Egypt’s economy main concern

CAIRO – I came to Egypt to examine the impact a Muslim Brotherhood president has had on the country. Egyptian liberals and moderate Muslims have been struggling with religious political parties over the role of Islam in the state.

But an explosion of new fighting in Gaza, as Israel retaliates for a wave of Hamas rocket attacks on its cities and towns, reveals the constraints on any efforts to radically change Egypt. It also shows why Egypt’s peace treaty with Israel is likely to last.

In interviews with Brotherhood members, more orthodox Salafis, and opposition leaders during the week before the Gaza fighting began, it quickly became clear that the most pressing issue in Egypt is the economy, not sharia law.

“Ninety-nine percent of the people don’t care about this discussion of the constitution,” which is bogged down in a debate over sharia, said Mohamed ElBaradei, a key opposition leader and a former head of the International Atomic Energy Agency. “The people want work and health care, because the economy is stagnant.”

ElBaradei said that when he recently visited Aswan, a major tourist destination, its top tourist hotel was only 1 to 2 percent occupied. “People were only talking about jobs, jobs, jobs,” he said.

Egypt’s new elected president, longtime Muslim Brotherhood member Mohamed Morsi, understands this huge economic challenge, as does the Brotherhood’s political front, the Freedom and Justice Party. Morsi knows he and his party will be judged by whether they can provide jobs and improve ordinary Egyptians’ standard of living.

To do that, they desperately need help from global agencies as well as direct foreign investment. Morsi knows Egypt can’t afford to scare off investors and tourists, and it most certainly can’t afford to fight another war.

That’s why, although Morsi recalled his ambassador to Israel over its airstrikes on Gaza and sent his prime minister to Gaza City, he has not threatened to provide military aid to Hamas or take direct action against Israel.

Nor can he afford to cut off all diplomatic or trade relations, including the so-called QIZs – Qualifying Industrial Zones – which give Egyptian textiles preferential access to U.S. markets as long as they contain a symbolic 10 percent contribution from Israel. The QIZs have created tens of thousands of desperately needed jobs.

Of course, Morsi is under pressure from a newly politicized public, Brotherhood members, and Salafis to take stronger action against Israel. Given that Hamas has Brotherhood roots, that pressure will intensify if the Israeli strikes continue. If Israel invades Gaza, Morsi could be forced to take action he wants to avoid.

Previously, the Brotherhood had developed a rationale for keeping the treaty with Israel (while talking about possible but unlikely changes to it). “The treaty is just an ending of the state of war,” said Sobhi Saleh, a founding FJP member and one of its leading legal experts. “It is not a friendship treaty. No state in the world seeks war, so it is normal to keep the treaty.”

With an eye toward Egypt’s security, Morsi also has tried harder than his deposed predecessor, Hosni Mubarak, to close the tunnels that link Gaza to Egypt’s Sinai Peninsula, which have become a conduit for terrorists and weapons.

Morsi’s pragmatism, born of economic necessity, probably explains why his party has not pressed to give sharia a greater role in the draft constitution being intensely debated. Egyptian liberals worry about constitutional loopholes and an increasingly religious social climate, as well as Salafi pressures (so far unsuccessful) to include more specific references to sharia rulings. The current draft calls for Egyptian laws to be in accordance with “the principles of sharia” – the same vague reference that has been in the constitution for decades.

The new president knows his reputation will rise or fall on whether he can make ordinary Egyptians’ lives better. He rashly promised to improve Cairo’s impossibly congested traffic and woefully absent garbage collection in his first 100 days. But Cairo’s main roads are still so jammed that they often resemble parking lots, and piles of garbage sit on many streets.

Morsi’s FJP, which espouses free-market principles, also knows that it will be judged in next year’s parliamentary elections by whether the president has delivered. Having been banned for decades, with many of its members imprisoned, the Brotherhood speaks of its parliamentary and presidential victories as divinely ordained. It came into office full of grandiose plans to eliminate Egypt’s legendary corruption, revamp its bureaucracy, and restore its historic glory.

Those promises quickly collided with a bureaucracy that has a 6,000-year history. Gehad El-Haddad, a member of the executive council of the Brotherhood’s Renaissance project (which is supposed to design a new, Islamically moral framework for the economy), offered a telling example: The Ministry of Information had 48,000 employees but only 12,000 desks – and no necessary functions. And when bribes were outlawed, it and many other ministries ground to a halt.

Facing such obstacles, Morsi most likely will try to avoid new ones for the foreseeable future. He simply cannot afford a major conflict with Israel. And the moment is not ripe for any full-court press on sharia law.