Egypt's usual calm has been shattered. Nearly every day new incidents occur in the deadly struggle between the government of President Hosni Mubarak and Islamic militants known as the Gamaa al-Islamiya, or Islamic Group. The militants gun down policemen, ambush officials and hostile intellectuals, and terrorize tourists with bombs near the pyramids or the Karnak Temple. The government hits back with equal ferocity. Suspected extremists are rounded up by the score in bloody sweeps that have left many bystanders dead or wounded. This summer Mubarak began sending his antagonists to the gallows. Groups of six and seven men were hanged on single mornings. Such mass executions are rare and shocking in Egypt.

Mubarak is facing the most serious challenge since he took over the government following the assassination of Anwar Sadat in October 1981. The danger is not so much that the Gamaa will seize power. They lack the popular appeal and the talent to take over any time soon. But they could cripple Mubarak's ability to deal with economic and political challenges that are daunting enough without the added complication of an armed insurrection. The rebellion also leaves Mubarak vulnerable to criticism that he is partly to blame for the emergence of the militant Islamic groups. His critics take him to task for failing to promote sound economic growth; for tolerating corruption and growing social injustice; and for putting off political liberalization, thus giving frustrated youths nowhere to turn to except militant Islam.

In the coming months Mubarak's confrontation with the militants will strain the special relationship that has developed between the United States and Egypt since the Camp David process began in the mid-1970s. Indeed, there is already tension between the Egyptian government and its powerful benefactor. For the United States it is impossible not to compare the current situation in Egypt with the one that led to the disastrous fall of the shah of Iran in 1979. Once again a Middle Eastern country central to America is menaced by Islamic activists. Once again American policymakers ask whether the enormous political and economic capital that they have invested in Egypt, including $35 billion in aid since 1975, is in danger of being swept away. They also question whether Mubarak's leadership adds to the risk of failure.


Mubarak realizes that to snap Egypt out of its present malaise and decrease the appeal of Islamic fundamentalists, he must improve the economy's performance. He has taken the first step of committing himself to an ambitious restructuring of the economy, but he faces a herculean task. Years of avoiding the sort of structural reforms so many other countries have adopted have weakened the Egyptian economy. The economy stagnated during the 1980s, while external debt rose by nearly 150 percent, from $21 billion to $50 billion. In 1991, with arrears to foreign creditors mounting, Egypt was forced to agree to a reform program monitored by the International Monetary Fund and the World Bank. In deference to the role it played in the Persian Gulf War, Cairo received extremely generous compensation-$7 billion in military debt write-offs from the United States and another $10 billion from other bilateral creditors, conditioned on Egypt's staying in the good graces of the international lending agencies.

So far the reform effort has progressed more smoothly than anyone expected. Floating the Egyptian pound and initiating treasury bill auctions brought some $14 billion in reserves into the central bank coffers. But the hard part is still to come. The international agencies are pushing Egypt to begin privatizing chunks of the public sector, which still accounts for nearly 70 percent of industrial production, and to drop the current high tariff barriers. But with the possibility of further social unrest doubtless in mind, Mubarak is balking at policies that could raise unemployment, already unacceptably high at 15 percent. Mubarak is also running into resistance from the notorious public sector bureaucracy, which does not want to see its power base turned over to private businessmen. Even private businessmen are far from unrestrained admirers of reform. They have spent large sums to obtain permission to operate in Egypt. Protection often makes their plants highly profitable. The last thing they want is relaxed rules that allow competitors entry into their markets.

The goal of the reform program is to create quality export-oriented manufacturing jobs. That is fine in theory, but Egypt will likely have to endure a lot more economic hardship before it becomes reality. Government officials confess that it is not yet clear which Egyptian industries will be internationally competitive or what markets they will serve. In addition, the militants' attacks on tourists have blighted the prospects of a $2 billion to $4 billion a year industry once considered a sure growth area. They have also warned off foreign investors, whose funds are badly needed.

The most likely scenario is that Mubarak will have a tough time preserving existing Egyptian living standards. While a combination of government efforts and other factors has brought population growth down to 2.4 percent, given Egypt's estimated population of 57 million that still means more than a million new mouths to feed each year. The current zero to one percent economic growth rate is nowhere near enough to keep the already dismal $700 annual per capita income from sinking further. In addition, the legacy of the mini-baby boom after the October 1973 war means that Egypt will have to create 4.5 million jobs in the 1990s just to keep up with additions to the labor force. That is a frightening number, considering that the total labor force is only 15 million and that only 2.2 million domestic jobs were created between 1976 and 1986. In addition, the 2.3 million Egyptians working in Saudia Arabia, Libya and other Arab states are vulnerable to political and economic instability.


The success of Islamic fundamentalists in Egypt has been due in part to their ability to channel public discontent with the economy into support for an Islamic regime. The Gamaa al-Islamiya, which is leading the challenge to Mubarak, evolved in the 1980s from several Egyptian militant groups. The most prominent of these was al-Jihad, an arm of which was responsible for President Sadat's assassination in October 1981. Al-Jihad was established in 1980 by a Cairo electrician named Abdel Salam Farag. Farag was an Islamic activist thinker in the tradition of the Muslim Brotherhood, the seminal Islamic revolutionary organization founded in Egypt by Hassan al-Banna in 1928. In particular, Farag built upon the work of the Brotherhood ideologue Sayyid Qutb, who was one of several brothers hanged under the Nasser regime. The Brotherhood campaigned mostly for purging the Arab world of Western influence and fighting the Zionists in Palestine. Qutb, who was tortured in prison, drew Nasser's ire by arguing that the Egyptian military regime's secularist outlook and its brutal persecution of Islamic activists proved that it was non-Islamic, or pagan. Islam had to be propagated as it was among pagans--by force. Farag went one step further, saying that the state's determination to crush Islamic activism made all courses of action futile with the exception of violent attempts to overthrow the rulers.1/4

Lacking religious credentials, Farag brought in Sheikh Omar Abdel Rahman, a graduate of al-Azhar, Cairo's leading Islamic university, to bless al-Jihad's military operations. The sheikh was either too peripheral or too clever to be convicted of involvement in Sadat's assassination, but he seems to have been instrumental in picking up the pieces of the movement after Farag and four others were hanged in 1982. Abdel Rahman is now the spiritual guide of the Gamaa and the inspiration behind the bombing of the World Trade Center in New York City and a number of other terrorist plots.

The Gamaa is organized in cells, making it very hard to monitor and suppress. It also has separate military and da'wa, or "call," wings. The da'wa preachers are charismatic local sheikhs who avoid involvement in violent operations. The military wing seems to have been strengthened by the return of Egyptian volunteers from the war against the Soviets in Afghanistan. Known as "the Afghanis," these militants are said to be the Gamaa's toughest and most effective fighters. The Afghan connection raises Egyptian suspicions of CIA involvement. In the late 1980s Abdel Rahman was a visitor to Peshawar, Pakistan, the staging area for the CIA-supported effort to defeat the Soviets. Many Egyptians believe Abdel Rahman was a CIA recruiter and that the agency is protecting him. Reports that a CIA official signed his U.S. visa approval in Khartoum strengthen such suspicions. The Egyptian Islamic groups have maintained offices and training centers in Peshawar, and some of their leaders, including Mohammed Shawki Islambouli, the brother of Khaled Islambouli who led the squad that killed Sadat, were based there. Recently the Egyptians persuaded the Pakistanis to close many of these offices.

Islamic militants gained their first foothold by taking over Egyptian student politics in the 1970s. They won adherents by providing relief from the squalid conditions in Egypt's underfinanced but open-to-all universities. They offered female students protection from sexual harassment by providing them with private transportation and campaigning for sexual segregation in the packed classrooms. They helped students save money by producing cheap copies of textbooks and organizing private tutorials to compete with the expensive ones offered by professors. It is worth noting that Sadat encouraged the Islamic movement until he realized his mistake in the late 1970s. Sadat viewed the Islamists as a useful counterweight to the left. He also thought making a show of his own personal piety would raise his stature. Saudi Arabia, whose policies toward Islamic radicals have also been incredibly shortsighted, contributed government and private funding for Islamic causes.

The Islamic activists' horizons broadened in the 1980s. While still retaining control of the campuses, they moved out into slum neighborhoods such as Cairo's Imbaba and the rural backwaters of upper Egypt. Through a network of thousands of "unofficial" mosques as well as through cassettes and pamphlets they spread the message that Mubarak's government was tyrannous, corrupt and un-Islamic. The solutions they propose are not very profound. Egypt should have Islamic law, or sharia, rather than the French-based system that now prevails in most courts. They claim that under an Islamic system Egyptians would not have to bribe their children's teachers or swelter in wretched apartment blocks while Cairo's elites cavort in five-star hotels and nightclubs.

Both domestic and international circumstances enhance the appeal of their message. The Islamic preachers constantly stress that Egypt's patron, the United States, is bombing such Muslim countries as Iraq and Somalia while doing nothing to aid the Muslims being slaughtered in Bosnia. At home the Egyptian government, under pressure from Western creditors, has been dismantling the ramshackle welfare state built by Nasser in the 1950s and 1960s. Food, fuel, clothing and electricity all used to be available for a small fraction of world prices in Egypt, but their prices have risen substantially in the last two years with the slashing of subsidies and lifting of controls. The poor, of course, suffer most from higher prices, and their neighborhoods tend to receive low priority when it comes to establishing schools and health clinics. The Islamic activists have been able to ease some of the burden with health clinics, Koranic schools and even loans.

Published lists of those accused of terrorism show that the Gamaa appeals to young disadvantaged men-tradesmen, food vendors, schoolteachers, students, the unemployed. Such men find themselves in a terrible position in today's Egypt. They are unlikely to find decent jobs unless they go to Saudi Arabia or other wealthy Arab states. Without good jobs they will not be able to afford the stiff prices for apartments, a requirement for marriage.

While estimates of the Gamaa's strength are sketchy, its militants may number around 10,000, with hard-core support several times that. A high percentage of both the Gamaa rank and file and its leaders come from such upper Egyptian cities as Asyut, Sohag and Beni Suef. The people in these regions tend to be poorer and more alienated from Cairo than those in the north. They are also more prone to blood feuds and other violence. Finally, the large numbers of Christians in these regions exacerbates Muslim extremist sentiments. The Gamaa's ugliest trait is its harassment and persecution of Christians. Some local Gamaa leaders have been ruling areas of upper Egypt as virtual fiefdoms, forcing the Christians to pay taxes and robbing them to finance Gamaa activities. In the last two years there have been numerous killings of Christians in upper Egypt, including the massacre of 12 people in an upper Egyptian village in 1992.

Such violent acts are a two-edged sword for the militants. While taking on the government has gained the Gamaa notoriety, the mayhem alienates most Egyptians. In particular, a recent series of nail-packed bombs that killed children and other ordinary Egyptians has hurt the Gamaa's cause, although the group denies responsibility for these attacks. In addition, many Egyptians are discovering that the Gamaa's attacks on tourism have severely cut into their livelihoods.

Mubarak has accused Iran and Sudan of being deeply involved in the wave of terrorism in Egypt. In March, he threatened military strikes if Sudan allowed Iranian warships to use Port Sudan. The Iranians undoubtedly have some contact with Egyptian militants. They do what they can to encourage Islamic revolution throughout the Middle East--although with only minor success so far. As for Sudan, the regime of Lieutenant General Omar al-Bashir probably is giving refuge to Egyptian militants, as it does to other Arab extremists. They may well be infiltrating across the wastelands between the two countries. On the other hand, neither foreign regime's role seems crucial to the Egyptian movement. It is essentially a homegrown phenomenon that arises from the particular circumstances in Egypt. There will always be a gulf between Egyptian and Iranian militants, because the former are Sunni Muslims and the latter Shiite.

Mubarak may have ulterior motives for his bellicose rhetoric toward Iran. Egypt may be trying to stay in tune with the Clinton administration, which has expressed concerns about Iranian arms purchases and intentions. It also may be trying to persuade the gulf Arabs to make use of Egyptian troops. The Egyptian regime is disappointed that Saudi Arabia and the other gulf Arabs have shown no interest in having Egyptian troops stationed in their region, preferring to rely on American forces for defense.


At present it is difficult to conceive of the Gamaa taking power in Egypt. The movement lacks a leader with the charisma of an Ayatollah Khomeini or the ability of Sudan's Hassan al-Turabi. This shortcoming, moreover, applies to the whole Egyptian Islamic movement, not just the Gamaa. Until recently Abdel Rahman was not well known in Egypt and not taken very seriously. But he has shown considerable dexterity in manipulating his dealings with U.S. and Egyptian authorities to gain publicity. The militants also suffer from organizational problems. Their loose, decentralized structure helps in recruiting and in creating new leaders, but it also encourages strong personalities to form their own groups. Egyptian press reporting on the movement is full of tales of ideological and personality conflicts. There still seems to be a conflict between expatriate remnants of al-Jihad, who want to concentrate on assassinating key regime figures, and activists inside Egypt, who might be amenable to an accommodation with the authorities that would ease the burden of repression. The nail bombs may have been intended to sabotage any deal with the government. Tensions have on occasion led to deadly shootouts among the groups.

On the other hand, the Islamic tide is still rising in Egypt. Cairo's atmosphere has changed over the past 15 years. Today one frequently encounters women in full Islamic regalia, including heavy veils, and a majority of women cover their hair in public. The bounds of what is permissible in literature and scholarship are narrowing. A professor was denied tenure this year at Cairo University because Islamic authorities said his work smacked of atheism. Books by Farag Foda, a writer assassinated by the Gamaa in 1992, and other works deemed offensive to Islamic mores were barred from display at this year's Cairo book fair.

Many intellectuals deplore the Islamic trend because it threatens to curtail their freedom and does not seem to offer useful answers to Egypt's problems. But they are now asking whether it will dominate Egyptian politics as Arab nationalism did in the 1950s and 1960s. While they find Mubarak uninspiring, they nevertheless side with him against the militants as the lesser of two evils. Others, seeing opportunities, have shifted from being Marxist writers to Islamic ones.

The Muslim Brotherhood, whose appeal is broader than that of the Gamaa, could wind up being the beneficiary of this cultural shift. Still officially banned, the Brotherhood has been tolerated by the government since the 1970s as a moderate alternative to groups like the Gamaa. It has formed an alliance with the Socialist Labor Party, which allows it to use the party newspaper al-Shaab as a forum for its views. In the last seriously contested parliamentary elections in 1987 this grouping easily outdistanced other opposition parties, winning 17 percent of the vote. But the Brotherhood has been concentrating its efforts on taking control of the influential professional associations, whose elections are much more democratic than votes for the legislature. It now has control of the doctors', pharmacists' and engineers' unions and about half the seats on the governing council of the Egyptian Bar Association.

Although it dabbled in terrorism in the past, the Brotherhood claims to have learned a bitter lesson from the brutal repression it suffered under Nasser and to be interested only in peaceful evolution toward an Islamic society. While there are undoubtedly contacts between the Brotherhood and the Gamaa, there is also tension. Brotherhood spokesmen have openly criticized Abdel Rahman's calls for violence, saying that the Gamaa's tactics could provoke a wave of retribution that would set the Islamic movement back for decades. The Brotherhood has a very different face from the Gamaa. It is rooted in the traditional establishment of professionals and businessmen. The Brotherhood's appeal, however, suffers somewhat from its image as an exclusive, bourgeois secret society. It has elaborate initiation procedures, and many of its leaders are men well past their prime. Also, many Egyptians have lost money in Islamic banking schemes--some of which were associated with the Brotherhood.


Although islamic revolutionaries have been a problem for Mubarak throughout his term, the Egyptian president has yet to come up with a coherent strategy for dealing with them. He is relying mainly on crude repression. The 14 men executed in June and July were tried in military courts known for not respecting due process. Moreover, many Egyptians believe that Mubarak has given the police so much license that they are out of control. On March 10, for instance, police are said to have lobbed tear gas grenades into a mosque in Aswan and then killed seven people and wounded 15 others as they tried to escape the fumes. Human rights groups such as Middle East Watch and the Egyptian Organization for Human Rights report that torture and detention without charge are common practices. Such tactics may backfire because they radicalize prisoners and their families. Mubarak's tough approach could also lead him into conflict with the United States. He has been warned that human rights violations could jeopardize the $2.15 billion the United States gives Egypt each year but, publicly, he is shrugging off the warnings. "I refuse to allow human rights to become a slogan to protect terrorists," he said in July.

At the moment Mubarak's approach seems to be all stick and no carrot. He risks making the same mistake as the Algerian regime--repressing the Islamic movement relentlessly without providing any outlet for peaceful religious activism. He recently ousted Interior Minister Abdel Haleem Moussa in part because the minister favored a dialogue with the militants. He is also backing the Muslim Brotherhood into a corner by changing the election rules for professional associations so as to break its grip on them.

While his aides talk of the need for a multidimensional approach, Mubarak seems to be more or less standing pat. His prime minister, Atef Sidqi, appointed in 1986, is one of the longest-serving heads of government in modern Egyptian history. Several members of Mubarak's cabinet have served even longer. He has not responded to months of pleading by intellectuals and liberal politicians that he counter the fundamentalists by broadening political participation. He has done nothing to bring corruption under control, even though it has become a major political issue, affecting the society from top to bottom. In the early part of his term Mubarak was considered an honest-if plodding-manager, but one now hears frequent rumors of corruption in his cabinet and in his entourage. Some American companies will not even bid on Egyptian government contracts because they think the process is rigged. Before making changes in the oil industry in 1991, Mubarak allowed years of mismanagement to drive out foreign companies and hurt the prospects of a major foreign exchange earner. Egyptians complain Mubarak spends even more lavishly on vacation homes and other perquisites for himself than did Sadat. Some Egyptians think that it is unethical for Mubarak's son, who works for Bank of America in London, to be arranging lucrative Egyptian debt-equity swap deals worth about $200 million.

Mubarak risks being increasingly seen in Egypt, as well as the United States, as part of the problem. He has not made use of the system of limited democracy that Sadat introduced to keep his opponents occupied. While the opposition press is quite open and free, the party system has become almost moribund. Most of the opposition parties boycotted the last parliamentary elections in 1990 because they considered the election rules so biased in favor of Mubarak's National Democratic Party that it was not worth participating. Because the parliament nominates the president, its compromised legitimacy will detract from his mandate if, as expected, he runs for a third six-year term in October. Mubarak will probably face embarrassing challenges to the legality of the election laws.

Criticism of Mubarak comes not only from the opposition but also from the heart of the establishment. Last fall, Tahseen Bashir, a senior retired diplomat and former spokesman for Sadat, published an open letter to Mubarak detailing shortcomings that hobbled Egypt's political and economic development. "There is a general perception among all classes of people that corruption is spreading in a shocking way and that it is having a negative effect on all economic production and the capacity to grow and compete," Bashir wrote.

As long as Mubarak retains the confidence of the military, he will be reasonably secure. Under Egypt's three military leaders, the officer corps have become almost a separate caste, living in their own enclosed world of subsidized housing, education and recreational facilities. In Cairo today one picks up only hints of military discontent. Senior officers are said to be unhappy that their living standards no longer compare with those of wealthy businessmen. There are also reports of senior officers extracting financial tribute from underlings. Junior officers are said to be unhappy with their seniors' monopoly on perquisites such as subsidized apartments, which they rent out for extra income.

Such grumbling is certainly not sufficient cause for risking intervention. It is also unlikely that the officer corps have been extensively penetrated by Islamic extremists, although Islambouli and another key al-Jihad figure, Abboud Zommour, a jailed rival to Abdel Rahman, were officers. But if the mobs take to the streets, as they did in 1977 and 1986, Mubarak will likely have to call on the army to restore order. One wonders whether in the present circumstances the general staff would be tempted to demand political adjustments.

To keep the military on his side, Mubarak will have to preserve access to modern weapons, training and other benefits that come mainly from the United States. If the military thinks he is jeopardizing this relationship, Mubarak will be in trouble. It is a good bet that some of the savvier officers are already skeptical about how Mubarak will fare with the Clinton administration. They doubt that he appreciates the changes in Washington, and suspect that he does not understand that the new administration will likely place more emphasis than its predecessor on democracy, human rights and political reform. In the event of trouble, the pro-American but controversial former Defense Minister Abdel Haleem Abu Ghazala could serve as a rallying point. Abu Ghazala was damaged by involvement in a recent scandal but still has admirers in the military.


The troubles in Egypt create an acute dilemma for the United States. Despite debilitating economic problems, Egypt is the closest thing the Arab world has to a leader. As such it is probably a more useful ally than Iran ever could have been. Egypt was instrumental in assembling the Arab coalition against Iraq in the Persian Gulf War, and Mubarak has persistently pushed the Palestinians and Syrians to make good faith efforts in the U.S.-sponsored Arab-Israeli peace process. Egypt in the hands of an aggressive, Islamic regime-still a remote possibility--could prove far more destabilizing for the Middle East than Iran. Such a regime would almost certainly threaten the peace with Israel. And it would likely have much more influence in the Arab countries than the Iranians, who are partially isolated from their Arab neighbors by language and cultural barriers.

But these concerns and Mubarak's value as an ally should not stop the United States from taking stock of its relationship with Egypt. Of course aid has been generally a good deal for the United States in that it has helped keep the peace with Israel. But in the long run Egypt and, indeed, Israel are not so important to the United States that they should receive half of U.S. foreign aid. Moreover, it is disturbing that after an enormous, nearly 20-year American effort so little about the Egyptian economy and political system has changed. There seems to have been too much funding and not enough tough questioning. Because the United States has consistently gone along with Egyptian officials' arguments that reform would be too risky, it bears some responsibility for Egypt's economic problems.

In an interview, Osama al-Baz, Mubarak's able political counselor, acknowledged that American aid cannot continue forever at current levels and indeed should not. But he warned that five to seven more years were needed "to cushion the impact of reform," or it might be aborted. It is hard to deny the general thrust of this argument, but the United States should nonetheless demand economic reform.

It would also seem fair to ask Mubarak to take some important steps to address U.S. concerns about Egypt's political stability. Although the Egyptian political parties have severe flaws, holding more open elections, as King Hussein has done in Jordan, might well improve Mubarak's position. The U.S. Agency for International Development is putting together a project to increase the clout of the Majlis al-Shaab, Egypt's parliament, but such a program will not be terribly effective if the organization is a sham. Mubarak has also put off grooming a successor for far too long. Though there are rumors that Mubarak will soon appoint one or more vice presidents, including someone from outside the military, he has long resisted such a step, apparently for fear of creating a rival. But a dangerous situation could arise if something should happen to Mubarak. There is no clear choice among the current defense minister, Mohammed Hussein Tantawi, and other top officers. Some analysts fear a factional struggle could ensue if Mubarak suddenly departed the scene.

Egyptians may bridle at American interference, but the United States has little choice but to push harder-albeit diplomatically--for reform. Mubarak and Egypt probably have time to make adjustments, but the recent troubles show that they cannot afford to muddle along forever.

While supporting Mubarak, the United States should avoid adopting a broadly hostile stance toward Islam. The troubles in Egypt may signal that a period of change is coming to the Middle East, which has so far avoided the upheavals that have swept the communist world. The Arab nationalist military regimes that have dominated the Middle Eastern stage for four decades appear to have worn out their welcome. While the Gamaa and other Islamic revolutionaries do not seem to be the Arab world's Václav Havels or Lech Waleþsas, American policymakers should keep open minds about Arab leaders with strong Islamic credentials-and indeed about other emerging agents of change. A more traditional, Islamic Arab world does not have to be a more anti-American one, unless the United States helps make that happen.

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