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As Egypt seeks to navigate its new economic crisis, there is media confusion about the decision-making process in this country. While President Abdel Fattah al-Sisi attempts to contain his opponents, he insists that his regime is not responsible for the country’s precarious economic situation.
Sisi, fed up with his opponents taking advantage of the National Dialogue Initiative, expressed his displeasure with the criticism of the development projects he launched. During the inauguration of several new naval vessels in the Suez Canal, Sisi said, “They want a dialogue although they don’t understand what it means to rule. They demand to know the importance of the development projects. (…) They don’t understand the components that constitute a functioning state.”
Sisi’s words indirectly responded to the Civil Democratic Movement ‘s refusal of “the regime’s impulse to take economic and political measures of strategic proportions before any form of dialogue, especially since these measures burden the citizens.”
Several incidents suggest a sudden problem in Egypt’s political decision-making, including recent cabinet changes and the dismissal of the Central Bank governor. This coincided with the announcement of a World Bank loan amid fears of exchange rate liberalisation and the effect of another jump in the US dollar rate on the economic crisis.
Economist Ziad Bahaa-Eldin believes that structurally reforming economic problems is the government’s job, not the Central Bank’s. According to Bahaa-Eldin, the media’s portrayal of the governor of the Central Bank’s appointment as a breakthrough is contrary to reality and unhelpful. He added, “The suggestion that the crisis will be resolved once a new governor takes over is a severe exaggeration and overburdens Hassan Abdullah, acting governor of the Central Bank, beyond his capacity and constitutional authority.” This suggestion “raises people’s expectations too much, threatening the credibility of any sincere efforts to improve the economy,” he said.
Hassan Abdullah faces the daunting task of repairing an economy hit by overvaluation, rising inflation and foreign currency depletion.
The tools available to the Central Bank will be limited, especially since the Ukraine war shocked the globe. Business portfolios and tourism investments have weakened, and the cost of importing goods has increased.
According to a Reuters report, much of Egypt’s population has been hit by austerity measures following the IMF’s $12 billion loan in 2016. The annual inflation rate now stands at 13.6 per cent, the highest since March 2019.
The devaluation of the Egyptian pound and the sale of government assets appear to be prerequisites for a new agreement with the IMF. In 2022, Egypt pledged to sell $10 billion worth of state-owned assets annually for the coming four years.
Appeasing The Poor
To appease the poorest class, Sisi increased support on the ration cards for the neediest families from EGP100 to EGP300. Additionally, he ordered a social campaign to protect up to a million families.
According to the Middle East News Agency, the campaign included pumping EGP32 billion into the subsidisation of bread. The number of families covered by cash support under the Takaful and Karama programme has increased from 4.1 million to 5 million. This means that some 22 million Egyptian citizens will benefit from the conditional cash support programme.
Coincidingly, Egyptian politician Hamdeen Sabahi confirmed that the Civil Democratic Movement accepted Sisi’s call for a national dialogue for fear of an explosion of the situation in Egypt. “We were not partners in making the crisis, but we are ready to be partners in formulating the solution if we are allowed to provide real guarantees,” Sabahi said.
As the former and next presidential candidate sees it, the dialogue is between “an authority and an opposition, not an authority and a loyalist. ”
A year after the launch of the National Human Rights Strategy, peaceful dissidents continue to be targeted, forcibly disappeared and imprisoned, according to the Cairo Institute for Human Rights Studies (CIHRS). Journalists and human rights defenders also continue to be held behind bars. This comes at a time when torture, denial of health care, and deaths in custody continue to be widespread.
The CIHRS indicates that the Egyptian authorities continue to “maintain tight control over public and political space and exercise a complete monopoly over public discourse.”
Amnesty International has called on the Egyptian authorities to drop all charges against four independent journalists from Mada Masr. The organisation requested Cairo to stop what it described as “harassing one of the few remaining independent media platforms in Egypt.”
Human Rights Watch also accused the Egyptian regime of imposing obstacles on the work of Egyptian environmental groups weeks before Egypt hosted the 2022 United Nations Climate Change Conference (COP27).
According to the organisation, government repression has forced activists and leading civil society groups to “leave the country, or downscale or quit their activism. Some foreign human rights and environmental organisations have closed their offices in Egypt since 2014.”
Egypt is speculating that hosting this summit will facilitate its return to the regional diplomatic landscape. While numerous foreign governments have congratulated Egypt on hosting COP27, NGOs have denounced it.
These organisations view it as a “reward for the repressive regime.” It also lends legitimacy to a country experiencing political and economic stagnation due to the implementation of massive and costly projects while a third of its population lives below the poverty line.
Recently, two US-based NGOs filed a complaint against Egyptian and French officials on suspicion of using a French counterterrorism operation in Egypt for internal repression.
Some see the current political landscape as an attempt by the regime to shift the opposition in its favour ahead of the November 2022 COP27.
Khaled Dawoud, the assistant rapporteur to the Political Parties Committee, believes that the president feels more confident today than at any other time since he took office in June 2014.
As more traditional opponents of Sisi, including Wael Ghonim – one of the legends of the January 25 revolution – are returning to the country, Sisi is showing an ability to contain and reposition his opponents to serve a political landscape in which he remains victorious at the expense of the economic situation.
The decision-making process unusually relies on a crowd of advisers in various disciplines. However, in Egypt, it is restricted to the closed circle of the president and his advisers. Sisi has improvised a list of advisers, opening the way for some imposters to take advantage of the system.
Some of the appointments appear to serve as a form of reward. Tarek Amer, for example, was released from his role as the Central Bank’s governor and is now an adviser to the president without a specified job description.
Another example is Dr Mohamed Awad Tageddin, whom many Egyptians know as the former Minister of Health and current adviser for health and prevention affairs. He is, however, not just the man commonly seen on television during the Corona crisis; he also proposed adding a box on the national ID to distinguish organ donors.
Despite the army of advisers that surrounds Sisi, Cairo University political science professor Mostafa Kamel al-Sayyid believes that “the real decision-maker is the presidential institution, not the government, whose president and members boast that they are technocrats who have nothing to do with politics.”
Political science researcher Asmaa Mostafa notes that Egypt’s decision-making is a process that has multiple factors and is organised by several formal and informal institutions. These include think tanks that are essential in providing advice to the Egyptian decision-maker.
The late writer Yasser Rizk noticed an issue with political decisions over numerous years. Many were the result of confusion in the decision-making process or the selection of the most unsuitable alternative.
In the same context, Hani al-Salamouni believes that “decision-making in Egypt is in bad condition,” noting that the decision-makers seem hesitant and retract or postpone multiple times. This indicates a terrible imbalance in decision-making mechanisms and a tug-of-war between stakeholders irrelevant to the national interest.
With Sisi promoting a new republic, there seems to be a need to reconsider the priorities of the next phase. Solving the current crisis would represent a milestone before Sisi seeks his next presidential term.