March 2015 archive

Quick notes on Egypt and the Yemen War..

Given their very nature and usually brutal consequences, it’s hard to find the silver-lining in any war or regional conflict. The new war in Yemen is no different: a humanitarian crisis will ensue, humans will die and be regarded as collateral damage, and there is really no real strategy or endgame that can be achieved there without a long and arduous boots-on-the-ground campaign. So, yeah, the Yemenis are going to continue being screwed by this war (which realistically didn’t start last week at all) no matter the outcome. There is no silver-lining for them. The same can’t be said regarding Egypt in my opinion. For me there are two positive developments that this war is forcing, even though I will be probably the only one seeing it this way.

1) This war ended Egypt’s continued contribution to the middle-east’s regional disintegration: There was an implicit understanding between the gulf and Egypt since june 30th; The gulf will aid Egypt economically and get it on its feet, in exchange for Egypt supporting the gulf militarily when it needs to. It’s a deal that should make sense on every level for the current government for two reasons: 1) It allows the government to delay the local implosion that the economic realities of our country predict its inevitability, and 2) It allows the military regime the chance to finance the upgrading of its weaponry and capabilities with the gulfies footing the bill with their “money like rice” budgets. The gulf has honoured its part of the deal thus far, and Egypt- with the exception of some rhetorical support here and there- really hasn’t. Why? Three main reasons:

i. The Egyptian military’s knows its place: By their very nature, the Egyptian military isn’t really comfortable with attempting to extend their forces outside of Egypt’s border. The History of the Nasser-era has shown that they suck at imperialism (all of their attempts for regional hegemony or over extending their power- Yemen, Palestine, Syria- has ended up in humiliating defeats and embarrassments), so they have grown content with controlling Egypt and only Egypt. Given Egypt’s instability, in their minds a soldier on the ground in Egypt doing nothing is better than a soldier fighting ISIS in either Iraq or Libya, even if they can afford to send him there without endangering their grip on the country. If it weren’t for that mentality, Egypt would’ve had half of its military in Libya “safe-guarding democracy” and resolving their energy crisis by getting paid in free-libyan oil.

ii. Upgrading capabilities forces the need for reforming the way the military operates: And this is a real problem. The Egyptian military boasts the fact that it’s the only real functioning institution in the Egyptian state, but knows that any real assessment will showcase that they also suffer to various degrees from the same ailments that plague the rest of egypt’s institutions: corruption, bloated-ness, inefficiency and outdated-ness. Any capabilities upgrade that isn’t merely about stockpiling new weapons in storage would require reforming the way the military operates to turn it into the modern efficient military that its allies need it to be. This means stirring a hornets nest in a very conservative institution that has always been resistant to change, and will have reverberations into the civilian actual state as well, since the military doesn’t exist in a vacuum. Despite the necessity of such reform, the military and the state are neither ready nor willing to start the process any time soon, which makes them unfit to carry on their part of the deal. This war and the subsequent conflicts will force their hand on this issue.

iii. The Egyptian regime over-estimates its intelligence: The Egyptian regime knows that Egypt is too important for the gulf to allow it to fail, and thinks it can get what it wants from the gulf without paying any real price or making the necessary sacrifices. It also uses the outdated 60’s handbook of international diplomacy- as evident by planning of the Putin visit, which they aimed to use to play off the US and failed because of reality- which is no longer the way the world operates (No one in the gulf is amused by the Putin visit or Sisi’s support of bashar). The Gulf’s response: we won’t let you fall, but we don’t need to get you up on your feet either, which is truly the message that the government received by the results of the economic conference.

All of these factors contributed to a doom scenario of regional disintegration where the local powers can’t resolve their issues to handle the region’s problem: a crisis would happen, and the gulf sans Qatar would be taking a position, and Qatar taking a second position, and Egypt taking a third position, and Morocco a fourth, and no one works together, giving international powers the pretext to step-in eventually, and weaken the regional powers’ influence. This scenario was just pre-empted by having Saudi launch this war. It was the region’s- and Egypt’s- “shit or get off the pot” moment and it empowered the gulf powers to lead the agenda openly according to their timetable. They would’ve probably much rather it was done with Egypt fronting this action, to bolster its image as the “regional leader” and continue the whole “as Egypt goes, so does the region” narrative instead of having it look like a supporting actor who wasn’t even involved in the initial strike, but they needed to act- for the lack of a better work-  in a “decisive” manner and they did. This is not to say that they launched this war to get Egypt to stop “pussy-footing”, but it doesn’t hurt matters on that front either.

2) This War has highlighted just how outdated Egypt’s intelligentsia truly is: Egypt has a seriously misinformed public thanks to its official intelligentsia, which still spouts opinion and analysis that do not reflect the times we live in or Egypt’s geopolitical reality, because they too are relics from the 60’s and refuse to acknowledge that Egypt has a really excellent relationship with Israel, needs the US on its side and being friendly to Putin will realistically get it nowhere. Their simplistic narrative of conspiracies and having a foreign policy that closely resembles the actions of a teenage girl throwing tantrums instead of playing real-politik has been decimated by the complexities of the alliance in this strike.

How can they explain to their audience that Egypt is on the same side as the US, Qatar and Turkey, after the piles of Bullshit -that in no way reflects reality- that they have been spewing for months if not decades? How will they explain that in the real world countries shape policy solely upon interests and that there is no place for acting based upon dignity and emotions in international diplomacy? That, for example, Prince Tamim of Qatar is young and will stay in power for decades, and that for the sake of the region’s interest Egypt will have to reconcile publically with him sooner or later? Or that thumping our noses in the face of the US publically is ill-advised because Egypt can not really afford to lose its “strategic ally” privileges in the condition it is in? That you can disagree vehemently and even clash on issue, but you always have to maintain the guise of international friendship and cooperation because of…let’s say it all together…YOUR INTERNATIONAL AND STRATEGIC INTERESTS? Dear reader, can you believe that this is a new concept for the Egyptian intelligentsia and that no one mentions this or advocates it in our media? And that it’s 2015?

Look, am not happy that my Country is being pressured by external forces to do things it doesn’t want to do, especially going to War; no one who loves his country wants that. However, I do want to see Egypt address its state’s need for reform, to honour its agreements and to conduct its international affairs with maturity instead of empty grand-standing, which is all happening or will happen thanks to the clusterfrak called Yemen. It might be a stretch giving the price and implications that this war will have, but that’s way it’s called a silver-lining: it’s a semi-bright spot in an otherwise pile of really dark shit. That’s all.

The EEDC and Obstructionism

As the events of the Egyptian Economic Development Conference have come to a close, with over 1700 investors’ attending and $50 billion dollars of aid, investments and pledges made to Egypt, it’s time to take stock of what it all means to Egypt, both domestically and internationally. While many of you outside of Egypt might not have heard of the conference or even wonder about the significance of an economic conference to begin with, the view from inside Egypt could not be more different. For the majority of the Egyptian public, this was the most important event of 2015: It was Egypt’s coming out party; the social ball of the season, with the Egyptian government playing the role of the sole debutante.

The reception of the conference by the Egyptian public has been nothing short of positive, with the local media covering every detail and social media timelines positively buzzing with conversations on its organization, execution and the positive sentiments its attendees expressed regarding the future of the country. The amount of goodwill it generated towards the Sisi government could not be overstated, especially in contrast to the litany of news about daily bombings, austerity measures- both enacted and proposed- and horrifying deaths caused by ISIS or ISIS affiliates, the notorious Egyptian ministry of Interior, or incompetency and pure negligence. With the government hyping up the conference for the past few months as Egypt’s main chance of survival amidst a regional sea of chaos, its success in terms of drawing international figures, lack of organizational hick-ups and the absence of “security incidences” has made it nothing short of a triumph in the eyes of the Egyptian middle-class. For the first time in ages, Egypt looked- for a lack of a better word- shiny.

As far as Sisi and his government are concerned, this conference was a much-needed kiss of life. After a year filled with subsidy cuts, rising prices, embarrassing security leaks, and well-documented horrifying cases of human rights abuses both on the hands of the police and the judiciary, the government’s desperately needed an “achievement” to show the people. Sisi, on the other hand, needed to showcase that he had the international legitimacy that all of his previous predecessors’ – including Morsi and Mubarak-enjoyed. This event’s success would mark the end of Egypt’s international isolation since June 30, one that his critics attribute solely to his decision to run for office after deposing previous Islamist President Mohamed Morsi. By drawing in Western diplomats, MNC’s and heads of state, Sisi can finally silence his critics and showcase his ability to bring Egypt back into the international fold and bring in much needed foreign investments. It doesn’t matter that none of this would’ve happened if his regime wasn’t backed by Saudi Arabia and the UAE, who have certainly helped bring in the international business community; in the end, it’s Sisi who ended up getting all the credit. The Irony here is that, if you speak to the people involved in organizing the conference, it all almost fell apart thanks to Sisi’s government, specifically the Ministry of International Cooperation.

The story goes as follows: The EECD is officially the show of the Egyptian ministry of Investments, who worked closely with many in the Egyptian private sector and international consultants, to ensure that it all came out perfect, with the Emiratis footing the bill. However, in compliance to Egyptian bureaucracy, the UAE couldn’t pay them directly, so they have to send the money through the ministry of International cooperation, which is responsible for receiving all international aid and is supposed to act as a funnel for the money, and nothing more. However, anyone who works in civil society in Egypt knows that the MIC resents being simply a conduit between foreign donors and local partners, especially those who they had no influence in choosing or approving. So in order to gain influence, the Ministry of International cooperation end up doing the one thing they are not supposed to do: they obstruct.

The MIC either outright refuses to release the money, or delays it as much as humanely possible. Why? Some claim that they do so to earn as many interest points as they can on the money going through their bank-accounts, but the reality is that they do this because it gives them leverage and importance, a role if you will. This is their M.O. with all the local NGO’s for the past decade, and they didn’t change it when it came to the EECD’s money. They delayed the payment of the international organizers to the point that they- much to the chagrin of the UAE who had sent the money long ago- threatened to pull the plug on the conference mere weeks of its launch if they don’t get paid. It was then and only then that the MIC finally released the money, preventing the EEDC from becoming an international fiasco and ruining the hard work of everybody involved. To be fair though, the MIC isn’t the only government institution that used obstructionism as method for leverage and power when it came to this conference; the entire Egyptian state – with the exception of the ministry of investment- did in fact.

Foreign Investors have two main problems when it comes to investing in Egypt, and both were not addressed in the new Investment law: 1) The State’s land zoning and allocation: knowing which land in Egypt is allocated to which government body to facilitate the process of buying it, and 2) Being able to get their money or profits out when they chose to. The first problem exists because it would require the military to clearly state which land belongs to them and to allocate the rest to the different ministries and municipalities, which means that the military would have to publically state which land belongs to them, and to give up land under their control, neither of which they want to do. This leaves any potential investor without the proper information necessary to 1) plan his/her investment, whether it was industrial, real estate, touristic, agricultural, mining, i.e. any investment that requires land purchase, and 2) know which governmental body to go to in order to purchase that land they wish to acquire. This naturally limits potential foreign investors from investing in Egypt, which limits the FDI dollars sorely needed in the country to solve problem #2, being able to transfer foreign currency out. Both problems would be resolved if the military cooperated and the state created a clear land allocation map for Egypt, but the military obstructed for the aforementioned reasons, and the country ends up with only a fraction of the investments it sorely needs to jumpstart the economy.

The good news is, much like the MIC and the conference money, the military will eventually be forced to stop its obstructionism and work with the rest of the state to create that map, which would not only benefit foreign investors, but local ones as well. They will do so because they have no choice, and because goodwill and PR can only take you so far before economic realities slap you in the face, and they will sooner than later. The old state needs to learn that having their cake and eating it too will not work for long in a country this hungry, and that instead of using obstructionism to gain influence or retain interests, they might have to also work and compromise in order to get Egypt back on its feet. Egyptians have patiently accommodated painful austerity measures and higher taxes as part of the price to pay to get the country moving; its high-time for the government to do the same.