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Status quo or change?

Jonathan Power
Filed on July 8, 2006

NEARLY everyone here who keeps themselves informed agrees that the sands are shifting in Egypt. The unanswered question is where to?

For decades foreign correspondents have reported that economically Egypt is in a terrible mess and is much too vulnerable politically to survive as it is much longer. But it does survive and under Hosni Mubarak who took over 25 years ago when President Anwar Sadat was assassinated by an Islamic militant it has, in its own idiosyncratic way, gradually stabilised. But progressed? It seems not much.

Mubarak inherited a political and economic system fashioned in two contradictory ways by his predecessors, Sadat and Gamal Abdel Nasser. Nasser nationalised half the economy. The very poor were given a safety net and an imaginative land reform was enacted. Before long, although the liberated peasants began to thrive, the urban economy became encrusted and barnacled.

Sadat turned the ship in the other direction. The reorientation of Egypt’s political bearings away from Moscow and toward Washington and the decision to make peace with Israel brought a vast infusion of American aid. But the attempt to liberalise the economy was so abrupt that, rather than revitalising it, the effort merely spawned a new breed of entrepreneurs and speculators who both milked it and failed to impress Western businessmen that Egypt was a suitable milieu for long-term investment.

Mubarak inherited the worst of both worlds. A more decisive man might have pushed on with Sadat’s economic reforms, but Mubarak felt boxed in by the leftward-leaning Nasserite old guard that even today wields influence. Only in the last few years has privatisation of a moribund economy gathered speed. Deregulation —which means abolishing the hundreds of layers of officialdom that have impeded both the creation of new businesses and trade —is now moving so fast that the World Bank has singled Egypt out as the number one developing country in this regard.

Tourism is growing at a headlong rate. Gas exports are booming and the economy is now expected to grow at 6 per cent. But to get to this stage has taken Mubarak over 20 of his 25 years. And he is still not within sight of cracking Egypt’s horrendous unemployment problem.

The privatised companies have little money to spend on employing more people. Surplus cash simply goes to paying off years of bad debts. Moreover, in one of the most perverse of decisions, the successful Nasserite land reform programme is being rolled back. Landlords are being re-empowered and rural inequality and destitution is again on the rise.

But the wasted years of economic policy are nothing compared with the wasted years of political development. Mubarak has long acted as if he feels checkmated by Islamic fundamentalism. It is the force of the fundamentalists that has made him fear to this day an open and free electoral contest.

Last November’s highly controlled presidential and parliamentary elections were no different from past ones except in one important regard —the Muslim Brotherhood, the umbrella grouping for moderate to radical Islamists (now adhering to non-violence), was allowed to contest a limited number of seats and now have a serious presence in parliament. The violent wing of the Islamists always gave Mubarak the rational to keep democracy at bay. Indeed the atrocities of the Gama’a and Jihad, the last being the murder of over 50 tourists visiting the tombs at Luxor in 1997, were a mortal threat at the time. But their leaders renounced violence in 1999. (The bombing of tourist resorts in the Sinai a year and half ago was the work of a marginal fringe group.)

But what Mubarak always and still ignores is that fundamentalist strength, both violent and non-violent, waxed because he closed off all political avenues of dissent. Only very recently is the press being given some room for manoeuvre. Torture and police beatings are a common form of response to those who demonstrate or protest. Added to that is the growing hardship of the poor.

If Mubarak had been a wiser leader he would long ago have seized the opportunities offered by democracy. He probably would have had nothing to fear if he had done this 20 years ago. The Islamic Brotherhood is an urban phenomenon, and almost half of Egypt’s voters are in the villages, where they have long combined uncomplicated peasant religiosity with a wholesome support for Mubarak.

But now with the unravelling of the land reform he is losing this support in the countryside at a time when the Brotherhood have a new confidence in their step.

This is why nobody seems to know quite where the country is going. Egypt is not likely to go up in smoke, which some people thought a few years back. But neither is the most important country in the Middle East dramatically going forward. But being stuck in the sand when the sands are shifting is a policy to nowhere.

Jonathan Power is a veteran foreign affairs commentator. He is currently on a visit to Egypt. He can be reached at JonatPower@aol.com


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