Has there been a Mursi-Effect on Egyptian politics? Or: It’s the economy, stupid!

By: Tor Håkon Tordhol.

As the first 100 days of Muhammad Mursi’s presidency nears completion, is it possible to detect any change in the direction of Egyptian politics – a “Mursi-effect” as it were? This is perhaps particularly pertinent now that the former brother has just given his first speech in the UN General Assembly, and used the occasion to lament the many wrongs of the “international community” and his opinions of the by now infamous (anti-)Muhammad-film caught most of the headlines. His words on the occasion are perhaps as telling as any, but some context is still desirable.

Politics in limbo: Economy in shambles

In his pre-inaugural speech at Tahrir-square, the then President-elect made several promises. In an Egyptian parallel to the Obama-meter, he received his own Morsi-meter, which tracks the overall progress on these promises. So far with less than 10 days left of his first 100, the completion rate is at 4 of 64 with an additional 23 labelled “in progress.” As a barometer on domestic political progress it is telling, although it is not possible to lay the blame solely at Mursi’s feet. The entire political situation in Egypt is best summed up in one word: limbo. Parliament has been dissolved, and a caretaker cabinet is hardly able to provide even suggestions for reform, far less actually implement any.

However, Mursi has not at all been idle. Although progress (and possibility) has been scant in the political field, the picture is rather different in the human resources department. Not content with having his state-apparatus staffed by the ancient regime, several posts have recently been taken up by new appointees members of or sympathetic to the Brotherhood. One concrete instance is the replacement of virtually all the editors of the state-run newspapers.[i] Here, arguably, the long-term perspective of the Muslim Brotherhood is all but visible. Still though, it would be harsh not to give Mursi and the brotherhood the benefit of the doubt with respect to their democratic credentials after less than 100 days in power. The old guard was after all duly appointed by the former regime. Furthermore, his impressive coup-de-grace to the military rule that dated from the revolution, gives the impression that this is a man able to balance the fine lines of Egyptian politics. That is, under the shadow of an economy in near-constant crisis. His ability to deal successfully with on that issue will ultimately prove the litmus test of Mursi’s presidency. Thus, and despite his early successful manoeuvring on the domestic political scene, his reign might be brief lest he can improve the economic situation of ordinary Egyptians.

The limits of Mursi’s new “balanced” act: beggars can’t be choosers

The Mursi-effect seems more clearly visible in the foreign policy arena, choosing symbolically Beijing and Tehran before Washington, and Riyadh first of all. However, and in spite of the destinations chosen say something about the aspirations for future Egypt, they reveal even more about its current economic predicament. Mursi himself has made calls for a more “balanced” foreign policy, presumably hinting that he will be less a stooge of Washington (and Tel Aviv) than his predecessor was. Notwithstanding, his very first trip abroad, tellingly less than two weeks since his own inauguration, went to Saudi Arabia. The aims of this visit, presumably, were to patch up relations with a key backer of the previous regime, as well as to secure financial aid and investment for an ailing economy.[ii] Both of which are important issues by themselves, but taken together they ensure that Cairo has sufficient reasons to keep the relations with Riyadh in order.

His next two visits came in September, to Beijing and Tehran. Although the Iranian visit – which was not actually a state visit, but a summit meeting in the Non-Aligned Movement – caught most of the headlines, I would rather stress the significance of his visit to China. Though the reports in the press are a fraction of the coverage his Iranian visit received, it is still possible to make out the purpose of this visit – attracting business and investment. Accompanying the Egyptian President was a sizable delegation of businessmen, and reportedly expectations are high with hopes for Chinese investments in the range of $ 3 billion over the next to years.[iii] This is coupled with a $ 75 million grant as well as a $ 200 million commercial loan. Although the figures are comparatively small, compared to previous Chinese assistance to Egypt they reveal something about the future intentions for this relationship.

The contrast with Mursi’s visit to Iran is telling. During his four hours there, he both refused to meet with Ayatollah Khamenei – the Iranian Supreme leader – and spoke directly against Iranian politics on the issue of Syria. “[…] Morsi’s performance in Tehran disappointed his Iranian hosts as cruelly as it mocked those who warned that his visit would deliver Egypt into Iran’s camp and reveal a radical new Egyptian foreign policy.”[iv] This is an apt summary of the visit, and the point is further underscored by the fact that Mursi also refused to upgrade the diplomatic relations between the two countries. This was seemingly in spite of his own statements that Egypt new more “balanced” foreign policy approach also would include Iran.[v]

The hard reality of politics: the economic foundation of Egyptian politics

Mursi’s hitherto final visit was to the USA, where he spoke at the UN General Assembly and met with the Secretary of State, Hillary Clinton. The latter was duly eclipsed by his speech at the GA and specifically the row over that film and the succeeding embassy protests. However, an equally important indicator of what concerns Cairo these days was his meeting with Clinton. Arguably, Mursi got what he came for, which was guarantees that the $ 2 billion support with which Washington provides Cairo yearly, will continue. In a strikingly similar vein, that very issue also overshadowed his lightning trip to Brussels. Rather than the much-publicized discussions on the freedom of speech, his was a different errand and ostensibly he got what he came for: more than a billion dollars in aid.[vi]

Half of that amount was conditional upon Egypt’s acceptance of a negotiated $4,8 billion IMF loan package. Although the terms of which has been described as lenient, with among others an interest rate of 1.1% together with political “recommendations” rather than demands, it still caused a fuzz within Islamist circles. Members of the Muslim Brotherhood have previously expressed themselves in skeptical terms on borrowing from the IMF.[vii] And internal opposition from among others the Brotherhood was the main reasons for which the SCAF ultimately refused to accede to a previously negotiated loan package in the early summer of 2011, preferring instead higher interest loans from local banks. The current reversal of this position is indeed a powerful testament to the economic dictates of politics.

So to answer the initial question: has there been a “Mursi-effect”? Two implications are made above. Firstly, President Mursi seems to be acutely aware that Egyptian politics still is determined by economic imperatives. In a democratic system, leaders can ill afford to let the economy slide, and Mursi certainly recognizes this fact. His many trips abroad seems better understood as efforts to secure financial supports than attempts to realign Egypt internationally. The second implication follows directly: In his pursuit of economic assistance Mursi is also unable to challenge the existing forms of economic dominance. Hence, the neoliberal political course that has characterised the Egyptian economy appears boud to continue. Thusly, it is safe to say that the Mursi-effect has been limited both domestically and abroad, and will remain thus for the foreseeable future in the absence of marked economic improvement, none of which seems imminently forthcoming. The estimated required input to secure the budget deficit and attract investment is $10 billion.[viii] As the economic situation continues to provide powerful determinants for Egyptian politics, Mursi will find his room for manouver, both domestic and internationally, severely constrained. In this regard, the words of Clinton’s old elections slogan still holds true: It’s the economy, stupid!