Posters of presidential candidate and current Egyptian President Abdel Fattah al-Sisi line a road in Cairo, Egypt, Dec. 5 ahead of the presidential elections to be held next week.MOHAMED ABD EL GHANY/Reuters
Bessma Momani is a professor of political science at the University of Waterloo and senior fellow at the Centre for International Governance Innovation.
The Arab Spring was meant to produce democracy. Instead, its lasting legacy in Egypt is a leader who quickly turned the country into an autocracy again.
When demonstrations in Tahrir Square brought down the 30-year dictatorship of Hosni Mubarak in 2011, Abdel Fattah el-Sisi was a little-known general. One year later, the democratically elected Muslim Brotherhood president Mohamed Morsi tapped him to serve as his minister of defence; two years after that, riding a wave of nationalist popularity after leading the coup against Mr. Morsi and restoring power to the Egyptian military, the soft-spoken and unassuming Mr. el-Sisi rose to the presidency.
Undoubtedly, his all-encompassing grip on power could not have been secured without crushing the nearly 100-year-old Muslim Brotherhood, which represented the most organized opposition to the military. The Islamist group has claimed to disavow its insurgent past, but the military has always assumed it to be a terrorist organization all the same. But the crackdown has gone beyond the group, suffocating serious domestic opposition to Mr. el-Sisi’s rule and putting tens of thousands of political prisoners behind bars – though this is only an estimate, as Cairo refuses to release the true number.
Next week, despite previously stating that he would not run for a third time, Mr. el-Sisi will likely win a landslide victory in a presidential election that will hardly be free and fair. He has prevented any serious contenders from running, consolidated the military and security apparatus around him, and overseen constitutional changes that would allow him to remain in power until at least the end of this decade. But while he may be assured of a third term, he may have a difficult time making it to the end. His nine-year rule has brought significant economic hardship and pain to this country of 105 million – and on top of that, he now faces unrelenting geopolitical turmoil in the Middle East. And while popular mobilization against him has been limited, sporadic and easily crushed, it has almost always been sparked by the masses’ economic despair, which is certainly on the rise.
For Mr. el-Sisi, re-election will be the easy part. What will come next is the ultimate test of his nationalist resolve.
Throughout the President’s rule, Egypt’s response to economic malaise has been to lean on populist nationalism. He has done so by brandishing the military as the country’s saviour, using it to build engineering megaprojects such as roads, tunnels and replacements for other dilapidated public infrastructure, as well as to supply goods in shortage into the market. This has historical echoes to Egypt’s boom times under the military leadership of Gamal Abdel Nasser, who ruled for most of the postrevolutionary period that began when nationalists overthrew the British-installed monarch in 1952. As such, Mr. el-Sisi has continuously tried to tap into these deep sociocultural roots to rally the country around him and the military with projects such as an US$8.5-billion, symbolism-laden widening of the Suez Canal, which Nasser had nationalized away from foreign hands, and a new US$60-billion administrative capital outside Cairo. These developments have allowed Mr. el-Sisi’s regime to boast impressive growth in Egypt’s gross domestic product, of approximately 5 per cent a year.
However, the trickle-down to the poorest segment of Egyptian society has remained minimal. Many initiatives that were swaddled in nationalist fanfare were in fact vanity projects for the regime, benefiting only a small group of wealthy Egyptian developers, industrialists and cronies connected to the military. What’s more, after nearly a decade of primarily international borrowing to fund these expensive projects, Egypt has accrued US$165-billion in external debt – a number that has quadrupled under Mr. el-Sisi, and now accounts for nearly 90 per cent of the country’s GDP.
World events have only made things worse. The COVID-19 pandemic decimated Egypt’s tourism industry for several years, leaving the country with a severe shortage of foreign exchange, and foreign investors and debtors started to worry about solvency. To make matters worse, like many other emerging economies in late 2022, foreign capital started to slowly exit Egypt in favour of lower-risk Western markets with rising interest rates. But Egypt’s debt-service payments kept rising as it continued to borrow to reschedule old debts denominated in foreign currencies, so much so that more than 40 per cent of Egypt’s revenues next year are projected to go toward interest payments alone. Then came Russia’s war on Ukraine, which complicated things even further, as both countries represented about a third of Egypt’s tourist base, and supply 80 per cent of the grain used for Egyptian bread production.
Cairo was forced to turn to the International Monetary Fund for a financial bailout last December, but the US$3-billion rescue package came with stipulations: Egypt had to reduce its number of state-owned assets, minimize the military’s involvement in the economy and, most importantly, devalue its currency to bring it into line with market prices to spur exports, attract foreign investment and reduce imports. Currency devaluations have compounded already soaring inflation, particularly on food – Egypt is totally reliant on imported wheat – and that has disproportionately hurt the country’s poor, who make up 60 per cent of the population and are highly dependent on subsidized bread for sustenance. Yet Mr. el-Sisi has tried to drape even this hunger in nationalism: “If progress, prosperity and development come at the price of hunger and deprivation, then Egyptians will not shy away from progress,” he said in October. “Don’t say it is better to eat.”
Undoubtedly, Egypt will need to devalue its currency further if it is to get its next tranche of sorely needed IMF funds and to regain both foreign and vital Arab Gulf investor confidence in its economy. Indeed, when Mr. el-Sisi announced the election dates on Oct. 2, it was meant to get ahead of another painful but imminent currency devaluation.
Egypt’s economic situation, then, had already been in a critical state. But on Oct. 7, when Hamas attacked Israel, things became bleak. Tourists have cancelled travel plans to the region and global investors are pricing in even more risk, further raising Egypt’s borrowing costs. Worse, Mr. el-Sisi must now contend with the possibility of a massive influx of hundreds of thousands of Palestinians from the Gaza Strip into the Sinai desert, essentially producing a “three-state solution” mooted in an Israeli Intelligence Ministry document leaked in October.
For two months, Egyptians have been consuming brutal social-media images and unrelenting stories of the daily pain and suffering of Palestinians because of Israel’s continuing military offensive in Gaza. Like much of the Middle East, there is no shortage of strong public support in Egypt for the thousands of Palestinian civilians, mostly women and children, who have been killed by extensive Israeli bombing in densely populated areas or as a result of the humanitarian catastrophe that has ensued. But Egypt is aware that opening the Rafah crossing to Palestinians would repeat the historical displacement of the Nakba (Arabic for “catastrophe”), when 750,000 people became refugees as they were pushed from Israel into surrounding regions, as the state of Israel was created in 1948.
Events such as war in the Middle East and a global pandemic are, of course, impossible to control for. But this is an economic disaster of Mr. el-Sisi’s own making. Egypt’s massive debt and the inflamed regional political dynamics have sown suspicions that Israel, the West and perhaps the Arab Gulf countries would offer to pay off Egypt’s mounting debt in exchange for taking in Palestinian refugees. There’s some historical precedent for the deal-making, too; in 1991, more than US$40-billion in Egyptian foreign debt was forgiven at least partly in exchange for the country’s support during the U.S.’s war in the Persian Gulf.
There are no easy policy solutions to Egypt’s economic calamity. The question now: Is there a price that Mr. el-Sisi would put on taking in Palestinian civilians from Gaza who likely have no homes to return to, who face high prospects of disease and famine, and who have been all but abandoned? The cost would not just be further security instability in the Sinai, but the shame that the President would carry for betraying the Palestinian cause for self-determination and for selling out Egyptian nationalism – which is Mr. el-Sisi’s bread and butter. On the other hand, refusing to accept fleeing Palestinians might just lead to similar shaming, but without the benefit of debt relief.
Mr. el-Sisi will win next week’s election. But with Egypt facing severe challenges on multiple fronts, it could well be a poisoned chalice.