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5 "Tells" that the Stock Markets Are About to Reverse

Algerian Scenario For Egypt?

Politics / Egypt Jul 30, 2013 - 10:12 AM GMT

By: Andrew_McKillop

Politics

WESTERN APPROVED COUP
On November 3 1988, Algeria's one-party state run by the FLN, the 'historic' liberation front which fought the French in the 1956-63 colonial war, under prodding from Western democracies, amended the constitution to allow parties other than the FLN to stand. The FIS (Islamic Salvation Front) was founded shortly after, on February 18 1989, led by the elderly sheikh Abbassi Madani and the charismatic young mosque preacher, Ali Belhadj. Elections held in December 1991 were cancelled by the FLN after the first round, exclusively because the FIS was well ahead. The country's military took control. The FIS was banned and thousands of its members arrested. Islamist guerrillas rapidly emerged and began an armed campaign against the government and its supporters, that terminated in 2002 so far as major fighting was concerned, leaving at least 250 000 dead.


The army coup, at all times coordinated with the ruling FLN overthrew the president, Chadli Benjadid who had amended the constitution allowing the FIS to come so close to power. Benjadid was followed by no less than 5 other presidents in 7 years, before stability was attained, with the entry of Abdelaziz Bouteflika, still incumbent but seriously ill, to the presidential palace in April 1999.

Western criticism of this coup, suppression of democracy, and overthrow of an elected president (even if “vetted” by the FLN) was at all times muted, especially in France, the former colonial power. French military support to the Algerian army was increased following the coup, despite the army's use of outright terror in response to the terror campaign of FIS's armed Islamic, often “djihadist” fighters such as the AIS and GIA.

The reasons for the French attitude and that of other democracies boils down to two words: oil and gas.

The Algerian FIS can in several important ways be compared with Mohamed Moursi's dependence on and total linkage with the Muslim Brotherhood movement. Basically, the Algerian FIS was in no way prepared for power, and its flimsy political platform was at one and the same time eccentric and unworkable. Nevertheless, the FIS received massive voter support.

The FIS's eccentric proposed program, thrown together as a platform in 1989 and published as a pamphlet with the title Projet de Programme (outline provisional program) featured the proposal that all Algerian women should be paid by the State to stay at home rather than working. This would not only allow sexual segregation, it being “immoral” for females and males not married to each other to occupy the same office or workplace, but would also raise the number of jobs available to men at a time of chronic unemployment. The education system, still including large slabs of the old French colonial education system, would be completely “Arabized”. This in turn would disfavour returnee Algerians, educated mainly in France, who had formed a elite class, inciting social division and jealousy from indigenous Algerians. No major economic change, other than stopping women from working and establishing Islamic banking (only for the artisanal and handicrafts sector) was proposed in the flimsy provisional program.

MOURSI'S NON-PROGRAM
Almost totally absent from any coverage of the now-dramatic state and condition of Egypt, the Muslim Brotherhood and its figurehead president Moursi were close-to devoid of a coherent economic program. The Rafik Hariri Center for the Middle East, 27 June, was forced to conclude Moursi had done little or nothing: “As the first anniversary of President Mohammed Morsi’s term approaches on June 30, it is clearly evident that Egypt’s first democratically elected president has so far failed to tackle the core economic issues which fueled the popular uprising in January 2011”.

The political “party in the window” for the Muslim Brotherhood, the The Freedom and Justice Party, to be sure, produced and published it’s seemingly heavyweight economic program called the Nahda (Renaissance) Project. This was described as a 20-year social and economic blueprint and alternative to the Mubarak crony capitalist system.

Moursi regularly quoted from the Nahda Project. For example, this Project claimed that Egypt's economic growth rate would attain 6.5 to 7 percent a year by 2016, would be sustained, unemployment would fall to 7 percent, inflation to 4 percent, and the annual budget deficit would be cut and then held at about 6% of GDP.  The real world performance was drastically different. Growth in 2012 was under 2 percent, unemployment rose to 13 percent, inflation remained high at around 9 to 15 percent, and the Egyptian Pound was weak. Foreign exchange reserves fell, stayed dangerously low and would have been depleted below the level needed to pay for food imports – covering about 40 percent of Egypt's total food supply - had it not been for gifts from Kuwait, other Arab Gulf states and Turkey.

How the fine goals of the Nahda Project were to be achieved was never, ever explained. Possibly by Islamic magic we might say, but both strangely and obviously with Obama administration support, the Project was accepted by the IMF qualifying Egypt for a $4.8 billion loan, to which Kuwait offered an additional $3 billion. Unfortunately for Egyptians, infighting and backbiting among Freedom and Justice Party politicians, Muslim Brotherhood ideologues, Islamic scholars and Moursi's provenly eccentric way of handling power led Egypt to refuse the IMF loan in December 2012. The continuing political turmoil in the aftermath of several divisive decrees by Moursi, and the political dispute surrounding the referendum on the constitution were important factors in Egypt’s decision not to proceed with the economic plan that it had presented to the IMF.

2012 was therefore a Lost Year. For Moursi it was his first and last year in office. The comparisons with Algeria after the coup which overthrew Chadli Benjadid in January 1992, helping trigger the civil war, and the overthrow of Mohamed Moursi of Egypt in July 2013 are unfortunately not fanciful.

MIRAGE OF STABILITY
Egypt lies at the heart of Arab history and played a major role in the “Arab Spring” revolution, even if the original spark was in Tunisia, now also edging towards civil strife, even civil war between pro-Islamists and anti-Islamists to the backdrop of a ruined economy. Egypt's imagined but not eternal attributes – strategic location symbolized by the Suez canal, its stable border with Israel, its large population – did not include democracy, or a successful economy. The overthrow of Egypt’s democratically elected president Moursi, may or may not have much broader repercussions.

Argument is rife as to whether his ouster was a classic counterrevolution by the army, or a coup to  prevent a total takeover of power by the Muslim Brotherhood? The Brotherhood, supposedly for John Kerry's advisers, could or might have propelled Egypt into economic collapse enabling “the Clerics” to take total power and declare an Islamic religious dictatorship. This lurid scenario-building ignores what happened in 2011. Egypt's few pro-Western liberals and huge numbers of urban “modernized” youth rallied and protested against Mubarak. The same groups supported the coup of 2013, lending it a certain legitimacy. Arguing that the overthrow of a democratically elected government by the military cannot be glossed over ignored the very heavy gloss-over that the Algerian coup of 1992 produced. To be sure, Egypt is not a major exporter of either oil or gas.

The real problem today is that Egypt can repeat the Algerian tragedy of a nine-year civil war, or it can morph into something like a Kemalist “democracy” of the Turkish type – that is a civilian government with the military pulling the strings. Saying that this only promises Mubarak 2.0 throws up the major problem for a “Kemalist” solution – and shifts the attention to Turkey's own current street rebellion against an arrogant, corrupt and distant government.

One thing is unfortunately certain. Power in Egypt is split between the army and the Muslim Brotherhood. They divide power between themselves. The place for Western-oriented liberals and intellectuals may look “significant” on You Tube or Twitter, but not in the streets of Egypt. Hamas, which rules Gaza since 2006, may be the model of what the Brotherhood wanted: undivided power, including power over its rag-tag military. For this reason “the Arab street” in Egypt, which is a youth-dominated movement knowing all about Internet and cellphones, is the real deciding factor. These young people want progress, not power. They are to a certain extent Western-oriented, but through sheer numbers they will not be crushed by the Brotherhood on one side, or by the army on the other.

Most important, Egypt's “Arab street” has two short-fuze dangerous attributes: it is poor in a country where the official poverty line is set at $1.65 a day for adults, and it is relatively educated. It has its own intellectuals, if not the “Western type”, and cannot be called middle class. Egypt's drama will be framed by the triangle of contradictions among these three groups. Neither the military nor the Muslim Brotherhood have any credible answer to Egypt's social problem of inequality and poverty which riddles nearly all Arab societies. The Brotherhood's political ideology is rooted in the 1920s of its origins, and the Labour party of its British colonial power – basically left-wing European politics of the nineteenth century. This is an antique ideology made even worse by Islamic obscurantism. The military is at the complete other end of the ideological spectrum, due to decades of heavy American aid.

Under any hypothesis, doing nothing to help Egypt will be as bad as letting Algeria rot in the 1990s. The new and “infant democracies” of the Arab world, if they cannot deliver any hope to their large youthful populations, literally have No Future. They need enhanced cooperation, which in the current Egyptian situation means the West working with all three leading political forces – the military, the Brotherhood, and the urban young. Marginalizing or even persecuting the Muslim Brotherhood and political Islam, as in Algeria, will be fatal - and Egypt is a very small oil and gas exporter.

By Andrew McKillop

Contact: xtran9@gmail.com

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2013 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisor.

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