was the shadow government for decades, and it will take considerable institutionalisation and continued public scrutiny, not to mention demonstration of
democratic government capability, to put the military in the back seat. As for international pressure, there might be outcries over specific cases of human
rights violation, but for the US or Western Europe the “devil we know and happen to get along with” is far preferable to an MB government. Further
change in Egypt will mainly have to come from within.
Models of the Future
We turn now to examine two oft-cited comparisons of Egypt’s situation, Algeria and Turkey, and then look at how the circumstances on the ground might
lead to something more ambiguous.
Algeria: Failed Democratic Experiment Leads to Civil War
In the late 1980s Algeria was facing an economic crisis which resulted in seeking IMF handouts in exchange for the usual austerity measures. The
result was felt on the street, and the government sought to buy public complacence with a promise of democratisation. Municipal elections happened first,
and Islamists (indeed Algerian MB as the FIS party) came out well on top. This made the generals nervous, but they and the president were in too
deep to stop the process. National legislative elections were held next, and FIS again came out on top. This was too much for Le Pouvoir: They had
understood that their power might be attenuated somewhat through a democratic process, but did not envision, despite their attempts at manipulation, the
rise of an alternative set of interests. In 1991 / 92 they responded by annulling the parliament and putting a military junta in power, much to the relief of
Western supporters and other MENA regimes paranoid about the implications of an Islamist government in the sub-region.
Then, to be concise, all hell broke loose. The military takeover did not go down well, to say the least. For many Algerian youth, at the brink of nihilism
anyway because of long years of irrelevance and watching the elites float past in imported cars, this was the last straw, and they joined in the calls of
FIS’s radical offshoots to fight the military regime in the name of Islam. The resulting civil war (which consumed approximately 100,000 lives, mainly non-
combatants caught between both sides) was exceptionally ugly and costly, and no one came out looking clean, even though after 10 years the military
did more or less prevail. Since its dubious victory the military has alternately backed and hassled the wearying civilian president, Bouteflika (by some
accounts a hesitant military stooge), while pulling all necessary strings to maintain the military’s own prominence at all levels, economic included. It was
truly one of the most horrific domestic conflicts in recent decades, along with some concurrent wars (Chechnya, Yugoslavia, Afghanistan, Ruanda, DRC...),
and indeed it is not quite over yet.
Despite, or perhaps because of this tumultuous recent history, Algeria managed to sidestep much of the Arab Spring. Its population was tired and wary
of inciting violence, and the security services had gained considerable experience in social manipulation (among other things) during the civil war. There
have been nearly routine protests over basic living conditions in urban hubs, but "the street" has avoided challenging the whole premise of the regime,
and the police have been careful not seem brutal. Nonetheless, the country is on a hair trigger, and the monopoly of power might eventually fragment.
What does this unfinished lesson mean for Egypt? Algeria was always a rather sidelined issue, interesting for France and some others in the EU (those
with their eyes on Algerian gas for one thing), but otherwise receiving only mild global media attention (which suited Le Pouvoir well as it gave them the
latitude to wage a really nasty counter-insurgency without much international backlash). Egypt, by contrast, is very much in the spotlight, and the military
would probably face serious repercussions if it tried to crush its opponents. The Egyptian MB is also very cautious, and has survived this long by
avoiding overt conflict. Taken together, the two sides would probably be able to reach some compromises before the point of open conflict arose. Another
point worth making: Much of Algeria’s political identity is premised on its war with France, and this imbued a tradition of insurgency and indeed this did
partly guide insurgents in the 1990s. Egypt has no such legacy; while it has had its share of terrorist groups and shadow fights, there is no cultural
blueprint for a zero-sum struggle. If the SCAF makes some serious mistakes and pushes its own agenda too hard, the MB and Egyptian activists might
well respond with violence, but while this scenario is a risk, and while there are parallels between Algeria and Egypt, it is on the whole rather unlikely.
Turkey: Deep State, Periodic Civilian Rule, Effective if Questionable Islamist Government
Turkey has undergone considerable extremes in its political evolution. Even while the military held all the cards, it periodically experimented with
democracy, yielding room for much political debate. The military would allow these experiments, and then when the messy civilian process hit a brick
wall or strayed “too far off the reservation”, it would step in and sort things out, then eventually let the civilians have another go at each other.
All the while, the military fundamentally distrusted the shenanigans of weak civilian rule, and created a sub-structure to ensure the long-term integrity of
its vision of the Turkish nation-state, come what may on an overt political level. It created a host of “plausibly deniable” shadow groups to enforce its
will, with little regard for the fact that many of these went rogue, and had no concept of human rights. Even under past democratic governments,
everyone knew that the military was a power in itself, and it kept up steady if subtle repression of alternative trends while the civilians debated.
Unlike in Egypt or Algeria, the military did not become significant players in business, but its “old boy” networks were still an important source of
advantage. Its main motivation was nationalistic, and guided by the ideal set down by Ataturk – that Turkey should be a modern, secular state capable of
defending itself and of exerting its influence in the region and beyond, building on a past prominent in which was the Ottoman Empire.
The government and by extension the military had always sought some degree of socio-political progress, as defined by its nationalist ideology, but it
faced increasing public scrutiny as people became more aware of political alternatives and looked more to Europe as a model of the country’s political
future. It backed off to see what would happen if it did not manipulate politics, and in order to reduce Europe's wariness about military intervention in
politics, thereby making a shift towards Europe easier. In 2002 the moderate Islamist AK Party came to power, and remains the head of national
governance.
AKP is a conundrum for observers. It was democratically elected and has won three prime ministerial contests, and has concurrently controlled much of
the legislature. These elections have been deemed more or less free and fair. The average tourist to Turkey might see a cosmopolitan country and
considerable social latitude, and be surprised by AKP's successes, but visitors probably seldom associate with the stark slums, towns and villages which
still comprise the bulk of voters. AKP has made considerable inroads in addressing Turkey’s socio-economic challenges: the country has seemed at least
partly exempt from global financial crises, healthcare and infrastructure have improved considerably, Turkey has a high regional and international profile,
and local businesses are doing quite well. So, an Islamist government can pull it off.
Or not. Many legitimate journalists have been arbitrarily detained under AKP’s administrations, there is a highly apparent and increasingly aggressive
Islamist bent on domestic social policy (which worries many segments of the population, educated woman included), and, arguably since the issue is so
nebulous, the administration seems to spinning dubious and vague indications of anti-AKP plots into "severe and immediate subversive threats" and
detaining hundreds of seemingly unconnected people on these bases, without charge or due process, probably in order to shore up its own position
and get potential nay-sayers out of the way. Its control has extended from general democratic clout and legitimate institutional powers to direct control
over key ministries and the judiciary especially. The military got squeezed. A constitutional or democratic coup? The military had already by and large
acquiesced to a necessary diminution of its power in order to see Turkey accepted by the EU, if not as a member then at least as a partner. It let its
guard down expecting to be at least morally rewarded by the EU and Turkish democratists for stepping back, but instead AKP further lambasted it, and
moved aggressively into the salient and entrenched itself in power and increasingly in other walks of life.
Some say that this aggression is necessary in order to root out the “Deep State”, even if some skilled journalists and long-time and dedicated military
officers, among others, are cooling their heels in prison on no specific charges. The military did indeed spawn a range of shady networks and perhaps
AKP had to tackle them on their own terms. There is an unflattering argument, though, that the current AKP government is now forging its own deep
state, taking over enforcement apparatii and embedding its adherents into a variety of corners to better monitor and control. It also maintains extensive
ties with the business community, ties which by international standards would be regarded as dubious at best. Was it necessary to break some eggs to
make an omelette, or is this a manifestation of the predicted fear that an Islamist government would cynically use democracy only to get its foot in the
door, and then go for the gold?
AKP has done quite well for Turkey in terms of basic indicators, but its commitment to transparent democracy and clean governance is not yet proven.
So we have an example of the good and the bad of a moderate Islamist regime taking control. And now the MB has the presidency is Egypt, and if
legislative elections were replayed in the future, Islamists might do just as well as before. Is this Egypt’s track?
The MB / FJP might very much like to emulate the APK, but it has a long culture of wariness and caution, and is unlikely to challenge the military
(though it will press and niggle). The Egyptian military is also not in the same position as Turkey’s – in Turkey, the military was a rear-guard, keeping
things on track according to its own values, and it had the confidence to allow democracy and civilian rule. It will take a while before Egypt’s military is
similarly confident, and for the foreseeable future they are very much on the political scene. As well, the Turkish military stepped back partly because of
the country’s sense that political proximity to Europe was a good thing, and a politicised military was not in Turkey’s interests in that respect. Egypt’s
main foreign backers are the US, with its Global War on Terror agenda and concern for oil supplies, and other Western governments who are wary of
Islamism and regional instability – the military has no particular foreign pressure to retire to the barracks, though it needs to tread carefully.
It is unlikely that Egypt will directly follow Turkey’s example. Turkey has had considerable political experimentation, and the military’s own vision for the
country compelled it to take a back seat (a move it might now regret, and one can postulate that its fate might be an unavoidable aspect of political
evolution). The FJP is cautious and will take its time in expanding the boundaries of its freedom to manoeuvre. A more hybrid military / civilian / Islamist
situation is more likely in Egypt, at least until all sides gain confidence in civilian government and legitimate institutions start to prevail.
Not Quite Algeria, Not Quite Turkey – So Then What?
Predictions at this point are unworkable, but we can postulate a top-level hypothesis. Here goes nothing:
• The FJP does have considerable control over domestic policy, and will move to restore economic stability and confidence, and get people back to work
as far as feasible. It has shown organisational discipline and business acumen in the past, and even without the military's support it will likely make
some inroads in restoring a degree of socio-economic normality (it can probably only be better than the ambiguity of the last year and a half). We
loosely talk about the FJP, Morsi and MB interchangeably - on the whole this is workable, but we need to note that Morsi and the FJP represent more
centrist strands of the MB - they can probably mobilise considerable MB support for socio-economic initiatives, but will need to negotiate with the fringes
of the movement to maintain their support, and when irrationalities arise we might look to failures or hard compromises in these discussions.
• The MB will not press the Islamist agenda for the foreseeable future, as it is wary of alienating the non-Islamist segments of the population and
inciting a clash with the military, but after a while, and perhaps after another presidential election, and if an Islamist-dominated parliament is
(re)established, it will begin to assert Islamist principles, perhaps not harshly and not to an extreme, but it will make some segments uneasy.
• The military will keep watch from its self-assigned roost, and there will likely be a variety of closed door negotiations on pressing policy issues that
both the MB and military have a say in, or for which agreement is necessary.
• The military will be wary of getting a reputation for being rogue or behaving badly, but we can expect repression of acute dissent and Islamist
extremism, and the odd ploy to make the FJP look inept and unprofessional.
• In the main, though, the military cannot afford to be seen as an inhibitor of political and economic progress, and the FJP will readily use it as
scapegoat for its own failures – this will likely compel the military to step back, while still retaining a say and some veto power in policy direction.
• There will no doubt be some vociferous protests against military political engagement and slower-than-expected economic progress, and it will be
interesting to see what combination of the police (controlled by the civilian government) and military will partake in containing unrest – neither side wants
to be seen as the heavy hand, nor as unable to maintain stability, and negotiations between the two on how to handle unrest will probably be rather
convoluted and perhaps delay responses.
• It is unlikely that the military will make further power grabs – Morsi has started his new job, and they will give him a bit of rope, perhaps in the hope
that he will hang himself, but the military will not risk incurring a re-revolution by playing a heavy hand as the government emerges and gains confidence.
• When will the military take a back seat? They have to at some point, because having two pillars of power in one country is ultimately unworkable. If
the MB / FJP proves that it is reasonably professional and keeps a lid on its Islamist agenda, if Egypt stabilises and foreign supporters are no longer so
wary of an MB government, and if the military thinks that it can still maintain some essential networks and perks, then it will begin to relinquish more
controls. This might take a while, and there will be some confusion in the process.
• Is there a risk of civil war or major insurgency? Yes, but it is not a big risk. The actors are rational and cautious, Egyptian society is getting tired of
mayhem and just wants to get back to work if they can find jobs, and there is considerable international scrutiny of the situation. If either side overplays
its hand, there could be a violent reaction from extremist elements on either side, and if the military messes with / impedes democratic process and policy-
making, there will certainly be more demonstrations, but large scale violence would probably be forestalled by back room negotiation and caution.
Summary
It is a gamble to present ideas on a situation in progress, but Egypt presented some very compelling questions. Harmattan are not country experts, and
no doubt experts will find flaws in this assessment. So be it. The aim was not to define, rather to postulate, and we assume that readers will take this
away as only one more piece of the puzzle. This, then, constitutes a view from London, and we turn next to a view from Cairo.
______________________________________________________________________________________________________________________________
2. Cairo Perspective: A) Economic and Business Implications of MB / FJP Rule, B) Some Questions about Western Commitment (28
June 2012)
A) Muslim Brotherhood Perspectives and Ideologies’ about Business and Economy (Opportunities & Risks)
A Business-Centric Outlook
Founded in 1939 as a political entity in Egypt, The Muslim Brotherhood (of which the FJP is a manifestation) has grown to become a significant
economic entity, consisting of wealthy businessmen whose economic agenda embraces privatization, foreign investment and free-market capitalism. Until
today, there are no clear numbers that reveal how many companies and how much of the economy the MB actually owns and controls. Many socialists
and communists accuse the MB of capitalistic perspectives and ideologies, just like Mubarak and his regime, which also emphasised private-led growth,
free market economy, scaling down the role of government, and empowering the private sector. This characterisation might not be fair, given the MB's
commitment to free enterprise and grass roots social progress; and the old regime's interest in having a tight hold on business assets in a model that
more resembled state capitalism than free enterprise.
Despite jail-time and rejections by the military and former presidents Nasser, Sadat and Mubarak, MB members have managed to fully run their
businesses. In 2007, several businessmen of the MB were tried in front of a military court, and about 70 companies were forced to shut down as a
result of the underlying competition between the two entities that controlled capital in Egypt, namely Gamal Mubarak's state elite and the more grass
roots Brotherhood.
After the revolution and the ousting of the Mubarak-regime, the MB has been more courageous in opening big factories and companies, because they
believe that the corruption and culture of favoritism has been or will be reduced to create a more stable business environment (as potential foreign
investors might eventually see it, depending on how the situation unfolds). Two names that continuously appear within MB circles are multimillionaires
and entrepreneurs Hassan Malek, and Khairat ElShater. Both have similar backgrounds and having worked together, and each of them built up a
business empire of their own. These two players are summarised below.
- Hassan Malek: Entrepreneur and businessman, he has been establishing companies ever since 1983 in various industry sectors. He was imprisoned
several times, but like most senior MB members it seems apparent that he was arrested for fabricated cases in order to curtail business and political
competition against the Mubarak regime. Malek believes that the key factor for the economy’s survival is local manufacturing and cutting loose from being
a consumer market. In other words, Egypt has an opportunity, with its huge and youthful population, to become a producer for both local and especially
export consumption, and that this would provide solid jobs for many disadvantaged people, who seldom benefit from import and indirect investment
businesses (which build no real national economic clout anyway - for example China's rise was built on becoming a dependable producer, and only
then did it become a global financial and consumer hub).
Earlier this year, Malek and several other MB-businessmen founded the “Egyptian Business Development Association” (EBDA), which aims at promoting
and developing the Egyptian economy, adopting many investment projects which will contribute effectively to a grass roots economic revival, and launching
Egypt into the ranks of burgeoning economic heavy-weights. Malek believes it necessary to focus on training efficient and professional labor force, not
only to enable local business capability and growth, but by way of providing credible local partners to attract foreign direct investment (FDI).
- Khairat El Shater: Strict, bold, non-joking and direct are the characteristics of Khairat El Shater, the chief strategist of the MB and its main source
of funding. He was imprisoned several times for arguably dubious money laundering and similar charges. He was the MB nomination as their presidential
candidate for 2012 but was soon replaced by Dr. Mohamed Morsy, after Shater got disqualified, as less than six years had passed since his release
from jail. His businesses cover diverse sectors, such as furniture, fabrics, tractors, car manufacturing, chemicals and management consultancy. Shater has
succeeded in silently overstepping the fine line between his own business interests and the MB’s finances, and merging both in a way that made it
impossible for state security to trace the money that went to the “outlawed organization" (MB). From the Western point of view, his finesse in this respect
could be regarded as conflict of interest, but given that the MB's chief opponent, the Mubarak regime, played by its own self-advantageous rules both in
business and politics (and the wide space in between), we can understand why El Shater sought similar advantage for his side. Even when he and
Malek were jailed in 2006, the MB’s financial situation did not deteriorate and his businesses kept flourishing, as he met his business associates and
officials in several sectors, and managed to maintain some direction of his businesses, until his release in 2011.
Again, many socialists and communists (small in numbers but vociferous and articulate in Egypt, in some ways a legacy of Pan-Arab nationalism, with
some influence among educated urban youth) accuse the MB of capitalistic perspectives and ideologies, equating the MB's ideas to those of Mubarak
and his regime - on initial glance, the regime and MB both held to a degree of private-led growth, free market economy, scaling down the role of
government (or perhaps in Mubarak's case just holding onto grips in the private sector as a way of maintaining regime financing), and empowering the
private sector. One point of distinction is critical. The regime, even though some elements believed in the merits of free enterprise, held onto influence in
private business through a desire to maintain control, their own wealth, and preeminence in the socio-political structure. They never really allowed a free
market economy. It was more state capitalism, with the regime controlling much of the economy, and the regime was just as happy if it benefited from
indirect foreign investment and kickbacks as it did from sustainable investment in local enterprise.
The big difference is which private sector you are talking about. Previously the regime had its focus toward mobilizing investment, but the beneficiaries
were those who were well-connected, and brand names in the investment world. Facilitating safe havens for investment and banks did not affect the
"person on the street". It did not "trickle down". In the best-case scenario, and deriving from emphasis on local productivity, a Muslim Brotherhood-led
economy could open up opportunities to previously under / uneployed, perhaps giving rise to an entirely new business class, people who start out in
basic jobs, and through merit and training gain a stake in their employer's organisation and gain choices and a higher standard of living. If the MB
succeed with their intentions, it could well be a workable model for sustainable socio-economic development.
The Elected President and The Economy
Dr. Mohamed Morsy has now officially become the new elected president of Egypt. Morsy plans to turn Egypt into an economy building on grass roots
business for organic growth and as a lever to attract and sustain FDI. With economic development as the lynch pin of presidential planning, the concept
includes:
1. Comprehensive transformation from a retainer / rentier economy to a productive or value-adding economy, within the boundaries of near-term learning
and the current productive baseline. The presidency has postulated 100 national projects (each exceeding a billion dollars) aimed at building Gross
Domestic Product in five years at an annual growth rate of 6.5-7%.
2. Reforming the banking system to ensure it performs its principal role of supporting the national economy at different levels (e.g. from micro-finance to
backing major national investments), while providing developmentally-appropriate monetary tools to ensure the effective participation of the banking sector
in development projects and to ensure its focus on grass roots priorities.
3. Developing a program to support small and medium scale enterprises (SME) to provide a suitable environment for the advancement and sufficient
activation of this economic segment by:
a. Providing necessary technical support for selecting, developing, and managing these projects
b. Providing a training and certification program for the required management and technical cadres, and for individual advancement
c. Providing the financial studies and tools necessary and appropriate to provide strategic guidance for SME projects
d. Providing a legislative climate that guarantees SME access to opportunities and fair competition
e. Creating societies and syndicates to support this segment
f. Providing marketing opportunities and permanent exhibitions
The Risks
A question remains: Will the Supreme Council of Armed Forces (SCAF) let the MB rise and fulfil its mandate? It is known that the Egyptian military has
built its own economic and capitalistic empire during the Mubarak regime, and it is believed that it owns about 40% of the country’s stock. How would
the leaders of this independent empire react to the rise of a similar (and perhaps competing) one, and how will they decide on how share the benefits
between both? What measures will SCAF take to ensure that it loses nothing and continues to gain?
One needs to take into consideration that the military is a crucial factor in the Egyptian market, economy and stock market and offers an income to an
uncountable amount of Egyptian citizens through coordinating support for employing enterprises of all sizes. It is all about money, shares, and production,
and for ordinary people about jobs too. It is hard for many Egyptians to denigrate the military when they have effectively driven a lot of business
opportunities.
According to the New York Review of Books, Tantawi and his clique “controls 40% of the Egyptian economy,” making him the “corporate head of this
empire”. But what does the military really own? They at least have a controlling stake in a wide variety of enterprises, from production of the tiniest
plastic spoons to the biggest aircrafts and bridges; they cover all sectors – agriculture, industry, chemical, services, construction etc. Carnegie Endowment
for International Peace (CEIP) states that “the military owns at least 35 factories” which they refuse to privatize. These companies do not belong to the
defense industry, but rather produce non-military goods and services. CEIP also states that there are three major military bodies that operate in civil
production: the Ministry of Military Production, the Arab Organization for Industrialization, and the National Service Products Organization. Besides
producing consumer goods, the Arab Organization for Industrialization (AOI) also has strong international relations with major multinational companies in
France, United States, United Kingdom, China, Spain, Germany and Japan. According to AOI’s website, it has relations with General Electric, Chrysler,
Peugeot, Rolls Royce, Mercedes, Knorr, ThyssenKrupp, Mitsubishi, and NEC.
The involvement of the military in producing civilian goods is nothing new, and flourished especially in Mubarak’s era, perhaps in an attempt to
monopolize the Egyptian market by way of extending socio-political control. In Fiscal Year 1985, military-operated facilities (including dairy and poultry
farms, fisheries, cattle feedlots, vegetable and fruit farms, bakeries, and food-processing plants) accounted for 18 percent of the nation's total food
production – and it has been growing ever since, and has military control and investment has diversified considerably.
Till today, there are economic and political tensions between the private business elite (of which MB adherents are a major element) and the military, but
the overall relationship between the two still appears to be cooperative, rather than adversarial.
The question is: how safe is it to let the military detach itself from defense production and enter the civilian production market with such strength and
power? How will such a pervasive military rule hand over the power to civilians and completely pull out of the country’s system, when it already is deep-
rooted in the economy and has almost monopolized the manufacturing industry? Finally, it is worth noting that the army’s generals would definitely refuse
to lower their current standard of living and the Supreme Council of Armed Forces surely does not want anyone poking around in the history of their
accounts, let alone be held responsible for their income.
Summary
We can draw some conclusions or wider questions from this snapshot.
- The MB and FJP by extension is business-friendly, and would welcome foreign investment as long it aligns with their national strategy of building
domestic productive and value adding capacity - the MB is nationalistic, but pragmatic and has no issue with private business or ownership.
- The MB and other privateers were always a thorn in the military's side, as the military has preferred a state capitalist model both in the interests of
controlling the direction of Egyptian national strategy and for the benefit of its own key cliques and power holders - this is an additional facet of the MB-
military relationship which is seldom noticed or remarked upon in the West.
- The military's state capitalist and crony capitalism model has been a major element of the Egyptian economy, and has worked for some while generally
failing to keep pace with demographics and expectations; would the military be willing to relinquish its economic grip in the interests of giving the MB's
plans a chance? What deals or guarantees might be necessary to enable this hand over? It is likely that the military's sensibilities will not be dealt with
easily, and this will be an impediment to rational economic planning. While the MB might be open to foreign investment and business models, investors
need to be cautious about where their initiative might stand in relation to this economic standoff, which will take some time to resolve.
- Both sides have something to lose by open conflict, and the links between them will probably help to mitigate open tensions and rivalry, though there
will still be considerable subdued friction on several fronts, from ideological to economic.
B) Questions About Western Commitment to Egyptian Democracy
This element was not written by BCI, rather it is Harmattan's written interpretation of questions and perspectives provided by BCI in the course of
discussions. BCI has posited some unique Egyptian perspectives on how the West (US and Europe mainly, US especially) might perceive and approach
the transition in Egypt, and combined with Harmattan's own take on Western foreign policy, this represents an interesting hypothesis worthy of summation.
These views are not necessarily held by BCI or Harmattan, but they are a significant Egyptian theory, and that being the case might indeed have at
least some influence on Egyptian foreign policy approaches to the West in the foreseeable future.
To say that the West had an investment and stake in the secular, or at least Western-friendly, regimes of the Arab world is an understatement. Indeed,
the longevity of such regimes was at least a tacit linchpin of Western foreign policy in the region (ironically the US demagoguery around democratisation
has somewhat backfired in the Arab Spring context - democratisation is fine if the West controls it, dangerous if it happens by itself). Egypt, being the
bulk and hub of the Arab world, was highest on the list of priorities, and was the number two (after Israel, ironically, Egypt's main military threat)
recipient of regional US aid, military support and subsidised arms transfers in the Middle East, at least until the revolution (and perhaps after, though
recent trends have yet to be discerned in detail).
Why this interest? Because the region has geo-strategic importance, as the bridge between north and south, east and west, and Egypt is the most
significant hub in the region. Access to the region supports an extension of influence well beyond the Middle East's own boundaries. Second, oil and
gas reserves make it important. While Egypt is not oil rich, it has both proximity to and influence over oil rich countries in the region, and as such is a
useful ally and base to help act on potential threats to Middle Eastern hydrocarbons supplies. Finally, regarding Egypt specifically, the US and by
extension European NATO understand that in many ways Egypt is the focal point of political thought in the Arab world, and that if the West could
demonstrate a strong relationship with Cairo, it would have a good argument that it was "Arab-friendly" and other Arab regimes might want to stay on
board.
This strategic vision was premised on the longevity of a Western-friendly and manipulable regime. Western-friendly might have meant not just alignment in
general geo-strategic outlook, but also personal appreciation among specific power cliques for US investments towards helping Egypt to remain a major
military power (though always kept a rung under Israel), and appreciation for the kickbacks and perks that being a US partner and recipient afforded.
Does the US and West like what has happened? Probably not, or at least there is considerable unease. Western intelligence have supported (and
indeed coordinated, as in Iran in 1953) coups against potentially hostile regimes in the past. Was the final acquiescence to Morsi's victory a tacit and
begrudging recognition that covert efforts to boost the preferred Shafiq had failed, and that the West had to live with the results of its own democratist
diatribe?
Now we see the US and other Western powers congratulating Morsi and the FJP, with Hillary Clinton in Cairo recently to apparently stress the US'
commitment to democracy and development in Egypt, although she held separate meetings with Morsi and Tantawi and who knows happened when the
cameras were not running.
The crux of this argument is that having failed to manipulate electoral results, the US and its NATO friends will attempt to give Morsi and the FJP / MB
enough rope to hang themselves, while making it difficult for the moderate Islamists to do a good job in governing. This will spark a popular reaction
against the "inept and amateur" Islamists, and in a subsequent election (or ideally sooner) the military's man will win the presidency, and his people will
win in parliament. This entails openly speaking softly and kindly about democracy, while behind the scenes constraining support to the government and
maintaining support to military interests. If one looks back to Iran in 1953, as one example, Western intelligence also ran black propaganda and
organised demonstrations against Mossadegh's nationalist government. After considerable experience in Iraq and Afghanistan, Western actors might be
better equipped than ever to subtly make life difficult for the MB and Morsi. In this postulation, if the West has it their way, the MB will look like a
shambles and there will be a gravitation towards Western-allied prospective leadership, who will be in a good position for a democratic win, and who
can count on continued Western support and indeed the old repressive apparatus to help stay in power.
Does this theory hold water? We might need to detach ourselves from our ingrained perspectives based on routine Western media drip feeds and official
government policy statements, and try on the shoes of a cynic and skeptic, in order to see that quiet but influential elements among Western powers
might indeed consider such a strategy, and have the means to at least try to pull it off. One cannot discount that the West (at least the US and UK,
and France from time to time mainly in Africa, all usually with general NATO acquiescence) have manipulated regime change in the past, starting in the
1950s in Latin America and Iran, then in the 1960s in Africa, and again in Latin America in the 1970s (other less significant cases were concurrent).
Even Italy saw some Western covert manipulation when the communists posed an electoral challenge. There are very likely other cases since that are
not public knowledge. Nor can we ignore the invasion of Iraq based on very massaged intelligence, resulting in "de-Baathification" that effectively took
official power and public services out of the hands of anyone remotely connected to the old regime (the army, teachers, civil service, etc), a move that
paved the way for insertion of more manipulable elements (and a move that backfired in dire terms, since anyone with training or experience was
effectively barred from their profession). Afghanistan: Invasion, appointment of what was initially perceived to be a manipulable president - again a failure
even when measured against the nebulous and shifting objectives, but a clear example of a willingness to try to call the shots in a far flung country
(and Afghanistan is hardly geo-strategically important compared to Egypt).
Regime change initiatives usually have long-term hidden costs and risks that are ignored in the heat of the moment, but which lead to ultimate failure
often because while it might be possible to exert control over certain cliques and elites, it is much harder to control a populace, and as information
technology has evolved people are better informed and more capable of organising to resist unpopular changes. That being said, regime manipulation
has been a foreign policy tool in the past, and is likely on the list of considerations now. Egypt, as the centre of gravity in the Middle East and a long-
time US and NATO ally, is a clear Western priority, and it is likely that all cards are on the table in terms of how to deal with it. So, yes, it is very
conceivable that the West tried and failed to get their man into the presidential seat, and would try to inhibit the MB's performance while boosting
secular and military-linked opposition.
Now we can look at the counter-argument. Shafiq might well have done well in the elections because many Egyptians were tired of the trauma
associated with change, and might have seen remnants of the old regime as a safe prospect; maybe the US had nothing to do with his standing. And
would the US (and West) risk trying manipulation in such a high profile case, when the US' own military and intelligence commanders are openly asking
for a foreign policy attitude that reduces Muslim antipathy towards the US and West, and helps them to get out of foreign wars, and when leakage is
becoming a hobby among bureaucrats? The US government was conspicuously quiet in global policy debates around how to handle the Arab Spring,
perhaps based on a realistic assessment of "Who are we to talk anyway after taking over two Muslim countries and making a lot of noise around
democracy?". They have enough problems without being found out as a manipulator in Egypt or other Arab states. If any covert effort was leaked, it
could lead to severe repercussions in terms of Al Qaeda's popularity, undermining the credibility of up and coming governments, and souring relations
with other Arab partners, not to mention Egypt itself. In the extremes, if the West had to follow up on failed covert initiatives with military action (and we
have seen how instances of irrational momentum can happen), it would be hard pressed to find the resources given its other self-imposed commitments.
There is, then, very high risk in a manipulation strategy, which could make it quite unpalatable.
Additionally, what might Morsi and the MB mean for the US if they did succeed? The MB's Turkish equivalent, while stretching the boundaries of the rule
of law domestically, has not leapt out of the "international community" and remains an ally, albeit rather strong-headed and inconvenient these days. Even
Hamas in Gaza (the local MB) is far from being a worst case scenario - while they do see themselves as resistance fighters, they still maintain a degree
of regularity and avoid outright nihilistic war with the US' ally to the north. There is no longer a Soviet Union lurking in the shadows, ready to act on
any indication of hostility to the West for its own strategic gain. As BCI's article made clear, on at least one major axis, economic ideology, the MB is
quite aligned with Western attitudes. Finally, the mainstream MB is certainly not interested in Al Qaeda's agenda. It could well be safer to just see how
the situation evolves, and to build ties with a legitimate government and apply the normal tools of influence (diplomatic and economic) than to manipulate
and foster rivalry that could easily backfire on a number of levels.
Net assessment? The West and even the US government's individual security organs are far from homogeneous. There are various ideological strands
and strategic perspectives within, and it is hard to ascribe any single entity to a some grand design. Much political history, including Iraq and
Afghanistan, happens though luck (bad luck too), irrational personal quests among decision-makers, and accident, with subsequent investment to follow up
on the initial commitment by way of making the most of unexpected opportunities and conducting the inevitable damage control. No doubt there are some
Americans and Europeans with significant influence who see some imperative in the manipulation of the Egyptian transition. There could well be
experiments to this effect, and no doubt some influential elements are pressing for more direct control over the transition. On the other hand, while there
is a degree of Islamophobia in the West, the more rational and safer track for the US government, a track which many therein likely see, is probably to
recognise that moderate Islam is an inevitable reality in the Middle East, and to learn to live with it. We do not really know what is happening under the
level of declared policy, but we can suppose that whatever is going on, it is probably not a coordinated conspiracy, and there is considerable debate,
dissent, and alternative thinking. Maybe this assessment is too generous, but time will tell.
(Note: BCI directly relayed this theory as they discerned it. Harmattan is responsible for the interpretation here, and for the assessment of why and why
not this could be a viable scenario or concern.)
Copyright: Buhaisi Consulting International and Harmattan Associates
Harmattan Associates has a fluid and mutually informative relationship with an Egyptian consultancy, Buhaisi Consulting International (http://www.bpc-egypt.
com/index.php), who specialise in strategic marketing and international business in the Middle East. Together we have learned from each other, but
recognise that we have distinct perspectives. We have combined forces to provide two assessments of the situation in Egypt. Harmattan's can be
regarded as the Western perspective (i.e. Western European / North American), while Buhaisi Consulting's point of view is based on the direct
experience of living in Egypt through recent changes. Both sides recognise that we do not speak for some archetypal mainstream view in our respective
regions, and our ideas here are our own interpretations, but we will inevitably have a different cultural lens deriving from our regional point of view.
These two pieces are not counter-arguments, and indeed both participants would be hard pressed to forget what we have learned from each other. They
are rather complementary points of view, with an interesting divergence in focus and of course in detail, starting with the basic question, what do
changes imply and where might they lead to. This is hopefully a useful introduction to some of the main issues that could be on the table in Egypt for
the foreseeable future, and to the different points of view depending on where one sits.
1. London Perspective - Egypt’s Ongoing Transition: Questions and Hypotheses (27 June 2012)
In recent weeks we have seen:
• the first run of presidential elections, indicating a standoff between two parties which represented very divergent elements and visions of Egyptian society
• then very close to the run-off elections we saw the military, the SCAF, impose a variety of strictures on the presidency and ascribe itself additional
powers
• the Electoral Commission dissolve the parliament (elections to which were a very complex and costly affair)
• and finally the run-off election, with a rather delayed publication of final results which put the Muslim Brotherhood FJP’s candidate, Mohamed Morsi,
into the presidential seat
The situation is confusing even to the direct participants, yet Egypt remains a hub of political and economic influence in the Middle East and Arab World
generally, and what happens there will have tremendous significance for the region and even beyond. It is worth taking the time for an initial
consideration of the situation.
This situation warrants intensive research and indeed whole books will likely derive from events of recent months and weeks. We are not so ambitious in
the top-level glance that we present here. First we pose some elementary questions about the situation and its evolution – there is considerable
ambiguity, but by defining questions we at least know what to examine later on. Next we ask about the underlying positions and motives of the key
actors in the current equation, by way of getting closer to an indication of how events might evolve from here. Then we examine three scenarios of how
the situation might unfold, all of them messy, but only one seems particularly bleak.
Some Questions
We can posit several questions about how things have gone in Egypt. It is far from straightforward, and the best we can do is clarify the salients of
ambiguity in the situation.
Strange Voting Behaviour?
The parliamentary and first run of presidential elections had a reasonable turnout, while the run-off received only moderate attention. It is interesting that
in the parliamentary elections, Islamists (combining all sub-stripes) took the clear majority, while the subsequent presidential vote was almost evenly split
between moderate Islamists and a representative of the old regime playing on the security / stability card. Why the discrepancy between parliamentary
and presidential voting tendencies? Did people really vote against their preferred parliamentary positions in the presidential elections? Were there a new
set voters? Did people willingly seek a balance of powers between parliament and presidency (rather sophisticated by any standard, but not unfeasible)?
The outcome of the first presidential vote seemed to deflate popular democratic enthusiasm in the next round, perhaps because just prior to the next
round the SCAF reduced the relevance of any future president, and perhaps because the two best available choices were only between the frying pan
and the stew pot, i.e. highly divergent visions each with its own risks. Observers have assessed the rise of the two extremes as a result of people not
voting for whom they would like to see in power, but as voting for the best bet against whom they did not want to see in power. In other words, people
voted for Morsi because he was the most likely bet against the old regime, and for Shafiq because he was the most likely non-Islamist candidate.
Now Egyptian liberals and many non-ideological youth who took to streets and to Tahrir Square to enable change in the first place are left
disenfranchised, unwilling to support either side, yet they were probably more willing to see Morsi take the seat, since his win at least demonstrates
room for change.
Initial explanations aside, the situation begs the questions: Why were more mid-stream alternatives to either Morsi or Shafiq so sidelined in the
presidential runs? Were they politically and organisationally inept, did they lack funding, did they seem unable to bear the inevitable pressure? What
would have happened if El Baradei had run? Why did voters seem to contradict their earlier parliamentary choices?
SCAF’s Last Minute Power Grab and Parliamentary Dissolution
It is highly unusual, to say the least, for an interim government in a post-revolutionary situation to fundamentally adjust the rules of the game on the cusp
of long foreseen elections. Yet the SCAF did just that, claiming legislative powers for itself, restricting presidential powers, and with the Judiciary’s
support (the courts say at their own urging) dissolving the old parliament.
Why the sudden move? Did SCAF foresee an ultimate Islamist win and move to ensure that the country did not fall fully under an Islamist government’s
dictates? Were their moves motivated by purely nationalistic concerns, ensuring that the bigger questions for long-term resolution resided within a stable
institution and clearer heads? Or was it more of gut reaction to the possibility of losing influence?
If the elected parliament was so flawed in the first place, why was it allowed to form as it did several months ago? Why did the Judiciary find the flaws
in the original voting process (parties were allowed to bid for many seats assigned to independents) now, and not prior to the last parliamentary
elections (which were a very complex and costly affair and which went a long way towards shaping popular expectations)? Was the first round just a
white wash to buy time for power consolidation? Questions, not assertions, but the issue begs scrutiny.
A Nearly 50-50 Vote but FJP Comes Out on Top, by a Hair’s Width
In fact, the Muslim Brotherhood’s early estimates of the vote were nearly equal to the official outcome, even before counting had finished in both the first
round and run-offs. Yet there were over 400 complaints about election rigging (combined from both sides), a number which was parsed down by the
Electoral Commission to a more manageable set, apparently discarding the more dubious complaints. Even then, the time between the run-off voting and
declaration of the winner was scant considering the remaining questions on fairness to be resolved. If the long-sought past parliament was disbanded
(with SCAF taking control of legislative powers) on a technicality one would assume that the hunt for irregularities would be quite thorough and that the
powers that be would not hesitate to put the results of the presidential elections to the test.
Why was the FJP pronounced winner by a very small margin when so many doubts about electoral fairness persisted? In the ambiguity of the situation,
one might have expected that small margin to have been more heavily challenged and scrutinised. Was this just pragmatism and resignation to the
numbers as they appeared to be, i.e. an effort to get it over with and get on with it?
There are some definite oddities in the way that the Egyptian political transition has proceeded in recent weeks. We cannot offer answers, and the
element of “muddling through” might well account for some of the stranger aspects. Nonetheless, those with an investigative bent might be inclined to
follow up on some of these questions, and indeed this was just a sample.
Players and Thinking
The Silent Majority
When a revolution occurs, the most audible voices arising from the affected society position the old regime as the “bad guys” and the winners as “good
guys” (this is harder in Egypt, because only the pinnacle of the old regime was removed, not the sub-structure). Mubarak and his cliques were bad,
those pushing for his ouster and change were good, as at least the Western media has it. Most other Egyptians were absorbed with necessary day to
day issues and watched from a distance when they had a chance to put their feet up.
In seeking the perspective of the silent majority, we have to ask though, was Mubarak so bad? Like in Tunisia with Ben Ali, the real track record of the
last dictator remains an open question for observers with no real stake in the situation. Was Mubarak corrupt? Sure, very, but so are many others across
the world who have the opportunity for illicit gain. Was he lacking commitment to national progress or a national vision? Unsure. And many Egyptians felt
that his government provided a bulwark against instability and extremism, and a degree of economic predictability, that would otherwise have been
tenuous. He was also a consistent face, and was at least the devil people knew. Even the thousands in Tahrir Square or other hubs of protest would
only amount to a very small fraction of the Egyptian population. Those who were organised, who had an acute grudge (personal or ideological), and
who could sustain themselves in central Cairo and other urban hubs pushed the initial change. What about the rest?
While energetic, technologically savvy and idealistic (and mainly young) people might have been responsible for the initial revolution, many more just
wanted to get on with life and resented the mayhem, especially the economic decline, that resulted from the contest of wills. Maybe they explain some of
the voting behaviour: the more traditional underclass and rural elements, being in a situation where they had to choose, either went for Morsi because
religion is a big aspect in their lives and the Muslim Brotherhood is a trusted “brand”, or they voted for calm and continuity, i.e. Shafiq. The urban
middle class who had already found their niche in the old patronage system went mainly for Shafiq, though those few experimenters who sought to see
a first step to democracy and wanted to see if change could happen at all, went for the best bet against the old regime, Morsi.
Hence, while many original protesters might now feel left out in the cold, we might be able to interpret the nearly split results of the election as the
general will of the silent majority, most of whom watched or listened to the revolution unfold on the TV or radio, with only a sense of mild trepidation
balanced by mild hope. Most had livelihoods to sustain and activism and ideological theorising were a luxury. This is only a hypothesis, but it might
explain something if we can assume that the presidential votes were more or less legitimate - people, those who bothered at least, had to throw their
vote somewhere, and went either for social tradition or political continuity (and by voting the FJP they in fact went for a long established Egyptian
institution, arguably a choice for continuity with a different face).
Another element to this could be the disorganisation of alternative parties. The old regime and the Muslim Brotherhood have been the two main
contestants for decades, and no one else had the experience to be able to present a credible face when push came to shove. It is still surprising that
the vote nearly discounted all alternatives, but maybe other choices were seen as nearly defunct to start with. This is worth further investigation.
Sideline: A Judgement on Mubarak?
A look at Mubarak's legacy might help in understanding voting behaviour of the silent majority. Mubarak shuffling off, whether to intensive care or the
morgue (the latter an absurd episode that was sidelined by more serious issues - whether or not he has passed away his status is more or less the
same from a political point of view, and one can only die once - whoever engineered that ambiguity hopefully sees that it was interpreted, appropriately,
with cynicism and scant concern by most Egyptians and much of he international audience) is probably of little consequence now. But we take a brief
tangent here to consider what he did mean. The inclination of most people (who seldom check their own moral bearings) is to dismiss deposed dictators
as a joke of history and getting their just desserts, but in so doing we sometimes forget why they were there for so long in the first place, and forget all
that they have shaped, and that they might have done some good here and there (few readers are dictators, so it is hard for us to understand the
complex mix of ideological and "clan" imperatives, strategic visions, fears / survivalism, anxieties and social values that motivate dictators, few of whom
have been psychopaths and only some of whom have been narcissists, at least based on a general knowledge of the issue). Mubarak was a dictator,
he was known as corrupt (by what standards? His Western supporters kept the money flowing knowing full well that he took his cut) and probably he
did have a direct hand in some human rights abuses (he surely had an indirect hand, knowing how extensively torture and arbitrary detainment were
used by all levels of security forces before the revolution, but ironically he was only charged with deaths during the revolution, the results of immediate
tactical "street level" decisions taken in the heat of the moment over which he probably had scant control).
While it is hard to argue in favour of deposed dictators, history might eventually afford Mubarak some credit for pushing a vision of a regionally
significant Egypt and for economic experimentation that went between Pan-Arab leftist dependency theory and Sadat's unqualified leap into free
marketeering. His economic solution was perhaps an ad hoc acquiescence to internal pressures - state and rentier capitalism with targeted handouts, in
addition to making Egypt look like a Western-friendly recipient of foreign investment and tourism. He managed to prolong some balance between
traditional and grass-roots values and evolving socio-economic expectations, and had a vision (maybe a wrong vision) of a modern and internationally
relevant country, not to mention he avoided regional war and averted a serious Al Qaeda challenge. It is unfair to judge those who have few left to
speak for them, and Mubarak's case is not so clear cut that we can discount him entirely or vilify his legacy without some qualification. Could someone
else have done better? Maybe so, if his clique had let them try. Or maybe anyone dealt the same cards would have played the same game, being
under the same constraints. Emergency law for decades indicates severe insecurity, and must posit the question that the regime recognised a
misalignment between society and the regime, but we cannot be sure at this point. Records from deposed regimes usually leak out years later (unlike in
Libya where the trashed files afforded a glimpse), and in Egypt's case we still have the military guarding access to historical insight. If we take note of
his achievements, it might be easier to see why an ex-regime figure did well in the elections, and why Morsi needs to tread carefully. .
The Activists
It is hard to portray average early protesters: They came from the educated middle class and the poor, and sought human dignity and fairness in striving
for opportunity, and cross-cut class, ideology and sect. It is probably fair to say, however, given the lack of Islamist and other ideological sloganeering in
the initial uprising, that most were young, non-aligned in ideological terms and had a at least a vague hope for a new future. Some core and many
fringes were internet-savvy, and they had no other pressing obligations, not surprising given the real youth unemployment rate. The same can be said of
other Arab countries’ initial protest movements, with variations.
Have they been left out in the cold? Were they are minority? We can look back to Iran in 1978-79 as an example of a “hijacked revolution”, where
young leftists and “liberals” took the upfront risks and then the clerics stepped in seemingly at the last minute and took over the resulting vacuum. A
more in depth analysis might reveal that it was not that simple, and that the politicised clerics had paved the way for outrage and protest long before it
reached its crescendo. In any case, what now with the Egyptian democratic activists? They wanted choice, dignity, freedom, and fairness. They have
proven once that they can be a severe pain in the neck and were willing to risk everything for change, and yet voting results, if we can trust them,
seem to portray them as a minority voice.
If one were to guesstimate, it is probably a safe bet that most democratic activists voted for either an alternative party, or for Morsi in the belief that any
change was better than being linked to Egypt’s “emergency laws” past, and that he was the most likely non-regime contender. Many will be disappointed
by the elections results, and they will keep up their scrutiny of the fairness and openness of any subsequent government(s). Once the dust has settled
from Morsi’s win, we might expect to hear more from the original activists, who will hold both the SCAF and the FJP to account for indications of self-
interest or regression in terms of inclusiveness and democratic evolution. For now they have been somewhat sidelined, but the means for their renewed
activism remain in place, and only the motive is yet to be decided, on the basis of how the subsequent political situation evolves.
Perhaps the revolution tired out this segment of the population, and they need to get back to their daily concerns and chock up their wins as better
than nothing. Perhaps not. Much depends on at least small steps towards further progressive political evolution, and on the current and emerging leaders
avoiding significant public outrages and self-interested rule-changing.
The Muslim Brotherhood (MB) and FJP
The Egyptian MB is a long-time player in Egyptian politics, and indeed one of the original hubs of political Islam (i.e. the thinking that there is no
necessary separation between religion and politics, and indeed that Islam has solid political prescriptions) in the Muslim world. It has given rise to off-
shoots much more radical that the MB itself, including extremist factions responsible for killing Sadat, and for terrorist attacks on other state symbols and
Western tourists. But the MB for most part had kept its head down, making the most of its truces with the government, and quietly maintaining its
networks and influence when it was too dangerous to be visible. It has endured outright repression and more subtle regime efforts to marginalise it,
including through the appointment and control of high profile Muslim clerics and institutions (few of whom were really stooges – many state-sanctioned
clerics saw any opportunity to spread Islamic influence as worth taking, even if the occasion came from the hand of an “apostate” regime). The MB has
also not been averse to truces with old regimes, which recognised that eradicating the MB was probably never going to work.
There are several tendencies within the MB (and by extension probably also the FJP, although it represents the most centrist bandwidth), ranging from
quietist (i.e. subtle influence and social engagement) to nearly Salafist (i.e. we need to fight for the re-attainment of our pious Islamic roots). But the
mainstream MB has mainly sought political relevance through legitimate means. It does have an Islamist agenda, but historically has been adaptive to
socio-cultural trends and the mainstream within the MB would likely see the outright imposition of conservative Islamist values as political suicide in today’
s context, not to mention perhaps irrelevant to the wider, softer, aim of imbuing core Islamic tenets into mainstream life, business, and politics.
The MB was a refuge and a channel for people frustrated with corrupt regimes that ate out of foreign hands and neglected all that traditional Arab and
Muslim society had to offer as an organising blueprint. Leftist Arab nationalism under Nasser had failed to deliver, and the Soviets (the ally with which
he is most closely associated, though originally he was hoping for positive Western perceptions) were cynical atheists. Sadat’s “Open Door” economic
policy aligned well with the Western globalist agenda – it perked up trade, at least imports, but without delivering anything for most Egyptians (the rich,
who could buy foreign goods with little taxation to sell domestically at inflated prices, got richer; the poor were just mystified), and many saw Sadat’s
peace treaty with Israel as a capitulation. Mubarak took a more even keel economically, but also ramped up internal security. In MB eyes he was a
corrupt apostate, a lackey of the US and by extension an apologist for Israel’s transgressions. And the repressive apparatus under Mubarak was both
nasty and arbitrary, with even ordinary police using torture on a routine basis, and this further fuelled the MB’s distaste for his regime.
The MB kept its head down during the initial revolution. It was worried that if it did actively partake, one of two things would happen. One, the
revolution succeeds but is rejected by the international community dominated by the West because of its Islamophobia and the perception that the MB
was driving change. Two, the revolution fails and the MB has exposed its networks to arrest and dismantlement. Many recent observers saw this stance
as cowardly and cynical, but looking back a while, the MB has been the main risk-taker in face-offs with the regime, and its members the ones
undergoing the bulk of the torture and disappearances under past regimes.
What does the MB want? Though pragmatic on the whole, they are still driven by a vision of a melding of Islamic precepts with civil society, economic
interaction and politics. They see a path by which Egypt and other Muslim countries can establish a “Third Way” (i.e. not socialism or liberal capitalism)
most suitable for their society. They resent vestiges of colonialism but recognise that they need to play ball with global powers, at least as on a tactical
level. And they resent Israeli transgressions against the Palestinians and the unquestioning Western support for Israel (the oft cited past MB’s calls for
Israel’s dissolution and that it is “evil”, etc, can be taken with a grain of salt – any Arab politico needs to say that now and then or they lose credibility
with the “street”, who watch the Israeli-Arab equation as many fans watch football), but the FJP at least knows that Israel is here to stay and that the
relationship with it needs to be managed as a fundamental reality, not as an annoying blip on the radar).
Undoubtedly, the core cliques within the MB, as with any long-standing revolutionary organisation, have acquired some self-interest in their positions – the
Brotherhood is their fiefdom, and they see the benefits accruing from their positions as natural and normal. But this tendency is only a fraction of their
wider organisational interests, unlike with the cliques supporting the old regime, for whom wealth and aggrandisement were paramount. The MB is
constrained by the need to remain credibly affiliated with core Islamic ethics, or it loses its raison d’être and appeal altogether.
The MB / FJP will probably give it their best and most pragmatic shot. They have not howled over the dissolution of parliament and have not boycotted
the game altogether. They have said that they will abide by the treaty with Israel. Morsi has not yet publicly condemned the SCAF’s recent shenanigans,
at least not in absolutist terms. He has also pledged to respect and uphold the rights of the diversity of Egyptians, and his choice of VPs seems to
support this pledge. One of his, and the MB’s, main problems will be trying to provide credible governance under the severe (ideally temporary)
constraints imposed by the SCAF. The MB will have to balance whittling away at SCAF control without inciting a hard line military reaction. Indeed, if the
SCAF remains in the picture for long, it might just find itself the scapegoat for the FJP whenever the party fails to deliver on specific socio-economic or
democratic promises, an unenviable position for the SCAF.
The other issue is whether or not the MB has the capacity to take on Egypt’s complex socio-economic issues. Even in the absence of the SCAF’s ball
and chain, does the MB know how to govern? We have the Turkish example of the Islamist AKP making considerable inroads in terms of socio-economic
development (even while indulging in the usual dirty tricks which brings it back to a degree of “Third World-ism”). We have Hamas, the Palestinian MB,
doing a credible job in Gaza despite the immense challenges. Although Hezbollah is not an MB element, it too has demonstrated the ability of a political
Islamist group to organise and provide a degree of reasonable governance (actually better than their main backers, Iran). Does the MB have the
expertise, or could they co-opt it when necessary to bridge the gaps? Will they make the most of the better technocrats or replace them with their own
motivated but less experienced people? The MB has shown a capability for self-organisation and resilience, a certain political cunning, and basic skills
in addressing some of the local social issues in areas where it has had a strong presence. It remains to be seen if this can be translated into
addressing the considerable woes of the most populous Arab country.
SCAF / Military
The SCAF is the essentially the representative of the higher echelons of the military and the core security and intelligence services. As in Iraq or Syria
(to name but two of dozens of cases worldwide), the military has been an important political actor since decolonisation (or in Egypt's case the easing of
European control), and Nasser, Sadat and Mubarak were all ex-military officers, each maintaining close ties to the defence establishment. The Egyptian
military has followed a common pattern of becoming one of the more institutionalised and modernised bureaucracies in a developing country, thereby
seeing itself as the guardian of progress and rationalism, and entitled to a considerable stake in the gains afforded by development.
In Egypt, the military’s standing was boosted considerably after the 1973 war with Israel, which achieved at least the limited aim of giving the Arab side
some bargaining power in its dealings with Israel (which for a little while in the war was really concerned about its own survival). Since then it has
become an entrenched part of the Egyptian political scene.
The military has three main aims, or drivers of its behaviour.
One is nationalist. The military has fought Egypt’s wars and has stood up for socio-economic progress, under a thin veneer of political disinterest. It
does not really trust a democratic government and the messy post-revolutionary process to yield the best decisions for the country’s long-term strategic
interests. It especially does not trust the MB, with whom its security (and the police) have periodically waged a quiet war over the last several decades,
albeit with periods of collusion against common opponents. It sees itself as the philosopher king, able to grasp and contemplate big ideas for the greater
good, make the necessary sacrifices, and maintain stability and order. It sees these as essential perquisites to Egypt’s further development, a large part
of which lies in adaptation to inevitable globalisation as driven by the Western “international community”. As such it is wary of attaching the label of
“Islamist” to Egypt, and would seek to maintain Western defence and economic ties even as it makes the odd bow to Egyptian sovereignty (such as
hassling NGOs sponsored by foreign political parties – this move was probably also partly designed to reduce foreign ethical scrutiny of the military’s
dubious commitment to democracy).
The other interest is linked to the one above: Economic. By various estimates the military controls between five and 30 percent of the economy, either
through direct control, or more often by business ownership by ex-military officers with close ties to the military establishment. Getting the capital for
company ownership and control in the first place indicates what Westerners would call grand corruption, as no military salary would add up to much and
there is no strong correlation between military officers and wealthy family backgrounds. In Egypt’s context, however, the military would see the corruption
enabling commercial control as the price to pay for the necessary imposition of the best organisational and management practices that the country has to
offer onto an otherwise discordant and weak private sector. State capitalism prevails in Egypt and is dominated by the military, but it is often concealed.
Finally, there is pure self interest. There is no more advantageous position in a country than to have and wield power, and it carries a variety of perks
and personal / economic security. Given the national level of poverty, and the risk that an ordinary citizen has carried in terms of police abuse, this
status is worth hanging onto. There is night and day between being an ordinary Egyptian and a member of the military power clique, who keep the
night clubs and luxury property developers and car salesmen in business. This is a regrettable fact, but it should not be overplayed – the military is
probably on the whole more nationalistic than self-interested.
Letting the democratic process proceed on its own might be inviting mayhem, and the military certainly sees that process as risky, and they want a
smooth transition that does not disrupt their own channels for influence and status, and which does not result in Egypt becoming an international pariah
or inadvertently stepping into a conflict with Israel. The continuation of US and Western defence and economic support / investment is critical to the
generals and colonels – it helps them to fulfil their remit of keeping Egypt secure and stable, boosts the public perception of the military’s relevance, and
it is likely that some of the kickbacks contribute to the unofficial perks. The military would be horrified by an inept civilian regime treading on its delicate
networks of mutual domestic and international interests, playing havoc with diplomacy and catering to the mood on the ever-messy “street”.
One hypothesis is that the elections were somewhat manipulated by the security services tied to the SCAF, but that despite this Morsi still appeared to
come out on top after round one. The SCAF played to get Shafiq into power, but it became an untenable gamble – if they had pushed it too hard, the
backlash from foreign allies and the “street” would have been unmanageable. Therefore, as this hypothesis goes, before the run-off elections the SCAF
made sure that whatever happened on the electoral front, it still preserved its power, hence the last ditch scramble to undo and revise.
The military will need to learn to live with the MB and the activist fringe, and if the FJP seem to govern well, it would be the military’s interest to back
off, otherwise it will seem like the military is main constraint on progress. But it is highly unlikely that it will relegate itself to the barracks anytime soon.
It was the shadow government for decades, and it will take considerable institutionalisation and continued public scrutiny, not to mention demonstration of
democratic government capability, to put the military in the back seat. As for international pressure, there might be outcries over specific cases of human
rights violation, but for the US or Western Europe the “devil we know and happen to get along with” is far preferable to an MB government. Further
change in Egypt will mainly have to come from within.
Models of the Future
We turn now to examine two oft-cited comparisons of Egypt’s situation, Algeria and Turkey, and then look at how the circumstances on the ground might
lead to something more ambiguous.
Algeria: Failed Democratic Experiment Leads to Civil War
In the late 1980s Algeria was facing an economic crisis which resulted in seeking IMF handouts in exchange for the usual austerity measures. The
result was felt on the street, and the government sought to buy public complacence with a promise of democratisation. Municipal elections happened first,
and Islamists (indeed Algerian MB as the FIS party) came out well on top. This made the generals nervous, but they and the president were in too
deep to stop the process. National legislative elections were held next, and FIS again came out on top. This was too much for Le Pouvoir: They had
understood that their power might be attenuated somewhat through a democratic process, but did not envision, despite their attempts at manipulation, the
rise of an alternative set of interests. In 1991 / 92 they responded by annulling the parliament and putting a military junta in power, much to the relief of
Western supporters and other MENA regimes paranoid about the implications of an Islamist government in the sub-region.
Then, to be concise, all hell broke loose. The military takeover did not go down well, to say the least. For many Algerian youth, at the brink of nihilism
anyway because of long years of irrelevance and watching the elites float past in imported cars, this was the last straw, and they joined in the calls of
FIS’s radical offshoots to fight the military regime in the name of Islam. The resulting civil war (which consumed approximately 100,000 lives, mainly non-
combatants caught between both sides) was exceptionally ugly and costly, and no one came out looking clean, even though after 10 years the military
did more or less prevail. Since its dubious victory the military has alternately backed and hassled the wearying civilian president, Bouteflika (by some
accounts a hesitant military stooge), while pulling all necessary strings to maintain the military’s own prominence at all levels, economic included. It was
truly one of the most horrific domestic conflicts in recent decades, along with some concurrent wars (Chechnya, Yugoslavia, Afghanistan, Ruanda, DRC...),
and indeed it is not quite over yet.
Despite, or perhaps because of this tumultuous recent history, Algeria managed to sidestep much of the Arab Spring. Its population was tired and wary
of inciting violence, and the security services had gained considerable experience in social manipulation (among other things) during the civil war. There
have been nearly routine protests over basic living conditions in urban hubs, but "the street" has avoided challenging the whole premise of the regime,
and the police have been careful not seem brutal. Nonetheless, the country is on a hair trigger, and the monopoly of power might eventually fragment.
What does this unfinished lesson mean for Egypt? Algeria was always a rather sidelined issue, interesting for France and some others in the EU (those
with their eyes on Algerian gas for one thing), but otherwise receiving only mild global media attention (which suited Le Pouvoir well as it gave them the
latitude to wage a really nasty counter-insurgency without much international backlash). Egypt, by contrast, is very much in the spotlight, and the military
would probably face serious repercussions if it tried to crush its opponents. The Egyptian MB is also very cautious, and has survived this long by
avoiding overt conflict. Taken together, the two sides would probably be able to reach some compromises before the point of open conflict arose. Another
point worth making: Much of Algeria’s political identity is premised on its war with France, and this imbued a tradition of insurgency and indeed this did
partly guide insurgents in the 1990s. Egypt has no such legacy; while it has had its share of terrorist groups and shadow fights, there is no cultural
blueprint for a zero-sum struggle. If the SCAF makes some serious mistakes and pushes its own agenda too hard, the MB and Egyptian activists might
well respond with violence, but while this scenario is a risk, and while there are parallels between Algeria and Egypt, it is on the whole rather unlikely.
Turkey: Deep State, Periodic Civilian Rule, Effective if Questionable Islamist Government
Turkey has undergone considerable extremes in its political evolution. Even while the military held all the cards, it periodically experimented with
democracy, yielding room for much political debate. The military would allow these experiments, and then when the messy civilian process hit a brick
wall or strayed “too far off the reservation”, it would step in and sort things out, then eventually let the civilians have another go at each other.
All the while, the military fundamentally distrusted the shenanigans of weak civilian rule, and created a sub-structure to ensure the long-term integrity of
its vision of the Turkish nation-state, come what may on an overt political level. It created a host of “plausibly deniable” shadow groups to enforce its
will, with little regard for the fact that many of these went rogue, and had no concept of human rights. Even under past democratic governments,
everyone knew that the military was a power in itself, and it kept up steady if subtle repression of alternative trends while the civilians debated.
Unlike in Egypt or Algeria, the military did not become significant players in business, but its “old boy” networks were still an important source of
advantage. Its main motivation was nationalistic, and guided by the ideal set down by Ataturk – that Turkey should be a modern, secular state capable of
defending itself and of exerting its influence in the region and beyond, building on a past prominent in which was the Ottoman Empire.
The government and by extension the military had always sought some degree of socio-political progress, as defined by its nationalist ideology, but it
faced increasing public scrutiny as people became more aware of political alternatives and looked more to Europe as a model of the country’s political
future. It backed off to see what would happen if it did not manipulate politics, and in order to reduce Europe's wariness about military intervention in
politics, thereby making a shift towards Europe easier. In 2002 the moderate Islamist AK Party came to power, and remains the head of national
governance.
AKP is a conundrum for observers. It was democratically elected and has won three prime ministerial contests, and has concurrently controlled much of
the legislature. These elections have been deemed more or less free and fair. The average tourist to Turkey might see a cosmopolitan country and
considerable social latitude, and be surprised by AKP's successes, but visitors probably seldom associate with the stark slums, towns and villages which
still comprise the bulk of voters. AKP has made considerable inroads in addressing Turkey’s socio-economic challenges: the country has seemed at least
partly exempt from global financial crises, healthcare and infrastructure have improved considerably, Turkey has a high regional and international profile,
and local businesses are doing quite well. So, an Islamist government can pull it off.
Or not. Many legitimate journalists have been arbitrarily detained under AKP’s administrations, there is a highly apparent and increasingly aggressive
Islamist bent on domestic social policy (which worries many segments of the population, educated woman included), and, arguably since the issue is so
nebulous, the administration seems to spinning dubious and vague indications of anti-AKP plots into "severe and immediate subversive threats" and
detaining hundreds of seemingly unconnected people on these bases, without charge or due process, probably in order to shore up its own position
and get potential nay-sayers out of the way. Its control has extended from general democratic clout and legitimate institutional powers to direct control
over key ministries and the judiciary especially. The military got squeezed. A constitutional or democratic coup? The military had already by and large
acquiesced to a necessary diminution of its power in order to see Turkey accepted by the EU, if not as a member then at least as a partner. It let its
guard down expecting to be at least morally rewarded by the EU and Turkish democratists for stepping back, but instead AKP further lambasted it, and
moved aggressively into the salient and entrenched itself in power and increasingly in other walks of life.
Some say that this aggression is necessary in order to root out the “Deep State”, even if some skilled journalists and long-time and dedicated military
officers, among others, are cooling their heels in prison on no specific charges. The military did indeed spawn a range of shady networks and perhaps
AKP had to tackle them on their own terms. There is an unflattering argument, though, that the current AKP government is now forging its own deep
state, taking over enforcement apparatii and embedding its adherents into a variety of corners to better monitor and control. It also maintains extensive
ties with the business community, ties which by international standards would be regarded as dubious at best. Was it necessary to break some eggs to
make an omelette, or is this a manifestation of the predicted fear that an Islamist government would cynically use democracy only to get its foot in the
door, and then go for the gold?
AKP has done quite well for Turkey in terms of basic indicators, but its commitment to transparent democracy and clean governance is not yet proven.
So we have an example of the good and the bad of a moderate Islamist regime taking control. And now the MB has the presidency is Egypt, and if
legislative elections were replayed in the future, Islamists might do just as well as before. Is this Egypt’s track?
The MB / FJP might very much like to emulate the APK, but it has a long culture of wariness and caution, and is unlikely to challenge the military
(though it will press and niggle). The Egyptian military is also not in the same position as Turkey’s – in Turkey, the military was a rear-guard, keeping
things on track according to its own values, and it had the confidence to allow democracy and civilian rule. It will take a while before Egypt’s military is
similarly confident, and for the foreseeable future they are very much on the political scene. As well, the Turkish military stepped back partly because of
the country’s sense that political proximity to Europe was a good thing, and a politicised military was not in Turkey’s interests in that respect. Egypt’s
main foreign backers are the US, with its Global War on Terror agenda and concern for oil supplies, and other Western governments who are wary of
Islamism and regional instability – the military has no particular foreign pressure to retire to the barracks, though it needs to tread carefully.
It is unlikely that Egypt will directly follow Turkey’s example. Turkey has had considerable political experimentation, and the military’s own vision for the
country compelled it to take a back seat (a move it might now regret, and one can postulate that its fate might be an unavoidable aspect of political
evolution). The FJP is cautious and will take its time in expanding the boundaries of its freedom to manoeuvre. A more hybrid military / civilian / Islamist
situation is more likely in Egypt, at least until all sides gain confidence in civilian government and legitimate institutions start to prevail.
Not Quite Algeria, Not Quite Turkey – So Then What?
Predictions at this point are unworkable, but we can postulate a top-level hypothesis. Here goes nothing:
• The FJP does have considerable control over domestic policy, and will move to restore economic stability and confidence, and get people back to work
as far as feasible. It has shown organisational discipline and business acumen in the past, and even without the military's support it will likely make
some inroads in restoring a degree of socio-economic normality (it can probably only be better than the ambiguity of the last year and a half). We
loosely talk about the FJP, Morsi and MB interchangeably - on the whole this is workable, but we need to note that Morsi and the FJP represent more
centrist strands of the MB - they can probably mobilise considerable MB support for socio-economic initiatives, but will need to negotiate with the fringes
of the movement to maintain their support, and when irrationalities arise we might look to failures or hard compromises in these discussions.
• The MB will not press the Islamist agenda for the foreseeable future, as it is wary of alienating the non-Islamist segments of the population and
inciting a clash with the military, but after a while, and perhaps after another presidential election, and if an Islamist-dominated parliament is
(re)established, it will begin to assert Islamist principles, perhaps not harshly and not to an extreme, but it will make some segments uneasy.
• The military will keep watch from its self-assigned roost, and there will likely be a variety of closed door negotiations on pressing policy issues that
both the MB and military have a say in, or for which agreement is necessary.
• The military will be wary of getting a reputation for being rogue or behaving badly, but we can expect repression of acute dissent and Islamist
extremism, and the odd ploy to make the FJP look inept and unprofessional.
• In the main, though, the military cannot afford to be seen as an inhibitor of political and economic progress, and the FJP will readily use it as
scapegoat for its own failures – this will likely compel the military to step back, while still retaining a say and some veto power in policy direction.
• There will no doubt be some vociferous protests against military political engagement and slower-than-expected economic progress, and it will be
interesting to see what combination of the police (controlled by the civilian government) and military will partake in containing unrest – neither side wants
to be seen as the heavy hand, nor as unable to maintain stability, and negotiations between the two on how to handle unrest will probably be rather
convoluted and perhaps delay responses.
• It is unlikely that the military will make further power grabs – Morsi has started his new job, and they will give him a bit of rope, perhaps in the hope
that he will hang himself, but the military will not risk incurring a re-revolution by playing a heavy hand as the government emerges and gains confidence.
• When will the military take a back seat? They have to at some point, because having two pillars of power in one country is ultimately unworkable. If
the MB / FJP proves that it is reasonably professional and keeps a lid on its Islamist agenda, if Egypt stabilises and foreign supporters are no longer so
wary of an MB government, and if the military thinks that it can still maintain some essential networks and perks, then it will begin to relinquish more
controls. This might take a while, and there will be some confusion in the process.
• Is there a risk of civil war or major insurgency? Yes, but it is not a big risk. The actors are rational and cautious, Egyptian society is getting tired of
mayhem and just wants to get back to work if they can find jobs, and there is considerable international scrutiny of the situation. If either side overplays
its hand, there could be a violent reaction from extremist elements on either side, and if the military messes with / impedes democratic process and policy-
making, there will certainly be more demonstrations, but large scale violence would probably be forestalled by back room negotiation and caution.
Summary
It is a gamble to present ideas on a situation in progress, but Egypt presented some very compelling questions. Harmattan are not country experts, and
no doubt experts will find flaws in this assessment. So be it. The aim was not to define, rather to postulate, and we assume that readers will take this
away as only one more piece of the puzzle. This, then, constitutes a view from London, and we turn next to a view from Cairo.
______________________________________________________________________________________________________________________________
2. Cairo Perspective: A) Economic and Business Implications of MB / FJP Rule, B) Some Questions about Western Commitment (28
June 2012)
A) Muslim Brotherhood Perspectives and Ideologies’ about Business and Economy (Opportunities & Risks)
A Business-Centric Outlook
Founded in 1939 as a political entity in Egypt, The Muslim Brotherhood (of which the FJP is a manifestation) has grown to become a significant
economic entity, consisting of wealthy businessmen whose economic agenda embraces privatization, foreign investment and free-market capitalism. Until
today, there are no clear numbers that reveal how many companies and how much of the economy the MB actually owns and controls. Many socialists
and communists accuse the MB of capitalistic perspectives and ideologies, just like Mubarak and his regime, which also emphasised private-led growth,
free market economy, scaling down the role of government, and empowering the private sector. This characterisation might not be fair, given the MB's
commitment to free enterprise and grass roots social progress; and the old regime's interest in having a tight hold on business assets in a model that
more resembled state capitalism than free enterprise.
Despite jail-time and rejections by the military and former presidents Nasser, Sadat and Mubarak, MB members have managed to fully run their
businesses. In 2007, several businessmen of the MB were tried in front of a military court, and about 70 companies were forced to shut down as a
result of the underlying competition between the two entities that controlled capital in Egypt, namely Gamal Mubarak's state elite and the more grass
roots Brotherhood.
After the revolution and the ousting of the Mubarak-regime, the MB has been more courageous in opening big factories and companies, because they
believe that the corruption and culture of favoritism has been or will be reduced to create a more stable business environment (as potential foreign
investors might eventually see it, depending on how the situation unfolds). Two names that continuously appear within MB circles are multimillionaires
and entrepreneurs Hassan Malek, and Khairat ElShater. Both have similar backgrounds and having worked together, and each of them built up a
business empire of their own. These two players are summarised below.
- Hassan Malek: Entrepreneur and businessman, he has been establishing companies ever since 1983 in various industry sectors. He was imprisoned
several times, but like most senior MB members it seems apparent that he was arrested for fabricated cases in order to curtail business and political
competition against the Mubarak regime. Malek believes that the key factor for the economy’s survival is local manufacturing and cutting loose from being
a consumer market. In other words, Egypt has an opportunity, with its huge and youthful population, to become a producer for both local and especially
export consumption, and that this would provide solid jobs for many disadvantaged people, who seldom benefit from import and indirect investment
businesses (which build no real national economic clout anyway - for example China's rise was built on becoming a dependable producer, and only
then did it become a global financial and consumer hub).
Earlier this year, Malek and several other MB-businessmen founded the “Egyptian Business Development Association” (EBDA), which aims at promoting
and developing the Egyptian economy, adopting many investment projects which will contribute effectively to a grass roots economic revival, and launching
Egypt into the ranks of burgeoning economic heavy-weights. Malek believes it necessary to focus on training efficient and professional labor force, not
only to enable local business capability and growth, but by way of providing credible local partners to attract foreign direct investment (FDI).
- Khairat El Shater: Strict, bold, non-joking and direct are the characteristics of Khairat El Shater, the chief strategist of the MB and its main source
of funding. He was imprisoned several times for arguably dubious money laundering and similar charges. He was the MB nomination as their presidential
candidate for 2012 but was soon replaced by Dr. Mohamed Morsy, after Shater got disqualified, as less than six years had passed since his release
from jail. His businesses cover diverse sectors, such as furniture, fabrics, tractors, car manufacturing, chemicals and management consultancy. Shater has
succeeded in silently overstepping the fine line between his own business interests and the MB’s finances, and merging both in a way that made it
impossible for state security to trace the money that went to the “outlawed organization" (MB). From the Western point of view, his finesse in this respect
could be regarded as conflict of interest, but given that the MB's chief opponent, the Mubarak regime, played by its own self-advantageous rules both in
business and politics (and the wide space in between), we can understand why El Shater sought similar advantage for his side. Even when he and
Malek were jailed in 2006, the MB’s financial situation did not deteriorate and his businesses kept flourishing, as he met his business associates and
officials in several sectors, and managed to maintain some direction of his businesses, until his release in 2011.
Again, many socialists and communists (small in numbers but vociferous and articulate in Egypt, in some ways a legacy of Pan-Arab nationalism, with
some influence among educated urban youth) accuse the MB of capitalistic perspectives and ideologies, equating the MB's ideas to those of Mubarak
and his regime - on initial glance, the regime and MB both held to a degree of private-led growth, free market economy, scaling down the role of
government (or perhaps in Mubarak's case just holding onto grips in the private sector as a way of maintaining regime financing), and empowering the
private sector. One point of distinction is critical. The regime, even though some elements believed in the merits of free enterprise, held onto influence in
private business through a desire to maintain control, their own wealth, and preeminence in the socio-political structure. They never really allowed a free
market economy. It was more state capitalism, with the regime controlling much of the economy, and the regime was just as happy if it benefited from
indirect foreign investment and kickbacks as it did from sustainable investment in local enterprise.
The big difference is which private sector you are talking about. Previously the regime had its focus toward mobilizing investment, but the beneficiaries
were those who were well-connected, and brand names in the investment world. Facilitating safe havens for investment and banks did not affect the
"person on the street". It did not "trickle down". In the best-case scenario, and deriving from emphasis on local productivity, a Muslim Brotherhood-led
economy could open up opportunities to previously under / uneployed, perhaps giving rise to an entirely new business class, people who start out in
basic jobs, and through merit and training gain a stake in their employer's organisation and gain choices and a higher standard of living. If the MB
succeed with their intentions, it could well be a workable model for sustainable socio-economic development.
The Elected President and The Economy
Dr. Mohamed Morsy has now officially become the new elected president of Egypt. Morsy plans to turn Egypt into an economy building on grass roots
business for organic growth and as a lever to attract and sustain FDI. With economic development as the lynch pin of presidential planning, the concept
includes:
1. Comprehensive transformation from a retainer / rentier economy to a productive or value-adding economy, within the boundaries of near-term learning
and the current productive baseline. The presidency has postulated 100 national projects (each exceeding a billion dollars) aimed at building Gross
Domestic Product in five years at an annual growth rate of 6.5-7%.
2. Reforming the banking system to ensure it performs its principal role of supporting the national economy at different levels (e.g. from micro-finance to
backing major national investments), while providing developmentally-appropriate monetary tools to ensure the effective participation of the banking sector
in development projects and to ensure its focus on grass roots priorities.
3. Developing a program to support small and medium scale enterprises (SME) to provide a suitable environment for the advancement and sufficient
activation of this economic segment by:
a. Providing necessary technical support for selecting, developing, and managing these projects
b. Providing a training and certification program for the required management and technical cadres, and for individual advancement
c. Providing the financial studies and tools necessary and appropriate to provide strategic guidance for SME projects
d. Providing a legislative climate that guarantees SME access to opportunities and fair competition
e. Creating societies and syndicates to support this segment
f. Providing marketing opportunities and permanent exhibitions
The Risks
A question remains: Will the Supreme Council of Armed Forces (SCAF) let the MB rise and fulfil its mandate? It is known that the Egyptian military has
built its own economic and capitalistic empire during the Mubarak regime, and it is believed that it owns about 40% of the country’s stock. How would
the leaders of this independent empire react to the rise of a similar (and perhaps competing) one, and how will they decide on how share the benefits
between both? What measures will SCAF take to ensure that it loses nothing and continues to gain?
One needs to take into consideration that the military is a crucial factor in the Egyptian market, economy and stock market and offers an income to an
uncountable amount of Egyptian citizens through coordinating support for employing enterprises of all sizes. It is all about money, shares, and production,
and for ordinary people about jobs too. It is hard for many Egyptians to denigrate the military when they have effectively driven a lot of business
opportunities.
According to the New York Review of Books, Tantawi and his clique “controls 40% of the Egyptian economy,” making him the “corporate head of this
empire”. But what does the military really own? They at least have a controlling stake in a wide variety of enterprises, from production of the tiniest
plastic spoons to the biggest aircrafts and bridges; they cover all sectors – agriculture, industry, chemical, services, construction etc. Carnegie Endowment
for International Peace (CEIP) states that “the military owns at least 35 factories” which they refuse to privatize. These companies do not belong to the
defense industry, but rather produce non-military goods and services. CEIP also states that there are three major military bodies that operate in civil
production: the Ministry of Military Production, the Arab Organization for Industrialization, and the National Service Products Organization. Besides
producing consumer goods, the Arab Organization for Industrialization (AOI) also has strong international relations with major multinational companies in
France, United States, United Kingdom, China, Spain, Germany and Japan. According to AOI’s website, it has relations with General Electric, Chrysler,
Peugeot, Rolls Royce, Mercedes, Knorr, ThyssenKrupp, Mitsubishi, and NEC.
The involvement of the military in producing civilian goods is nothing new, and flourished especially in Mubarak’s era, perhaps in an attempt to
monopolize the Egyptian market by way of extending socio-political control. In Fiscal Year 1985, military-operated facilities (including dairy and poultry
farms, fisheries, cattle feedlots, vegetable and fruit farms, bakeries, and food-processing plants) accounted for 18 percent of the nation's total food
production – and it has been growing ever since, and has military control and investment has diversified considerably.
Till today, there are economic and political tensions between the private business elite (of which MB adherents are a major element) and the military, but
the overall relationship between the two still appears to be cooperative, rather than adversarial.
The question is: how safe is it to let the military detach itself from defense production and enter the civilian production market with such strength and
power? How will such a pervasive military rule hand over the power to civilians and completely pull out of the country’s system, when it already is deep-
rooted in the economy and has almost monopolized the manufacturing industry? Finally, it is worth noting that the army’s generals would definitely refuse
to lower their current standard of living and the Supreme Council of Armed Forces surely does not want anyone poking around in the history of their
accounts, let alone be held responsible for their income.
Summary
We can draw some conclusions or wider questions from this snapshot.
- The MB and FJP by extension is business-friendly, and would welcome foreign investment as long it aligns with their national strategy of building
domestic productive and value adding capacity - the MB is nationalistic, but pragmatic and has no issue with private business or ownership.
- The MB and other privateers were always a thorn in the military's side, as the military has preferred a state capitalist model both in the interests of
controlling the direction of Egyptian national strategy and for the benefit of its own key cliques and power holders - this is an additional facet of the MB-
military relationship which is seldom noticed or remarked upon in the West.
- The military's state capitalist and crony capitalism model has been a major element of the Egyptian economy, and has worked for some while generally
failing to keep pace with demographics and expectations; would the military be willing to relinquish its economic grip in the interests of giving the MB's
plans a chance? What deals or guarantees might be necessary to enable this hand over? It is likely that the military's sensibilities will not be dealt with
easily, and this will be an impediment to rational economic planning. While the MB might be open to foreign investment and business models, investors
need to be cautious about where their initiative might stand in relation to this economic standoff, which will take some time to resolve.
- Both sides have something to lose by open conflict, and the links between them will probably help to mitigate open tensions and rivalry, though there
will still be considerable subdued friction on several fronts, from ideological to economic.
B) Questions About Western Commitment to Egyptian Democracy
This element was not written by BCI, rather it is Harmattan's written interpretation of questions and perspectives provided by BCI in the course of
discussions. BCI has posited some unique Egyptian perspectives on how the West (US and Europe mainly, US especially) might perceive and approach
the transition in Egypt, and combined with Harmattan's own take on Western foreign policy, this represents an interesting hypothesis worthy of summation.
These views are not necessarily held by BCI or Harmattan, but they are a significant Egyptian theory, and that being the case might indeed have at
least some influence on Egyptian foreign policy approaches to the West in the foreseeable future.
To say that the West had an investment and stake in the secular, or at least Western-friendly, regimes of the Arab world is an understatement. Indeed,
the longevity of such regimes was at least a tacit linchpin of Western foreign policy in the region (ironically the US demagoguery around democratisation
has somewhat backfired in the Arab Spring context - democratisation is fine if the West controls it, dangerous if it happens by itself). Egypt, being the
bulk and hub of the Arab world, was highest on the list of priorities, and was the number two (after Israel, ironically, Egypt's main military threat)
recipient of regional US aid, military support and subsidised arms transfers in the Middle East, at least until the revolution (and perhaps after, though
recent trends have yet to be discerned in detail).
Why this interest? Because the region has geo-strategic importance, as the bridge between north and south, east and west, and Egypt is the most
significant hub in the region. Access to the region supports an extension of influence well beyond the Middle East's own boundaries. Second, oil and
gas reserves make it important. While Egypt is not oil rich, it has both proximity to and influence over oil rich countries in the region, and as such is a
useful ally and base to help act on potential threats to Middle Eastern hydrocarbons supplies. Finally, regarding Egypt specifically, the US and by
extension European NATO understand that in many ways Egypt is the focal point of political thought in the Arab world, and that if the West could
demonstrate a strong relationship with Cairo, it would have a good argument that it was "Arab-friendly" and other Arab regimes might want to stay on
board.
This strategic vision was premised on the longevity of a Western-friendly and manipulable regime. Western-friendly might have meant not just alignment in
general geo-strategic outlook, but also personal appreciation among specific power cliques for US investments towards helping Egypt to remain a major
military power (though always kept a rung under Israel), and appreciation for the kickbacks and perks that being a US partner and recipient afforded.
Does the US and West like what has happened? Probably not, or at least there is considerable unease. Western intelligence have supported (and
indeed coordinated, as in Iran in 1953) coups against potentially hostile regimes in the past. Was the final acquiescence to Morsi's victory a tacit and
begrudging recognition that covert efforts to boost the preferred Shafiq had failed, and that the West had to live with the results of its own democratist
diatribe?
Now we see the US and other Western powers congratulating Morsi and the FJP, with Hillary Clinton in Cairo recently to apparently stress the US'
commitment to democracy and development in Egypt, although she held separate meetings with Morsi and Tantawi and who knows happened when the
cameras were not running.
The crux of this argument is that having failed to manipulate electoral results, the US and its NATO friends will attempt to give Morsi and the FJP / MB
enough rope to hang themselves, while making it difficult for the moderate Islamists to do a good job in governing. This will spark a popular reaction
against the "inept and amateur" Islamists, and in a subsequent election (or ideally sooner) the military's man will win the presidency, and his people will
win in parliament. This entails openly speaking softly and kindly about democracy, while behind the scenes constraining support to the government and
maintaining support to military interests. If one looks back to Iran in 1953, as one example, Western intelligence also ran black propaganda and
organised demonstrations against Mossadegh's nationalist government. After considerable experience in Iraq and Afghanistan, Western actors might be
better equipped than ever to subtly make life difficult for the MB and Morsi. In this postulation, if the West has it their way, the MB will look like a
shambles and there will be a gravitation towards Western-allied prospective leadership, who will be in a good position for a democratic win, and who
can count on continued Western support and indeed the old repressive apparatus to help stay in power.
Does this theory hold water? We might need to detach ourselves from our ingrained perspectives based on routine Western media drip feeds and official
government policy statements, and try on the shoes of a cynic and skeptic, in order to see that quiet but influential elements among Western powers
might indeed consider such a strategy, and have the means to at least try to pull it off. One cannot discount that the West (at least the US and UK,
and France from time to time mainly in Africa, all usually with general NATO acquiescence) have manipulated regime change in the past, starting in the
1950s in Latin America and Iran, then in the 1960s in Africa, and again in Latin America in the 1970s (other less significant cases were concurrent).
Even Italy saw some Western covert manipulation when the communists posed an electoral challenge. There are very likely other cases since that are
not public knowledge. Nor can we ignore the invasion of Iraq based on very massaged intelligence, resulting in "de-Baathification" that effectively took
official power and public services out of the hands of anyone remotely connected to the old regime (the army, teachers, civil service, etc), a move that
paved the way for insertion of more manipulable elements (and a move that backfired in dire terms, since anyone with training or experience was
effectively barred from their profession). Afghanistan: Invasion, appointment of what was initially perceived to be a manipulable president - again a failure
even when measured against the nebulous and shifting objectives, but a clear example of a willingness to try to call the shots in a far flung country
(and Afghanistan is hardly geo-strategically important compared to Egypt).
Regime change initiatives usually have long-term hidden costs and risks that are ignored in the heat of the moment, but which lead to ultimate failure
often because while it might be possible to exert control over certain cliques and elites, it is much harder to control a populace, and as information
technology has evolved people are better informed and more capable of organising to resist unpopular changes. That being said, regime manipulation
has been a foreign policy tool in the past, and is likely on the list of considerations now. Egypt, as the centre of gravity in the Middle East and a long-
time US and NATO ally, is a clear Western priority, and it is likely that all cards are on the table in terms of how to deal with it. So, yes, it is very
conceivable that the West tried and failed to get their man into the presidential seat, and would try to inhibit the MB's performance while boosting
secular and military-linked opposition.
Now we can look at the counter-argument. Shafiq might well have done well in the elections because many Egyptians were tired of the trauma
associated with change, and might have seen remnants of the old regime as a safe prospect; maybe the US had nothing to do with his standing. And
would the US (and West) risk trying manipulation in such a high profile case, when the US' own military and intelligence commanders are openly asking
for a foreign policy attitude that reduces Muslim antipathy towards the US and West, and helps them to get out of foreign wars, and when leakage is
becoming a hobby among bureaucrats? The US government was conspicuously quiet in global policy debates around how to handle the Arab Spring,
perhaps based on a realistic assessment of "Who are we to talk anyway after taking over two Muslim countries and making a lot of noise around
democracy?". They have enough problems without being found out as a manipulator in Egypt or other Arab states. If any covert effort was leaked, it
could lead to severe repercussions in terms of Al Qaeda's popularity, undermining the credibility of up and coming governments, and souring relations
with other Arab partners, not to mention Egypt itself. In the extremes, if the West had to follow up on failed covert initiatives with military action (and we
have seen how instances of irrational momentum can happen), it would be hard pressed to find the resources given its other self-imposed commitments.
There is, then, very high risk in a manipulation strategy, which could make it quite unpalatable.
Additionally, what might Morsi and the MB mean for the US if they did succeed? The MB's Turkish equivalent, while stretching the boundaries of the rule
of law domestically, has not leapt out of the "international community" and remains an ally, albeit rather strong-headed and inconvenient these days. Even
Hamas in Gaza (the local MB) is far from being a worst case scenario - while they do see themselves as resistance fighters, they still maintain a degree
of regularity and avoid outright nihilistic war with the US' ally to the north. There is no longer a Soviet Union lurking in the shadows, ready to act on
any indication of hostility to the West for its own strategic gain. As BCI's article made clear, on at least one major axis, economic ideology, the MB is
quite aligned with Western attitudes. Finally, the mainstream MB is certainly not interested in Al Qaeda's agenda. It could well be safer to just see how
the situation evolves, and to build ties with a legitimate government and apply the normal tools of influence (diplomatic and economic) than to manipulate
and foster rivalry that could easily backfire on a number of levels.
Net assessment? The West and even the US government's individual security organs are far from homogeneous. There are various ideological strands
and strategic perspectives within, and it is hard to ascribe any single entity to a some grand design. Much political history, including Iraq and
Afghanistan, happens though luck (bad luck too), irrational personal quests among decision-makers, and accident, with subsequent investment to follow up
on the initial commitment by way of making the most of unexpected opportunities and conducting the inevitable damage control. No doubt there are some
Americans and Europeans with significant influence who see some imperative in the manipulation of the Egyptian transition. There could well be
experiments to this effect, and no doubt some influential elements are pressing for more direct control over the transition. On the other hand, while there
is a degree of Islamophobia in the West, the more rational and safer track for the US government, a track which many therein likely see, is probably to
recognise that moderate Islam is an inevitable reality in the Middle East, and to learn to live with it. We do not really know what is happening under the
level of declared policy, but we can suppose that whatever is going on, it is probably not a coordinated conspiracy, and there is considerable debate,
dissent, and alternative thinking. Maybe this assessment is too generous, but time will tell.
(Note: BCI directly relayed this theory as they discerned it. Harmattan is responsible for the interpretation here, and for the assessment of why and why
not this could be a viable scenario or concern.)
Copyright: Buhaisi Consulting International and Harmattan Associates
Questions and Hypotheses on
Egypt's Transition - Western
and Egyptian Perspectives
1. The point of view of a
London-based international
consultant - focus is on some
of the issues and questions
that arise from recent trends
2. The perspective of a
Cairo-based international
consultant (Buhaisi Consulting
International) on some of the
questions about MB / FJP
economic implications, and
questions around the West's
attitudes towards change in
Egypt
Egypt's Transition - Western
and Egyptian Perspectives
1. The point of view of a
London-based international
consultant - focus is on some
of the issues and questions
that arise from recent trends
2. The perspective of a
Cairo-based international
consultant (Buhaisi Consulting
International) on some of the
questions about MB / FJP
economic implications, and
questions around the West's
attitudes towards change in
Egypt