Sukuks and not very halal Islamists

The Economist's Pomegranate blog writes about the travails of Egypt's sukuk law, championed by the MB but blocked by al-Azhar in one of the many unintended consequences of the shoddy constitution:

Egypt’s finance minister, Al-Mursi Al-Sayed Hegazy, says sukuk issuance could generate $10 billion a year for the country. That is highly unlikely any time soon, considering the current junk status accorded by ratings agencies to Egypt’s ordinary bond issues. But given the severity of the country’s economic situation, the protracted IMF negotiations over a possible $4.8 billion loan (which Salafists have also attacked despite a proposed interest of only 2%), and growing global demand for Islamic banking, the scholars of Al Azhar might be wise to spare the hair-splitting. Egypt right now needs every piastre of money it can find.

Sukuks are a fine investment vehicle, but I differ on the view that al-Azhar is hair-splitting. The issue al-Azhar has taken up is that sukuks, by their very nature, involved the lender taking as collateral the investment project itself. Azhar opposes their use in state projects (as opposed to private ones) because public goods would risk falling into lenders' hands. Since this is precisely the kind of situation that led to Egypt coming under British overlordship, Azhar's position is not surprising — especially considering that considering the state of Egypt's finances, a default on sukuks is not unlikely. The real problem here is that the Muslim Brothers want to change the terms of sukuks so that such collaterals are avoided in the case of public projects. Except if that's the case, in Sharia terms this is not a sukuk anymore. It's something else. The Brothers cannot have their cake and eat it too, by claiming to implement Sharianomics and then bending these supposedly holy rules.

Disinformation and Egypt's multiple realities

I used to joke that Egyptians have their own reality distortion field, which once entered can lead you to believe that their country is center of the universe and where black is white, the patently untrue is brandied as incontrovertible fact, ​and a person will assure you of one thing when its opposite is plain to see in front of your very eyes. 

In the current media scene, the Egyptian reality distortion field has multiplied into (at least) two views of reality: one in which the Muslim Brotherhood is a savior that will guide the country to a Renaissance and Mohammed Morsi is geopolitical genius; another in which an Iranian-Israeli-American plot to install the Brotherhood threatens to unravel the country. The latter discourse is more shrill and insane, perhaps due to the fact that Islamists control a small minority of the print media in the country, that their numerous satellite channels have less compelling non-religious programming, and that their normal discourse is bizarre and nasty enough for the propaganda to be relatively tame. The two worlds co-exist and occasionally collide, a bit like the sci-fi show Fringe​.

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Perfection itself assaulted by vile, envious Baradites

Some hilarious language in this Brotherhood defense of Egyptian Ministry of Supply Bassem Ouda — which the opposition would like to see replaced by a neutral figure to prevent the MB from getting an electoral advantage through control of the ministry, particularly after allegations that state property was being distributed by the MB in electoral campaigning in January — but that is being spun here as an attack on a stalwart and heroic figure. Like all propaganda pieces, it sounds very silly, particularly when it claims Mr Ouda "invented" popular committees, to have "solved" the problem of flour smuggling, etc.

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Issandr El Amrani

Issandr El Amrani is a Cairo-based writer and consultant. His reporting and commentary on the Middle East and North Africa has appeared in The Economist, London Review of Books, Financial Times, The National, The Guardian, Time and other publications. He also publishes one of the longest-running blog in the region, www.arabist.net.

Does Anti-Ikhwanism Really Matter?

Really good commentary by Khalil al-Anani:

After the revolution, the MB's leaders replaced Mubarak's repression with the opposition's conspiracy against their rule as a rallying point. It is one of many tactics that are employed by these leaders in order to maintain members' loyalty and sustain the unity and coherence of the movement particularly during hard times or crises. Therefore, although they are in power, they continue to perceive themselves as "victims" of the opposition which turned to be the "external enemy" that attempts to undermine the "Islamic project" regardless of what the latter means. Ironically, the most powerful opposition to the MB's rule now comes from Salafis and other Islamist forces not from liberal and secular forces. More importantly, by treating the opposition as an uncompromising "foe" the MB leadership could ensure members' adherence and maintain their control over the organization. Indeed, the attacks on the MB's headquarters in Mokattam in March was a golden chance for leadership to feed this narrative and internalize within members' mindset. "Now the entire tanzim (organization) is under the control of the conservatives and all members would unwaveringly support President Morsi to the end of his tenure," a senior member of the MB told me. Clearly, the more the opposition presses the MB, the more solid and coherent the movement becomes.

Hence the importance of constantly exaggerating the role of the opposition — and particularly the NSF — in fomenting unrest, even though there's scant evidence that ElBaradei and friends are putting thousands on the street. The MB does not know how to maintain coherence among its diverse members without fighting culture wars.

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Issandr El Amrani

Issandr El Amrani is a Cairo-based writer and consultant. His reporting and commentary on the Middle East and North Africa has appeared in The Economist, London Review of Books, Financial Times, The National, The Guardian, Time and other publications. He also publishes one of the longest-running blog in the region, www.arabist.net.

Stability in Algeria, or is "reform" even possible?

Today's reports that Algerian President Abdelaziz Bouteflika suffered what is being called a "minor stroke" and is hospitalized in France, and the ongoing debate about a new constitution being drafted ahead of new presidential elections (which might very well now be rushed) next year, are a good time to issue a report on Algeria. Which is what Carnegie's Lahcen Achy has just done, in The Price of Stability in Algeria. He argues, among other things:

If left unaddressed, the social, economic, and political grievances festering beneath the surface in Algeria could rapidly escalate into popular revolts that threaten the regime’s stability. The government must begin enacting managed political reform or face the possibility of collapse.

There's a lot more there, but post-Arab uprisings one has to wonder: is "managed reform" ever a possibility, and if so what is its aim? Managed reform was what was being advocated in Egypt, Syria, Tunisia and elsewhere before 2011. It invariably was carried out only superficially — but was nonetheless part of the rhetoric of these regimes. They were always on the road to reform, and often did implement some sort of changes, especially in economic policy, but never democratized. If anything, appearing to be engaged in a process of reform considerably increased the political risk for these regimes, creating a gap between the rhetoric of reform and the reality of autocratic rule. Autocratic regimes that never claimed to reform, like Saudi Arabia (indeed most monarchies) or Sudan, turned out to be safer.

The lesson for autocrats from the Arab Spring, indeed, may be "whatever you do, don't reform." Do not initiate a process that promises more than you can deliver. If, like me, you believe the central cause of the uprisings was not strictly political or economic, but moral — that the regimes had exhausted their capital of legitimacy and were proving unable to renew it — it's not clear that Algeria has reached that point of collapse. The regime continues to have legitimacy, after all.

The reforms advocated in the Carnegie report are all fine if somewhat vague — e.g. "Enact deep political and economic reforms conducive to sustainable and equitable economic expansion, increased public participation in politics, and effective accountability of political leaders" — but can they be carried out by the current regime leadership? Isn't the story elsewhere, at the heart of how power and legitimacy is constituted and understood in Algeria, and what will happen to the real power structures of Le Pouvoir once dominant personalities leave the scene?

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Issandr El Amrani

Issandr El Amrani is a Cairo-based writer and consultant. His reporting and commentary on the Middle East and North Africa has appeared in The Economist, London Review of Books, Financial Times, The National, The Guardian, Time and other publications. He also publishes one of the longest-running blog in the region, www.arabist.net.

Fahmy Howeidy on Egypt's political crisis

I have in recent weeks neglected the blog, including the regular In Translation ​feature provided by the wonderful people at Industry Arabic, your go-to place on quick and quality translations from or to the language of the ض. I'll be posting some delayed pieces over the next few days. The first one is by the man generally regarded as Egypt's, and one of the Arab world's, most influential columnists, Fahmy Howeidy. It dates from a few weeks ago but the themes it raises are still relevant.

Howeidy is generally seen as an Islamist intellectual, but has not been an all-out partisan of the Muslim Brotherhood, even though he is sympathetic to them. ​In the piece below, his critique of the opposition mirrors that of many Islamists, and he also offers a critique of the Morsi administration striking lack of political deftness in handling a country still in transition. And he offers some suggestions for handling the coming time period leading to new parliamentary elections, including that the Brotherhood should steer clear of ministries involved in elections (thus echoing NSF demands). It's an interesting balancing act.

Read on.

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Podcast #42: An opposition strategy

Our latest podcast went up yesterday after a too-long absence. Ursula, Ashraf and I talked about the Dubai art scene and censorship in the Gulf, the UAE and Qatar's soft power, how Islamist governments are doing in Tunisia and Egypt, and then we zero in for a long discussion of the Egyptian opposition's strategy, or absence thereof, and what might need to be changed.

Remember you can always get the podcast first on iTunes.

The Arabist Podcast

Podcast #42:

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Issandr El Amrani

Issandr El Amrani is a Cairo-based writer and consultant. His reporting and commentary on the Middle East and North Africa has appeared in The Economist, London Review of Books, Financial Times, The National, The Guardian, Time and other publications. He also publishes one of the longest-running blog in the region, www.arabist.net.

On "engaging" the Muslim Brothers

I found this draft of a post I started writing in April 2011 — just three months after Mubarak was toppled. I can't remember why I never published it, but if my feelings were tentative when, it pretty much describes exactly what I have argued to officials since mid-2012 what the mistake of the US and other Western powers towards the MB has been for the past two years.​ I wish I had made the argument more forcefully and earlier.

I have always hated the term "engagement" when applied to the Muslim Brotherhood, a term that became fashionable around 2005. It is generally used as in, "the US should engage the Muslim Brothers". It has its fierce advocates in the US foreign policy community, and many who are against. The problem is that the term is ill-defined and thus meaningless.

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US u-turn on Syria?

So says Abdel Bari Atwan in US U-turn on Syria:

Speaking in Oslo, the US secretary said: 'What the US and the world want is to stop the killing in Syria.' He added, 'Syrian President Bashar al-Assad should sit with the leaders of the Syrian opposition at the negotiating table to form a transitional government, according to the framework agreement concluded in Geneva.'

Such statements tell us that the US administration, during its second term, has turned to adopt a different position to the Syrian crisis, looking to achieve a political solution.

The US Secretary of State did not stipulate that the resignation of the Syrian president was a pre-condition condition for any political solution for the Syrian crisis during the press conference. He did not say that the Syrian regime or its representatives should sit with the Syrian opposition at the negotiating table, while he said Assad should negotiate with the opposition. The statement is essentially American recognition of the legitimacy of the Syrian regime.

To be more clear, we should remind ourselves that for the last two years, President Obama told the world that President Assad had lost his legitimacy, stressing that he should leave the power. However, he has not said anything of the sort for the last five months.

He predicts "more harmonious relations between the Syrian regime and the US" in the future, as part of a Russian-US deal. I doubt it.

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Issandr El Amrani

Issandr El Amrani is a Cairo-based writer and consultant. His reporting and commentary on the Middle East and North Africa has appeared in The Economist, London Review of Books, Financial Times, The National, The Guardian, Time and other publications. He also publishes one of the longest-running blog in the region, www.arabist.net.

Congress makes its move on US aid to Egypt

Above, Senator James Marco Rubio makes a speech about amending US aid to Egypt. Worth a listen to get a sense of the mood. And not altogether unreasonable, either.

POMED has more:

Senator Marco Rubio (R-FL) submitted an amendment to H.R. 933 placing conditions on two forms of U.S. assistance to Egypt unless the country adopts economic reforms and human rights safeguards. The amendment will also begin a comprehensive, long-term reevaluation of U.S. military aid to Egypt. Speaking before the Senate, Rubio said, “The U.S.-Egypt relationship has been a critical one for decades, but it must be adapted to reflect the new political reality the Arab Spring has created. That adaptation process must begin with how our money is being spent and conditioning our assistance on Egypt’s adoption of economic reforms and a serious effort to protect the rights of religious minorities, women, a free press and the ability of Egyptian and foreign NGOs to promote civil society, governance and democracy.”

Read their post for full details. 

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Issandr El Amrani

Issandr El Amrani is a Cairo-based writer and consultant. His reporting and commentary on the Middle East and North Africa has appeared in The Economist, London Review of Books, Financial Times, The National, The Guardian, Time and other publications. He also publishes one of the longest-running blog in the region, www.arabist.net.

Solar eclipse

I'm not sure whether I linked to it, but last week my Latitude piece was about the shortages in diesel fuel in Egypt (called Solar). It's here.

For a closer look at the frustrations faced by microbus drivers, who have been blocking roads in protest at shortages, there is a fine piece of reporting in the Daily News Egypt. It's also the top story in many of today's Egyptian dailies, with fighting breaking out during protests and at gas stations. Some report that fuel is being diverted to Gaza (it is much cheaper to get Egyptian fuel than Israel fuel, after all.) Others that the fuel shortages reach as much as 60% in some provinces, and 30-40% in most. Apparently several fuel tankers are awaiting to be paid to unload their cargo — but the government has no cashflow.  

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Issandr El Amrani

Issandr El Amrani is a Cairo-based writer and consultant. His reporting and commentary on the Middle East and North Africa has appeared in The Economist, London Review of Books, Financial Times, The National, The Guardian, Time and other publications. He also publishes one of the longest-running blog in the region, www.arabist.net.

The police and the Ultras - a pox on both of their houses?

This weekend in Egypt, as in the past several weeks, the Ultras have been out of control, the kids who like to pretend they're Ultras and block traffic have been out of control, and the police has been either nowhere to be seen or out of control. I really recommend listening to this NPR report by Laila Fadel about police degenerating into revenge gangs to put things in context.

I have an op-ed coming up soon in The National about this issue (Update: here it is.) But it's easy to blame the police for everything — no one likes them. Someone needs to stand up to the Ultras and their teenage copycats who vandalize hotels and cars on the Nile Corniche and elsewhere too.

Issandr El Amrani

Issandr El Amrani is a Cairo-based writer and consultant. His reporting and commentary on the Middle East and North Africa has appeared in The Economist, London Review of Books, Financial Times, The National, The Guardian, Time and other publications. He also publishes one of the longest-running blog in the region, www.arabist.net.

In Translation: How the Constitutional Declaration came to be

Much of the mayhem currently taking place in Egypt is a direct result of the Constitutional Declaration President Mohammed Morsi announced on 22 November 2012 and the political upheaval it caused. There has been much speculation as to why the declaration was made when it was (just after the end of the Gaza crisis), who had planned it and who was out of the loop and what its purpose was. Mohamed Basal, a reporter for al-Shorouk newspaper, has the inside story of how the Declaration came to be, shedding some light on some of these questions. We bring it to you in English thanks to the upstanding folks at Industry Arabic who make our In Translation series possible.

Basal's article is meticulously — though anonymously — sourced and provides a plausible narrative of how the Constitutional Declaration came to be. Some key points:

  • It was largely drafted by the Legal Affairs Committee of the Freedom and Justice Party, in consultation with Brotherhood leaders, but only with late input from presidential advisors.
  • Key judicial figures were only consulted late and opposed some of its provisions.
  • It was initially intended to include bringing the retirement age of judges down to 60 years old. Such a provision could still be implemented later this year to purge a large number of senior judges. The Vice-President threatened to resign over this.
  • The Minister of Justice and the Vice-President, both judges, fought against several of its provisions and did not think it was necessary — or legal — to "protect" the Constituent Assembly from a Supreme Constitutional Court decision.
  • Morsi and the Brothers believed a conspiracy was afoot (this much we know from their cryptic statements) for the Supreme Constitutional Court to launch impeachment proceedings against President Morsi — even though there are no constitutional means for this. They were also receiving information of a destabilization campaign from "sovereign bodies", meaning intelligence agencies.
  • The Constitutional Declaration was originally intended mostly to deal with the replacement of the Public Prosecutor and the extension of the Constituent Assembly, which by late November was far from finishing its work. It was the FJP's legal committee that added other provisions, backed by Morsi notably on the question of protecting the Constituent Assembly from dissolution and giving himself extraordinary powers (intended to deal with a perceived threat of unrest caused by the opposition).

Here's the quite long and detailed article for Egypt-watchers who want to understand the steps that led to the Morsi administration's biggest mistake to date.

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Ghannouchi on HardTalk

The Ennahda leader on the BBC's interview show. A critique of the interview is here. Ghannouchi makes some controversial comments about Chokri Belaid's accusations of Ennahda tolerating violence, made shortly before his assassination.
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Issandr El Amrani

Issandr El Amrani is a Cairo-based writer and consultant. His reporting and commentary on the Middle East and North Africa has appeared in The Economist, London Review of Books, Financial Times, The National, The Guardian, Time and other publications. He also publishes one of the longest-running blog in the region, www.arabist.net.

Khaled Fahmy on police reform

Khaled Fahmy asks What doesn't Morsi understand about police reform?, looking at a landmark 1861 decision to end beatings by the Egyptian police.

After I spent many years exploring the National Archives, I concluded that torture was repealed from the Egyptian criminal code in the 19th Century because of a decision from within the state apparatus itself, specifically the police which reached an advanced degree of professionalism. It was also a reflection of a high degree of centralisation, strength and self-confidence of the state’s administrative apparatus, at the heart of which is the police.

It is disappointing to watch the serious regression of the Egyptian state over the past 30 years; a regression back to torture practices at police stations and locations of detention in Egypt.

Even more upsetting is that those in power today do not recognise the dangers of continuing to ignore this explosive issue, especially after a revolution which – in my opinion – primarily occurred to end torture and other systematic abuses by police against citizens.

The president has not said a single word about torture; the prime minister went to the headquarters of Central Security Forces after recent clashes in Port Said to promise them he would give them more weapons; the government has brushed aside all initiatives to reform the police; the minister of justice denied torture existed under President Morsi, and has often said the police cannot be reformed except from within and based on initiatives by its leadership. And so it seems, President Morsi’s government has made up its mind on this matter and does not wish to address police violations, and at the same time cannot force police leaders to change their ways in dealing with the people.

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Issandr El Amrani

Issandr El Amrani is a Cairo-based writer and consultant. His reporting and commentary on the Middle East and North Africa has appeared in The Economist, London Review of Books, Financial Times, The National, The Guardian, Time and other publications. He also publishes one of the longest-running blog in the region, www.arabist.net.

Rural Egypt's anger

A good report from Kafr al-Sheikh by al-Jazeera's Rawya Rageh. This undermines the notion that unhappiness with the Brothers is mostly urban, some of the current crises — notably shortages in diesel — are actually more deeply felt in the countryside.

Update: This report highlights growing anger elsewhere, mostly in provincial towns rather than strictly rural areas.

Issandr El Amrani

Issandr El Amrani is a Cairo-based writer and consultant. His reporting and commentary on the Middle East and North Africa has appeared in The Economist, London Review of Books, Financial Times, The National, The Guardian, Time and other publications. He also publishes one of the longest-running blog in the region, www.arabist.net.

Egypt: Brothers get routed in student elections

Results for student elections taking place in Egyptian universities this week suggest the Muslim Brotherhood, normally one of the best-organized and most successful political movements in student politics, has lost much ground. This tends to confirm and accelerate trends first seen last year of new political movements on campus becoming more popular, as well as some good coalition-building between radicals, leftists, liberals and others to face challenges by Brothers and the Salafis. The trend has also been seen in professional syndicates over the last year, and may also grow this year. This should be striking, as one would expect the Brotherhood to reap the benefits of being the party in power. But the opposite is happening, and the failure of the Brotherhood to win a majority in a single election yesterday (although of course there will be more) is telling of the discontent with them.

Three things stand out to me other than the Brothers' relatively poor performance:

  1. Coalitions of non-Islamist political trends seem to work quite well, suggesting it is worth it for them to contest elections;
  2. I think the formation of Salafi factions on campus is a new thing (someone tell me if I'm wrong — Update: Assiut of course had strong Gamaa Islamiya presence in university), and they are doing well in places (like Minya in Upper Egypt), possibly at the expense of the MB.
  3. In several places the Destour Party (of Mohamed ElBaradei) is running in coalitions or alone and doing quite well — which shows that contrary to the prevalent armchair punditry that they are getting out there and mobilizing to some extent.

How does this translate in a national election? It's not clear. Obviously university students are more educated and live in an urban environment (although many, of course, will come from a rural background — or what passes as rural in one of the mostly densely populated countries in the world.) They are not that representative of the national whole, and vote for different reasons. The Brotherhood's electoral machine alone, depending on who else is running, makes its goal of winning an outright majority in the upcoming parliamentary within reach — although I think it's a longshot.

Below are results of elections in various university faculties, culled by Nour The Intern from the @afteegypt Twitter account which has been doing some sterling coverage of student politics.

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