Normative Narratives

Conflict Watch: Egypt in a “State of Emergency”


Protesters opposing Egyptian President Mohamed Mursi march despite a nighttime curfew in the city of Suez January 28, 2013. REUTERS/Stringer

This past weekend marked the two year anniversary of the ousting of former Egyptian dictator Honsi Mubarak. Unfortunately, instead of serving as a uniting force in Egypt, the anniversary seemed to reignite the flames of revolution for many Egyptian dissenters. 52 people have been killed in violent uprisings in the past week. These uprisings were (in general) a response to disillusionment with the Morsi government and specifically to the death sentences given to 20+ violent soccer “ultras” by an Egyptian judge.
The continuation of the struggle of the different political forces … over the management of state affairs could lead to the collapse of the state,” said General Sisi, who is also defense minister in the government Mursi appointed.

He said the economic, political and social challenges facing the country represented ‘a real threat to the security of Egypt and the cohesiveness of the Egyptian state’ and the army would remain ‘the solid and cohesive block’ on which the state rests.”

The Economic issues facing Egypt have two primary sources. One is the depreciation of the Egyptian pound, which has meant higher prices for food and other imports.  Egypt owes countries “oil debts” based on previously agreed upon contracts. As the currency depreciates, Egypt will owe more oil, as oil contracts are typically denominated in an international currency (which is appreciating against the Egyptian pound). Further compounding the problem, a depreciating currency has meant Egypt cannot keep up with international demand for it’s oil, “The state-owned Egyptian General Petroleum Corporation has been unable to receive some deliveries of crude because it could not obtain letters of credit.” Not only can Egypt not increase its oil production for additional revenue, it is currently having trouble fulfilling already agreed upon contracts.

Monetary instability has led to a second related issue, the stagnation of the Egyptian economy. The Egyptian economy suffers from inadequate investment, there is simply not enough credit for the economy to function at (or even near) full output. Higher food prices and lower oil revenues mean less domestic savings and investment in the economy. Compounding the problem, companies are not exactly lining up to invest in Egypt due to political uncertainty and general insecurity. The government cannot assume more debt, because it hopes to secure an IMF loan to help fix its currency problems:

“Most worrying to economists and former government officials is the possibility that the government will not able to gain a consensus on austerity measures needed to get the country on track after two years of instability, rising unemployment and lower tourism revenues.

Such measures would also help to secure a $4.8 billion loan from the International Monetary Fund, talks on which were suspended last month by the president, Mohammed Morsi, because of the political crisis surrounding the constitution.

The IMF loan would provide a quick, cheap source of funds but, more importantly, send a signal to international donors and investors that Egypt is on the path to a sustainable economy.”

What Egypt really needs, first and foremost, is political stability. Political instability drives away desperately needed foreign investment (both FDI and IMF loans). Physical insecurity from fighting and violent protests hurts the day-to-day domestic economic activity that underpins any strong economy (no economy can flourish solely on exports).

I blame Morsi’s opposition groups for most of the instability in Egypt. Mursi’s opponents have called for more protests on Monday. ‘Down, down Mursi, down down the regime that killed and tortured us!’ people in Port Said chanted as the coffins of those killed on Saturday were carried through the streets.”

These are the same opponents who have time and time again refused to come to the negotiating table with Morsi. If you will not negotiate for what you want, and instead call for violent protests and overthrowing the government, then you do not represent a legitimate faction. Political ideology almost always flows from the top down, top opposition officials could call for either compromise or opposition; they have made their stance very clear.

It would be one thing if Morsi was indeed a dictator who would not let his opposition have a voice, but this is not the reality of the situation. Morsi was elected democratically, and his constitution passed an open and transparent vote. Democracy needs to be given a chance to work in Egypt; up until this point it has not. Instead of working with Morsi to ensure the stability and security needed to fix Egypt’s economic problems, the opposition has used economic (and ensuing social) issues as an opportunity to challenge Morsi’s presidency.

Egypt is a very important Western ally in the Middle-East.  The opposition needs to come to the bargaining table with Morsi in order to stop the violence that has destabilized the country. Once there is political cooperation and less violent protest, the Morsi government will be able to better provide the social services needed for a democracy to function. It will also allow Egypt to attract the international investments it needs to get the economy producing closer to capacity, which will reinforce political and social cohesion (when people prosper, everyone is happy, when they do not, no one is).

It is in everyone’s best interest for Democracy to work in Egypt. The only people who would suffer are the old Mubarak-era-elite who stand to lose power as democracy and modernization envelope Egypt. Morsi and the international community cannot let this loud minority to continue to play the “spoiler” role, there is too much at stake.   


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