Guest post by Professor Mohammad H. Fadel, an Egyptian-American-Canadian lawyer and legal academic who practiced corporate finance, banking, and corporate and securities law at the New York law firm of Sullivan & Cromwell LLP. He blogs here and tweets here.
As Egypt’s President Mohammed Morsi completes his seventh month in office, it is looking ever more doubtful that Egypt can build on the accomplishments of the January 25 Revolution; the risk of relapse into authoritarian rule increases with the passage of each day in which Egypt’s civilian political leadership prove themselves incapable of addressing the country’s seemingly endless problems.
For many opposed to Morsi, all the post-revolutionary problems facing Egypt can be laid at his doorstep, or at the doorstep of the Muslim Brotherhood, the organization to which he belongs.
But the truth is a little harder to swallow.
Egyptians have inherited from the Mubarak years a legacy of neglect and maladministration on an epic scale. It will take a generation of hard work to recover.
From this perspective, Morsi’s seven months have been a relative success, and his willingness to negotiate a loan with the International Monetary Fund, rather than being held against him and the Muslim Brotherhood as proof of a Machiavellian approach to politics where all principle can be sacrificed in the pursuit of power, should be taken as evidence of a pragmatic willingness to give reality greater weight than ideology.
From my perspective, economic reform must be the first priority because in the absence of a growing economy, it will be impossible to solve any of the problems facing Egypt, much less achieve freedom, dignity and social justice. I think all Egyptian political movements can learn from the pragmatism that the Muslim Brotherhood and Morsi have been willing to show with respect to the IMF.
Morsi certainly deserves no stars, but for Egypt’s democratic transition, that may also be his virtue. Some Egyptians may pine for a charismatic and brilliant popular leader at this phase in its history who will take bold and decisive action to solve the nation’s problems, but such a figure would have heightened the risk of authoritiarian relapse.
If Morsi’s weakness and indeciviseness are his greatest vices, his greatest virtue is that he has not acted in a fashion consistent with the stereotype of “one-man, one-vote, one time” that has been attributed to Islamists and indeed, the Middle East generally: Egypt is on the cusp of instituting a viable, even if imperfect, system of electoral politics, which has the possibility, given the magic of compounding over time, to begin to solve Egypt’s structural economic problems.
Until Egypt’s structural problems are on the road toward a solution, however, it is fantasy to be believe that Egypt will get anything more than minimalist democracy. Egypt’s opposition must rise to the occasion, desist from actions that inflame the situation, and always act to reinforce the nascent democratic institutions that are available, always with the hope of deepening and broadening them in the future.
Instead of continuing to fight yesterday’s battle, the opposition needs to organize effective political parties and formulate clear political programs that address Egypt’s practical problems. Uniting around an anti-Muslim Brotherhood agenda is a recipe for civil war, not for solving Egypt’s problems. So, the ultimate judgment on the competence of Morsi and his government must be made not only in light of the historical legacy of virtual social collapse inherited from Mubarak, but also on the relative competence of his adversaries, and here the saying that “the one-eyed jack is king in the land of the blind,” is perhaps only too apt.
Assessing the performance of Morsi and his government over the last seven months is crucial in thinking about what kind of policies any Egyptian government at this stage could reasonably be expected to pursue. To do this, we need to step back in time, and first assess the problems that any post-Revolution government will have to face. In short order, these include the following:
1. A deeply-divided population: despite the beauty of the pictures from Tahrir Square during the 2012 Revolution, Egyptian society is deeply-divided along lines of class, religion, ideology, and region. The various rounds of voting, beginning with the March 19, 2011 referendum have confirmed these sharp differences, and the free-wheeling political competition among Egypt’s various political entrepreneurs have, if anything, only exacerbated these differences in the meanwhile. Given this reality, the idea that Egyptians could produce a constitution based on a deep social consensus was nothing more than a “Tahrir Square moment”-induced fantasy.
Accordingly, the constitution essentially reflects only those relatively few points on which there was deep agreement: the end of absolutist presidential rule; the end of unlimited emergency rule; the end of arbitrary police powers; and the end of a closed-political system by instituting regular elections that are genuinely contested. As for the extent of personal rights or social rights, these are, for good or ill, objects of deep contention in Egypt and at the present moment, it is inconceivable that there could be any resolution of these questions which would represent a social consensus. The constitution therefore delegates these questions to democratic politics. Disappointing, but certainly not an unreasonable strategy, and certainly not consistent with either an Iranian or Saudi approach. Passage of any kind of constitution in this circumstance would have proven extremely difficult for any Egyptian politician, and if this constitution is annulled as many in the opposition are demanding, it’s hard to see that a new constitutional assembly would do a better job in preparing a consensual document. In short, any post-revolutionary government will have to navigate a public that is fractured, and until the material background conditions improve significantly, there is little hope to expect healing in the body politic.
2. An economy on the verge of collapse: The current crisis in the Egyptian economy, exemplified in the recent panic about the persistent decline in the Egyptian pound, reflects a generation of failed economic policies. From 1980 to 2000, for example, the average rate at which capital per worker increased in Egypt was a paltry 1.14%. While I have not come across post-2000 data, there is no reason to believe that the rate of capital investment has substantially improved. Egyptian investments as a percentage of GDP in 2011, for example, was only 15%, while in Indonesia it was 32% for the same period. The systematic over-consumption and under-investment in the country’s human and physical capital has debilitated the ability of the country to be competitive in the international market and, as the recent train wreck and apartment collapse in Alexandria demonstrate, are literally endangering the lives of thousands of Egyptians on a daily basis.
We should not forget the problem of youth unemployment, which is effectively in the range of 75%: According to a recently published report on youth unemployment in the Arab world that included statistics from Egypt, the youth participation rate in the workforce is the lowest in the world, standing at 35%, and despite that extremely low participation rate, the Arab world still has the highest youth unemployment rate at 25%.
There are no easy answers to Egypt’s structural economic crisis, and any plausible set of answers will all involve pain and sacrifice on a people who are already struggling. The best we can do is ensure that it does not call on further sacrifices on those Egyptians who are struggling to survive. In this respect, the government’s determination to enter into an agreement with the IMF is something to be commended, not to be dismissed based on visceral hatred of anything that smacks of Mubarak’s policies, especially in light of the absence of credible alternatives from the opposition. (I have previously defended the proposed IMF loan elsewhere, here and here, so there is no need to rehearse in details its advantages for Egypt, particularly in light of this blog’s own excellent analysis of the loan here and here).
3. An ineffective and bloated bureaucracy: The Egyptian civil service is, at once, incompetent, corrupt, and bloated. Even the best strategy of reform will require a competent civil service to implement that policy. The professionalism of the current bureaucracy, however, has been systematically undermined since the Free Officers’ Revolution, when they made the catastrophic decision to use the lure of government employment as a means to win the loyalty of the educated urban class rather than as an instrument of rational governance. There are too many state employees who do nothing, and not enough to do what is needed. Nor is it clear that the bureaucracy has enough skills to implement the kinds of policies that Egypt obviously needs. Take the desire to implement subsidies targeted specifically to the poorest 40% of Egyptians. Execution of such a policy requires a fairly sophisticated bureaucracy which is capable of identifying those individuals, making sure they can get the appropriate electronic subsidy card, and then establishing some mechanism so that merchants can process payments through these subsidy cards. In the alternative, the state could provide direct cash subsidies to these 40%, but that would require that the poor have bank accounts, etc. In short, even the best-formulated and most rational policies require complicated logistical steps for implementation, and it is not at all clear that the Egyptian bureaucracy can be relied upon, even if it was willing to go along with new governmental policies, to execute competently these new policies.
4. The Rule of Law: While the excesses of the police in the Mubarak era are well-known, it is not by any means clear how a post-revolutionary Egyptian government will be able to reform the police over the short-term when the police itself was as much the target of the Revolution as Mubarak himself. In short, how does one radically transform an institution which itself is required to maintain law and order over the short and medium terms? But, the police are not the only problem. Egypt’s courts are notoriously slow, due largely to unreasonably high case loads placed on judges. The inability of the average Egyptian to rely on the judicial system to enforce his rights in a timely fashion means that, for the most part, the legal system of rights and duties is ineffective, and the people must rely on informal means, sometimes involving violence, to enforce their rights. Add to this the problem of transitional justice, and the need to hold accountable members of the Mubarak regime and their allies within the security services, and one is left wondering how Egypt’s judiciary, even if it were the most honest judiciary in the world, could reasonably be expected to uphold the law effectively for all Egyptians? This week’s tragic outcome in Port Said illustrates the difficulty. Again, any post-Revolutionary government will have inherited a broken judiciary system that in its present condition is incapable, even if it is willing, to provide effective justice to Egyptians, whether in political cases or even disputes involving private property.