Interpreting Recent Egyptian Developments

Almost a week into Egypt’s latest popular uprising — it officially hit television screens around the world on June 30th when millions took to the streets to express frustration and seek change — commentators are rushing to catch up with facts on the ground. In the process, many complex and surprising issues have emerged.

Competing views on what is occurring fuel disagreements and clashes within Egypt, and robust discussions and concerns outside. They also influence the framework for future political negotiations and critical national reconciliation efforts. Moreover, there may also be implications that potentially influence the flow of financing to Egypt.

Confusion and worry are further accentuated by images of tragic human fatalities and street violence that dominate today’s news. And, in such a fast moving and volatile reality, anxiety is high and the risk of misinterpretation is far from trivial.

To put all this into some perspective, it is important to be clear about some of the country’s priors. So here are four that may be particularly relevant for what is currently happening there.

1. Egypt’s incomplete revolution: The first popular uprising 2 ½ years ago (the one that ousted President Mubarak) proved insufficient to place Egypt firmly on a path that ultimately fulfills the revolution’s legitimate objectives of “bread, dignity and social justice.”

Political parties scrambled to get organized, with many running out of time (and organizational capacity) as they were starting from scratch. Sequencing the key anchors of a successful democratic transition — a robust constitution, and free and fair elections for both parliament and the presidency — was mishandled. And some army generals gave the impression that they could be interested in more than just transitional rule.

As such, the initial phase under the SCAF (Supreme Council of the Armed Forces), while hopeful at first, gave way to disappointment.

2. Messy initial conditions: The January 2011 uprising was fueled by anger about institutions and an economic system that were coopted by a privileged few rather than serving the country as a whole. These were long-standing and deeply-entrenched problems. And, inevitably, the new Egypt found itself saddled with all the resulting challenges — past, present and future.

Durable solutions are inherently detailed and complex. They require a multi-year focus, specialized knowledge and hands on management. And the tasks become even more intricate in a turbulent global context involving a debt crisis and recession in Europe, as well as anemic growth and unusual political polarization in the U.S.

3. Accentuating the difficulties: Poor economic and political management under President Mursi, as well as over-reach (particularly last November grab for additional legal power), compounded the challenges Egypt faced on the tricky journey to a fully-functioning and durable democratic system. They also amplified the frustration of most citizens. With the domestic security situation also remaining a problem, the sense of personal insecurity often reached intolerable levels.

Having waited so long for their revolution and having fought so hard for it, the vast majority of Egyptian citizens was unwilling to stand by and see the country’s promising future evaporate so quickly.

4. Weak institutional checks and balances, and limited presidential appetite for course correction: Mature democracies have many inbuilt mechanisms for the timely identification of problems and related changes. Egypt’s young and incomplete political transition did not.

The result was the tense impasse that emerged earlier this week: between a peaceful grass-root uprising and a democratically-elected president holding to power despite a notable erosion in popular support.

As each side felt an enormous sense of legitimacy, neither was willing to step back. In fact, both raised the stakes with their strong rhetoric.

All this limited the scope for endogenous course corrections and national reconciliation. It also constituted a potentially-explosive cocktail, with the frightening possibility that violent street confrontations could dangerously degenerate into a broader civil conflict.

These four factors placed the political process really far away from the world of first best; they placed enormous pressures on the fabric of society; and they confronted the country’s friends and allies with vexing issues. Specifically:

* President Mursi had lost the popular support and legitimacy to rule competently. Yet he refused to step down and call early elections.

* The millions of citizens in the street had lost patience and confidence, rendering the path to regularly-scheduled elections in three years quite volatile and hazardous.

* The anti-Mursi movement as not the only one to take to the street. The president’s supporters were also there, pushing the probability of human casualties to uncomfortably high levels.

* An already-struggling economy was being brought to its knees, threatening the country with an additional spike in unemployment, higher inflation, spreading poverty, foreign exchange crisis, and widespread shortages.

* No external party could aspire to succeed in the role of intermediary. There was even a huge downside to anything that could be interpreted as foreign involvement.

* The army was the only national institution able to play the role of referee. But, having been burnt by the earlier transition, the generals were hesitant to step in for many reasons, including the potential for domestic unrest. They also recognized the risk that their motives could be misinterpreted.

No wonder Egypt ended up with many regard as a messy, noisy and uncertain outcome.

The military assumed power again and removed a democratically-elected president, suspended a constitution that was approved by a national referendum, and dissolved the only sitting chamber in parliament. The reactions in the street ranged from joy to despair. And all worried about what the immediate future would bring in terms of clashes.

Some, including many observers outside Egypt, have gone as far as suggesting that this was a “military coup,” evoking images of Chile (1973). Yet the army’s intervention has the support of the majority of (though not all) Egyptians, including those who were greatly disappointed by its 18 months of transitional government after the outset of President Mubarak. It has also been strongly endorsed by virtually all political parties and strands (with the notable exception of the Muslim Brotherhood).

Many Egyptians worried that the prior status quo threatened the potential dis-integration of Egypt. They would have preferred to avoid temporary military rule, especially given the country’s history and its really urgent and long to-do list. They desperately aspired to being able to pursue change through the ballot box and rule of law, representative government, strong institutions, and a vibrant civil society. But they felt stuck in a painful reality where better options, while highly desirable and warrant steadfast pursuit, were simply not feasible in today’s highly-imperfect Egyptian political context.

That is also why so many people in the country complain loudly when they hear any reference to a “coup.”

For them, the army’s exceptional intervention was necessary to reduce the risk of a large loss of human life and destructive violence; and it was required to give time for the country to come together and put in place the basis for a better future.

Most Egyptians still fear civil unrest and violence, especially in the next few days and weeks. They look to the army to waste no time in progressing on the path to national reconciliation and a comprehensive and durable democracy, including by holding new elections.

Have no doubt, Egyptian citizens are determined realists. They have overcome the fear that imprisoned them for so long but they are yet to reach a new national equilibrium. They care deeply about overcoming repression, social injustice and economic incompetence. And they will not hesitate to return to the streets in their millions should the army have ambitions beyond helping them collectively to press the rest button on the revolution and its legitimate objectives.

About the Writer:
Dr. El-Erian is CEO and co-CIO of PIMCO and is based in the Newport Beach office. He re-joined PIMCO at the end of 2007 after serving for two years as president and CEO of Harvard Management Company, the entity that manages Harvard’s endowment and related accounts. 

Dr. El-Erian has served on several boards and committees, including the U.S. Treasury Borrowing Advisory Committee, the International Center for Research on Women, the Peterson Institute for International Economics and the IMF’s Committee of Eminent Persons. He is currently a board member of the NBER, the Carnegie Endowment for International Peace and Cambridge in America. He holds a master’s degree and doctorate in economics from Oxford University and received his undergraduate degree from Cambridge University. 

Source : The Huffington post