Egypt: Seven years under Sisi

Gamal Essam El-Din , Thursday 10 Jun 2021

President Abdel-Fattah Al-Sisi faced huge economic, security, and political challenges when he came to office seven years ago. Al-Ahram Weekly examines his success in tackling them

Seven years under Al-Sisi
Al-Sisi signing the presidential oath that ushered him into power

When Abdel-Fattah Al-Sisi was sworn in as president of Egypt on 8 June 2014 he pledged that he would work to improve the standard of living for Egyptians and restore stability after three years of political turmoil and security lapses.

President Al-Sisi came to office after a tumultuous year following the overthrow of Islamist president Mohamed Morsi amid mass protests to his rule. In his first two years in office he had to face terrorist organisations which threatened to undermine the country’s internal security, and at the same time put the country on sound economic tracks after two years of chaos and turbulence.

“The two years, 2014 and 2015, were critical for President Al-Sisi,” says Gamal Zahran, a professor of political science at Suez Canal University. “He made the fight against terrorist organisations, achieving stability and improving the economy, his top priorities. But it soon became clear it would take longer than two years for Egypt to emerge from its security and economic crises.”

The downing of a Russian passenger airplane in Sinai in October 2015 “dealt a deafening blow to the economy and showed the world that Egypt was far from being secure from terrorist operations”. The crash, says Zahran, “killed all hopes that tourism, a major earner of foreign currency, would be the locomotive for economic growth”.

Egypt’s foreign exchange reserves in 2015 stood at just $15 billion, down from $36 billion when Egypt’s longtime president Hosni Mubarak was forced to resign in February 2011.

Minister of Finance Mohamed Maait said in a TV interview on Monday that when President Al-Sisi took office in 2014, Egypt was facing the real possibility of bankruptcy.

“We were suffering a severe shortage of foreign exchange to buy wheat and medicines,” said Maait. “In 2015, the Paris-based Organisation for Economic Cooperation and Development considered Egypt a high-risk country for foreign investments because of instability and security threats. Now, after seven years under President Al-Sisi’s leadership, Egypt today is economically prosperous.”

Many economic analysts believe the crash of the Russian airplane forced Al-Sisi to turn to the International Monetary Fund (IMF) to seek help. “Before the crash there were still hopes Egypt could recover from its years of turmoil without foreign assistance. The air crash killed those hopes,” said Maait.

Seven years under Al-Sisi
Seven years under Al-Sisi

President Al-Sisi’s decision to seek help from the IMF and implement radical economic reform programme was historic, argued Maait. “He knew that this programme could trigger wide-scale social unrest and mass protests from the people but he opted to shoulder his responsibilities and take the risk.”

The first phase of the IMF-inspired economic reform programme (2016-2019) proved very successful, though it was hard for a majority of Egyptians. The devaluation of the Egyptian pound in November 2016 and the phasing out of fuel and electricity subsidies negatively affected Egyptians’ spending power.

Minister of Planning and Economic Development Hala Al-Said told MPs two weeks ago that “the economic reform programme was a bitter pill that the chronically ill Egyptian economy had to swallow.”

“What made the programme a success,” says Maait, “was the public’s awareness that it was indispensable. The country couldn’t recover without the reforms.”

President Al-Sisi said in a speech in August 2016, two months ahead of the implementation of the IMF programme, that he would not shirk the economic reforms that previous presidents had avoided for fear of mass protests.

During a youth conference in the New Administrative Capital on 30 June 2019, Al-Sisi revealed that “when we signed the agreement on the economic reform programme with the IMF I told the cabinet we should all be ready to resign if the public rejected the reforms.”

Ahmed Samir, head of parliament’s Economic Affairs Committee, told Al-Ahram Weekly that “not only did the programme achieve economic and financial stability by the end of 2019, it also helped Egypt ride out the damaging effects of the Covid-19 pandemic when it hit in 2020.”

The economic reforms adopted between 2016 and 2019, says Samir, led to the budget deficit being cut from 12.5 per cent of GDP in 2016 to 7.9 per cent in 2020. It is expected to drop to 7.7 per cent in 2021 and 6.7 per cent in 2022.

According to Samir, “the most notable economic achievement is that foreign exchange reserves rose from $15 billion at the end of 2015 to more than $45.5 billion in February 2020.”

“And though reserves dropped to $38 billion in March 2020 in the wake of the Covid-19 crisis, they increased again to reach $40 billion currently, enough to cover eight months of imports.”

Samir also hails the reduction of inflation from a high of 33 per cent in 2017 to 4.5 per cent in March.

MP Mustafa Bakri argues economic reform would not have been possible without first defeating terrorist organisations and regaining stability.

“When President Al-Sisi came to office in 2014, he faced a battle with jihadist terrorists allied with the Muslim Brotherhood. These groups, primarily based in Sinai, posed a real threat to Egypt’s security.”

The years 2013 to 2018 were the most difficult, says Bakri. By the end of 2018, however, it was clear that Egypt was winning its battle against the terrorist organisations.

Bakri believes Al-Sisi’s policy of supporting the National Libyan Army led by Khalifa Haftar made it difficult for terrorists from Libya to infiltrate Egypt to carry out attacks.

“In 2017, the Islamic State branch in Libya, led by fugitive Egyptian army officer Hisham Ashmawi, was able to penetrate Egypt, attack churches in Tanta and Alexandria and kill 43 Christians. It was Al-Sisi’s support for the Libyan army,” Bakri says, “that helped defeat terrorists in Libya and safeguard the border with Libya against infiltration.”

In May 2019 the Libyan army arrested Ashmawi and handed him to Egypt to face trial.

Tarek Al-Khouli, deputy chairman of parliament’s Foreign Affairs Committee, believes Egypt’s success in defeating terrorism and improving the economy would not have been possible without building bridges with the outside world.

“When President Al-Sisi took office in 2014 he faced the colossal task of improving Egypt’s image after three years of upheaval. The Muslim Brotherhood was everywhere, in Turkey, Qatar, Europe — England and Germany in particular — and, flush with cash, tried its best to portay Al-Sisi as the leader of a coup. Through diplomacy and a lot of patience, President Al-Sisi was able to open channels with world leaders such as German Chancellor Angela Merkel, French presidents François Hollande and Emmanuel Macron, Russian President Valdimir Putin, and US president Donald Trump.”

“Facing a Muslim Brotherhood-led alliance including Turkey and Qatar, Al-Sisi moved to form a counter alliance with Greece and Cyprus. This eventually led to the setting up of the East Mediterranean Gas Forum in Cairo in September 2020, turning Egypt into a regional hub for gas production.”

Al-Khouli believes Egypt’s active diplomacy under Al-Sisi has been most clear in Libya where “the president’s strong contacts with the Libyan army and tribes led to the marginalising of the Turkish-supported government in Tripoli.”

While Al-Khouli acknowledges relations between Egypt under Al-Sisi and the United States have fluctuated, they are now on an even keel. “Al-Sisi and Donald Trump developed a warm personal relationship which helped Egypt regain influence in the region. Though new US President Joe Biden is completely different from Trump in the end he had to open direct channels with President Al-Sisi after realising Egypt could mediate a ceasefire between Israel and Hamas.”

Seth J Frantzman, executive director of the Washington-based Middle East Center for Reporting and Analysis, noted in an article in Hill newspaper on Monday that Egypt, after seven years of Al-Sisi’s leadership, has emerged as an influential regional powerbroker. “The overall picture shows Egypt beginning to step back into the leadership role it once held in the Middle East. It is seeking to create stability from Libya to Syria, and in Gaza — currently three centres of conflict in the region. If Egypt can help reduce tensions in these areas, it will have succeeded where many have failed in the past decade,” wrote Frantzman.

Tellingly, says Bakri, two countries hostile to Al-Sisi are now seeking rapprochement with Cairo.

“After eight years of animosity Turkey decided to send a delegation to mend fences with Egypt while Qatar, whose TV channel Al-Jazeera had consistently attacked Egypt’s president, sent Foreign Minister Mohamed bin Abdel-Rahman Al-Thani two weeks ago to extend an invitation to Al-Sisi from the emir of Qatar to visit Doha.”

Al-Khouli sees Egypt’s reaching out to African states as one of the most significant developments of foreign policy under Al-Sisi. Egypt has concluded defence cooperation agreements with Sudan, Kenya, Uganda and Rwanda, and has also extended its humanitarian aid across the continent. A week ago President Al-Sisi was in Djibouti for talks, the first visit by an Egyptian head of state to the strategically important Horn of Africa state.

*A version of this article appears in print in the 10 June, 2021 edition of Al-Ahram Weekly

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