The Egyptian conundrum

Amr Khalifa , Monday 23 Jun 2014

The uphill challenges Egypt's new president faces are so formidable that even supporters may soon have their nerves tested

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

Though human rights, education, sectarianism, women’s rights, and children’s rights are of mammoth importance to the advancement of any modern nation state, they are, for the most part, long term domestic matters. To survive, and possibly thrive, in his first year, Abdel-Fattah El-Sisi must carefully choose short term agenda items that most affect the day-to-day existence of the average Egyptian.

The ability to tick off success markers on the following issues will provide El-Sisi with the necessary political capital to move on to more ambitious long term goals. Chief among those agenda items will be security. Also atop the long list must be the flailing economy, with a particular focus on the devastated tourism sector. Naturally, you cannot hope to revive any economy without solving the puzzle of supply and demand of energy. As such, the energy crisis places highly on El-Sisi’s "to do" list.

Yet if El-Sisi were to miraculously resolve these central issues and fail to significantly impact the unemployment and Muslim Brotherhood fronts, Egypt could be confronted by a continuation of the instability and polarisation that have plagued the domestic scene since the January 25 Revolution.

Tourism and security are forever interlinked. Tourism without security is a zero-sum game. While the Pyramids, Valley of the Kings and the Nile remain, the tourists do not. Tourism dropped a mammoth 43 percent said Adela Ragab, economic advisor to the minister of tourism, according to a recent Reuters news report. This drop followed an equally monumental one in the preceding year after the Rabaa Al-Adawiya dispersal. Statistical drops are one thing and the murder of two innocent Korean tourists and an Egyptian driver in February in Sinai are entirely another.

These kind of attacks have analysts sounding the alarm. "Without confidence-building measures and a visible national reconciliation" of some kind, says Nael Shama, political researcher and writer, tourism may see spurts of improvement but no "recovery." Indeed, the sector was in desperate need of recovery even before the Rabaa dispersal last year. Occupancy rates in Cairo were a reported 15 percent, and in the ever popular Luxor the figure was a more decrepit five percent.

For El-Sisi to regain necessary hard currency reserves for crucial imports of gas, oil and wheat, Egypt, in the coming months, will need to target two key tourist markets. That currency will need to come from the European/American branch coupled with the cash-rich Arab market, particularly with Eid Al-Fitr a mere seven weeks away. This will not happen without Egypt's ability to project an image of stability to the outside world.

But stability cannot come without a strong security apparatus, led by a resurgent Ministry of the Interior (MOI) in full control of restive domestic scene. But while some analysts view a MOI returned to its former glory as a necessary lever for the state to return to full control, which will kickstart economic recovery, others believe it is a political liability for the El-Sisi regime. Since the 3 July ouster of Mohamed Morsi, reports have been rampant about police abuses becoming commonplace again.

To be specific, WikiThawra, the independent human rights watchdog, states that from July 2013 to February 2014, 80 Egyptians have lost their lives in police custody. It would stand to reason that in an effort to decrease polarisation, and to a degree to appease the small revolutionary minority, that El-Sissi might begin to undertake reshaping the MOI. But that will not be the case, argues Shama: "I don’t believe El-Sisi feels the MOI needs reforming … He is a man of the state. He grew up in its arms" as part of the military. Indeed, Shama continues, "There is not a speech that goes without El-Sisi being complimentary" towards the efforts of the police.

For many months, however, the police and army have, both, been under attack from various jihadist groups in multiple governorates spanning from Sinai to Cairo. While Shama believes "the offensive in Sinai has undermined jihadist capabilities," the situation is a far more dire than in the 1990s. Back then "Gaddafi was in firm control of Egypt’s western borders" and Syria and Iraq weren’t "playgrounds for several militias" and a spawning ground for jihadist elements.

Furthermore, the Muslim Brotherhood, now again a banned group, has been submerged beneath the political landscape. The events of the past 10 months are likely to have multiple effects on its members — not the least of which is the radicalisation of some of its youth who see no hope in a political solution. This can only further muddy a complex security picture, especially since El-Sisi is showing no inclination towards a political solution. Couple that with weapons smuggling from the Lybian border, interject the crisis in Sinai, and you have a venomous security mix that is sure to test El-Sisi.

Think for a moment of the importance of economic empowerment of nations and the multiple aspects of life it impacts. One of the most important facets of daily life impacted by this all-important engine is the degree of satisfaction of citizens with their lives. Hence, it is a strong predictor of oncoming instability. In Egypt’s case, it is an understatement to say that Egyptian self-perceptions are bleak. Egypt ranks, stunningly, below the strife-torn nations of Palestine and Yemen, suggests the latest Gallup poll.

Even more troublingly, 91 percent of Egyptians in that poll identified themselves as "suffering" or "struggling." The pointed question is: if Egypt has suffered economically even more since 25 January 2011, due to the inherent instability in the many transitional phases the country has experienced since, where are the percentages now? To understand where the dissatisfaction emanates from one need look no further than the plight of the unemployed in Egypt. As of last year, Hafez Ghanem Sr, fellow at the Brookings institution, reported 95 percent of the unemployed have above secondary level education, and of those "only 28 percent find formal sector jobs" while "72 percent end up working in the informal micro and small enterprise sector."

The numbers for women are even more telling of an unemployment epidemic: women are "3.8 times more likely to be unemployed than young men" reports Brookings. "Egypt has no idea how to deal with the informality… besides regularly asking informal businesses to register" emphasises Mohamed El-Dahshan, development economist and fellow at the Atlantic Council. But El-Sisi has no choice, points out El-Dahshan: "A coherent plan needs to be devised." The economic quagmire is further compounded by inflationary rates that have only escalated in the three years following the revolution.

"The weakening of the pound vis-à-vis foreign currencies means that the cost of imported goods is increasing," says El-Dahshan. This dynamic is, to a degree, currently diffused by cash injections from the Gulf States that have supported El-Sisi from the get go. But this won’t last, explains El-Dahshan. This can only be "temporary" as the well will run dry. "I doubt Gulf countries would be willing to keep injecting cash for long." No matter how you slice it, El-Sisi may be in for an arduous summer.

Even if El-Sisi is able to press all the right buttons in his ministerial announcements and tamp down the economic implosion, how will he deal with an energy crisis that plagued his predecessor’s tenure? Multiple news reports estimate that the country owes various energy consortiums nearly $6 billion and, put in the simplest terms, Egypt’s demands far outpace its supply of energy. Millions, on a daily basis, experience multiple blackouts throughout Egypt. You don’t need a degree in rocket science to understand that if you take Cairo July heat, mix in Ramadan, stir in blackouts, that the new regime can a have a quickly combustible situation on its hands.

So what is the solution El-Sisi proposes for the 1,000 megawatt shortage in Egypt’s electrical grid? A change from old lamps to an energy saving version potentially saves 4,000 megawatts stated El-Sisi in multiple TV interviews. Coal is the other energy alternative being floated, but it has met stiff opposition due to its damaging environmental effects. It is an expected reaction when you consider coal’s many adverse effects. The thinking of coal’s opponents is: you don’t solve one problem by creating a larger and health-damaging one. No matter the avenue El-Sisi chooses on this front, blackouts have become a fact of life for all Egyptians and unless that changes it will not bode well for a man attempting to deliver on the uber high expectations of his followers.

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

The writer is a freelance journalist recently published by The Globe & Mail, Mada Masr and Inter Press Service.

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