Sisi’s mission: building on an old foundation for a new beginning

Yesterday, Egyptian President Abdel Fattah al-Sisi’s inauguration occurred with festivity and fanfare. All the appropriate motifs of Egyptian politics showed the world that this new government in Cairo heralds the vestiges of the old order with the attributes of the new mandate. This juxtaposition illustrates that Egypt under President Sisi is serious and will move forward with the intent to reverse the economic ills befalling Egypt. Two former presidents are in jail for crimes and the Egyptian military and the deep state are in true ascendance and control.

President Sisi’s inauguration occurred with a swearing-in ceremony with the attendance of Interim President Adly Mansour, Prime Minister Ibrahim Mehleb, the ministers, Azhar Grand Sheikh Ahmed al-Tayyeb, Egypt’s Copts’ leader Pope Tawadros II and other Egyptian notables. Following the ceremony, a reception occurred with leaders and representatives from around the world at the presidential Ettihadiya Palace. After the public holiday and the joyous celebration, Egyptian President Sisi will get to work on Egypt’s most vexing issue - reversing Egypt’s economic decline.

Key economic issues

To be sure, Egyptian President Sisi needs to address key economic issues to include external financing, job creation and rapid building programs, just to name a few remedies to the country’s requirements. The GCC states are ready to help Sisi at any cost, including donor conferences. That cost is already up to $40 billion and there is more to come via the GCC states and from other countries who see the necessity for a stable and prosperous Egypt. Consequently, Sisi is pursuing a mix of development models from the GCC states that include a dozen economic cities, residential and commercial complexes, energy grids and pipeline expansion, the growth of tourism, and new airports. One such project by Arabtec envisions 160 million square meters across 13 sites in Egypt for lower income individuals. In theory, millions of jobs will be created combined with President Sisi’s planned economic progress.

Placing a foreign template on Egypt’s foundation only creates instability, chaos and ultimately, in Egypt’s case, terrorism

Dr. Theodore Karasik

Sisi’s reliance on the Egyptian military’s vast financial holdings, properties, and construction companies forms the foundation of any new Egyptian push to boost the economy. According to other sources, the Egyptian military’s oldest commercial interests are the factories run by the Ministry of Military Production, the Arab Organization for Industrialization (AOI) and the National Service Projects Organization. The Egyptian military also supervises many companies of state-owned holding companies and owns shares in public-private ventures. These smaller operations are embedded in transnational corporations that reach into construction and maritime shipping to weapons manufacturing. In the past two years, real estate development and heavy equipment leasing, in which the military’s enormous land holdings, infrastructure and capital provide major advantages, as well as the privately owned businesses that constitute what is now known as the “officer economy.”

Accepting the facts

These facts must be recognized as a “need to acknowledge and work with model” because there is no other way to help the Egyptian economy. Much like other states who find themselves in similar situations around the world, economic growth must start with the state properties and lands under governmental control. “Shock Therapy” is not a solution because such austerity measures will only make Egypt worse.

Importantly, and this point cannot be stressed enough, placing a foreign template on Egypt’s foundation only creates instability, chaos, and ultimately, in Egypt’s case, terrorism. It is a good idea to rely on the Egyptian military’s foundation because with GCC’s help it will help to bring the private sector into building a robust economy. Although this activity may take years to bear fruit, there is no better place to start in Egypt than with the existing military ownership system and its financial attributes.

What happens next in Egypt will likely be steady yet cautious reforms because social harmony is key. With the additional funding from the GCC noted above, one can expect those monies to be directed towards low interest loans, investments in real estate, and the energy industry such as Tharwa Petroleum with salient up-stream products. In addition, GCC monies will bridge the financial gap for the remainder of the year given the large external debt and such an action will help to assist Egypt to restart IMF negotiations to be perhaps concluded in Fall 2014. With an IMF agreement in place, the GCC states assisting President Sisi should be able to help other investors as Egypt’s economy starts to stabilize. But if “negative manifestations” occur such as terrorism, then the forward momentum will get stalled. Therefore, much is at stake in making sure Egypt remains stable and secure. Strong discipline by the deep state and their supporters, plus the assistance of other countries in training and equipping security and police forces will continue to be just as important as stimulating the economy. The new president is in charge and will attack Egypt’s woes with vigor and resolve through the foundations already in place - there is no other way out of the current situation.

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Dr. Theodore Karasik is the Director of Research and Consultancy at the Institute for Near East and Gulf Military Analysis (INEGMA) in Dubai, UAE. He is also a Lecturer at University of Wollongong Dubai. Dr. Karasik received his Ph.D in History from the University of California Los Angles.
 

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Last Update: Wednesday, 20 May 2020 KSA 09:42 - GMT 06:42
Disclaimer: Views expressed by writers in this section are their own and do not reflect Al Arabiya English's point-of-view.
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