Can Egypt Survive Its Latest Crisis?

Its economy is in terrible condition and state authority is apparently breaking down. It’s time to contemplate an intervention by Egypt’s military, says CFR’s Steven Cook.

January 31, 2013
11:00 am (EST)

To help readers better understand the nuances of foreign policy, CFR staff writers and Consulting Editor Bernard Gwertzman conduct in-depth interviews with a wide range of international experts, as well as newsmakers.

Egypt is in the midst of a very serious crisis, says CFR’s Steven A. Cook, who points to President Morsi’s recent decision to declare a "state of emergency in the Suez cities of Port Said, Suez, and Ismailia, and in Cairo, which has been basically ignored." He says "these are worrying signs of a breakdown in social cohesion," and notes that Defense Minister Abdel Fattah El Sisi has threatened to intervene. Cook says, "the military is obviously concerned about this situation, and has at least contemplated what it might do in the event that the situation in Egypt really does get out of control." He adds that Egypt’s economy is in "terrible" shape, with tourists staying away and virtually no foreign investment coming into the country. Yet despite these developments, he is doubtful that Morsi will accept a bid for a coalition government.

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There’s been considerable chaos on the second anniversary of the overthrow of Hosni Mubarak: street demonstrations and anti-government riots, plus major disturbances in Port Said after the courts handed down a ruling against two dozen fans for the 2012 soccer riots that led to seventy-four deaths. We’ve had calls for a national unity government. Meanwhile, President Mohamed Morsi’s flown to Germany seeking economic help. Is the situation in Egypt deteriorating, or is this the new normal?

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To be honest, it’s hard to tell. We have seen these periodic spasms of protest and violence in Egypt over the course of the last two years. At times, it seemed that Egypt was on the verge of collapse--in November 2011 and again in December 2011. There have been big protests more recently in November and December of 2012. And just when people raise questions about what might come next, things seem to settle down a bit. What we’re seeing in Egypt right now is really an extension of those protests that rocked Egypt in November and December. I do think it’s serious in the sense that President Morsi has declared a state of emergency in the Suez cities of Port Said, Suez, and Ismailia, and in Cairo, which has been basically ignored.

Chaos in EgyptDemonstrators in Cairo. (Photo: Mohamed Abd El Ghany/Courtesy Reuters)

What do you draw from that?

This indicates a breakdown in the authority of the state, a breakdown of central authority. And you do see the emergence of different factions and groups and a willingness to use violence. There have been gun battles in Port Said; there is the emergence of this "Black Bloc"--no one knows from whence this group has come--dressed in black as anarchists, with their faces covered. No one is quite sure about what they want or what their goals are; there have been rumors fueled, of course, by the Muslim Brotherhood that this is a Christian militia. They are being arrested all over Egypt now. But these are worrying signs of a breakdown in social cohesion, and Egypt is quite paralyzed. But are we moving into another phase of Egypt’s transition in which the stakes are even higher? It’s at least possible.

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Yesterday, Defense Minister Abdel Fattah El Sisi, the head of the military, seemed to warn that if the rioting continued, the military might step in. How serious is this?

I think that was an indication that the military is obviously concerned about this situation, and has at least contemplated what it might do in the event that the situation in Egypt really does get out of control. But keep in mind, so far, it’s only three Suez cities plus Cairo where we’ve seen violence--the rest of the country is quiet, at least for now. But the military is obviously concerned about this becoming more widespread. El Sisi’s statement, I think, was a warning to the Muslim Brotherhood and to the opposition. This shows that a military response is at least being contemplated.

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Is the military still popular in Egypt?

In the very difficult transition from Mubarak to Morsi, the SCAF--the Supreme Council of the Armed Forces as it was constituted under Field Marshal Tantawi--certainly tarnished the images of these officers, but the military itself as an institution remains highly regarded among average Egyptians. Does that mean that Egyptians will once again welcome the military’s intervention and takeover? Public opinion would certainly be divided on this. Average Egyptians would like to see some sort of normalcy return to the streets of Egypt, but they also would like to see a real change. I think that the usual suspects would raise outrage over the military, but if things really did slide out of control, the military is the organization or institution of last resort. And it would be their duty to try to salvage the situation.

How bad is the economy?

Terrible, really sputtering in a very bad way. There are virtually no tourists--there haven’t been for quite some time--and there is no foreign direct investment coming into the country. The Egyptians have run through a good deal of their foreign reserves. The government subsidizes fuel and food stuffs--things it can’t afford--but it also can’t afford to unwind those subsidies politically, so it is really in a very serious situation. It has been able to limp along at this stage by the good graces of handouts from the Qataris and various accounting gimmicks, but the pound has been losing its value against the dollar, which makes everything more expensive for Egyptians. The situation is not good on the economic front at all, and surely the violence in Port Said, Suez, and Ismailia, and Cairo, in particular, and the recent attack on the Semiramis InterContinental hotel is not going to be a boost for the Egyptian tourism industry, to say the least.

Morsi was heading off to Europe to seek economic assistance. He was in Germany on Wednesday, but has apparently postponed his visit to France. Is the EU in a position to help Egypt out?

"The consequences of an Egyptian economic collapse that lead to political collapse are not in anybody’s best interest."

If any country in the European Union is in a position to help them out, it is certainly Germany. Obviously, the European Union has its own financial difficulties that it’s confronting, but certainly because of the dire situation that Egypt finds itself in, the international community as a whole has an interest in helping the Egyptians. The consequences of an Egyptian economic collapse that lead to political collapse are not in anybody’s best interest. This is the largest Arab country, and it’s a critical partner of the West. If ungovernable, Egypt is a significant problem. Already Sinai, an area that has been neglected by the central government in Cairo, is proving itself difficult to regain control over. So can you imagine all of the country becoming ungovernable? It would be a very significant problem, so it’s in everybody’s interest to not allow this very leaky boat to sink.

Back in November, President Morsi (along with U.S. Secretary of State Hillary Clinton) helped bring about the cease-fire in Gaza between Israel and Hamas, so relations between the United States and Egypt seemed pretty good back then. How much U.S. aid is going to Egypt these days?

"Morsi’s ... pushing through a new constitution that the [Obama] administration protested, but perhaps not as strongly as it could, suggest[s] that the United States is right back where it started--that it doesn’t matter what Egyptian leaders do at home as long as they help establish stability and security in the region."

The United States just delivered F-16s to the Egyptian military, and there are M1A1 tanks that are on the way. The administration has not made any changes to its military aid package nor its economic aid. The United States promised a billion dollars in debt relief. The administration has not followed up on that, but I think there is pressure to do so. Now is not really the time to cut aid to the Egyptians. Of course, people will point to President Mohammed Morsi’s anti-Semitic comments that were recently revealed. These are comments that he made in 2010, and then when a congressional delegation asked him about them, he made even more anti-Semitic comments. These are terrible things, and they show his obvious lack of sophistication and a deeply ingrained anti-Semitism--after all, he comes from the Muslim Brotherhood. But there is, again, this question of the consequences of an Egyptian failure, which far outweighs Morsi’s odious comments.

I think the Obama administration wants to signal to the Egyptian military--which, of all the parties in Egypt, at least for now, continues to share our core interests--that the United States is not going to abandon the military relationship. Certainly, the president and Secretary of State Clinton praised President Morsi for his handling of the Gaza episode in November, and the Egyptians deserve praise for that. The Egyptians demonstrated that it had a new relationship with Hamas, and they could work well with everybody in deescalating the situation in Gaza. However, Morsi’s moves immediately thereafter, pushing through a new constitution that the [Obama] administration protested but perhaps not as strongly as it could, suggest that the United States is right back where it started--that it doesn’t matter what Egyptian leaders do at home as long as they help establish stability and security in the region.

Should the United States have been tougher with Morsi?

There might have been an opportunity for the United States to strongly emphasize principles of democracy, application of law, transparency, checks and balances--the first principles of liberal democratic politics that makes us feel good about where we live.

What about Mohamed El Baradei’s call for a government of national unity? The opposition has rejected Morsi’s own calls for wide discussions.

The opposition has rejected Morsi’s call for dialogue because they don’t believe that he is very serious about it. [On Thursday, leaders from prominent Egyptian political factions met in the country’s highest seat of Islamic learning to sign an agreement condemning violence.] Of course, they have made a number of demands on him and wanted him to meet those demands before they even engaged in a dialogue. So what we see are two positions that are seemingly irreconcilable, and a lot of mistrust. El Baradei is calling for something bigger than just dialogue. He’s calling for an actual national unity government, something that he’s called for before. This is probably not going to get a lot of traction with Morsi and his people. Morsi was elected president and why, at this point--the way the Brotherhood sees it--should they give in to a national unity government with people who they defeated in an election that the international community said was largely free and fair? So I’m not sure that El Baradei is going to get anywhere with that. It’s more likely that El Baradei, who is a shrewd politician, is doing that to put the Brotherhood further on the defensive, knowing that they would reject it.


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