Middle East Notes and Comment: Egypt Five Years On

Five years ago today, President Hosni Mubarak of Egypt resigned, heralding a new era for Egypt and the region and seemingly foreshadowing the end of Arab autocracies. Looking around the region, the new era looks even worse than the old one. Arab autocrats are back in force, and civil wars rage in many places where they have fallen. It is hard to feel much nostalgia for the theatrical sycophancy that surrounded Muammar el-Qaddafi, and Saddam Hussein’s systematic brutality still seems like a nightmare. Yet, it is hard to imagine when Syria will ever resemble a normal state again, when the bloody rivalries in Libya will subside, or when those conflicts (and others) will cease to bleed into neighboring states.

Amidst the chaos, it is tempting to suggest that Egypt is something of a bright spot, having rediscovered its center. After all, a general in a suit once again sits in the presidential palace. Egypt’s peace with Israel is once again assured. Egypt has once again had parliamentary elections, although the parliament’s power remains uncertain. It is true that the security services have been emboldened, rounding up thousands of Islamists (and hundreds of liberals). It is true, too, that young people sometimes vanish into police custody, and some never emerge. It is ugly, but one could argue that this all was the norm for decades under America’s ally Hosni Mubarak.

Yet, it is premature to judge that Egypt’s worst times are behind it, and far from clear that the government’s current strategy will produce stability. The stakes for Egypt, for the Middle East, and for the United States are consequential, and the decisions ahead deserve more attention than they have gotten.

It is hard to forget the joy that poured out of Tahrir Square five years ago. At that moment, the nation of Egypt was bigger than its government. The people had brought the government to its knees, and citizens were about to engage in the fundamentally creative act of shaping a new government that not only met their needs, but also served their aspirations.

To hear current officials tell it, the citizens bungled the job. They brought in the Muslim Brotherhood, or at least let it be foisted on them. The army needed to step in to save the people from themselves. Truth be told, many seem grateful. The traditional forces that have governed Egypt for six decades—the military and the security services—are back on top, and there is little question that power in today’s Egypt flows from the top down and not from the bottom up.

The spirit of Tahrir has vanished from Egypt, and so has the energy it created. Even in the latter days of Hosni Mubarak, entrepreneurial communities were sprouting up all over Egypt. Newspapers opened, technology incubators were founded, and investment banking firms set up shop. After the revolution, the pace increased even further. Activists of every stripe began the work they were passionate about only after the normal workday ended, and they extended their working days into the wee hours of the morning.

In a visit last month, it was clear that passion has dissipated. Academics are taking a lower profile. Where once a businessman had hoped to change the country through his voluntary work, he now withdraws in hopes of avoiding liability. Some in the business community whisper that current ministers are unwilling to make a decision, because virtually every former minister seems to be facing multiple court cases for his or her actions when in office. Foreign investment is less than 20 percent of its pre-revolutionary high, and domestic investors wonder how they can invest when they have no sense of what the economic and regulatory environment will be like in three years, let alone in a decade.

The military has stepped into the breach, planning where others refuse to and coordinating where others cannot. The paradoxical effect has been not so much to catalyze additional investment as to inhibit it. Who wants to compete with a government entity, after all, especially one with virtually unlimited resources? And who wants to invest in one’s country if the only people considered to be patriots are in uniform?

While there are some reasons for guarded optimism in the Egyptian economy, little of that optimism comes from traditional pillars of economic strength. Tourism is way down, harmed most acutely by the bombing of a Russian aircraft in the Sinai Peninsula in October (an incident that the Egyptian government alone among governments continues to insist is a mystery). Suez Canal tolls are flat amidst a global trade slowdown. Low oil prices produce a double-whammy, reducing remittances flowing into Egypt and curbing the enthusiasm of some of the Gulf Cooperation Council states to continue to pour tens of billions of dollars into Egypt, as they have done since the Muslim Brotherhood fell from power. The Egyptian pound is overvalued, pushing businessmen into the black market for dollars and raising the prices of Egyptian exports on international markets.

The answer is not artfully constructed conditionality. No set of international conditions will be able to force the Egyptian government to do what it does not want to do. The government is risk-averse, and it is distrustful after what it sees as five years of foreign meddling that flirted with disaster. It seems far more likely to spitefully defy outside demands and seek internal political gain than to comply with them.

At the same time, outsiders should not seek to sustain what is unsustainable. Egypt needs to take economic steps, such as pass a new investment law and float the pound. It needs to move toward more inclusive politics that enlist the constructive passions of the public and diminish fear and passivity. It needs to do this all while keeping a close watch on security, which continues to be worrisome throughout the country.

Positive change will be palpable, and if it emerges, the world should support Egypt with trade and investment. The world should also be prepared to work in concert if Egypt stumbles in the face of the steep challenges it faces, and planning for that event should start now. After all, when Egypt was revolutionary, the region seemed revolutionary. When Egypt was Islamist, the region seemed Islamist. If Egypt were to stumble, the entire region would shake.

Jon B. Alterman
Senior Vice President, Zbigniew Brzezinski Chair in Global Security and Geostrategy, and Director, Middle East Program