The Pandemic Depression
The Global Economy Will Never Be the Same
Today’s anniversary of the 2011 Egyptian revolution—which led in quick succession to the overthrow of longtime President Hosni Mubarak, the election of the Muslim Brotherhood–affiliated candidate Mohamed Morsi, and the ouster of Morsi by the Egyptian military—is haunting sitting President Abdel Fattah el-Sisi.
Confronted with another social media campaign urging Egyptians to take to the streets on January 25, the president is worried that the kind of popular uprising that brought him to power may also come to unseat him. He is responding to the challenge with all the tools of repression at his disposal, including (paradoxically for a president determined to expunge the Muslim Brotherhood from Egypt) mobilizing religious authorities to prevent demonstrations.
Revolution against the government is enshrined in Egypt’s constitution. The January 25, 2011, uprising against Mubarak is praised as the beginning of Egypt’s first revolution, and July 3, 2013, the day the military deposed Morsi, is proclaimed as the triumph of the second revolution. In both events, the military emerged as the real winner. In 2011, it took advantage of the street chaos to depose Mubarak and keep its own power. In 2013, it went further, using widespread popular discontent with Morsi to orchestrate large demonstrations that provided the political cover for a coup d’état.
Sisi thus worries that the military, and he personally, will be the target of any public discontent. In that, his fears are well-founded. On January 25 last year, widespread protests led to violence that left 18 dead and at least 52 injured. He is concerned that a lot worse could happen this year, and so, over the past few weeks, his security forces have searched 5,000 homes and apartments in downtown Cairo and warned their residents not to take to the streets on January 25. Late last month, he even publicly asked Egyptians, “Do you wish to destroy your country and the people?” and pledged not to stay in office for a single day “against your will,” a statement that sounded more like a threat than a promise of democracy. By the time he spoke, 45,000 Egyptians had already responded positively to a Facebook call “to drop the tyranny.”
The measures the government has taken to prevent demonstrations are extreme, with new ones added all the time. Even under normal circumstances, Egyptians are already living under the most severe restrictions on their civil and political rights in decades. In December 2014, the government decreed that all demonstrations would require permits, which are rarely granted. Leaders of youth groups that tried to defy the decree by holding illegal protests have been sentenced to lengthy prison terms. Media freedom is curbed in the name of national security, and any statement that contradicts an official one is considered an act of sedition.
The one group still been able to vent frustrations is that of workers focused narrowly on labor issues. More than 1,100 strikes and protests, none of them authorized by the Egyptian Federation of Trade Unions, took place last year. It was apparently too large a number for Sisi to dare to suppress them by force.
Sisi, whose tenure in office has been marked by a relentless campaign against the Muslim Brotherhood, has turned to religion in an attempt to prevent new mass protests.
But everybody else is fair game. A crackdown on Facebook, the social media platform credited with sparking the 2011 uprising, began in December with the government shutting down Free Basics, a service that provided free access to text-only versions of Facebook messages. Several other services were also closed, affecting some three million Egyptians. In the last few weeks, the government has gone on to directly target administrators of Facebook accounts calling for demonstrations. Three were arrested on January 1 and two more on January 12, all accused of being members of the Muslim Brotherhood. On January 14, the government announced the arrest of 47 more.
Most remarkably, Sisi, whose tenure in office has been marked by a relentless campaign against the Muslim Brotherhood, has turned to religion in an attempt to prevent new mass protests. On January 8, the minister of religious endowments warned that anniversary demonstrations would violate Islamic law. It instructed all mosque preachers, who are government employees, to make clear in their Friday sermons that participation in the protest would be a crime. The ministry had Dar al-Ifta, the Egyptian institution in charge of issuing religious decrees, issue a fatwadeclaring the same.
Crackdown or not, the situation in Egypt provides plenty of fuel for dissatisfaction. Sisi continues to face an insurgency in northern Sinai waged by the Egyptian affiliate of the self-proclaimed Islamic State (also known as ISIS), Ansar Beit al-Maqdis. ISIS and suspected Muslim Brotherhood splinter groups have also attacked policemen, soldiers, judges, and, increasingly, tourists across the entire country. Hundreds have been killed on both sides.
The worst attack on tourists occurred on October 31 when a midair explosion aboard a Russian plane returning home from the Red Sea resort of Sharm al-Sheikh killed all 224 passengers and crew members. Russia, the United Kingdom, and the United States all concluded within days that the explosion was caused by a bomb, and ISIS immediately took credit. But the Sisi government has steadfastly refused to acknowledge terrorism as the cause.
Since the plane incident, however, terrorists have repeatedly struck hotels that cater to foreign tourists in Cairo and along the Red Sea in an obvious attempt to paralyze an industry that accounts for 11 percent of the country’s GDP and 14 percent of its foreign revenues. Russia, which had been the largest source of foreign tourists to Egypt (with three million visitors annually), has still not resumed flights to Egypt.
The shrinking tourism industry has already contributed to an acute foreign exchange shortage, according to the World Bank, which recently reduced its forecast of the country’s growth rate for this year from 4.2 to 3.8 percent. The country’s foreign reserves, $16.4 billion at the end of 2015, are so low compared with need that the central bank has resorted to rationing dollars to state and private companies, crimping their output, which is already reduced by constant strikes.
Sisi has suppressed all political activity outside the narrow confines of what the regime allows. The only outlet, once again, is the streets.
As a result of all these problems, Egypt’s economy is now on life support from wealthy Arab Gulf states, particularly Saudi Arabia, which collectively have given or pledged $40 billion in cash, loans, and investments.
Despite the financial crisis, Sisi has shown no qualms about lavishing funds on the privileged military. Egypt has plans to purchase 24 Rafale fighter jets and two Mistral warships from France and 46 Ka-52 attack helicopters from Russia. The total cost appears to be around $8 billion, though the government has kept the figures a tight secret.
Meanwhile, Sisi’s strategy for jump-starting the economy relies on half a dozen “megaprojects,” such as widening a stretch of the Suez Canal so that it can carry more traffic and bring in higher transit revenue, creating new industrial zones in the Suez Canal area, and building a new capital city to replace Cairo.
But none of these projects—or others to open millions of acres of new irrigated lands and build millions of new houses—has borne economic fruit yet, and it is likely that many will never be implemented. The one project that was finished with much ballyhoo in August was the Suez Canal expansion, which has not resulted in higher earnings. In fact, canal revenue has been decreasing.
Of all Sisi’s problems, the political situation should cause the least anxiety. Politics is dormant: since the security forces crushed Muslim Brotherhood resistance to Morsi’s ouster in August 2013, Egyptians have been largely passive, allowing Sisi to complete the announced road map for return to normality without incident. The constitution was revised to the government’s satisfaction, presidential elections anointed Sisi as a lawful president, and since January 10 the country finally has a parliament. Its members vie to outdo one another in singing Sisi’s praises, to the point that an announcer on state TV reminded them that their job was to monitor the president, not to love him. Even before the election, Ali Abdel-Aal, the leader of the largest pro-government coalition and now Speaker of the parliament, announced that the new parliament should amend the constitution so as to limit its own excessive power and strengthen the presidency.
Sisi has all of Egypt’s political institutions well in hand, but he has little political support. Parliamentary election turnout was an embarrassing 28 percent. Many Egyptians are still grateful that Sisi ousted the Muslim Brotherhood but have not found much else to like in the new regime. Since the heady period after the uprising, when young Egyptians, liberals, civil rights advocates, and Islamists all believed they had a part to play in the future of the country, everybody has been sidelined. Ziad Bahaa Eldin, an official in the Egyptian Social Democratic Party and a deputy prime minister for six months in the first government after the coup, summed up the country’s morose mood in an op-ed pointing to “a shift in Egyptian public opinion, which has abandoned the optimism of early last year  for concern, anxiety, and eroded confidence in the state’s ability to address the challenges.”
And this is what makes the possibility of mass protest on January 25 so threatening to Sisi. He has suppressed all political activity outside the narrow confines of what the regime allows. The only outlet, once again, is the streets.