President Morsi is caught between the IMF, with its demand for austerity measures, and protestors
When an important leader of the political opposition hints that a military coup might be preferable to the current chaos, and when a major financial organization proposes an economic program certain to spark a social explosion, something is afoot. Is Egypt being primed for a coup?
It is hard to draw any other conclusion given the demands the International Monetary Fund (IMF) is making on the government of President Mohamed Morsi: regressive taxes, massive cuts in fuel subsidies, and hard-edged austerity measures whose weight will overwhelmingly fall on Egypt's poor.
"Austerity measures at a time of political instability are simply unfeasible in Egypt," says Tarek Radwan of the Washington-based Atlantic Council. "He [Morsi] is already facing civil disobedience in the streets, protests on a weekly, if not daily basis, clashes between protestors and security -- he does not want to worsen the situation."
The "situation" consists of widespread police strikes, particularly in the industrial city of Port Said, but also including parts of Cairo and the heavily populated Nile Delta. The police in Sharqiya have even refused to protect Morsi's house. At its height the strike spread to half of Egypt's 27 administrative governorates.
Microbus drivers, angered at rising diesel prices and fuel shortages, blocked roads leading into Cairo, setting off massive traffic jams. Farmers in the Delta joined them, refusing to ship crops and shutting down farm machinery.
Added to the tense political situation are rapidly shrinking foreign currency reserves, an economy that is dead in the water, and an unemployment rate that has risen to 13.5 percent, and close to 25 percent for Egyptians aged 15 to 29. The number of Egyptians living below the poverty line has increased from 20 percent in 2010 to 25 percent today. And tourism, which contributes 11 percent of the gross domestic product, has tanked.
Morsi's Islamist government appears increasingly isolated, although the Muslim Brotherhood is still the best organized political force in Egypt. Reaching out to the opposition, however, is not its strong point. Morsi was elected with only 52 percent of the vote, and most observers think that support has eroded in the face of economic crisis and political instability. The government managed to ram through an Islamist constitution, but only 33 percent of the voters went to the polls. The government had planned on elections sometime between April and June, but a court recently overturned that decision.
The Morsi government has increasingly resorted to the use of force against opponents, including police tactics similar to those used by the Mubarak government. The government Attorney General recently caused an uproar by asking for "civilians" to arrest "lawbreakers." The opposition charges that the call is cover for the Morsi government to set up militias dominated by the Muslim Brotherhood.
The plagues being visited upon Egypt may not be of Biblical proportions, but they are serious enough to destabilize the biggest Arab country in the Middle East. They certainly threaten the gains of the January 2011 revolution that overthrew the autocratic and corrupt government of Hosni Mubarak and sent the powerful Egyptian army back to the barracks.
They may not stay there long.
Opposition leader Essam Al-Islambouli of the National Salvation Front told Al-Ahram Weekly, "Today, we don't just have a convoluted political process, but we are also facing confused and disturbing economic challenges, and we are seeing the threat of citizens bearing arms against each other. We might be reaching a point at which it will become inevitable for the Armed Forces to step in."
Mohamed ElBaradei, head of Egypt's Constitutional Party and founding member of the opposition National Salvation Front, told Ahram Online that while he doesn't "hope the military takes over," it would be better to be ruled by the military than by Islamic militias.
The Muslim Brotherhood does have a paramilitary wing called the "Hawks" that surfaced in 2006 during demonstrations at Al-Azhar University, and one rumor is that the MB has as many as 5,000 soldiers. There is also a reputed pledge by Hamas to send fighters from Gaza to support the MB. But it is very unlikely that the Brotherhood has anywhere near 5,000 armed men, and Hamas official Mahmoud Al-Zahar denied that the Palestinian organization intends to interfere in Egypt, calling the rumor nothing more than an attempt to smear Hamas. Indeed, relations between Hamas and the Morsi government have recently cooled.
The puzzling thing about the IMF's demands is that they fly in the face of a recent study by the organization's chief economist Oliver Banchard, which found spending cuts and taxes hikes only make recessions worse. Stimulus spending are far more effective in restarting an economy.
The Morsi government was hoping the international lending organization would front it $4.8 billion to pull Egypt through the current crisis, but Cairo has delayed asking for the loan, in large part because it is afraid of what the reaction would be. Cutting fuel subsidies would fall heavily on the poor, who use kerosene for cooking. However, without the IMF loan, loans from the U.S. and the European Union will be put on hold as well.
The Morsi government's fear is well founded. Egypt has long been a difficult country to govern without the consent of its people unless rulers can call on a powerful army. Its population of 83 million is concentrated in a few urban areas, the Delta, the narrow strip of land bordering the Nile, and several cities in the Canal Zone.
That concentration makes demonstrations formidable, as the Mubarak government found out in 2011. The Morsi government recently discovered that fact when it sentenced 21 soccer fans to death for their part in a 2012 riot in Port Said that killed 74 people. Port Said exploded at the verdict.
With the police overwhelmed -- and on strike -- Morsi was forced to call in the Egyptian Army to confront the rioters, but military commanders were less than happy at being caught between the demonstrators and the government. "The Egyptian armed forces is a combat institution not a security institution," grumbled Gen. Ahmed Wasfi, head of the Army division sent into Port Said. "No one can imagine the Army replacing the Interior Ministry."
Defense Minister Gen. Abdel-Fattah Al-Sisi warned the Morsi government not to try and "brotherhoodise" the military, and also hinted darkly that the continued unrest could bring about a possible "collapse of the state." It was a sobering statement from an institution that has intervened on other occasions in Egypt, including during the 1952 coup/ revolution that put Gamal Abdel Nasser into power.
As long as Mubarak controlled the army, he could rule Egypt. When the army stepped back in 2011, the government fell.
It is an old story. Ancient Egypt was one of the few areas in the Roman Empire that required two full legions just to keep the peace. And the Romans found that when Egyptians got riled, it was best to back off and cut a deal. Cleopatra used the power of Egypt's population to hold off Roman rule for more than two decades. It is a force that no government can afford to take lightly.
It is no secret that the U.S. is not overly enthusiastic about the Morsi government. During his recent visit, U.S. Secretary of State John Kerry offered aid -- and a modest $250 million at that -- but only if the government instituted "painful" austerity measures and kept Cairo's foreign policy consistent with Washington's. The U.S. has the most powerful voice in the IMF -- it outvotes Japan, Germany and France combined -- and the fact that the lending organization demands essentially parallel those made by Kerry is hardly coincidence.
The oil-rich monarchies of the Gulf Cooperation Council (GCC), the U.S.'s major allies in the Middle East, have been telling Washington "We told you so" about Islamic governments, and GCC member Qatar, which initially pledged $4.3 billion in aid, has yet to make good on it. Qatar and other GCC nations have also reneged on an economic assistance package.
Morsi's government is hardly radical. Its economic policies reflect its urban professional roots, and what MB business leader Hassan Malek calls "capitalism with attention to the poor," a pledge that will be hard to reconcile with the IMF's formula.
But Egypt has adopted a foreign policy that is not always in perfect alignment with Washington, including re-establishing relations with Iran and sharpening the criticism of Israel for its occupation of the West Bank and Golan Heights.
The U.S. has traditionally been more comfortable with authoritarian governments in the Middle East than democratic or Islamic ones, and it has influence with the Egyptian military through its $1.3 billion in yearly aid.
Are the statements by Egypt's opposition concerning the possibility of a military takeover simply a political maneuver aimed at forcing the Morsi government to be more inclusive, or are they laying a foundation for a coup? Loose talk about an Army takeover in Egypt is a little like hand feeding a crocodile: a good way to lose a body part.
Why is the IMF ignoring its own findings on austerity to push a program that can only ignite massive resistance? And why is the U.S. piling on?
Egypt is looking at a summer of higher food prices, rising unemployment, blackouts, fuel shortages, and growing political unrest. If the country were a chessboard, it looks like a lot of pieces are lining up for an assault on the king.
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Foreign Policy in Focus, "Is Egypt Being Primed for a Coup?"