Wednesday, January 25, 2012

The New Egypt - Bankrupt And Sinking Fast

All hail the wondrous Arab Spring!

It is one year ago today that the protests in Cairo's Tahrir Square began that ended in the fall of the Mubarak regime. It was fitting that President Obama mentioned it last night in his State of the Union Address, since he had a major role in that 'wave of change', calling for Mubarak's ouster and signalling to the Egyptian military whom now control the country which way to turn.It's well worth examining how things are going.

The parliamentary elections have been held, and the Islamist Muslim Brotherhood and the hard core Salafist al-Nour Party won - surprise!- over 75% of the seats.The FaceBook and Twitter liberals in places like Cairo and Alexandria everyone in the West was so in love with proved to be a negligible political force, and Egypt is likely headed towards an Islamist Republic as soon as the proper arrangements are made with the Army.

The Army originally had ideas of a government that had little civilian control over the military or is it's budget, ala' the old Turkish model. In response, Islamists played their cards quite cleverly, gradually fomenting discontent against military rule and instigating violent riots after Friday prayers over the military's refusal to turn over power to a civilian government. The riots resulted in a harsh series of crack downs that effectively turned the military from the people's heroes during the Revolution into oppressors and the chief villains opposing 'democracy'. Between September and the end of December, something like 100 demonstrators were killed by the Army and police, while hundreds were injured and arrested.

The military junta's tactics also turned the Brotherhood and the Salafis into heroes, and the election results show how effective their tactics were. The Egyptian military will almost certainly have to make the same devil's bargain with the Islamists that the Iranian military did.

So Egypt is likely headed towards Islamist rule, but the country's future is looking increasingly grim. Egypt's economy is essentially collapsing from within.

After the Lara Logan gang rape and the widespread scenes of unrest, most of Egypt's tourism industry is dead, and the rest will likely collapse as soon as the Islamists take power and put sharia law in place to outlaw alcohol, bikinis and mixed bathing on beaches.

Increased sectarian violence against Egypt's Coptic Christians, who largely supported the Revolution, is ensuring that a large group of Egypt's more prosperous and educated citizens are emigrating in droves.

Investors are unwilling to buy Egyptian bonds even at double digit interest rates, which means that Egypt's ability to borrow is being cut to the bone. No one wants the Egyptian pound. The only Egyptian bonds anyone wants to buy are dollar-denominated treasury bills. After the results of the last election, currency flight has become a major problem, as anyone with money is stashing it overseas as fast as they can in euros or dollars, preparing for a relocation out of the country.

Foreign aid is also problematical.Egypt's government has begun negotiations for a $3.2 billion IMF loan and still receives about $1.3 billion annually in military aid from the US but that's not enough for Egypt's needs and won't even begin to replace the amount of money leaving the country. And it's also likely that as things unravel, any of that military aid that's in cash and isn't directly spent on armaments will likely follow the rest of Egypt's treasury overseas, while foreign nations are unlikely or unwilling to be able to commit large amounts of aid right now. Unlike Libya, there's no significant oil wealth in Egypt to tap.

Any warehoused resources or stocks that can be sold for cash are being liquidated, resulting in shortages of fuel, foodstuffs and even medicines in a number of localities according to numerous reports. Since Egypt has a population of over eighty million it can't support or feed on it's own, food imports are a necessity and there is increasingly less money to do so, or for consumers to buy it even if it were available.

Egypt is heading for some very uneasy times.

Aside from major economic woes, Egypt's political situation looks increasingly bleak from an American standpoint. The best case scenario is an agreement between the military and the Islamists for governing which would at least ensure a certain amount of domestic peace, but would almost certainly be a setback for American strategic objectives in the region - helping to guard the Eastern Mediterranean, cooperating with the US on anti-terrorism efforts, keeping the Suez Canal and its access to the Red Sea and the Persian Gulf functioning and continuing to observe the Camp David Accords. Mubarak was at least a nominal, anti-Islamist ally in these matters, but those days are gone.

The Obama Administration will likely try to appease Egypt's new Islamist rulers, and Deputy Secretary of State William Burns met with Brotherhood leaders earlier this month to begin that process. Given the Brotherhood's hostility toward almost every American policy aim in the Middle East, that will probably end up working as well as President Carter's early attempts to appease the Ayatollah Khomeini in Iran did.

In later years, historians will be looking at President Obama's encouragement of the Muslim Brotherhood and the Islamists in Egypt, Libya and elsewhere the same way way they now see Jimmy Carter's encouragement of the same thing in a major foreign policy blunder.


B.Poster said...

You're largely spot on, however, there are just a few areas I would quibble with. First of all the Obama Administration did not play a major role in the so called wave of change nor did the US. There was absolutely nothing the US could have done to save the Mubarak regime even if it wanted to.

Once the military made the decision, not to quell the rebellion, Mubarak's fate was sealed. This is where allot of the talking head pundits get this entirely wrong. They think or at least claim that the people rose up to overthrow the Mubarak government. In actuality the military chose largely to stand down and they chose again to stand down against the Muslim Brotherhood.

While the US could not have saved the Mubarark regime even if it wanted to, it does appear that US leaders made a strategic error. Once it became apparent that the Mubarak government was going to fall, the US applied pressure at certain points to speed the process up and to aid the strongest group in Egypt which is the Muslim Brotherhood.

Had things been allowed to proceed without US interference Mubarak still would have fallen but it would have taken longer. This would have allowed other groups in Egypt the opportunity to gain their so called footing, improve their organization, gain funding, and increase their strength. As such while the MB still might have been the most powerful force in the new Egypt its highly likely that there would have been other forces in Egypt who could have and would have acted as a check on the MB and their supporters.

This is the likely outcome if we did absolutely nothing!! We'd have been better off to do nothing than to do what we did!!

Given the inevitability of the fall of the Mubarak government, we had really two viable options. 1.)Identify the groups in Egypt who would be most likely to be compatible with our interests and give these groups assistance. 2.)Do nothing and allow the situation to sort itself out and then chart our Middle East and foreign policies in accordance to how things turn out.

While option 1 would likely be the optimal solution, its probably not implementable. Given the general incompetence of the CIA and other US intellegence services its unlikely they could properly identify who we should be supporting. Furthermore given the rampant anti-Americanism in the region its unilikely we could find any one who would want to support us without asking to high a price and it would be the doom of pretty much any group to be caugt supporting us right now!!

As such, like it or not option 2, which is sit it out and do nothing, was really the only viable option POTUS or US policy makers had that would work well for America's interests. Once we knew how things turned out, then we would be in a better position to chart our course. By intervening in the way we did, it seems we only made matters worse!!

It should be pointed out that Mubarak was no friend of America. Essentially we were blackmailed by him and his country to the tune of several billion dollars a year for a long time so he and his country would not harm us or our interests. Eventually he would have turned on us when he felt it suited him.

Egypt is a major food importer. The US is a mjor food suuplier is it not? I wonder if there might be some way to work this to our advantage here?

Rob said...

Hi Poster,
Obama making a point of including the Muslim Brotherhood during his trip to Cairo, his encouragement of the unrest and his calling for Mubarak's ouster were the signal to the military which way the wind was blowing.He bears some responsibility.

Mubarak had one advantage - he stayed bought, which is about th ebest you can hope for in the Arab world. And he hated Islamists, because of the way the MB murdered his predecessor Sadat.There's no guarantee he would he stopped at least watching out fo rour interests as long as the baksheesh came in.

We are a food exporter - however, Egypt is running out of money to pay for it. Not much to do there.


B.Poster said...

I agree Mr. Obama does bear some responsibility, however, the Muslim Brotherhood was and is the most powerful group in Egpyt. If he is going to go to Cairo, he is going to have to include the Muslim Brotherhood or at the very least say nothing but that would be exceedingly difficult for a foreign leader making a trip to Egypt.

The best bet is likely for POTUS to reamin in the US and say and do nothing. Wait and see how things shake out and then you can decide how to conduct your foreign policy as it pertains to the Middle East.

Of course he called for Mubarak's ouster. Mr. Mubarak was and is gone. There was not a thing he could have done to prevent this. The military's lack of response to the protests cued him on which way the wind was blowing. By calling for Mubarak's ouster, he was simply responding to the political realities on the ground. Trying to prevent the inevitable collapse of the Mubarak government or speaking out in support of it would have probably been about the worst thing he could have done.

Again, as stated above, we were left with two viable options. 1.)Do nothing. Wait and see how things develop and chart our foreign policies according to what develops. 2.)Work to identify groups in Egypt whose goals are compatible with our interests and try and support their rise to power.

I pointed out in the previous post why option 1 is likely unworkable. As such, option 2 would have been our best option.

POTUS and his team opted for another option. Recognizing that Mubarak was going to fall they sought to try and get out in front of the events. Hence we get a call for Mubarak ouster when his ouster is all but inevitable. Recognizing the MB as the most powerful group in Egypt who was probably going to prevail any way they threw their support to this group. Furthermore they acted at certain key points that made the process move faster than it would have had they simply stayed out of it. I don't agree with their decision making here.

For whst its worth, had we simply stayed out of it the MB probably still wins but they likely get bruised in the process. This would make them less threatening and there likely would have been other groups within Egypt who would have put a check on their power. Such a situation would be infinitely better than the one we are likley to end up with.

As far a "looking back" on this, if America continues with its current policies, it only has at best 3 to 5 years before it falls apart or its enemies conquer it. As such, I'm not sure who would do the looling back. Now, if POTUS and his team somehow pull off some type of agreement with the MB and other Islamic terrorist organizations and we are able to peacefully coexist, the national debt is stabilizied, and the economy stays exactly as it is today, those who look back will hail the greatness of the current POTUS. Don't think thats likely though. The best bet seems to be removal of this current POTUS and replacing him along with most of the government and starting from scratch.

B.Poster said...

Since we are net food exporter and Egypt needs food, perhaps we can do "lets make a deal." You list out certain strategic objectives the US has with regards to Egypt. Perhaps in exchange for food the Egyptians might help us with these things.

Frankly to pull this off would require a certain "get tough" with foreigners that this POTUS, his team, as well as much the State Department, and others who would be involved with the negotians largely seem to lack. America's negotiating stance is largely predicated on what America did wrong, how can America rectify what it did wrong, what concessions must America make, what must America do, and what must America not do. Adversaries and potential adversaries are either expected to make no concessions or only token ones that make no real difference. Such a negotiating philosphy will get one no where good.

While not being in Egypt I'm not sure what the best approach for the Copt Christians is but I'm having trouble understanding why they would support the revolution. All the way on the other side of the world with only a computer and a monitor I knew immediately how this would end. Perhaps when one is to close to the action, it is hard to see things objectively. For example, I should have see tne problems with an American invasion of Iraq but did not.

A bit off topic but if there are a few things we should have learned from all of this are as follows. 1.)"Democracy", "one man one vote", or whatever we wish to call it is not a cure all. Even an American style Republic is not workable for all countries. 2.) Our approach needs to be on our interests and not on promoting "democracy" or whatever it is we are trying to do. We are MOT trying to subdue the world as some leftists and Paulbots suggest. I have little patience for such silliness. 3.)Russia and China have been by far and away the most successful countries in the 21st century. In contrast, America has lost ground in every area of importance. We should seriously study what those countries are doing and try to implement what we can. Some things they do are not desireable for us nor would they be workable. See lessons 1 and 2.

Rob said...

Hi Poster,
The Copts went along with the revolution for the same reason they went along with Egypt's Jew hatred and Israel Derangement Syndrome - because they're a despised minority anxious to fit in and prove themselves, and they perhaps hoped that 'liberals' would take over and not the Islamists.

We are a democratic Republic, and had a long grounding in the rights of the individual before we attained that.

Islam and that kind of government don't mix. It's that simple.

There is no deal we can make with the Islamists to safeguard our interests that they would keep. Carter made the same mistake with Khomeini and Eisenhower made a similar error with Nasser. They have their agenda and helping them is not in our best interest.

B.Poster said...

"There is no deal we can make with Islamists to safeguard our interests that they would keep." I think you are probably right about that, however, I don't think many Americans are fully aware of this. After all any half way decent leftist-main stream media personality can and will present a long laundry list of agreements America did not keep. Any educator can and will do this very easily and readily also.

At least that's the narrative. As with all narratives, what actaully happened is probably more complicated than that. Many people around the world and in America believe we are the problem not them. Of course America does have a huge and often hostile media spotlight on it 24/7. As such, it would be problematic at best for America to violate any agreement that it makes. The Islamists face no such scrutiny.

Since we can't make an agreement with them that they'd keep and helping them would not work well for us, we are really only left with one of two options. Well actually there's a third to be discussed later.

Our two main options are as follows. 1.)Conquer them outright and simply take whatever resources from their lands we need. The narrative says we are a "hyper power." As such, one would think that would be doable. 2.)Seek to limit our contact and exposure to them as much as possible. A great place to start be by developing our own oil and gas reserves and building more refineries. This would mean we would buy less oil from them which would mean less money available to them to harm us or our interests and it would give us some leverage in any negotiations with them.

While we're doing this seek to limit immigration to America from Muslim lands as much as possible. It makes sense to allow unfettered access to one's house by people who don't like them. America should not be expected to behave any differently in this regard than any other soverign nation.

While option one might be the optimal approach, its likely not doable. America as some sort of hyper power is a myth. By over stating the power of an adversary it makes it much easier to demonize that adversary. Given the litany of issues America faces right now that I've discussed in detail elsewhere on other threads, option two is likely our best approach and perhaps our only approach that has any chance of working to defend our nation and grow our economy.

Of course there is a third option that just might work. Russia and China seem to have excellent relations with Middle Eastern countries. We have horrible relations with all of them. What are they doing differently from us? Can we do any of what they are doing? Russia and China have been by far and away the most successful countries in the world in the 21st century. In contrast, the US has lost massive ground in pretty much every area of importance. We would do well to study what Russia and China are doing and trying to implement what we can that is doable and desireable for us. If you want to be the best, study the best!!

"We are a Democratic Republic, and had a grounding in the rights of the individual long before we attained that." Exactly!! I could not have said that better myself. Thank you for expressing my point much more eloquently than I did. Since Islam as well as many other cultures don't mix with that style of government, it is inadvisable for some to attempt it. A foreign policy based strictly on our interests rather than some nebulous idea of promoting "democracy" is going to be our best approach.

Anonymous said...

Cut the foreign aid to zero and tell them "Allah will provide."
Mass starvation might convince them to avoid Islamic Rule in future, if not, no great loss.

Sara Noble said...

The Obama administration has been a big supporter of the Arab Spring throughout the ME beginning with the trigger, his Cairo speech. He also put pressure on Mubarek and encouraged the protesters. He funded the Brotherhood, even though the leader was ex al-Qaeda. Only a fool would take any of these people for freedom fighters.

Obama, however, did not support the protesters in Iran who were real freedom fighters.

Obama insisted that Mubarek, and later the Egyptian army, include the Brotherhood in the formation of the new government.

I am not sure what to think of Obama, but he's into this disaster 100%.

I'm with anon, defund!

Anonymous said...

I agree, keep the money home. Invest the money in our country instead of these billions we just give Egypt. This will strengthen the internal fiber of our country. Keeping us working and independent from another county from walking in and taking over.
I do not blame Obama he just inherited this countries disaster. Set up by his predecessors. This country has been going down as the rich get richer Im guessing before he was born.

Rob said...

Oh, of course...President Obama's not to blame for anything, is he?

It was President Obama who encouraged and engineered the Muslim Brotherhood in this take over, just as he engineered the Muslim Brotherhood takeover in Libya. People are going to be shocked how badly that turns will make Jimmy Carter's encouragement of Khomenei and undercutting of the Shah pale by comparison.