Egypt Situation Report – December 2015

Historical Leader Plagued by Political Turmoil

Egypt Protest in 2011 Egypt is internationally famous as a cradle of civilization – and for having one of the longest histories of any country, becoming a nation state in the tenth millennium BC. Modern Egypt is still quite powerful, long considered a power in the region, holding influence in the Middle East, North Africa, and throughout the Muslim world. However, in recent years the country has faced widespread revolution and political turmoil, beginning with mass protests calling for President Hosni Mubarak’s resignation in 2011.

When Anwar Sadat was assassinated in 1981, then Vice President Mubarak quickly stepped into his role, maintaining dominance for the National Democratic Party. This political party ruled throughout the 1980s and 1990s, passing laws that severely hindered freedom of association and expression for all Egyptians. By the late 1990s, any kind of parliamentary politics had become immaterial and political expression was at an all-time low. The turning point came in 2007, when Mubarak’s government changed the constitution to allow the police to expand surveillance of Egyptians, and Mubarak gave himself the power to dissolve parliament.

In early 2011, protests erupted against Mubarak and his government. He resigned a month later and fled the country, prompting massive celebrations in Tahrir Square. The Egyptian military assumed power and the Chairman of the Supreme Council of the Armed Forces became the head of state. The first parliamentary election was held in November 2011, with a high turnout and no reports of election fraud. Mohamed Morsi, heavily supported by the Muslim Brotherhood, was elected president of Egypt in June 2012. Attempting to weave strict Islamic beliefs into the country’s constitution, Morsi issued a declaration announcing that no Egyptian could challenge his decisions. Because Egyptians had elected him hoping for a true democracy, this led to massive protests throughout the country.

Sisi’s Presidency: Action or Empty Promises?

In July 2013, the Egyptian military once again removed the sitting president in a coup d’etat, establishing themselves as the interim government. In 2014, Abdel Fattah el-Sisi, the head of the Armed Forces, announced he would run for office. In the presidential election he enjoyed a landslide victory, and was sworn into office in June 2014. During his first year in power, Sisi has made a lot of speeches but action on many necessary reforms and improvements remains stalled.

The election of Sisi has also made relations with the United States more complicated and confusing. Once in office, President Sisi wasted no time hunting down his Muslim Brotherhood opponents and putting them on “trial.” In July 2015, the president changed the laws so he could quickly execute his enemies. Under Sisi there has also been an increase in opposition journalists being imprisoned. However, the U.S. State Department still sends almost $600 million in military aid to the country – even with knowledge of these blatant human rights abuses.

Although Egyptians are happy Sisi overthrew Morsi, they seem to be uncertain about the man they now call president. His approval ratings are incredibly high, with 78% saying they would vote for him in another election, but many still remain cautious about their new leader. Domestically, Sisi has called for Islamic reform and modernization, moving to regulate mosques and the textbooks used in Islamic schools. He has attempted to set “a good example” for fellow Egyptians, by arriving to the office early, working to curb sexual assault, commuting on his bicycle, and donating half his salary to support the economy. Although his image suggests he is a man of the people, his government adopts a strong top-down approach. Sisi recently created a Supreme Council for Legislative Reform, which will draft new laws and simply inform parliament of the changes. He has increased control over religion and education, only allowing Muslim leaders aligned with Sunni centers to preach and personally appointing deans and presidents of universities.

Improving the economy is a key objective on Mr. Sisi’s list, as over 25% of Egyptians live below the poverty line. Unfortunately, the government has been unable to reach a decision on the reform needed to provide food and energy subsidies, which make up a third of the budget. Although Sisi supports the private sector, he seems to be committed to keeping the state in charge of any economic development. In fact, he has given the responsibility of managing large housing projects to the military.

However, economic development news is not all negative. Right after being sworn into office, Sisi created some national projects that may decrease the unemployment rate and increase income. He initiated the new Suez Canal, doubling its existing capacity, and created the Suez Canal Area Development Project, which would develop five new seaports in the area near the canal and build seven new tunnels connecting Egyptian cities. Sisi also established the National Roads Project, which will create a network of more than 4,400 kilometers of road.

Tourism Sharply Decreases in the Land of the Pyramids

In the past, tourism was one of the most important parts of Egypt’s economy. Unfortunately, the 2011 Arab Spring and revolution that followed have put a severe damper on the tourist industry. During 2011, the number of visitors to Egypt fell by 37%. Attractions at Luxor, which used to draw a daily attendance of 12,000, fell to only 300 visitors per day. Total revenue from tourism was over $12.5 billion USD in 2010 but has since decreased sharply, bringing in only $5.9 billion USD in 2013.

And Then a Bombing That Shocked the World

In October 2015, ISIS militants claimed responsibility for bombing a Russian plane full of tourists headed to Egypt, but details around this hugely publicized act of terror remain murky. This has contributed even more to the decline of tourism, with beaches and resorts completely emptied by the threat. The president has faced criticism in dealing with the bombing after he downplayed the attack and failed to release information about the investigation. He just recently visited the resort, weeks after the bomb killed 224 people, claiming to get to the bottom of the cause but doesn’t seem willing to work with the United States or Russia.

Egypt has a fickle history with military action abroad – while the administration is happy to strike down opponents domestically, they hesitate to get involved beyond their own borders. In February, Egypt launched its first military attack on ISIS, targeting a training camp in Libya, to retaliate against ISIS’s murder of 20 Egyptians. However, further military action against the terrorist group has been slow, even though Sisi has identified “fighting terrorism” as a key goal for his presidency.  The country has come under some criticism along with other more developed countries in the Middle East and Northern Africa for not doing more to address the challenges of ISIS.

Can a Queen Help?

In a stroke of luck, a recent discovery may help revive Egypt’s tourism sector. At the end of November, explorers scanned the walls of a tomb in the Valley of the Kings, hoping to find the long-hidden burial chamber of Queen Nefertiti. Although nothing is certain, the radar showed strong evidence there is a hollow chamber behind the wall. In the next few months, more analysis will be conducted to try to determine what is behind the wall, and then researchers may drill into the space to get a better look.

Egypt remains a powerful presence in the Middle East and North Africa. However, devastating impacts to the economy and political stability ensure that this is a country to watch. President Sisi has made many promises, but will need to start putting those ideas into action to revive Egypt as a regional leader.

To keep up-to-date on what is going on in Egypt, check out the Clements Egypt Risk Assessment Country Guide.

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Egypt Country Risk Assessment Guide