Monday, April 4, 2011

Bethel Finances: The Fate of the World's Peace Is to Be Determined in Egypt

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The fate of Egypt’s former dictator, Hosni Mubarak, remains uncertain as he is still kept under house arrest following the dramatic events of February 2011, when a popular revolt brought swelling crowds to the streets of Cairo and Alexandria and brought him down. So too is the delicate house of cards that has been erected with aid from the United States following the 1979 peace accords that has rendered a measure of security for Egypt and Israel. But as a new government emerges in the keystone of the Arab world, relations with Egypt for the United States and Israel may grow more difficult.

Indications are that an infusion of Arab nationalism, and revisionism regarding the landmark peace treaty with neighboring Israel, only bode ill for the world.

While the Muslim Brotherhood kept a low profile during the affray that pitted youthful protesters against Mubarak’s tanks at Cairo’s Tahrir Square, following elections this year the formerly banned organization expects to pursue closer ties with Gaza, currently controlled by the Hamas terrorist organization. Hamas is an offshoot of the Brotherhood. A leader of the Tahrir Square demonstrations was quoted recently that the famed treaty was merely a truce, rather than an end to war with Israel. For many in the revolt against Mubarak—and the Muslim Brotherhood—the assurances given by Egypt’s Supreme Council of the Armed Forces that the treaty would be respected for now will have to be revisited. By September 2011, parliamentary elections could then decide to put the treaty to a public referendum in an already unsettled polity.

The declaration by the Supreme Council, reportedly made at U.S. urging, was designed to reassure Israel, where Prime Minister Binyamin Netanyahu had warned that his nation faced uncharted dangers because of the revolts across the Arab world. Egypt’s posture towards Israel will be determined by the relationships that emerge between the military and the civilian government when it is elected this year. Representatives of the Muslim Brotherhood, and other groups involved in Mubarak’s downfall, are expected to fill some of the seats in the parliament. And once the Brotherhood is seated, it is expected to push for opening border crossings and promoting trade with Gaza as a way to undermine the Israeli blockade, which heretofore had been supported by Israel. And this is a sentiment shared by others, even within the group that supported Mohammed El-Baradei in the revolt against Mubarak.

An underpinning of Egypt’s posture towards Israel, until now, has been the nearly $2 billion received annually from the U.S. in military and development aid. In addition, since 1981, the U.S., NATO, along with Jordan, Kuwait, and the United Arab Emirates have conducted Operation Bright Star coalition military exercises in Egypt. An autocratic but faithful partner, Mubarak, eager to maintain economic and military aid from the United States, cooperated closely with Israel in Gaza security matters, including attempts to halt arms and other smuggling along the border. The Egyptian intelligence chief, Gen. Omar Suleiman, was a trusted intermediary between the Israeli government and Palestinian militant groups. Suleiman is long gone, having dropped out of sight along with Mubarak. Israeli Defense Minister Ehud Barak has said that the Muslim Brotherhood’s expanded role represents a threat to Israel and to Egypt itself. Even so, he expressed confidence recently that a new government in Egypt will wish to maintain good ties to Israel, if only to continue receive American largesse. Egypt’s 80 million mostly poor people and the country’s economic health depend on it.

The reception by revolutionary activists for Secretary of State Hillary Clinton was less than enthusiastic when she visited Cairo on a swing through the Mideast in February. Before Mubarak fell, Clinton sparked outrage among protesters when she suggested moderation and a democratic transition. A number of protest leaders refused to meet her in Cairo. A member of the protesters’ Council of Trustees of the Revolution, suggested treaty provisions limiting the number of Egyptian soldiers stationed along the Gaza border should be reviewed. But the main difference in Egyptian foreign policy is likely to be a demand for respect, she said, adding that many Egyptians felt humiliated by what she described as servile willingness by Mubarak to do what he was told by Washington. “No more of the headmaster telling us what to do,” she said.

Spreading around some Midwest niceness, Clinton avowed that Americans watched with admiration the solidarity of the Egyptian people in their quest for a more democratic government. On her visit, Clinton said the US wants to help meet the economic needs that Egypt now faces. “Because we know,” she said, “that political reform must be matched by economic reform, that there must be jobs and rising opportunities for all.” She reiterated the Obama Administration’s insistence on free and fair elections that "need to be meaningful, to be based on a strong foundation that will be stable enough and strong enough to move into the future, to hold parliamentary and presidential elections, to get results that will give you leaders that will be able to respond to the aspirations."

To gin up Egypt’s economy, work is afoot to establish the U.S.-Egypt Enterprise Fund to stimulate private sector investment, support competitive markets, and provide business with access to low-cost capital. The U.S. plans to initiate the fund with up to sixty-million dollars. In addition, the Overseas Private Investment Corporation will provide $2 billion in financial support to encourage private sector investments in the Middle East and North Africa. In addition, the U.S. has committed $90 million in economic assistance to Egypt in support of jobs and economic growth. Other examples of largesse include, $82 million in insurance from the US Export Import Bank to support letters of credit issued by Egyptian financial institutions. Also, the Qualifying Industrial Zones will foster the Egyptian economy by allowing goods from the land of the Nile to enter the United States duty free. Cheering on the Egyptian people was Secretary Clinton, who said "This moment of history belongs to you. . .this is your achievement and you broke barriers and overcame obstacles to pursue the dream of democracy, and the United States and President Obama and I will stand with you as you make this journey."

It is the Egyptian military under the Supreme Military Council that can be expected to benefit from the influx of dollars and economic support. A mainstay of the Mubarak regime, the military is now being courted by Secretary of Defense Robert Gates and urged to not hasten the coming elections, but allow the various parties to prepare platforms, candidates, and organizations. The fear is afoot that it is but the Muslim Brotherhood, and a few stragglers from Mubarak’s party, who would have the most to gain from holding elections too soon since their organizations have the strongest networks, unlike many of the Tahrir Square protesters.

The Supreme Military Council may be reluctant to give up power, and the economic prowess it has enjoyed for decades. The military resembles a military-industrial-complex which fully controls one-third of Egypt’s economy, according to the New York Times. The military operates child-care centers and beach resorts, while manufacturing television sets, vehicles, washing machines, furniture and olive oil. It uses conscript labor, and does not pay taxes or engage in transparency. Diplomats noted that the head of the SMC, Field Marshal Muhammad Hussein Tantawi is a strong believer in government control of prices and production, while opposing political reform. Such things, it is reported, Tantawi believes would lead to instability. Whether the military rulers will relinquish their emergency powers to civilian control is a question as yet unanswered.

But civilians might still be convinced that the military would provide the stability required to remain in power. The SMC has announced that parliamentary elections will be held in September, with a presidential vote coming at an as yet undetermined date. The military also banned the formation of political parties along religious, sectarian or geographical bases, but indicated that the emergency laws in effect since 1981 would be lifted before the election. The military council has promised to transfer power to the new civilian government once a president is elected.

Currently favoured to win a presidential election is former foreign minister and head of the Arab League, Amr Moussa. His election could chill relations with Washington and cause Israel to look back with nostalgia on the cold peace under Mubarak. Moussa was fired as foreign minister in 2001, after a song called “I Hate Israel and I Love Amr Moussa” became a big hit. His scathing criticism of Israel is a source of his wide popularity. Perhaps hedging his bets, Moussa has said the peace treaty with Israel is a reality and he would observe it. He doesn’t like the US very much, but has said good relations with Washington are important. And so he can rely on Marshall Tantawi and the army, which values the relationship – worth billions of dollars annually in aid and arms – and understands it is linked to honoring the peace treaty. And it is on this reliance that the delicate house of cards that has sheltered three decades of relative peace on the eastern end of the Mediterranean now rests.

Violent religious visions preceded the protests in Tahrir Square, as the Egypt’s Coptic Christians can attest following a New Years’ Day bombing that killed 21 and wounded scores. Now that Mubarak is gone, ultraconservative and moderate Islamists seek a political voice in a new Egypt. While Mubarak kept religion far from the center of power, the Islamist message is unshackled. The Muslim Brotherhood, the largest opposition party, expects a strong showing in September’s parliamentary elections. While political parties based solely on religion are currently outlawed, the military is now allowing further latitude. This tolerance may be calculated so that in coming months the army can hand over the nation to an elected parliament after assurances from the Brotherhood that it will not run a candidate for president.

Observers of the Mideast may hope that Egypt might go the relatively more moderate route of ostensibly secular Turkey, rather than aping the Wahabi inclinations of Saudi Arabia, for example. But the Islamist genie may prove unpredictable now that it has been released from where it was bottled up by Mubarak. And Egypt is not the only nation where Islamic messages are accompany the clamor of revolt. In Yemen, religious radicals are seeking to exploit anti-government protests against President Ali Abdullah Saleh, a U.S. ally against Al Qaeda. While the Obama Administration has supported Saleh, that may change. According to the New York Times, a Yemeni official said things changed during negotiations with Saleh on his departure over the last two weeks. Once again, there is proof here of the dictum of diplomacy that in this world there are no permanent friends: only permanent interests.

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