Egyptians Join Massive Rally Against Military Rule

Thousands came out to Tahrir Square in Cairo to protest the Egyptian electoral commission's handling of the upcoming presidential poll on April 20, 2012. Leading candidates for the Islamists and other forces have been disqualified., a photo by Pan-African News Wire File Photos on Flickr.

Egyptians join million-man march against military rule

Fri Apr 20, 2012 4:39PM GMT
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Egyptian protesters gather in Cairo's Liberation Square to renew calls for the transfer of power to a civilian government

Egyptians have poured into the streets of Cairo as the capital braces for a million-man march against the continued junta rule in the country, Press TV reports.

Tens of thousands of people gathered in Cairo’s iconic Liberation Square on Friday to condemn the Supreme Council of Armed Forces (SCAF) for failing to establish a civilian government.

They addressed the de facto ruler Field Marshal Mohamed Hussein Tantawi, demanding that the army must put an end to its "unconstitutional" rule in post-revolution Egypt.

"Hey Tantawi, the army has no role in the constitution," read a slogan written in Arabic on a huge national flag held by the protesters.

The military council took power in the aftermath of the last February revolution in Egypt that overthrew long-time dictator Hosni Mubarak’s Western-backed regime.

The SCAF promised to step down after a six-month period and hand over power to a civilian government, a pledge it has so far failed to fulfill.

The Friday rally was called by several activist groups and political parties.

The general public in Egypt says the military council is an extension of the Mubarak regime and accuses it of failing to meet their revolutionary demands.


Splits, but No Violence, in Egypt Rally

By MATT BRADLEY and CHARLES LEVINSON
Wall Street Journal

CAIRO—A rally in Cairo's Tahrir Square fractured into a peaceful cacophony of opposing political demands on Friday in a moment of calm after the most divisive candidates were ejected from Egypt's presidential race.

As the remaining 13 candidates prepare to campaign in earnest for the election, scheduled to begin on May 23, Egypt's transition—though fraught with setbacks—appeared once again to be stumbling forward.

Political forces have begun redirecting their efforts toward the remaining candidates, in tacit acceptance of the controversial decision by a military-appointed panel of judges to ban 10 candidates, including three of the race's most popular personalities.

Friday's demonstration offered a narrow sliver of common ground on Egypt's sharply divided political landscape. Even as rival messages emanated from more than 10 soundstages, cries of "down with military rule" seemed to predominate in Tahrir Square, the epicenter of protests last year that ended the three-decade rule of President Hosni Mubarak and brought an armed-forces council to power to oversee a political transition.

"The important thing is that people can go down to the street—that street pressure can happen again," said Hisham Kassem, a newspaper publisher and political analyst.

Tahrir Square on Friday showed the trappings of a jubilant political rally, rather than the sternness of a mostly Islamist march last week or the deadly violence of demonstrations during parliamentary elections in December and January. Families bought campaign knickknacks, signs lampooned presidential hopefuls, speakers blared dance music and children snacked on popcorn, nuts and candy.

The Muslim Brotherhood, whose presidential candidate Khairat al-Shater was among those excluded, unveiled its first batch of campaign kitsch supporting Mohammed Morsi, the backup candidate who will struggle to capture Mr. Shater's energy.

The Brotherhood's acceptance of an electoral commission decision on Tuesday to exclude Mr. Shater has helped cool street-level tensions that had threatened to further sharpen the conflict between Islamist politicians and the interim ruling military leadership.

The commission decided that the military's pardon of Mr. Shater's 2006 fraud conviction wasn't adequate to allow him to run for president.

Mr. Shater called the decision a "crime" in an interview on Thursday, but backed Mr. Morsi's candidacy.

On the opposite side of Tahrir Square from the Brotherhood stage, a crowd of hard-line Islamist supporters of Hazem Abu Ismail, a lawyer turned populist Islamic preacher, forcefully pressed their outrage over the exclusion of their candidate. But the so-called "Hazemoon," who have earned a reputation for passionately supporting Mr. Abu Ismail, also showed a tacit acceptance, saying they were prepared to back other candidates.

The electoral commission decided on Tuesday that Mr. Abu Ismail wasn't eligible to run because his mother was an American citizen.

"The judges running the elections are all from the Mubarak regime, the same ones who forged past elections," said Mustapha Ibrahim, 28, a supporter of Mr. Abu Ismail. "The revolution still hasn't fully changed the structure of the state."

Supporters of Omar Suleiman, the man whose candidacy had been the inspiration for Friday's rally, were nowhere to be seen. The commission disqualified Mr. Suleiman, a former intelligence chief under Mr. Mubarak, on Tuesday because his campaign had failed to gather enough nominating signatures.

Liberal protesters had planned a day of anger against so-called regime remnants such as Mr. Suleiman, and the feeling of unity in Tahrir Square on Friday owed much to his disqualification. His nomination earlier this month had outraged liberals and Islamists alike, who saw it as a veiled attempt by the ruling military to reconstitute Mr. Mubarak's old order.

Write to Matt Bradley at matt.bradley@dowjones.com and Charles Levinson at charles.levinson@wsj.com


Egypt's dire economy looms over elections

Egypt's foreign reserves have tumbled to $15 billion from $36 billion, jeopardizing the government's ability to meet the people's needs. The future is about a lot more than voting.

By Dan Murphy, Staff writer, Kristen Chick, Correspondent
posted April 20, 2012 at 9:21 am EDT
Christian Science Monitor

Egypt's unfinished revolution has ushered in an era of political uncertainty like nothing the country has seen since the 1950s, when Gamal Abdel Nasser mobilized millions of his countrymen and millions more across the region in support of pan-Arab nationalism and defiance of the region's old colonial powers.

Egypt's politics are once again rolling along, with the backroom machinations of generals, Islamists, and the surviving old guard from the Mubarak era punctuated by street protests and howls of complaint over opaque election rules and interference with efforts to write a new constitution. The country now heads towards a presidential election scheduled for May 23 with every thing to play for, and much uncertainty about the outcome and its eventual meaning.

But amid all this, one thing is certain: The Egyptian economy is in dire shape, and not due to get better any time soon, the promises of presidential hopefuls like Amr Moussa notwithstanding. This week, the International Monetary Fund (which usually skews its predictions in a positive direction) predicted anemic Egyptian economic growth of 1.5 percent this year, 9.5 percent inflation, and 1 million new workers added to the ranks of the unemployed.

Egypt's economic problems are a threat to a transition to a new, stable, and democratic system. Politicians are making promises, and many hopeful Egyptians will take them at their word. But if politicians fail to deliver on what is a daunting task, new rounds of upheaval could well follow, uglier and more strident than the joyous crowds that filled Cairo's Tahrir Square and public spaces across the country last year.

And with Egypt the Arab world's largest country, which still casts a long shadow over regional politics and trends, that could have broader implications. Monarchs and other autocrats, who argue that stability is far more valuable than risky democratic change, would be bolstered. Influential external actors like the US, whose support for political change in the region has been tepid and uneven, could back off even further.

How bad is the situation? Egyptian government finances have been devastated in the past year. Rich Egyptians have stashed ever more of their cash outside of their country, tourism has plunged (down 32 percent in the last quarter of 2012) and foreign investment has collapsed (down 72 percent in the third quarter of last year).

Egypt's military junta currently has a request in with the IMF for a $3.2 billion loan. IMF Managing Director Christine Lagarde told reporters before the start of IMF and World Bank meetings in Washington this morning that even if the loan goes through "it will not be sufficient. And everybody knows that." She says Egypt will need aid from other sources.

The problem is that Egypt's foreign reserves have tumbled to $15 billion from $36 billion before protests erupted against Mubarak in January 2011. Foreign currency reserves are used by central banks to manage the value of their domestic currencies, among other things. The Egyptian pound is now a knife's edge.

Belt-tightening elsewhere doesn't seem to be much of an option. The financial needs of Egypt are growing, with millions relying on government food subsidies to get by. About 40 percent of Egypt's 80 million people live on $2 a day. Political change may have come, but the investment climate remains as bureaucratic and corrupt as ever. By some accounts, it's getting worse.

Egyptian pound steady - for now
Strapped finances and corrupt business dealings are going to be economic facts of life challenging whatever constellation of powers guides Egypt in the coming years. Through the turmoil of the past year, the Egyptian pound has held surprisingly firm, now trading at about 6 pounds to the dollar. But currency pressure is likely to grow.

In September, the Bank for International settlements reported that $6.4 billion in Egyptian banks was moved offshore in the previous quarter, a 26 percent increase. Investors of all stripes hate uncertainty, and a major increase in investment is hard to imagine until some kind of stable and predictable order emerges. This affects everything from billion-dollar factory investments to local entrepreneurs thinking of shaking lose a little extra capital to expand.

Take Mohamed Rashed, general manager of Club Aldo, an Egyptian shoe retailer with 28 national branches. He says the firm was expanding by about 10 percent a year before the revolution, and was opening about two new branches a year. During the revolution, several of its stores were looted and burned.
Since, there’s been no growth or expansion.

“You need safety, you need a good environment to grow businesses,” he says. “We are waiting to see if things are going to get better or worse. Everyone is waiting for a new government and a new president. Everyone is afraid to bring money from outside.”

Growing tensions between military, Muslim Brotherhood

Indeed, Egypt’s messy political transition has gotten messier. In recent weeks, a court dissolved the body appointed by parliament to write a new constitution, the ruling generals suggested they’d disqualify an Islamist frontrunner, and the Islamist-dominated parliament, in turn, started to maneuver to block the candidacy of Omar Suleiman, a retired general and former confidante of Mr. Mubarak.

Rumors, accusations, and dire warnings have been flying back and forth, with tension rising between the Muslim Brotherhood, who won the lion’s share of seats in the parliamentary election, and a military establishment trying to shield its historic financial and legal privilege.

Where this is all ends is impossible to predict. The military gives every indication that it won’t quietly cede authority over its affairs to civilians, not least its sprawling, opaque, and expanding network of commercial interests. The Muslim Brotherhood’s Freedom and Justice Party (FJP), in turn, is growing edgy over the military’s political muscle-flexing, and has been increasingly strident in warnings about antidemocratic machinations from the men in uniform.

The military has also been expanding its role in the economy, says Kent State Political Scientist Josh Stacher, who recently completed a paper on “Egypt’s Generals and International Capital” with Shana Marshall. The military has done this by moving against other powers in the private sector, particularly those who had been close to the former president and his son, Gamal.

The military, Prof. Stacher says, likes the profit part of capitalism just fine, but not the competition part. Senior generals have set themselves up as major gate-keepers for investment, which will add to costs and corruption going forward, he argues.

“The uprising gave [the military] a chance to eliminate rivals,” says Stacher, who says the military’s crackdown on corruption appears to be selective. “This is terrible for competitiveness, access to capital is now even more dependent on [the military]. They’re interested in neoliberal profits, not neoliberal GDP growth. “

Dissension over emergency IMF loan
Egypt’s military-led government is currently negotiating an emergency loan of $3.2 billion with the International Monetary Fund (IMF), but that will only prove a stopgap for the constant, grinding need to pay for Egypt’s subsidized bread and fuel.

The cash could be released before the start of Egypt’s new fiscal year on June 30. But the IMF is demanding unspecified “reforms” and buy-in from all of Egypt’s major political players before signing on the dotted line.

And the Muslim Brotherhood, for the moment, is balking at giving the military carte blanche. “We told them [the government], you have two choices: Either postpone this issue of borrowing and come up with any other way of dealing with it without our approval, or speed up the formation of a government,” Khairat al-Shater, the Muslim Brotherhood’s principal presidential candidate, told Reuters in early April.

Mr. Shater is fighting a challenge against his eligibility to run for president. The successful businessman and Brotherhood strategist served four years in prison for his political activism in the waning years of the Mubarak regime and was only released a year ago, which could be used to disqualify him from running for office.

He’s been pressing the point that the military doesn’t have the standing to negotiate important deals on behalf of Egypt, since it is due to be replaced by a new president by the end of June. “It is not logical.... I have to agree to a loan, somebody else gets to spend it, then I have to pay it back? That is unjust.”

Magda Kandil, executive director of the Egyptian Center for Economic Studies, says Egypt needs the IMF’s cash, fast. “In the absence of resumption of natural sources of foreign income and containment of the outflow of capital.... I think the only hope is to strike a deal with the IMF to get a badly needed cushion.” An IMF loan might also encourage other lenders and investors to return, she says.

While it’s easy to talk about cutting spending in times of financial crisis, Egypt has very little wiggle room.

The Egyptian government is the largest wheat buyer in the world, spending $3 billion on it last year, and government fuel subsidies are projected to cost $16 billion this year, though that could easily rise depending on the global market. All told, government subsidies each year are equal to about 10 percent of GDP.

While international economists have long argued that the fuel subsidy, in particular, leads to inefficient consumption and should be replaced with measures that target Egypt’s neediest, the cost of fuel – used to transport food from farm to market – affects the cost of everything. A sharp increase in gasoline costs would stoke inflation, while unemployment remains high, raising the likelihood of major social unrest.