Thursday, 13 September 2012

What Is Muhammad Morsi's End Game?

Since his election in June, Muhammad Morsi's presidential term has been under great scrutiny from both international observers and Egyptian citizens. For many, Morsi's performance is key to planning their next move - whether it be local businesses, currently struggling, due to the economic disaster that followed the revolution, Egyptian expats thinking about returning to Egypt or, international players considering investment in the country.

Mohammed Morsi came to the presidency with just a 51% majority, just under 50% of the population, for various reasons, voted against the Muslim Brotherhood representative, afraid that his election would take Egypt back to the dark ages. Many believed that Morsi's personality and general demeanour was simply not cosmopolitan enough and would only serve to alienate the country from the rest of the world.

Interestingly, Morsi has surprised observers with his controversial foreign policy. Egypt now seems set on restoring Cairo to the status of political and intellectual capital of the Middle East. The new president has wasted no time in letting the world know that Egypt is back and no longer content to be America's lap dog.

American President, Barack Obama, was among the first statesmen to congratulate Mohammed Morsi on his electoral victory in June, breaking protocol to phone him directly. This, in itself, is significant, indicating anxiety in Washington to continue its 'special relationship' with Egypt.

Obama, then, wrote a letter to Morsi , sending the Deputy Secretary of State, William Burns, to Cairo in order to deliver it in person. Burns was followed to Cairo by Secretary of State, Hilary Clinton, again for an audience with Morsi. This was followed by a visit to Cairo by Defence Secretary Leon Panetta. All this was within just one month of Morsi's victory.

In response to America's attempts to ingratiate itself with the new administration in Cairo, Morsi promptly dispatched Washington's chief allies, the Egyptian military who had managed the transitional period, back to their barracks and dismissed Defence Minister Field Marshall Hussein Tantawi and Army Chief-of-Staff Sami Annan. He also cancelled the military-declared constitutional amendments that gave top generals extensive powers. Washington was forced swallow this bitter pill and hope that Morsi would prove as useful an ally as the military and the Mubarak regime had been.

This was followed by a most unexpected turn of events; Morsi's attendance of the Non-Aligned Movement Summit in Tehran. Egypt severed relations with Iran back in 1979 and, while this may not yet signal the return of full diplomatic relations, it is certainly an earth-shattering diplomatic coup.

Coupled with his visit to China, this turn of events is particularly significant in light of the American attitude towards the Russia - China - Iran alliance over regional developments in the Middle East. Morsi also announced his intention to find a successful solution to the ongoing violence in Syria and has taken steps to forming a regional quartet - Egypt, Saudi Arabia, Turkey and Iran - to work towards a negotiated settlement.

Unfortunately, Morsi has not been so successful on the domestic front, with rising criticism of his having made too many promises to be delivered in the unrealistic time frame of just 100 days. Even those, not directly antagonistic towards the president have been disappointed, saying that: "The people knew that Morsi's job would be difficult but the president was wrong to makes promises that he could not deliver". But, then again, what government is not guilty of making empty promises?

Moreover, the challenge that Mohammed Morsi has taken on is not an easy one. The Egyptian economy is a disaster, a vast proportion of the population live in poverty, almost 50% are illiterate, Egypt is suffering a $36 billion annual deficit and the once fertile country now imports half of its food.

Earlier in the year, Egypt applied for an IMF loan of $4.8 billion, which has so far, not been forthcoming and depends on some very unattractive structural reforms, which would include further devaluation of the Egyptian currency and a significant reduction in subsidies, which are essential to supporting (and placating) the impoverished population.

The president's efforts to garner financial support from Qatar and China have been humiliating - Qatar pledging just $2 billion and China $200 million- laughable when one considers that this is being put towards sustaining a country with such massive debts and a population of 83 million.

However, this has not been the sole purpose of the President's diplomatic mission- Qatar has pledged $18 billion in investments- Some $8 billion of which will go to establishing new electricity and LNG power plants. The remaining $10bn will go towards establishing a new tourist resort on the north coast as well as other real estate projects across Egypt.

Meanwhile, Morsi has been successful in attracting significant direct investments from China. China has roughly $500 million in existing investments in Egypt and has just signed on to build a power station, a water desalination plant and a high-speed train line between Cairo and Egypt's second city, Alexandria.

In light of the shambolic domestic situation, Morsi's foreign policies seem even bolder- especially considering that America is an important ally, which has been supporting Egypt since 1979 with an average annual income of $2 billion.

It seems clear that Mohammed Morsi realises that Egypt's reliance on handouts is not really working in the long term. The key to Egyptian development lies in encouraging trade, industry and investment- should this prove a success then Egypt will stand a chance of standing on its own feet and this is the only route to enable Egypt to regain its standing in the international arena.

Should Morsi pull this off, the Middle East will witness a resurgence of the historical giant of the Arab World. This may be the catalyst that could serve to encourage other countries in the region to regain their confidence in a better future - the social and economic disasters of the Middle East may well be on the way to a workable solution.

Appeared in the Huffington Post

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