Pulling Egypt from the brink

While clashes and violence are by no means over, today’s Egypt seems eerily headed towards normalisation. The regime is determined to signal its credibility to the West. In order to do so, Finance Minister Ahmed Galal has committed to start repaying 25 percent in arrears to all international energy companies by the end of the year. Egypt will also pursue negotiations with the IMF which are likely to bear fruit. The IMF loan is not enormous – $50bn over four years – but for the cash-strapped Egyptian economy, it is nonetheless important.

The government and security establishment are also determined to do their utmost to reassert order in the Egyptian streets, a priority for a population that has lived through three years of turmoil with preciously little political or economic returns. Defence Minister Abdel Fattah al-Sisi may have the ability to do this. He has been a key figure within the military for a long while and his loyalty to the institution is unquestioned, as is his operational hold over it.

As Egypt’s political and economic transformation slows down, the United States and the European Union may end up diverging on their foreign policy paths. The US will seek to re-establish the pre-2011 security status quo, while the EU will have to veer around the political crisis to preserve its economic interests in the country.

Short-term normalisation, long-term crisis?

In order to pull Egypt from the brink, far more needs to be done. A serious restructuring of the economy, including the imposition of temporary austerity, cannot be undertaken without a reconstituted social contract between authorities and its citizens. However, the prospects for a sustainable social contract are nowhere to be seen.

The country is deeply polarised. Defence Minister Al-Sisi enjoys pop-star status across the country. Liberals have accepted the regime as the only viable option. The youth are in a state of confusion. The judiciary is irredeemably politicised. While at face value civilians recognise the imperative to seek a new consensus with the Islamists, deep down, the military and civilian establishments have no visible incentives to seek the Brotherhood’s inclusion. The Muslim Brotherhood, on its end, is currently under cover and will not play the political game anytime soon both because it would not be allowed to do so and because it would suffer a humiliating defeat, if it were to do it.

In this context, the cards seem set for a reconstitution of the system, with somewhat different features from the pre-2011 regime: Egypt is likely to veer towards a presidential system coupled with a weak and fragmented parliament. The standing question is whether the presidential candidate will be a military man – al-Sisi himself, who may end up finding irresistible the popular call to run for the post – or rather a (weak) civilian state figure with close ties to the military, who would allow the latter to retain the reins of power (a set-up reminiscent of post-1980 Turkey). In the short-to-medium term this recipe may work. Such a regime will not usher in democratisation. Nor will it tackle deep-rooted economic reforms. But it may deliver order and piecemeal reform. 

Beyond the short term, a crisis looms. In a country with an overinflated bureaucracy, weak political parties, a politicised judiciary, a polarised society, and an all-powerful military, the prospects for dialogue, consensus building and ultimately democracy are poor. With the prospects of genuine political change dimming, rent-seeking behaviour by an unaccountable political (and military) class may become impossible to contain. The conflict between Egypt’s haves and the have-nots would reignite, and current palliatives, such as energy subsidies and Gulf assistance, can at best freeze the situation in the short-term, at worst accelerate the crisis in the long-run.

Coupled with this is the question of political Islam. The Brotherhood’s comeback capacity seems to have been neutralised for the time being. But it is difficult to imagine that political Islam is definitively buried in the country. And the precise form its resurfacing will take is still unclear today.

Egypt, the US and the EU

Washington will probably seek to re-establish a strong US-Egyptian security axis. The silence of the US Secretary of State about Morsi during his visit to Cairo only a day before the Brotherhood’s trial could not have been a clearer sign of the tide turning in US-Egyptian relations. The US needs Egypt and a strong Egyptian military to assist it in providing security to Israel and curbing instability in Sudan and North Africa. In security terms, al-Sisi is viewed as a reliable ally with the capacity to deliver. He holds the promise of rehabilitating the role that the US had carved out for Egypt in 1979 and was lost due to Mubarak’s brittle hold over the security establishment and the latter’s ensuing stagnation. US military assistance is likely to resume in the period ahead and be directed towards counter-terrorism, border security, military training, and weapons collection, if and as the situation normalises.

The US does not have vital interests in the Egyptian economy. American companies, notably energy companies, have already pulled out from Egypt a few years ago. Hence, the deep economic reforms the country needs so badly to avert a structural crisis, while seen as highly desirable in Washington (particularly in the State Department), are not considered vital. To the extent that providing critical security goods (including combating domestic terrorism) happens without political transformation and that deep-rooted socio-economic reform (which is predicated upon political change) is not vital to the US, the path seems set for a reconstituted US-Egyptian security relationship.

Europe is in a different spot not only because it has vocally criticised Morsi’s overthrow and the violent crackdown of the Brotherhood that followed. But also, unlike the US, Europe and European companies have heavily invested in Egypt’s economy. And as noted above, it is difficult to imagine Egypt’s wholesale socio-economic reform without an accompanying political transformation. The illusion that economic reform could precede and induce political change was a long-held European belief that the Arab uprisings have definitively washed away. Economic and political change can only take place hand-in-hand.

But what can the EU do? The space for manoeuvre is narrow. Egyptians are fatigued by revolts and revolutions. In a context in which all viable (Islamist) opponents are in jail, were al-Sisi to stand for presidential elections, he would win by a landslide. Alongside this, the EU’s leverage is limited, with EU assistance paling in insignificance to US (military) assistance and Saudi funds. With neither the domestic nor the broader international environment being conducive to a transformationist agenda, all the EU can do is to work with what is out there.

It can pick dossiers, either on security or economic matters, which can and do have broader governance implications, using these to put its foot in the door and marginally eek the door open from there. This means emphasising the rule of law components of economic or security cooperation projects. This is not to say that more openly political dossiers should not be touched. It is important, if not essential, for European leaders visiting Egypt to insist upon meeting jailed Brotherhood leaders, encourage reconciliation, and propose election monitoring as parliamentary and presidential elections will follow the end of the constitutional process. To do so is vital for the external identity the EU seeks to project.

But in all honesty, it is unlikely that straight-out democratisation policies will bear visible fruits. In the short-to-medium term, all that Europe can realistically hope to achieve is to work to support competent civilians in what remains of Egypt’s betrayed revolution. 

Nathalie Tocci is the Deputy Director, Istituto Affari Internazionali, Rome and editor of The International Spectator.