Unlike many leaders around the world, Egypt’s Abdel Fattah al-Sisi is delighted with the election of Donald Trump. While few governments took the real estate developer seriously during the campaign, the general-turned-president sought him out for a September meeting during the UN general assembly in New York. He was also the first leader to congratulate him on his victory.
The Egyptian media has marvelled at the “chemistry” between the two men, who share a populist streak and a worldview in which Russia is a benign geopolitical power and worthy partner. Above all, Mr Sisi finds in his new counterpart a kindred spirit who considers political Islam as threatening as jihadism.
In an interview at the presidential palace in Cairo, a former arabesque-style hotel with elegant marble hallways, Egypt’s 62-year-old strongman tells the Financial Times that he is “very optimistic” about Mr Trump’s election.
“President-elect Trump is tackling terrorism with more resolve and seriousness and that’s exactly what’s needed now,” he says. Co-operation between Moscow and Washington, he adds, would be a boon for stability in a conflict-ridden Middle East.
For Mr Sisi, terrorism extends well beyond the jihadis of Isis who are leading an insurgency in the Sinai that has reached the heart of Cairo, where a Coptic church was bombed last week, killing 24 worshippers. Crucially, his definition includes the Muslim Brotherhood, the political movement he ousted from power as army general in 2013 and has since brutally crushed.
The hope in government circles is that instead of an Obama administration that was accused by Egyptians of sympathising with the Brotherhood, Mr Trump would legitimise the security campaign and support the Sisi regime at a time of growing economic strain.
How much help Mr Trump will bring, if any at all, remains to be seen. But nearly six years after the revolution that captured the global imagination and raised hopes of a democratic transformation in the Middle East, the Arab world’s most populous nation is back in the grip of an authoritarian state. Egypt’s social, economic and political problems today are deeper than those that sparked the 2011 uprising against Hosni Mubarak, the former president.
In Cairo’s Tahrir Square, where Egyptian youth camped out for weeks in 2011, all signs of a popular revolt have been erased, replaced by a tall post with an Egyptian flag that residents see as a symbol of the return of state-imposed order. Vendors that occupied the side streets as a chaotic freedom swept the capital have since been removed; even the revolutionary graffiti has faded.
‘Getting more resilient’
Elected in June 2014, Mr Sisi rode a wave of disappointment with the one-year rule of the Islamists, who had proved divisive and incompetent. Egyptians fed up with chaos pinned their hopes on the general who presented himself as the father of a nation. They kept faith even as repressive security agencies they had rebelled against returned to the fore and security was elevated as the organising principle of the state.
Egypt’s problems, however, have piled up. The political space that even under the Mubarak regime allowed some freedom of expression has been firmly shut, and prisons are teeming with detainees. In a population growing at a rate of 2.5 per cent, 27 per cent of the 90m-plus Egyptians live below the poverty line, up from 25 per cent before the Arab spring. Youth unemployment has swelled, the 6m-strong and bloated public sector has added 1m workers, and domestic debt has climbed to more than 100 per cent of gross domestic product.
Tourism has taken a massive hit as security has worsened. Gulf backers who helped prop up the Sisi regime have grown weary of doling out largesse. Relations with Saudi Arabia in particular have been strained.
As the regime has been forced to turn to the International Monetary Fund and implement long-resisted reforms, Mr Sisi’s lustre has dimmed. The personality cult promoted by a sycophantic media has been deflated and criticism of his leadership has spread on social media. Although few Egyptians have an appetite for more upheaval, the newly empowered security agencies are said to be on permanent alert for more unrest.
For all that, Mr Sisi remains confident of his power to save Egypt from catastrophe, now that he has defeated the Brotherhood. He believes that the “great Egyptian nation” has a boundless capacity for “understanding and sacrifice”.
“For 30 months, attempts have been made to topple this country but to the surprise of many, Egyptians are getting more resilient, aware and supportive of their own country,” he says.
This resilience, however, will be tested by the regime’s ability to reform a dysfunctional economy. On that front, success will prove much harder to achieve.
True, since October, as a foreign currency crunch tightened and the dollar soared on the black market, the government implemented tough measures that successive administrations had postponed. It imposed a value added tax, capped public sector salary increases, slashed fuel subsidies and — most dramatic of all — allowed the Egyptian pound to float so that its value halved against the dollar.
The boldest reforms since the 1980s persuaded the IMF to agree a long-delayed $12bn loan programme over three years, intended to restore public finances to an even keel and rekindle the interest of foreign investors. The immediate impact of the measures, however, was a spike in annual inflation, which reached almost 20 per cent in November, and is expected to remain in double digits well into next year.
‘Reaching the right beneficiaries’
On the streets of Cairo, shoppers complain of rising prices and of having to cut back. Rana Ahmed, a divorced mother of two who says she has to work overtime to add to her meagre secretarial salary of $115 per month, laments the increased cost of transport after the fuel subsidy cuts. “I now spend a quarter of my salary on transport,” she says. Ibrahim Mohamed, a carpenter, says that he and his family used to eat meat or chicken every day, but now it is just twice a week. “It has been a month since I last bought any fruit,” he says.
The government is helping the poorest segments of society with cash handouts and a subsidised food programme. “The country was subsidising the pound and luxury items worth billions of dollars were just being imported. Now, there is a rationalised subsidy and the government has implemented safety measures to make sure subsidies reach the right beneficiaries,” says Mr Sisi. Yet, with half of Egypt’s food bill imported, including half of its wheat, all Egyptians — not least the salaried middle class — will feel poorer over the next few years.
Beyond fiscal and monetary stabilisation, the big question is whether the regime will pursue structural reforms that can revive stagnant investment and spur growth. These reforms, however, clash with a military mindset that is deeply suspicious of the business community, associating it with the corruption and cronyism of the Mubarak era that fuelled popular resentment.
Businessmen in Cairo say the army urgently needs “reconciliation” with the private sector. “The economy cannot be propelled forward without the private sector — first you have to come to this conclusion and they [the regime] have not yet,” says one businessman. Until then, he adds, “a lot of the private sector is staying on the fence”.
Mr Sisi has relied on the army to manage national projects that he sees as morale boosters, such as the expansion of the Suez Canal and the building of a new capital city — neither of which the business community finds necessary. The army, which has long owned some businesses, is expanding its footprint with a new law allowing it to partner local and foreign companies. New military-owned factories have sprung up over the past two years, including in the cement and steel sectors.
People familiar with the workings of the regime say a “shadow” cabinet made up of security agencies in effect operates alongside the civilian government and weighs economic decisions according to the risks of popular unrest.
In the interview, Mr Sisi is indignant at the suggestion the army could be looking to profit from business. “The Egyptian military is sparing no effort to help the country. It is so dangerous to accuse it of such things.”
The military economy accounts for 1.5 per cent to 2 per cent of gross domestic product, he contends. Military businesses are designed to ensure self-sufficiency for its personnel and relieve burdens on the market, not to compete with the private sector, he says. The other role it plays is “management and oversight” to guarantee “efficiency, compliance, timeliness and zero-tolerance of corruption” in contracts that are executed by private and public companies.
Officials say Mr Sisi had no choice but to rely on the army to meet people’s expectations and address the post-revolution collapse of investment. But fear of competition from such a powerful and unaccountable institution discourages private sector participation. As one businessman says: “It’s the perception that tomorrow they [the army] can enter a sector that is the issue.”
No ‘popularity contest’
The military’s economic interventions are one manifestation of the broader return of the security state that many Egyptians had thought was gone after the 2011 revolution.
The shortlived Islamist government of Mohamed Morsi showed its own autocratic bent but authoritarianism has become far more entrenched under Mr Sisi. The Muslim Brotherhood has received a “tremendous blow”, as Mr Sisi says. But western officials and some Egyptian politicians warn that attempts to eradicate it have also radicalised younger members and created new recruits for terrorist groups.
The security clampdown has not been confined to Islamists. Many liberals who had cheered Mr Sisi have watched with dismay as young secular activists who led the revolution were thrown in jail, human rights organisations have come under pressure and civil society leaders slapped with travel bans. Parliament recently approved a law to tighten control over civil society. The text of the law was even harsher than the one proposed by the government.
“The regime closes all avenues of expression because they are obsessed by the prospect of another revolution. Egyptians are too tired to revolt but what you could see is more sporadic, atomised unrest,” says a former official. The problem, he adds, is that the regime measures the success of its policies by whether people take to the streets.
“The measure of success is also how many people fall back into poverty, what happens to business confidence, whether the economy grows,” he says.
A few voices still dare to call for political reconciliation with parts of the Brotherhood and for a broader opening of the political space. Says one MP: “We have had a security policy for 40 years and it has failed, there has to be room for those Islamists who abide by the rule of law, they are part of society.”
For now at least, there is little chance of that. Mr Sisi dismisses human rights organisations’ claims of tens of thousands of political prisoners as “absurd”, stating that the numbers are confined to several hundred cases and more than 80 young detainees have recently been released.
“In a difficult situation such as ours, there might be some mistakes. They are not left uncorrected and in the soonest possible time,” he says.
Mr Sisi acknowledges that his approval ratings have gone down but says he is not running in a “popularity contest”. Rejecting a growing view that his rule is worse than that of Mubarak, he says he is “building love between Egyptians, a wave of respect for the other that will start in Cairo and spread across the region”.
The presidency of Egypt, he says, is a burden. Yet it is one that many expect him to try and keep when his term ends in 2018. He will not reveal whether he will seek a second term. There is no doubt, however, that his decision will depend in no small part on whether Egyptians are as willing to endure hardship and sacrifice as he believes them to be.
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