The Economic Incoherence of “El Bashmohandis”

Khairat El-Shater is hailed as the economic guru of the Muslim Brotherhood. He is certainly a successful businessman (although the details, as with everything relating to the MB, are secretive and murky). But businessmen are not always good macro-economists. What El-Shater revealed today is a rather disjointed and incoherent program, driven more by appeal to public prejudice than an actual desire to build a viable economy.  In part this is due to the straight jacket of “Islamist Economics”. However, if the MB assumes all the legislative and executive powers in Egypt, it would be helpful and patriotic to invest some of their political capital in making tough economic choices in the short term in exchange for long term gains. There are several warning signs why an Egypt dominated by the MB will not achieve rapid growth. At the moment Egypt ranks around 130 out of 210 in the world in GDP per capita ($6500 or so). It needs two decades of solid growth ( 6% or more)  to join the ranks of the “near developed” , defined as per capita of around $15,000 to $20,000.  Only a few nations have achieved that in recent times.

There are multiple reasons to doubt that El-Shater’s policy will lead Egypt to an economic renaissance. Here are a few:

1- Egypt will require a transparent and smoothly functioning financial system. El-Shater personal views and his evident need to appeal to the Salafis will push the country into uncharted waters of “Islamic finance”. There is no working model of such a financial system aside from rentier economies bolstered by oil, such as the Gulf countries or Malaysia. Today he revealed nothing about financial reform that would bolster the economy. There was nothing in his program about potential currency devaluation position, target growth or inflation numbers, and no target deficit or balance of payments. There is too much “inshallah” and too few numbers in his plan.

2- His program was light on manufacturing and new technology and spoke more to a service economy. It is not clear that Egypt is competitive in this area (say compared to India or the Phillipines), especially if creeping Islamisation  reduces tourism. Significant gains in manufacturing, which benefits from lower wages, are stymied by  lack of foreign investment inflow. These investments are scared away by the political uncertainties and regulatory structures, including lack of transparency, poor labor laws, and uncertainty about the validity of deals done under Mubarak. El-Shater seems to imply a program similar to that of Gamal Mubarak, but with the MB Grandees in place of Gamal’s cronies. That will not attract foreign capital, except from the Gulf countries. But then again the MB is on rocky terms with these countries. Also, any serious manufacturing effort will require dealing with the current military ownership of many enterprises, including joint ventures. The MB is the organization least qualified to do so.

3- Islamic governance will have a ratcheting effect on personal freedoms, which will push many of Egypt’s best out of the country. The young professionals necessary to start and grow innovative businesses are unlikely to suffer kindly the tomfoolery of Salafi strictures.

4- El-Shater mentioned nothing serious or detailed about telecom (Egypt is a main route of West-Far East land telecom traffic along the canal zone) and port development (including canal widening), in both of which Egypt could have a solid competitive edge. These developments will likely involve large capital that will want to bypass the MB favorites. Let us not forget that Israel is creating a high speed cargo rail line from Jaffa to Eilat, which could compete with the Suez Canal.

5- There was more nonsense about self-sufficiency in Agriculture. That is a nice nationalist sounding policy with almost zero chance of success. Climate changes and population growth will dictate that Egypt move from staple farming (wheat, rice etc.) to high-end farming, such as fruits, flowers, and other similar cash-for-export crops. Again, El-Shater’s policy is silent on that.

A quick survey of a few macro-economists reveals the MB program to be largely devoid of any serious plans, missing in any kind of specific “number-driven” forecasting and a profound ignorance of global economics. The program of the MB “renaissance Engineer” is embarrassingly amateurish. This is no way to build a 21st century economy.


The Dog Whistles of Omar Suleiman

Omar Suleiman sat atop Egypt’s General Intelligence Services (GIS) for 20 years, longer than anyone else has ever occupied that thorny and uncomfortable seat.  It would be easy to attribute this to pure ruthlessness. It would also be wrong. The man swam in a shark tank of cut throats. Ruthlessness would not have been enough. He must possess a keen and supple intelligence as well. Let us also remember that the entire Egyptian elite (including the MB) were willing to negotiate with him during the revolution, except for the El-Baradei.  Ignore for a moment the twitter chatter  and focus on what he has done and is likely to do. As with any spook, he is much more comfortable operating away from the limelight, and will use dog whistle politics at every chance. Let us count the many dog whistles he has and will engage in.

1- His entry into the race was impressive, just at the last minute after the field was clear and to force his opponents into fumbles. Egyptians respect wiliness.

2- He laid an easy trap for Khairat El-Shater, who foolishly walked into it. Instead of a reasoned response, El-Shater went into rhetorical overdrive, saying that Suleiman can never win a fair election and if he won there would be a revolution. This opens up El-Shater to the charge that the MB will only tolerate elections if they win them and that they threaten the state if the elections do not go their way. This also plays into the fears of many Egyptians and also to the fears of the West, expressed by the slogan about the Islamists “One Man, One Vote, Once”. Fence sitters who voted for the MB in the parliamentary elections will rethink voting for El-Shater.

3- He will appeal to the fears of the business class that the MB will replace the Gamal Mubarak cronies with the MB grandees. This is a powerful appeal to the Middle Classes, and to the business people who were squeezed by not being close to Gamal Mubarak and are just as afraid of the El-Shater cronies. He will make this appeal in a subtle way by emphasizing that he was opposed to Gamal Mubarak and by floating rumors that Gamal Mubarak tried to assassinate him in the waning days of his father’s presidency. This appeal, by the way, will work well with the Copts, many of whom are in the business classes.

4- He will appeal to the average Egyptian tired of rising crime but also wary of police corruption. His appeal will be that he is the only man ruthless enough and savvy enough to take on the the Ministry of Interior and win. He will tar others such as Amr Moussa and Aboul Fotouh as weak and not able to deal with the police gang, and El-Shater as wanting to replace the police with MB militias (the last trial of El-Shater was about forming a militia).

5- He will appeal to many anti-Islamists (occasionally called liberals) by saying he is an “old man” who will not have a dynasty, but serve one term, clean the mess and leave a better Egypt to one of their own.

6- He will appeal to the West and Israel by an unlikely route, he will out “national” the MB and socialist candidates. He can pull that off because of his personal relationships with many leaders in all the involved countries.

7- He will cultivate his insider status to appeal the the Arab Nationalist crowd by promising to restore Egypt’s leadership in the Arab world, without risking a breach with the Gulf countries.

8- He will blunt the Salafi vote by blackmailing many of the Salafi Sheikhs who control this vote.  These Sheikhs are mostly TV charlatans and there is no doubt they have alot to hide; passports, nose jobs, women, you name it.

9- His appeal to the Army top brass is obvious. They will cease to be in the hot seat, their benefits are not going away, and the dirt he has on any of them will not be leaked. Let us remember that part of the GIS charge was to vet the Army officers.

10- He will squeeze every ounce of benefit from his Saidi roots and play the village elder to many who supported the NDP in previous elections.

So these are the whistles. Will they work? Will they be enough to blunt his years of closeness with Mubarak? Time will tell.

 

 


Abu Ismael’s Mother

The whole controversy about Hazem Abu Ismael’s mother and her American citizenship is viewed from a purely tactical political angle. But in fact there is another more important aspect to it, one that will persist well past Abu Ismael’s farcical candidacy.  This is of course the fact that the US has a significant number of Muslim citizens, some of whom are openly Salafi while living a free and unmolested life. There is no point dragging the phrase “cognitive dissonance” into this. What ought to be obvious to Islamist politicians, but is willfully ignored, is that their behavior in power will have a large and profound effect on American attitudes toward Muslims.  One of the major effect of the 2011 Egyptian revolution was to show Muslims in a positive light in the US, after years of grainy mug shots of terrorist suspects.  The Muslim Brotherhood delegation visit to the US could have been a good opportunity to build on that.  Frankly they bombed.

First there were issues of exactly who was on the delegation. It was neither fish nor fowl. It was a mixture of FJP MPs and MB propagandists. They could never be viewed as solely politicians nor as members of a religious organization. It clearly put them at a disadvantage. There was also the manner in which they never seemed to answer questions directly and the occasionally fact-challenged responses. For example, insisting that violence against Copts is a “media myth” is an insult, certainly to the 21 people who perished in a car bomb outside a church on New Year’s eve 2011, or to the many others who lost their lives since then, and those who were dispossessed in mob violence. Then there is the fact that while issuing comfortable words about a “civil state”, on the same day,  Khairat El-Shater was assuring the Salafis of just the opposite.

The Muslim Brotherhood is terrified that now with absolute power within their grasp they might once again have it slip away. They should be more terrified about a different issue. That without an honest and soul-searching understanding of what they will do with this power, they might set back the progress of Egypt, specifically, and of Muslim-Christian understanding, generally, for generations.

The US has its share of “Islamophobes”, those who peddle fear for the sake of their narrow gains. They are to be shunned.  But if the Muslim Brotherhood in power proves them right, we will all suffer the consequences for decades. And those who advocated for an open dialog with Islamists, and even support for some of their candidates, will be judged by historians as useful idiots.


The Unchanged Brothers

The last week has brought into focus how little the Muslim Brotherhood has changed since its founding over 80 years ago. This is remarkable in a movement that has spanned a good part of the 20th century, the Monarchy and the First Republic,  World War II, the Cold War, several Middle Eastern conflicts, rapid technological change as well as massive changes worldwide in acceptance of personal rights.

A previous post (http://wp.me/p24pve-3a) mentioned Khairat El-Shater as a “dangerous man” without elaboration. This video of a recent speech that he gave after the Egyptian revolution should dispel any doubt about that designation.

http://www.youtube.com/watch?v=JnSshs2qzrM

The speech sounds like a caricature of what western intellectuals have labeled “Islamofascism”. There is the standard talk about the importance of the group over the individual, a re-working of broad swaths of history from the 13th century to the 20th century to fit the ideology of the MB, and a willful disregard for any thorough scholarly interpretation of historical events. There is the bemoaning of the disappearance of the Caliphate after the collapse of the Ottoman empire. Talk that we have heard from Bin Laden, who probably was aping Ayman El Zawahiri, a Muslim Brotherhood prince who must have absorbed all that in his youth.

It is pointless to try to do a point-by-point analysis of that speech or try to refute the points made by El Shater. Others have done that quite capably. It more critical to point out how the ideology of El Shater will shape Egypt, and the wider world, should he become President.

1- This is a standard MB ideology best distilled by Sayed Qutb over 40 years ago. The MB has not grown intellectually since that disastrous time, nor learned anything other than how to better bide its time. It still refuses any power sharing as part of a national political fabric. This is why the Monarchy tried to suppress it and why Nasser cracked down. The MB does not seek to serve Egypt, it seeks to take over Egypt. Egypt is simply a tool and a base of operation for a trans-national movement.

2- The most immediate and practical consequences of this ideology is that the MB will seek through both legal and extra-legal means to suppress all disagreements, both internal within the movement and in Egypt at large. That is why Aboul Fotouh was ejected. Obedience is critical, even at the expense of violating one’s conscience. The individual must be subservient to the movement. This bodes ill for any thinking individual or group, especially Muslims.

3- Egypt will likely find itself embroiled in many fights where her interests are not at stake in any meaningful way. In many ways it will be a repeat of Nasser’s adventurism and grandiosity but on a larger and more disasterous scale. The grandiosity of the MB vision (fix the individual in order to conquer the world) is completely at odds with the reality of Egypt, which is poor and weak and has gotten poorer relative to other countries in the last decades. This is a combustible reality unlikely to be tamed by logic.

4- Conflict with the West is inevitable, since the fundamental ideology is essentially the same that created the Gama’a Islamia and ultimately the Zawahiri group. Zawahiri is not an anomaly, he is the logical end product of a committed believer in this ideology. There will be many flash points beside the ever present Israeli conflict.

5- The MB will initially try to sidestep the Copts. They are not a barrier to its plans, liberal Muslims are a far more immediate danger. However, the Copts will always be there as a standby straw man to be tossed to the mob whenever things go terribly wrong. And in any case, the legal system will like make life harder on Copts. Any Copt who dares to speak his mind or engage in politics will be hit with some spurious “insult to Islam” law suit. Ultimately, however, they will turn on the Copts. They are a constant proof of the historical in-authenticity of their ideology and a link to a different and older Egypt that they wish to obliterate.

Western totalitarian ideologies evolved in two radically different directions. There was the adventurous kind which quickly collapsed in a nightmare of violence and bloodshed. There was the the more cautious and wily kind which lasted longer, but eventually collapsed under their own inefficiency. It is not clear which way Egypt under the MB will evolve; a rapid state collapse or a long nightmare of dreary and dark totalitarianism.

Missing from this gloomy analysis is any thought that Egypt can avoid a take over by the MB. It is possible, but at the moment it looks unlikely. The stars are aligned badly, just bad luck. Suppressing the movement will not work. That has been attempted and it has done nothing but garner support for it. The work of reducing and ultimately eliminating this force that has exerted a dark shadow over Egypt for nearly a century belongs to many generations. It needs to be done with  patience and thoughtfulness and it will have its ups and downs. Almost all of it will need to be done by the Egyptians themselves. But the outside world needs to help. We can start by seeing the movement for what it is, not what we wish it to be.


Numbers (Aboul Fotouh Again!)

A very successful American politician once remarked that all of politics is about coalitions and numbers. Egypt is still finding its way through open popular politics. But it is useful to remember this adage, especially for liberals, secularists and Copts who feel overwhelmed by the MB/Salafi Juggernaut.

The numbers are simple. Twice in one year it was shown clearly that the MB/Salafi grouping has 75% of the popular vote, while 25% belongs to a combination of liberal Muslims and Copts. We simply need to accept that as a fact.

The coalition part is a little trickier. For the 25% not to be marginalized they need to nearly double their number. They can only do so by attracting from their opposition, the current 75%. The MB has handed the 25% a golden opportunity to reach out, show political maturity and build a coalition. First of all, you only build coalitions with people you do not agree with on all aspects of governance. But you must have enough agreement on major aspects. Second, coalition building requires discipline and realism. The next President of Egypt will be an Islamist of some stripe (barring a return to military dictatorship). It is only a question of whom. The MB are relying on the obedience of their 50% of the vote plus enough Salafis to put El-Shater over the top (50%) in round 1. That scenario must be prevented at all costs. Another scenario that must be prevented is a runoff between El-Shater and another candidate, such as Moussa or Shafiq or Abo Ismael. El-Shater will win in all cases.  The 25% can not be quixotic and throw its vote toward an “ideal” secular candidate. Backing Aboul Fotouh, with all his shortcomings, will enable him to get to round 2 against El-Shater, but only if they do so in bulk. If he wins, then great! The MB was a dealt a solid blow and a new winning coalition of the decent has been established, for the betterment of Egypt. If he loses, then he will likely lose narrowly, again establishing an excellent coalition for “next year”, and denying the MB a mandate to run rough-shod over its opponents. In both cases, the MB will suffer fissures. It is good for Egypt not to have a single monolithic, secretive,  cult-like political power. This has been a dark shadow over Egypt for eight decades.

The 25% are in a tough spot. They need to be ruthless, realistic, principled and disciplined all at the same time. They need to do what is right for their country, over what feels good or satisfies their most cherished desires. And they need to get into the habit of winning.

And they need to show up bright and early on election day, happy and singing, in big numbers and in lockstep. And remember that chant, “Ahom, Ahom, Ahom, El-Masryeen Ahom!”