Egypt – Emergency Powers Will Help Push Through Reforms


Wednesday, July 05, 2017 12:55 PM / BMI

BMI View: Having received a ringing endorsement from President Donald Trump during his visit to the US, Egyptian President el-Sisi will hold few qualms about using emergency powers to stifle dissent and crush opposition at home. This will help the government push through the tough economic reform programme it is pursuing, but dissatisfaction with the government will rise, and Islamist terror threats will continue to preclude a recovery by the tourism sector.

Egyptian President Abdel Fattah el-Sisi introduced new emergency powers in April which we expect will be used to their utmost by the government to quell not only Islamist groups associated with recent bomb attacks in the country, but to stifle all opposition parties.

Coptic churches in Tanta and Alexandria were bombed on April 9, killing 45 people and wounding over 100 more.  

These attacks were swiftly claimed by Islamic State (IS), which is operative in the northern Sinai Peninsula, prompting President el-Sisi to introduce the emergency powers which expand police powers of arrest, allow limits on movement to be imposed, and enable greater surveillance and seizures.  

Emergency powers have a long history of being abused by authoritarian governments in Egypt, and we expect that the latest incarnation will be similarly used beyond their supposed remit of tackling Islamist terrorism.  

Emergency powers were in place for the duration of President Hosni Mubarak's 30-year tenure in office, who came to power in 1981 following the assassination of his predecessor, Anwar Sadat.  

The 2014 constitution places a time limit of three months with an optional extension of three months on the powers, and they have to be approved by parliament.  

However, they can be renewed again perpetually and parliament is likely to rubber stamp this. Given the economic hardships currently taking hold in Egypt, we expect that the government will seek to keep these powers for as long as possible. 

Powers Will Be Used To Quell All Opposition
After having entered into a new programme with the IMF in November last year, life for ordinary Egyptians has got increasingly hard, with a free float of the currency and the removal of many subsidies causing inflation to rise above 30.0%.  

While we believe that this has peaked (see 'Further Tightening Ahead As Inflation Remains High', April 21), with further subsidies on food set to be removed over the course of the year, price growth will remain in double figures.

This will see popular discontent with the government rise. Although there is an element of exhaustion from the tumultuous six years since Mubarak's ouster preventing massive demonstrations as yet, we expect that the government will use these emergency powers to quell any opposition, not only to crack down on Islamist militants.

Human rights groups such as Amnesty International have already brought attention to abuses by the Egyptian government, citing the use of the counter-terrorism law of 2015 to restrict popular assembly, and the large number of political prisoners in Egyptian jails. This will only be exacerbated by the new emergency powers.  

Trump Support Will Enable Crackdown
President el-Sisi will feel emboldened in his approach by a highly productive meeting with US President Donald Trump at the start of April. El-Sisi had been vocally criticised by previous US leader, President Barack Obama, for perceived human rights abuses, blocking billions in aid and assistance packages.  

While aid was eventually released in 2015 because of Egypt's strategic importance and rising threats in the Sinai, it was done so begrudgingly, and el-Sisi was never invited to the White House by the Obama administration.  

Under Trump, the situation is manifestly different, with the US leader having been very vocal in his support for el-Sisi, declaring that they 'agree on so many things' and saying to the ex-military man that 'you have a great friend and ally in the US and me.'  

El-Sisi may find himself disappointed with the level of aid that is eventually released, but he can certainly expect no vocal opposition to his use of emergency powers to stifle any opposition.

Islamist Threat Will Prevent Tourism Recovery
We expect that the effect of the emergency powers on curbing the Islamist threat will be fairly limited, with state limitations on comparatively moderate groups such as the Muslim Brotherhood (MB) likely to drive more into the embrace of more hard-line salafists more prone to anti-state violence.  

As living standards deteriorate in the face of high inflation, the absence of the MB, which for decades helped to provide for the poorest in society, will be more keenly felt.  

Political injustice and corruption at the hands of the military elite, emboldened by the emergency powers, will exacerbate dissatisfaction with the government.  

With few peaceful means left through which to oppose government policy, more will be attracted to the Islamist cause. A state of emergency has already been in place in Sinai with few tangible results. 

The end result of this will be that the country's tourism sector is highly unlikely to enjoy any substantial recovery over the next year.  

Since the emergency powers were announced, there has been an attack on a police checkpoint neat Saint Catherine's Monastery in the Sinai, formerly a major tourist attraction to visitors to the peninsula's coastal resorts.  

The attack, which killed one policeman and wounded four more, was claimed by IS. With the risk of violence set to remain pertinent, and foreign governments advising against travel to large parts of the country, tourists will remain wary of Egypt.  

The government has announced plans which it believes will see visitors return to pre-2011 levels in two years, including promoting religious tourism, but we are highly sceptical of this target.  

The government has also stated that terrorism is a global problem with attacks in Egypt no different to those recent incidents in London and Paris, but the public perception of Egypt as being highly dangerous will be hard to shift after a succession of incidents in recent memory. 

Related News  
1.       Sudan - High Inflation Will Cloud Otherwise Bright Outlook
2.      Congo DRC - New Cabinet Reinforces Likelihood of an Election Delay
3.      Kenya - Ongoing Drought Will Result In Growth Slowdown In 2017
4.      Tanzania - Development Expenditure To Widen After Downturn
5.      Uganda - Shilling Set For Long-Term Depreciatory Trend
6.      Sub Saharan Africa – Regional Favourites Facing Headwinds
7.       Pressure Builds on Eurozone Banks to Tackle High NPLs
8.     Government Cuts Will Weigh On Growth in Congo-Brazzaville
9.      Nana Akufo-Addo of Ghana to Launch Series of Reforms
10.  Increased Gold and Oil Exports to Boost Growth in Ghana
11.   Federal Reserve Releases Results of Comprehensive Capital Analysis and Review (CCAR)
12.  Investment and Export Opportunities Advantageous To Cameroon’s External Position
13.  Higher Price Competition for China's Private Auto Brands

Related News