The Cairo subway
was one of Hosni Mubarak’s proudest achievements. Built at a cost of several
billion dollars in the late 1980s, it reflected Egypt’s ancient civilization
and modern Egypt’s national pride. Air-conditioned in summer, quiet as a
pharaoh’s tomb, the subway was well-lit and beautifully appointed. Display
boxes of ancient Egyptian artifacts lined its platforms. A special police unit
kept the stations clean, safe, and graffiti-free.
Then came the
Egyptian revolution in January and February 2011. Today, the subway that transports
roughly 4 million passengers a day throughout this vast city of roughly 17
million is a wreck. The tile walls of its central hub, Tahrir Square—the
epicenter of the protests that forced Mubarak from power—are chipped and
filthy. Its platforms are strewn with litter. A main passageway from the
platform to the square has been dark for weeks; no one has changed the
burned-out bulbs. There are no policemen in sight. The passageways stink.
The subway is a
metaphor for post-revolutionary Egypt. The square that symbolized the
revolution is now occupied by riffraff and protestors who assemble periodically
to show the government that the people remain in control. Traffic around the
Middle East’s largest public square has been diverted.
While Cairo may
still be safer than Chicago, or even New York, Egyptian women, for the first
time in memory, fear shopping or taking cabs at night. Cairo’s police, blamed
for the deaths of protesters and unhappy with their pay, working conditions,
and lack of respect, sit in their precinct houses, refusing to provide security
that Egyptians once took for granted. Tourists have vanished, depriving Egypt
of a vital source of jobs and hard currency. Unemployment has risen from 9.8
percent in 2010 to 13 percent today. Inflation is officially 8.7 percent,
though more like 9.5 percent, or even higher, for food and basic commodities,
say economists. Even these figures are misleading, since an estimated 40
percent of Egypt’s economy is “black” or informal, unregulated by and
unreported to the government, according to Hazem el-Beblawi, an economist who
served as deputy prime minister under the army’s unpopular transition
government in 2011. Beblawi, a strong advocate of free-market liberalism who
resigned his post that year, accusing the army of taking Egypt in the “wrong
direction,” says youth unemployment probably tops 19 percent. Egypt, he
estimates, has less than its officially claimed $13.5 billion in hard-currency
reserves (versus $36 billion before the revolution). “Egypt imports roughly $60
billion worth of goods and services,” he says. “It exports under $25 billion.”
By summer, Beblawi
predicts, the government will be unable to import the wheat that sustains the
poor—Egypt imports 10 million tons of wheat per year, the most of any nation—or
the diesel that fuels bread ovens and transports 99 percent of everything that
moves in this country of more than 85 million. Egypt’s dilemma is this: it
cannot politically afford to stop providing the costly subsidies to the poor
that distort its economy. Poor Egyptians spend 70 percent of their income on
food, versus 55 percent for Egyptians as a whole; Americans spend roughly 14
percent. But unless it reduces these subsidies and adopts a pro-growth budget,
Egypt cannot secure the $4.8 billion International Monetary Fund loan it needs
to unlock what Angus Blair, a Cairo-based former investment banker and founder
of Signet Institute, an economic think tank, estimates could be $14 billion in
aid and investment. Egypt spends about 20 percent of its budget on fuel
subsidies alone. In other words, the government would be committing political
suicide to do what economists say must be done to sustain the country’s
economic viability. Only a government that enjoys public confidence can risk
taking such steps. “Egypt’s economic crisis has political roots,” Beblawi says.
“And a political solution is needed.” So far, he adds, none is in sight.
With their
legendary “sabr,” or patience, nearly exhausted, Egyptians blame the lack of
growth, jobs, fuel, services, security, and stability on what many call the
“incompetence” of President Mohammed Morsi and his ruling Muslim Brotherhood.
And they blame the United States, too, for supporting Morsi, who eked out an
election victory last year and took power last July thanks only to low voter
turnout and a fractious, divided secular opposition. “People no longer trust
Morsi,” Beblawi said, speaking for many among Cairo’s professional elite and
middle classes.
Just about the
only consensus in this deeply divided country is that Morsi and the Muslim
Brotherhood are failing. The Brotherhood is seen as repressive politically and
inept economically. The MB opposed the IMF loan before it was forced to support
it. Even so, two years and three rounds of negotiations later, Egypt seems no
closer to securing the IMF’s stamp of economic approval than it was when the
Brotherhood took power last summer. Last year, Morsi announced that the
government would cut subsidies to meet the IMF’s demands, only to renounce his
decision hours later, fearing a public backlash. The MB’s legal moves against
allegedly “corrupt” businessmen from theancien régime—former finance
minister Youssef Boutros-Ghali, activist trade minister Rachid Mohamed Rachid,
and Coptic billionaire activist Naguib Sawiris, Egypt’s second-wealthiest
citizen, all of whom have denied charges of financial impropriety—have
alienated potential foreign investors and prompted many wealthy Egyptians, even
die-hard patriots, to move money and assets out of the country. Sawiris’s claim
that the Brotherhood is “distorting” Egypt’s legal system to punish its
political opposition rings true among middle-class Egyptians. “What’s happening
now in Egypt resembles Mussolini’s rise to power in fascist Italy,” Sawiris
recently told Al-Ahram Online.
International
efforts to bolster Egypt—Qatar recently gave the MB government some $4 billion
in aid; Saudi Arabia has donated $1.5 billion; and the United States, during
Secretary of State John Kerry’s recent visit, kicked in $190 million—are “drops
in the bucket” given Egypt’s monumental needs, says Beblawi. He estimates that,
before this fall, Egypt must have an injection of between $10 and $15 billion
in hard currency to prevent widespread hunger and fuel-shortage riots. “The aid
so far is aspirin,” he says. “Egypt needs cortisone.”
Tourists, who once
brought over $10 billion a year into the country, will not return without
security and political stability, neither of which the Brotherhood has
restored. Foreign investment, which under Mubarak topped $13 billion a year, or
about 9.5 percent of GDP, has shrunk to roughly 0.4 percent under Morsi. Suez
Canal revenues total no more than $5.5 billion. Remittances from Egyptians
working abroad—the third major source of income and hard currency—have
increased, but this is deceptive, Beblawi says. Because many overseas workers
have been laid off—more than 1 million Egyptians once worked in neighboring
Libya, for instance—Egyptians are bringing their savings back home. “This is a
one-time injection of funds,” Beblawi says. “Soon, these workers too will be
demanding jobs.” Some 750,000 Egyptians enter the labor force each year. The
government has been able to create work for only a small fraction of them.
Egyptians are
growing desperate for change. Many are now calling for the military to take
control. “Most Egyptians believe in the integrity of the military, but the
military does not want to be back in charge,” says Blair. A military coup is
unlikely, many diplomats and Egyptian analysts agree. The military “was badly
burned by the pounding it took when it ruled Egypt after Mubarak’s departure,”
says a Western diplomat. Foreign and domestic analysts alike give poor marks to
the Supreme Council of Armed Forces, the so-called SCAF, which to quell public
opposition to its rule increased wages and hired more public workers, even as
productivity growth remained flat. The Muslim Brotherhood’s passion for
secrecy; the opacity of its political wing, the Freedom and Justice Party; its
ham-handed drafting of Egypt’s new constitution, which led Christians and most
non-Islamists on the drafting committee to quit; its reluctance to work with
other political parties and factions; its arrests and the charges of torture of
political opponents—all fuel suspicion that the tightly disciplined
organization is seeking to solidify its control of Egypt and may be unwilling
to relinquish it, no matter what. Since a court decision struck down the
country’s electoral law, the Brotherhood is unlikely to face elections for a
new parliament until the fall.
“They won’t work
with others,” complained Mohammed Nour, the leader of a Salafist
(fundamentalist) rival to the MB in an interview last week. As the
Brotherhood’s popularity plummets, that of the Salafists grows. Egyptians
increasingly see the Salafists as honest and pure, a plausible alternative to
the Brotherhood. Meanwhile, the secular democratic opposition is growing
despondent. “The Brotherhood is a fascist organization in democratic clothing,”
said Bassam Fathi, a secular activist who was a leader of the Tahrir Square
protests that ousted the Mubarak regime. “I fear that only the military can
save Egypt.”
Some leaders of
the National Salvation Front, the coalition of liberal, secular groups opposed
to the Brotherhood, now favor the formation of a so-called “national unity
government” to enable Egypt to manage its impending economic implosion. In an
interview, Amr Moussa, the former head of the Arab League and a former foreign
minister under Mubarak, said that to “save Egypt,” he was willing to work with
the Muslim Brotherhood to form a government that would have the “broad-based
legitimacy” that economic reform and political reconciliation required. “We
must consider such a step for the sake of Egypt,” Moussa said. But President
Morsi has shown little interest in such inclusion or compromise. Nor have other
members of Moussa’s own National Salvation Front, such as Mohammed el-Baradei,
the former head of the U.N. atomic energy agency. Many political dissidents
want Egyptians to hold the Brotherhood solely accountable for the slow-rolling
economic collapse that they see as inevitable, given current trends.
As for the
Brotherhood, it seems to have no interest in or strategy for healing Egypt’s
political rifts or solving the country’s economic woes. “The price for saving
Egypt may be the Muslim Brotherhood itself,” said Gehad el-Haddad, a
Brotherhood spokesman who heads an internal reform effort called the
“Renaissance Project.” Membership in the MB’s political party has grown to
600,000, he says, but 75 percent of its new members are not part of the
Brotherhood. “We’re new to governance,” said Haddad in an interview. “We have
splits on the left and on the right. The Brotherhood exists for social change,
but was pushed by circumstances into electoral politics—far beyond our comfort
zone.”
What was really
damaging President Morsi’s rule, he concluded, was Egypt’s bureaucracy. “The
SCAF added a million public employees to our payroll,” he complained. “And we
can’t fire anyone!” Most of Egypt’s public servants were hostile to the
Brotherhood’s Islamist agenda, he asserted. “The bureaucracy was a thousand
times worse than we ever anticipated. We’re stymied. We control only the top
positions in ministries, so getting anything done has been difficult, given
such entrenched resistance.”
That Egypt’s
would-be “Islamic fascists,” as their critics call the hapless Islamists, blame
their woes on Egypt’s 7 million public employees speaks volumes about the
nation’s crisis of governance—never mind its increasingly grim economic
situation. Somewhere, in an ancient tomb, a frustrated pharaoh must be smiling.
Or weeping.
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