Sunday, August 12, 2012

Egypt: Islamist President Morsi Orders Head Of Military Council Tantawi To Resign

A major power play took place in Egypt today as Muslim Brotherhood President Mohammed Morsi ordered the 'retirement' of several chief members of the Supreme Council of the Armed Forces(SCAF) the military junta that had been the de facto ruler of Egypt since the overthrow of Egyptian leader Hosni Mubarak.

"Field Marshal Hussein Tantawi has been transferred into retirement from today," presidential spokesman Yasser Ali said in a statement. Gen Abdel-Fattah al-Sisi, ( who just happens to be a Muslim Brotherhood member) was named to replace Field Marshal Tantawi as both armed forces chief and defense minister.

Also 'retired' were the army chief of staff, Sami Anan and the commanders of the Navy, Air Force and air defense. Annan and Tantawi supposedly retained as 'advisers' and were given Egypt's highest state honour, the Grand Collar of the Nile as a face saving gesture.

This is either a major overreach by Morsi and the Islamists or a signal that they have power well in hand. The key signal will be whether Tantawi, Assad and the others go quietly.

If they don't it will be because they have the rank and file military behind them, If they do, it will be because they're unable to get the troops to follow them against the Brotherhood.
Again, this is exactly what happened in Iran. Once Khomeini took over, he made a deal with the Iranian military to preserve some of their perks and power in exchange for them acquiescing to the Islamist Revolution. As soon as Khomeini felt he was strong enough. he purged the military.

As with most of these things, money is a major factor. What happens with the military and which way they jump will depend a great deal on economics.

Egypt's foreign currency reserves are disappearing steadily ( down to $5.8 billion in July, the last time I checked). Farmers are protesting ( and not peaceably) over water shortages. land taxes and the high cost of fertilizer, prices on staples continue to rise, and tourism is mordant, especially from western countries. Egypt's trade deficit is around $36 billion, the income from the canal brings in $5 billion or so a year, and they might net another $10-12 billion from taxes, cotton, what's left of the tourist industry and other miscellaneous sources, not including the $1.5 billion they get from the US, mainly military aid. An IMF loan is in the works, but hasn't materialized yet.

The country is notoriously corrupt, has very little foreign investment and a population of 80 million it's unable to feed.

In short, economically, Egypt is circling the drain.

The military might very well be taking a wait and see attitude, with the idea of putting together a coup later after an economic collapse that can be conveniently blamed on the Brotherhood.

So the big question that remains is whether the new Muslim Brotherhood-ruled Egypt is going to get a new 'sponsor.'

The main candidates are the Obama Administration, The Saudis and GCC countries and even, perhaps, Iran.

The Obama Administration has obviously made a few promises to Morsi and the Brotherhood about funding, and while President Obama hearts the Muslim Brotherhood, the money still has to go through Congress, and that becomes politically problematical, especially in an election year. Frankly, the U.S. and the EU have their own more pressing problems, which is also one of the holdups on the IMF loan.

Iran frankly lacks the amount of money the Egyptians need, but it might provide a few billion or so. I would expect the Muslim Brotherhood to flirt with Tehran in order to frighten their real target, the Saudis and GCC countries.

The Saudis haven't put much into Egypt yet ( they're not stupid) because the political situation is still very volatile. But if Morsi can goose the House of Saud along by flirting with the Iranians, there's a chance he might get them to play along.

Stay tuned...

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