Sisi’s First 100 Days: U.S.-Egypt Relations and the Challenges Ahead

8/21/2019 Sisis First 100 Days: U.S.-Egypt Relations and the Challenges Ahead

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1 Center for American Progress | U.S.-Egypt Relations

Sisis First 100 Days

U.S.-Egypt Relations and the Challenges Ahead

By Brian Katulis, Mokhtar Awad, and Hardin Lang October 20, 2014

Egypian Presiden Abdel Fatah al-Sisi finished his firs 100 days in office wih diplo-

maic flourish his Sepember. He addressed he U.N. General Assembly in New York

and me wih Presiden Barack Obama or he firs ime in wha could be a urning

poin in he rosy relaionship beween he Unied Saes and Egyp. Much hinges,

however, on he nex ew monhs and how Egyp addresses he muliple challenges iaces a home and in he region.

Sisi reurned home wih he same dauning lis o challenges he aced beore he

rip: a need o spark economic growh o creae jobs, a hos o domesic and oreign

securiy hreas, and he counrys sruggle over power in he mids o an incomplee

poliical ransiion process. Perhaps Sisis bigges accomplishmen since aking office

has been his abiliy o keep Egy ps myriad challenges rom becoming ull-blown

crises. Bu he did so wihou offering a longer-erm, susainable plan or he counrys

economic and poliical uure.

Te economic, securiy, and poliical challenges are inerwined, and how Sisi navigaes

hem will be criical o boh his poliical legiimacy a home, as well as o he amoun o

suppor he can build and mainain rom abroad, including rom he Unied Saes. Te

Unied Saes appears poised o open a new chaper in bilaeral relaions, bu progress

grealy depends on wheher Egyp makes choices ha posiion i o become a reliable

parner, one ha is capable o addressing is challenges and ha builds a sable ounda-

ion or he counrys uure.

The greatest challenge: The economy

Presiden Sisis success or ailure o srenghen he Egypian economy will affec boh

he enuous securiy siuaion and he incomplee poliical ransiion. Te economy is

he area in which Sisi has aken his mos ar-reaching seps; many have received a cau-

ious humbs up by economiss.1


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Sisis uel subsidy cus have given a measure o confidence o he invesors Egyp seeks

o atrac in he orhcoming donors conerence. Te subsidy cu led o a uel price

spike as high as 78 percen2a sep he governmen hopes will rim he budge defici

by 2.5 percen o GDP.3Sisi has also aken seps o reorm oher subsidies: Smar cards

ha help cu wase by monioring consumpion o subsidized goods such as bread4and

uel5are now in use. Bu inflaion, already a 11 percen, coninues o rise. Tose hardes

hi are he 65 percen o Egypians who live on our dollars a day or less.6Subsidy reormis a deeply poliical processone ha has led o popular proess in he pas.

Te counrys energy crisis is anoher major challenge. Te new governmen has moved

o repay deb owed o oreign energy companies such as BG and Apache Corporaion

in he hopes ha hese companies will expand exploraion and increase oupu.7* Bu

he governmen borrowed rom banks o do so,8a dangerous move given Egyps rank-

ing as he worlds 19h mos indebed counry.9Egyps annual defici would be a leas

5 percenage poins higher wihou assisance rom he Gul saes.10Bu he influx o

assisance rom he Gul canno keep up wih Egyps srained power grid, and severe

power cus remain a ac o lie across Egyp. In early Sepember, a oal blackou hiCairo or several hours during peak rush hour, a crisis deemed severe enough or Sisi o

address he naion and urge paience.11

Egyps energy roubles and public deb have led some o quesion Sisis muli-billion

dollar endeavor o expand he Suez Canal.12Due o be compleed someime in he nex

ew years, he governmen hopes ha he New Suez Canal will help double he revenue

generaed rom he waerway.13In an impressive display o mobilizaion, he governmen

raised $8.7 billion in eigh days hrough atracive cerificaes offering 12 percen ineres.14

Quesions remain, however, abou he efficacy and iming o he projec.15Bu when com-

pleed, he expanded canal migh offer new opporuniies or he inernaional communiyo reassess he ramework o is economic assisance arrangemens o Egyp.

Tese effors oward subsidy reorm and deb, energy, and inrasrucure invesmen are

jus he firs seps in wha mus be a massive and long-erm overhaul o Egyps econ-

omy, which has no me is poenial or decades and requires major privae and public

invesmens o spark job creaion. Wih a major youh bubble coming ino he labor

marke in he nex decade, Egyp needs o creae enough jobs o employ he esimaed

850,000 new enrans in he labor marke each year in order o susain isel.16

An unsettled and uncertain security environment

Compared o he urmoil sweeping hrough many pars o he Middle Eas and Norh

Aricaincluding in neighboring counries such as LibyaEgyp has remained airly

sable. Bu Egyps batle agains milians is ar rom over.


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New jihadis acorssuch as he Ajnad Misr groupoperaing in he Cairo meropoli-

an area coninue o elude auhoriies.17Recen erroris atacks in Egyps wesern deser

raise concerns over he hrea emanaing rom an imploding Libya.18Te Egypian gov-

ernmen has made some headway agains milian groups, including Ansar Bay al-Maq-

dis, or ABM,19bu recen repors o coordinaion beween ABM and he Islamic Sae in

Iraq and al-Sham, or ISIS, are cause or concern. 20Tousands o Egypians are esimaed

o be in ISISs ranks,21and he groups spokesperson recenly called or atacks in Egyp. 22

In his firs 100 days, Presiden Sisi made securiy a op prioriy. Bu i remains o be seen

wheher Egyp will underake a comprehensive overhaul o is securiy insiuions,

including he police and jusice secors ha are essenial in he batle o figh exremism.

An effecive figh agains erroris groups requires counererrorism raining and policing

capabiliies ha are sorely lacking in many Egypian securiy insiuions. Te curren

U.S. securiy assisance program ha emphasizes sophisicaed miliary hardwarebeter

suied or convenional wararerepresens a missed opporuniy o help Egyp resore

law and order and deal wih he new hreas rom exremis groups. Furhermore, he

overreach o securiy insiuions and he Egypian governmens jailing o many indi-viduals is unlikely o improve he securiy siuaion. A sronger ocus on undamenal

reorms in he police, law and jusice, and governance secors is required. Securiy coop-

eraion and assisance programs wih oher counries need o make hese secors a higher

prioriy in order o help Egyp deal wih inernal insabiliy.

Some o Egyps securiy challenges are direcly conneced o regional challenges

especially he urmoil nex door in Libya and he uncerain securiy siuaion in he

Sinai Peninsula and Gaza Srip. Under Sisi, Egyp has aken some seps oward address-

ing hese challenges, bu hese effors remain incomplee. Given he massive challenges

Egyp aces inernally, i remains quesionable how much Egyp can help in he fighagains ISIS. Bu i is clear ha Egyp needs o do more o secure is immediae periph-

ery, which means a sronger effor oward enhancing is border conrols.

Egypts incomplete political transition

Egyp remains locked in an inernal sruggle beween muliple ceners o power ha

emerged afer he ouser o Presiden Mubarak in February 2011. Presiden Sisi used

his firs 100 days o consolidae his own conrol over governmen insiuions and o

srenghen heir auhoriy.23Many significan quesions remain abou a broader effor o

lay he oundaions or uncional poliics, open debae, and pluralism. Tis is paricu-

larly challenging in a counry sill gripped by exreme polarizaion and a lack o deph in

poliical debae. As secular poliician George Isaac recenly pu i, Egyp has been going

hrough a poliics-ree period since Sisis elecion.24


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More han hree years afer he sar o Egyps poliical ransiion, he counrys poliical

debae remains sulified; Egyps leaders are largely disconneced rom he needs and

he ineress o ordinary Egypians. Te nex parliamenary elecions, expeced early

nex year, offer anoher opporuniy or poliical leaders and paries o organize and

creae a new specrum o voices o represen he many differen ineress o he broader

Egypian sociey. Bu early examples o he qualiy and naure o he public discourse

surrounding he orhcoming elecions are no encouraging.

Egyps new poliical landscape is inchoae and more chaoic han ever. Poliical paries

are weak and acions vying o be ceners o power independen rom he miliary are

on a igh leash. Te number o paries expanded subsanially since 2011: Some 80 are

regisered, and dozens more are in ormaion.

Ye afer ormer Presiden Morsis ouser in 2013, Egyps non-Islamiss ailed o organize

hemselves or heir ideas. Many are mired in pety disagreemens over coaliion names

and prioriy on he elecoral liss. Tese nascen poliical coaliions claim nondescrip di-

erences in heir ideological vision or Egyps uure. Moreover, Egyps new parliamen-ary elecion laws avor independen candidaes; almos 78 percen o he 540-member

body is o be allocaed o independens conesing single member disrics.25

Tree elecoral alliances have emerged hus ar: he Egypian Wad Alliance, he

Democraic Curren, and he Egypian Fron Alliance.26Te ormer wo are largely

secular and suppor he democraic principles o he January 25 revoluion, bu he

paries hemselves sill differ on essenially everyhing else. For is par, he Egypian

Fron Alliance does no hide is embrace o ormer members o Mubaraks now

disbanded Naional Democraic Pary. Nor does i hide is opposiion o he January

25 revoluion. Te Egypian Fron condemns is opponens as ani saeinclud-ing mainsream groups such as he liberal Consiuion Pary ounded by Nobel Prize

winner Mohamed ElBaradie.27

In his conex, he 2015 parliamenary elecions are shaping up o be a raw compeiion

or power, raher han a batle over ideas. As a resul, he oucome o he parliamenary

campaign is likely o be a reurn o he pas, when compeing acions were posiioned

agains one anoher wihou saking ou clear posiions and elecoral plaorms. Te

prospecs o a parliamen ha pracices Egyps old syle o poliics does no bode well

or he ype o legislaive reorm he counry badly needs.


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The need to address human rights and poli tical inclusivity

Te governmen coninues o resric poliical space in is campaign o silence civil

sociey and human righs aciviss, and arress are escalaing. One o he mos conro-

versial cases involves he prosecuion o high-profile aciviss or chal lenging he new

proes law.28Te governmen osensibly ook hese acions in he name o sabil-

iy, bu i has insead mired isel in a poliically cosly campaign agains nonviolenaciviss. Many o hese aciviss are serving long senences under errible condiions

and have resored o hunger srikes o raise awareness. Tis hreaens o agiae youh

groups whose possible reurn o proess may urher desabilize he counry.

Presiden Sisi has ye o demonsrae a willingness o ake bold seps o overcome he

poliical impasse wih he Muslim Broherhood. Ye a he same ime, he remaining

voices o he Muslim Broherhood have no signaled any willingness o engage in he

new poliical environmen ha has emerged under Sisi. Te sandoff wih he Muslim

Broherhood coninues, bu he movemen is splinered and lacks broad popular sup-

por afer is ailures in power.

Conclusion

As Egyp approaches he ourh anniversary o is ransiion, a enuous sense o sabiliy

has se inespecially compared wih Egyps pas hree years or wih he umuluous

evens now aking place in Syria, Iraq, Libya, and Yemen. Bu Egyps basic economic,

securiy, and poliical undamenals are worrisome.

Te economy requires major reorms o atrac he levels o direc privae and oreigninvesmen required o creae enough jobs o build a new oundaion or economic

growh. Te securiy siuaion remains uncerain, wih new ypes o hreas emerging

and he poenial or insabiliy rom he region spilling ino he larges counry in he

Arab world. Finally, Egyps poliical environmen remains sharply divided and polar-

ized: Te muliple poliical voices ha emerged since 2011 largely remain, bu he over-

all sysem appears incapable o adequaely incorporaing hese voices and does no seem

poised o open a pahway o more capable and inclusive governance.

Relaions beween Egyp and he Unied Saes remain on a shaky oundaion as well.

Te meeing beween Presidens Obama and Sisi could predic a new chaper, bu much

o his depends on how Egyp addresses hese massive economic, securiy, and polii-

cal challenges. A a ime when he Unied Saes is seeking reliable and capable parners

in a region plagued by exremism, muliple layers o ehnic and secarian conflics, and

coninued challenges rom Iran, Egyp could see is regional leadership role increase.


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Bu or now, he Obama adminisraion has adoped a wai-and-see approach on Egyp.

I has allowed some securiy assisance programs o resar, bu i is holding back oher

orms o assisance. Obamas meeing wih Sisi was inended o send he message ha

he Unied Saes is ready o re-engage Egyp and build a new oundaion or a bila-

eral relaionship on new, more consrucive erms. A new discussion beween he wo

counries ha includes a sraegic dialogue seting new and consrucive erms or he

relaionship is possible.

Bu his new oundaion won likely begin unless Sisi akes more seps o address he

problems acing he counry. Presiden Sisis firs 100 days offer very mixed signs as o

wheher Egyp can preven isel rom being lef behind and can char a pah o re-

emerge as a regional leader.

Te nex 100 days will be jus as pivoal as he pas 100.

*Correction, October 21, 2014:A previous version of this brief incorrectly stated which

foreign energy companies the Egyptian government has moved to repay debt. Te correct

companies are BG and Apache Corporation.


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Endnotes

1 Milan Ridge, Egypts al-Sisi: so far so good, say economists,Financial Times, September 16, 2014, available at http://blogs.ft.com/beyond-brics/2014/09/16/egypts-al-sisi-so-far-so-good-say-economists/.

2 Reuters, Egypt to raise fuel prices by up to 78 percentfrom midnight, July 4, 2014, available at http://www.

reuters.com/article/2014/07/04/us-egypt-energy-idUSKBN-0F91YG20140704.

3 Ridge, Egypts al-Sisi: so far so good, say economists.

4 Reuters,Egypt minister hails savings from smart-cardsystem for bread distribution, May 10, 2014, available athttp://www.reuters.com/article/2014/05/10/egypt-wheat-idUSL6N0NW0Q920140510.

5 Mohamed Adel, Fuel distribution monitoring via GPS andsmart card system reduces smuggling by 60%,Daily NewsEgypt, September 10, 2014, available at http://w ww.daily-newsegypt.com/2014/09/10/fuel-distribution-monitoring-via-gps-smart-card-system-reduces-smuggling-60/.

6 Adam Bouyamourn, Slow start to Egypts home-grownbudget solution, The National, September 6, 2014, availableat http://www.thenational.ae/business/economy/slow-start-to-egypts-home-grown-budget-solution#full.

7 Reuters, Egypt pays $1.5 bln to foreign energy companies- oil ministry, October 2, 2014, available at http://www.reuters.com/article/2014/10/02/egypt-energy-debt-idUSL-6N0RX1JY20141002.

8 Mada Masr, Egypt secures US$1.4 billion loan to repay oildebts, October 1, 2014, available at http://www.madamasr.com/content/egypt-secures-us14-billion-loan-repay-oil-debts.

9 Bouyamourn, Slow start to Egypts home-grown budgetsolution.

10 Ibid.

11 Sarah El Deeb, Egyptian president asks for patience overpower cuts, The National, September 6, 2014, availableathttp://www.thenational.ae/world/egyptian-president-asks-for-patience-over-power-cuts;AlMasry AlYoum.Sisisspeech on electricity c risis, YouTube, September 6, 2014,

available at http://youtu.be/0L8PJ9nPZLU.

12 Maged Atef and Sheera Frenkel, Sisi Is Trying To Build ANew Suez Canal But It s Not Exactly Going According ToPlan, BuzzFeed, September 3, 2014, available at http://www.buzzfeed.com/magedatef/sisi-is-trying-to-build-a-new-suez-canal-but-its-not-exactly#22zup03.

13 Mariam Fam and Ahmed A. Namatalla, Egypt Expects SuezCanal Revenue to More Than Double in 4 Years, Bloomberg,August 18, 2014, available at http://www.bloomberg.com/news/2014-08-18/egypt-expects-suez-canal-revenue-to-more-than-double-in-4-years.html.

14 Louisa Loveluck, Suez Canal 2.0: Egyptians pour savingsinto presidents ambitious project,The Christian ScienceMonitor,September 17, 2014, available at http://w ww.csmonitor.com/World/Middle-East/2014/0917/Suez-Ca-nal-2.0-Egyptians-pour-savings-into-president-s-ambitious-project-video.

15 Ibid.

16 The World Bank, SABER Work Force Development Report:Arab Republic of Egypt (2014), available at http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/08/25/000470435_20140825143149/Ren-dered/PDF/901050WP0Box0300Egypt0CR0Final02014.pdf.

17 Mokhtar Awad, Ajnad Misr: The Rise of HomegrownEgyptian Jihadists, Tahrir Institute for M iddle East Policy,September 18, 2014, available at http://timep.org/commen-tary/ajnad-misr-rise-homegrown-egyptian-jihadists.

18 BBC, Egyptian troops killed at checkpoint, July 19,2014, available at http://www.bbc.com/news/world-afri-ca-28387178.

19 Reuters. Egypt says kills top militant leader in Sinai,October 10, 2014, available at http://ww w.reuters.com/article/2014/10/10/us-egypt-security-ansar-idUSKCN0HZ23Q20141010.

20 Michael Gregory, Exclusive: Islamic State guides Egyptianmilitants, expanding its influence, September 5, 2014, avail-able at http://uk.reuters.com/article/2014/09/05/uk-egypt-islamicstate-idUKKBN0H017X20140905.

21 Reuters,Egyptian police arrest militants accused of recruit-ing for Islamic State, October 5, 2014, available at http://www.reuters.com/article/2014/10/05/us-egypt-militants-idUSKCN0HU0KA20141005.

22 Stephen Kalin, Islamic State urges more attacks on Egyp-tian security forces, Reuters, September 22, 2014, availableat http://www.reuters.com/article/2014/09/22/us-egypt-security-islamicstate-idUSKCN0HH0S220140922.

23 Nathan J. Brown and Katie Bentivoglio, Egypts ResurgentAuthoritarianism: Its a Way of Life, Carnegie Endowmentfor International Peace, October 9, 2014, available at http://carnegieendowment.org/2014/10/09/egypt-s-resurgent-authoritarianism-it-s-way-of-life/hrez.

24 The Cairo Post, 89 % of Egyptians approve of Sisi in his first100 days: Azhar and Sofia union,September 23, 2014, avail-able at http://thecairopost.com/news/125574/news/89-of-egyptians-approve-of-sisi-in-his-first-100-days-azhar-and-sofia-union.

25 Mohamed Elmenshawy, Egypts New Parliamentary Elec-tion Law: Back to the Future, Middle East Institute,July 17,2014, available at http://www.mei.edu/content/at/egypts-new-parliamentary-election-law-back-future.

26 Khaled Dawoud, Secular Parties in Egypts PoliticalLandscape, The Middle East Institute, September 11, 2014,available at http://www.mei.edu/content/secular-parties-egypts-political-landscape.

27 Hani Ezat, Allegations of inclusion of NDP figures threatenselectoral alliances,Al-Ahram, October 4, 2014, available athttp://www.ahram.org.eg/NewsQ/329327.aspx.

28 Moataz El Fegiery, Escalating reprisals against human rightsdefenders, Mada Masr, September 1, 2014, available athttp://www.madamasr.com/content/escalating-reprisals-against-human-rights-defenders.
http://www.thenational.ae/world/egyptian-president-asks-for-patience-over-power-cutshttp://www.thenational.ae/world/egyptian-president-asks-for-patience-over-power-cutshttp://www.reuters.com/article/2014/10/05/us-egypt-militants-idUSKCN0HU0KA20141005http://www.reuters.com/article/2014/10/05/us-egypt-militants-idUSKCN0HU0KA20141005http://www.reuters.com/article/2014/10/05/us-egypt-militants-idUSKCN0HU0KA20141005http://www.reuters.com/article/2014/10/05/us-egypt-militants-idUSKCN0HU0KA20141005http://www.reuters.com/article/2014/10/05/us-egypt-militants-idUSKCN0HU0KA20141005http://www.reuters.com/article/2014/10/05/us-egypt-militants-idUSKCN0HU0KA20141005http://www.thenational.ae/world/egyptian-president-asks-for-patience-over-power-cutshttp://www.thenational.ae/world/egyptian-president-asks-for-patience-over-power-cuts

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Sisi’s First 100 Days: U.S.-Egypt Relations and the Challenges Ahead