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Egypt’s two difficult and Self-Perpetuating Challenges.

Terrorist attacks, tension between al- Sisi’s regime and the Coptic minority, the emergence of new militant groups, economic and financial problems.

At least 28 people including many children were killed on May 26 in Egypt. It was yet another attack targeting Coptic Christians. The government responded by hitting jihadist camps in neighboring Libya. The attackers used automatic weapons, targeting two buses aboard which were Christians (Copts), traveling to the Saint Samuel Monastery in Minya, 200 km. south of Cairo. The masked attackers who approached the buses aboard pickup trucks are likely affiliated with Wliayat Sinai, the Egyptian ‘branch’ in Egypt. Apart from the violence and the repercussions for the Egyptian government and the Coptic community – the attack comes weeks after the Palm Sunday bombings at two churches, one of them being St. Mark Cathedral in Cairo, which killed 44 Copts.

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The recent bus attacks could be a significant turning point in both ISIS’ strategy and in the relationship between the Christian community and President al-Sisi. The bus and church attacks, leaving such a death toll, have not occurred since 2011. That occurred – shortly after president Mubarak was deposed in the ‘Arab Spring’- as a bomb exploded at the Church of the Saints in Alexandria, killing 21.
Tension between al-Sisi’s regime and the Coptic minority could weaken support for the president, who is running for re-election in 2018. The attack comes in the context of rising sectarian clashes in rural areas that have occurred with regular frequency since the July 2013 ‘coup’, which ousted President Morsi and the Muslim Brotherhood from power. Copts represent only ten percent of the population, but they are an economically important minority. The Coptic diaspora, especially in North America, is an important source of remittance of wealth in Egypt, which bolsters the community’s political influence.

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The increasing violence against Copts has only added to the growing diffidence between them and al-Sisi. Once hailed as the savior of the Copts, ‘sent from heaven’, al-Sisi has proven no better than his predecessors in addressing their concerns. In 2016, the Egyptian parliament passed a law restricting construction of churches. This has always been a source of discord for the Copts. Mubarak and Sadat restricted church construction. The former did not want to encourage the Muslim Brotherhood’s backlash. The latter ignored the Copts, because, in the 1970’s, he was courting the Muslim brotherhood to counterbalance the rising influence of communists in universities as the country shifted superpower relations from the USSR to the USA. The recent attacks will have persuaded Egyptian Christians they have nothing to gain from backing al-Sisi.
The Copts’ anger, moreover, can only increase, considering the American embassy in Cairo issued a warning on May 24 warning that the HASM group was planning attacks. Still, ISIS is the most likely suspect of the attack against Copt civilians. HASM generally targets security and military forces rather than civilians. The recently formed Hasm movement has conducted several attacks and assassinations in the Cairo region. It shares a similar ‘ideology’ as Islamic State, but it is Egyptian in focus. Thus, it is something of a nationalist Islamist movement.

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In recent months, the group has organized a series of attacks targeting members of the Egyptian security forces, as well as clerics and judges who have condemned extremist ideologies. HASM stands for Harakat Sawaed Misr (The Arms of Egypt Movement). The group first emerged in 2015 through websites and social media, inciting violence “against Egypt’s police and the army as well as judges and clerics who call for moderation. Like ISIS and others, HASM has used the northern Sinai as a base of operations, exploiting Egypt’s weaknesses in recent years, recruiting members of various extremist Islamist groups. Between them, ISIS and HASM can put considerable pressure on al-Sisi, targeting Copts. ISIS focuses on direct Copt civilians while HASM targets Muslims, who represent the voices of moderation.
The attacks on Copts and the emergence of new militant groups clearly show that Egypt continues to struggle with its insurgent movements. The Egyptian forces have responded to the latest attack, striking alleged ISIS training camps in Derna, in neighboring Libya, but this can have little effect in preventing efforts to destabilize Egypt. In extending the state of emergency for three months after the church bombings in April, al-Sisi admitted that the jihadists wanted to encourage division in the country. The Egyptian Christian community got some support from Pope Francis who had pleaded in Cairo for dialogue between Muslims and Christians during his visit there at the end of April. How the Copts – and the Presidency – react to the latest attacks will offer much insight into al-Sisi’s political future and the course of the 2018 elections, which risks being marred by intense violence.

The Economy

Still, for all of the risk that terrorism represents for Egypt, the economy is an even greater and more intractable one. Indeed, improving the economy would do much to resolve the terrorism problem as well. The Egyptian economy is simply too dependent on imports and international aid – and remittances from its migrants. For al-Sisi, getting the economy ‘right’ is all the more crucial, given that he has not exactly risen to the highest office in the land through a democratic path. Improving the population’s living conditions should be his priority. Instead, circumstances and the threat from terrorism have forced the Egyptian president to focus his attention in security. Since taking office in 2013, al-Sisi has found funds to purchase new military jets from France and even an aircraft carrier. The economy will take center stage in the preoccupations of most Egyptian families in June, given that Muslims will be celebrating Ramadan for much of it. Despite its focus on fasting and moderation during daylight hours, Ramadan involves many elaborate nighttime celebrations of food. Imagine celebrating 28 Christmas Eve or Thanksgiving dinners in a row; that’s what Ramadan is like. In Egypt, inflation reaches record levels and to restore the sick economy, the State has imposed austerity measures to fulfill a prescription from the International Monetary Fund (IMF). In addition, the historic alliance with Saudi Arabia has slackened due to the Egyptian retreat from the Saudi-led coalition in the war in Yemen and al-Sisi’s closer ties to Russia (and Syria) to counter jihadism. The Saudis have retaliated by cutting their financial support of Egypt.

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In April, annual inflation was close to 33%. But, food saw prices inflating by as much as 44% or more. Egypt has seen unprecedented price increases since the authorities ‘floated’ the Egyptian pound, allowing the exchange rate to vary according to the vagaries of the ‘market’ in November. The continuous rise in food prices has been followed by higher fuel and electricity prices, while salaries’ purchasing power has fallen accordingly. It was part of an IMF demanded reform to secure a loan of some $12 billion. Until that reform, the Egyptian pound traded at the official rate of 8.8 to the U.S. dollar. Now it takes 18 pounds – and counting – to buy that same single U.S. dollar. By the time you read this, it might be 20 pounds. Moreover, the Egyptian government has adopted a value added tax (VAT), offsetting fuel subsidies. The reforms had been postponed for decades, authorities fearing that these measures will trigger social unrest. Indeed, whenever, the Egyptian government has lifted food subsidies, it has triggered violent riots. In 1979, President Sadat had to reverse plans to lift subsidies on basic food items such as rice and sugar, after some 1,000 people were killed in protests. Given, the rising threat from fundamentalist organizations, the economic austerity measures can only serve to heighten security risks.
Egypt has for decades experienced economic and financial problems with no without tangible solutions or improvements. The 2011 revolt that ousted Mubarak may have encompassed a number of different and, sometimes conflicting ideals, but improving the economy was clearly a major impulse. Now, almost seven years after the revolution that saw the fall of Hosni Mubarak, the failure of the Muslim Brotherhood and a bloody counter-revolution and coup, al-Sisi has not yet managed to secure social and political stability. He has agreed to the IMF’s terms to jump-start a stagnant economy. But, the effort may take too much time and the country risks collapsing in a wave of violence before improvements are noticed. The precarious economic situation, therefore, is the biggest and most urgent problem that Egypt must confront. Al-Sisi has not tried anything new, certainly, he has not considered addressing the unsustainable costs of subsidies, welfare and – especially -y the largely Army controlled unproductive state apparatus.

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The post-2011 Egypt has also had to deal with a new challenge: the collapse of tourism. Tourism was an important generator of earnings and foreign currency. The more the security situation worsens, the more the economy suffers in a vicious circle. There has also been a reduction in Suez Canal traffic as many shipping companies prefer to use other routes to avoid piracy risks, and Yemen war, in the Red Sea.
The poor economy has perpetuated unemployment, inflation, rising poverty (one quarter of the population live in poor conditions) and the degradation of the middle class, the true pillar of Egyptian society.  Perhaps, the United States will have to intervene. Egypt has an important card it can play to exploit Washington’s support: the peace treaty with Israel. Washington needs Egypt to remain stable and to keep that peace.  It remains to be seen if Washington can use its influence on the World Bank and the IMF to secure more loans and better terms for Cairo. The goal is to encourage foreign investment. But, just as for tourism, the security situation poses a major obstacle.

Alessandro Bruno

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