Note: Today is the third in a series of posts that detail Eurasia Group's Top Risks for 2013.
The Middle East will enter a new phase in 2013. Arab Spring will give way to Arab Summer, as the region faces a series of increasingly complicated overlapping conflicts. As Americans and Europeans resist deeper involvement, rivalries among Saudi Arabia, Iran, and Turkey, competition for influence between Sunni and Shia, a lack of economic progress, and a resurgence of militant groups will each heighten tensions.
Syria remains the central arena of conflict, as Shia powers -- Iran and Lebanese Hezbollah -- on the one side, and Sunni states -- Turkey, Saudi Arabia and Qatar -- on the other compete for leverage. Jihadists have also entered the fray, and turmoil has spilled across the country's borders into Lebanon, Turkey, Jordan, and Iraq.
Emerging conflicts elsewhere are less obvious. Egypt, Tunisia, and Morocco now have moderate Islamist governments. In Jordan and Kuwait, Islamist opposition groups threaten the governing dominance of secular administrations. But while the words and actions of mainstream parties like Egypt's Muslim Brotherhood and Tunisia's Ennahda make headlines in the West, the more serious risk comes from militant organizations that threaten the ability of new leaders to govern and maintain security.
Fueling this trend is the reality that, across the region, new leaders are trying to consolidate power and build popularity at a time when complicated economic problems demand solutions that will make large numbers of people angry. New governments in Tunisia, Libya, Egypt, and Yemen will last only if they can deliver tangible economic progress for an increasingly frustrated and impatient public.
The risk that a Salafist or jihadist group can exploit these frustrations to seize power in 2013 is low, but groups like al Qaeda in the Islamic Maghreb, al Qaeda in the Arabian Peninsula, al-Shabab, and smaller affiliates continue to attract support and new followers by using resentments against local regimes to foster anger at America and the West.
But Iraq may become 2013's newest hotspot. Sunni-Shia tensions are growing, and none of Syria's neighbors is more vulnerable to the threats created inside that country by radical Wahhabi clerics, often with Saudi or Qatari support, now fueling the emergence of an increasingly radicalized and militarily experienced Salafist movement. The Kurdish regional government is becoming more aggressive in promoting its energy development agenda at Baghdad's expense, and Sunni-led violence inside the country might well encourage Iraq's Shia-led government to forge closer ties with Tehran, antagonizing the governments of Saudi Arabia and Turkey.
The Obama administration wants to focus on domestic challenges and an ongoing foreign policy shift toward Asia. But regional rivalries are heating up, and Americans and Europeans will only add to the uncertainty by keeping their distance -- in hopes that they don't get burned.
On Wednesday, we'll profile Risk #4: Washington Politics.
By Hani Sabra and John Watling
Egypt's first round of the referendum on the new constitution delivered a blow to the Muslim Brotherhood and boosted the hopes of the non-Islamist opposition. The draft constitution received a strong yes vote with 56 percent support, but it fell far short of the two-thirds majority that the Brotherhood had likely calculated would be the minimum vote it would win. In addition, voter turnout was low at just 31 percent and Cairenes reportedly rejected the draft 58 percent to 42 percent. The most significant point of comparison is the result of the March 2011 vote that set in motion efforts to draft the new constitution. The Brotherhood and other Islamist groups also backed that poll and it was approved by a massive 77 percent of voters while turnout was also stronger at 41 percent.
The implications for the upcoming parliamentary elections are potentially dramatic, with the non-Islamist opposition emboldened, united for the moment, and possibly on track to win a significant proportion of the seats, though it will still probably fall short of a majority. Egypt's electorate is fluid and a plurality of Egyptians are probably unaffiliated. The non-Islamists probably have a core support of around 20 percent, while the Muslim Brotherhood's core support is probably at around 25 percent. The Muslim Brotherhood also retains its robust electoral machine, and likely support from Salafists, who have their own parties but generally support Brotherhood initiatives. However, the Brotherhood's peripheral support among the remaining plurality of the population -- the unaffiliated voters -- appears to have taken a hit and is waning.
The results are likely to push the Brotherhood to take a less conciliatory approach to governing in the short term, as it scrambles to maintain its advantage. Despite rhetoric about so-called talks, Brotherhood leaders, such as Supreme Guide Mohamed Badie, are becoming increasingly nervous about opposition challenges, and do not want to appear as though they are negotiating from a position of weakness with groups they believed were irrelevant. In addition, as protest activity against the Muslim Brotherhood has increased, the movement has looked inward rather than reaching out to the broader Egyptian society.
The referendum results will fuel the tensions between the Brotherhood and the non-Islamist opposition. The confrontation, played out through protests, strikes, and clashes between opposition supporters and police, will make governing even more difficult. This will be compounded by the ongoing battle between the bureaucracy and the presidency.
Hani Sabra is an analyst with Eurasia Group’s Middle East practice. John Watling is a senior editor with Eurasia Group.
GIANLUIGI GUERCIA/AFP/Getty Images
By Hani Sabra and Willis Sparks
Thousands of Egyptians are now gathering across their country to chant their denunciations of Egypt's new draft constitution, a document completed by the Islamist-dominated constituent assembly just days ago. Pro-democracy revolutionaries, the young people who sparked the movement that toppled Hosni Mubarak in 2011, warn that the new constitution will give the military enormous power, fail to force the president to appoint a vice president, and the vague language on freedoms of religion and the press, and protections for the rights of women could actually be used to discriminate.
But when the constitution is put to a popular vote less than two weeks from now, it will pass. Why? Because its authors (the Muslim Brotherhood) and their sometime political partners (the military), remain the two most powerful groups in the country. Because the Islamists campaigning for it are organized and popular. And because they will argue, as they did in March 2011 during a debate over temporary constitutional amendments, that it is the duty of Muslims to vote for a document that will provide longed-for stability and that reflects the will of a people that elected the Muslim Brothers to power. (Seventy-seven percent of voters approved the 2011 constitutional amendments.)
There is another reason why the draft constitution will pass. The non-Islamist opposition has not made a clear and compelling case to voters that a "no" vote will make Egypt more stable and prosperous. The protesters warn that this constitution does not reflect the aspirations of those who ousted Mubarak to gain "bread, freedom, and social justice." They're right. But they haven't explained to large numbers of voters why a rejection of this document will improve their lives. The Islamists insist that a vote against the constitution is a vote for uncertainty, instability, and continued conflict.
In short, the protesters offer no clear alternative. There is no constitution B. Faced with a choice between yes and no, most Egyptians will choose the path they believe will move things forward toward a restoration of order-even though a new constitution won't really accomplish that. It's not that the Muslim Brotherhood is unbeatable; when Egyptian voters have a choice, Brotherhood candidates sometimes lose. Their man, Mohamed Morsy, is president, but he only drew a quarter of the vote in the first round of a hotly-contested election, and in the runoff, he barely defeated Ahmad Shafik, Mubarak's right hand man. To win that second round, he needed support from millions of non-Islamist voters who chose him because he represented a viable alternative to continuation of the old regime.
And until the young protesters and the broader non-Islamist camp offer an alternative that voters can understand and accept, they will have more defeats ahead.
Hani Sabra is an analyst in Eurasia Group's Middle East practice. Willis Sparks is an analyst in the firm's Global Macro practice.
GIANLUIGI GUERCIA/AFP/Getty Images
By Hani Sabra
Egypt was rocked on October 12 by yet another violent demonstration in Cairo's iconic Tahrir Square, but this time the two groups fighting were erstwhile comrades who had cooperated to bring down the previous regime. The street fighting between Egypt's young secularist revolutionaries and the Muslim Brotherhood's core supporters marks the opening of a rift between the two groups that had been threatening to emerge ever since the heady days after former president Mubarak was forced from power. It also could set the stage for ongoing tensions and perhaps weakening international support for the Islamist dominated government.
The cause of the fighting was a broadening dispute over Egypt's constitution. It's been nearly two years since former president Hosni Mubarak was ousted but the country is only now likely to get a new constitution in the next few months. The document, when it is finally approved, will probably only satisfy the nation's Islamists who are taking the lead given their slim majority in the constituent assembly that is drafting the new constitution and their majority among the population.
Egypt's Islamists have made it clear that they are completely willing to move ahead with their version of the constitution without buy-in from secularists or the Copts. And even if a court order dissolves the current constituent assembly (as was parliament) President Mohamed Morsy would move quickly to appoint a new assembly that would be of a similar makeup.
When the assembly releases a draft for a public referendum, it will pass. The last yes or no referendum in Egypt was in March 2011 soon after Mubarak was ousted. The Islamists then urged their supporters to support the constitutional amendments and the final tally was 77 percent in favor. The secular argument against a more Islamist-leaning constitution and in favor of one that stresses human rights, press freedom, and some separation between religion and state, does not resonate with a majority of the population, which is eager to end the constitutional vacuum.
Unfortunately, a new constitution will not settle Egypt's transitional woes. Continued tension, instability, and violence are likely to continue given that the young revolutionaries who sparked the movement to oust Mubarak, most of the establishment secular politicians, and their supporters are increasingly unhappy with Islamist efforts to monopolize politics. These groups represent a minority, but they are vocal and their anger is growing as evidenced by the ugly brawl between Islamists and the secularists.
The revolutionary activists are embittered and believe the Brotherhood has betrayed them. Many of these young secularists backed the Brotherhood for the past year and half and even voted for Morsy in the second round of the presidential election when he faced Mubarak confidant Ahmad Shafik. They also supported Morsy's move to sideline the two most senior Mubarak-era generals. In exchange, the revolutionaries believed the Muslim Brotherhood would honor its promise to ensure that the constitution would be broad-based, and that it be a truly democratic founding document. This will not be the case. In fact, early drafts raise concerns on issues such as women's rights, religious tolerance, and freedom of expression, spurring sharp criticism from local activists and international organization such as Human Rights Watch.
The revolutionaries do not have the public support or the capacity to force adoption of a more liberal constitution or bring down the Morsy government. But they can make the next several months difficult for the Muslim Brotherhood, and they probably will. More clashes like the recent episode in Tahrir Square are likely, and will attract exactly the kind of attention that Morsy's government would prefer to avoid, given that it wants to project an air of stability for foreign investors and governments.
Hani Sabra is an analyst in Eurasia Group’s Middle East practice.
By Hani Sabra
Egyptian President Mohamed Morsy's sacking of the intelligence chief and other powerful security figures in the wake of an attack on Egyptian border police gave him some short term credibility. He wisely used that political capital to sideline the two most powerful members of the Supreme Council of the Armed Forces (SCAF) and cancel amendments to the interim constitution that gave SCAF legislative power. On paper, Morsy is now the most powerful person in Egypt. But claims the move is an important step toward civilian ascendency in Egypt misread both the military's ongoing strength and the motivations of the SCAF's new senior members.
A closer look at the firings reveals the limits of Morsy's power. Remember that Morsy did not elevate junior officers to fill the positions opened up by sacking SCAF head Field Marshal Hussein Tantawi and army chief of staff General Sami Enan. His appointments were in fact conservative and he chose other top military men to fill the vacated posts. More importantly, Morsy would never have been able to sideline Enan and Tantawi without the support of other military leaders. That step was the Brotherhood's greatest tactical success; it was able to build strong enough links with some members of SCAF, exploiting personal differences and opportunism rather than ideology.
Senior members of the military want to benefit financially from their positions and are not a force for secularism as some observers allege. Morsy was able to convince some commanders, such as the new Minister of Defense Abdel Fattah el Sisi, that it would be better for them to tie their fortunes to the Muslim Brotherhood rather than the old guard (Tantawi and Enan were closely associated with Hosni Mubarak's regime). Morsy will need to nurture these relationships; if they feel threatened, senior officers remain powerful enough to cause the president real problems. As a result, the seesawing battle for ascendancy between the Brotherhood and the military will go on.
Hani Sabra is an analyst in Eurasia Group's Middle East Practice.
Mark Wilson/Getty Images
By Hani Sabra and John Watling
Egypt's presidential election is devolving into a comedy of errors, but with potentially tragic consequences. It is no longer primarily a contest about who voters believe is the most credible and trusted politician to lead Egypt through a potentially tricky transition. Instead, it is turning into a war of wills between the Muslim Brotherhood and the ruling Supreme Council of the Armed Forces (SCAF). These natural antagonists have accommodated one another for the past year in an effort to marginalize the young revolutionaries who ignited regime change. But the tensions inherent in the relationship have turned them into frenemies. The process has been particularly apparent during the past few weeks as their interests have diverged. When and how that relationship unravels completely -- and the presidential election is a key element -- is critical to Egypt's future.
On 31 March, the Muslim Brotherhood reversed the position it had maintained since Hosni Mubarak's ouster and announced that it was fielding a presidential candidate. The Brotherhood had claimed for more than a year that it would not do so, ostensibly because it wanted to reassure Egypt's political class that it was not interested in dominating power as Mubarak's National Democratic Party had done. The more likely reason was an understanding with SCAF about the division of power; the Muslim Brotherhood would get domestic policy portfolios (the premiership and control of the cabinet) while SCAF would control the security and foreign policy portfolios by having a weak and friendly president. Yet, the Brotherhood became both cocky and nervous. At the same time that it saw broad public support, it was losing confidence that SCAF would hold up its end of the bargain. Finally, the Brotherhood's leaders decided that without a new constitution and with no guarantee that the president's power would be reduced, that the group needed to contest the election. Indeed, the courts today disbanded the assembly that was set to write the constitution, and which was dominated by the Brotherhood and other Islamists, signaling that the Brotherhood was perhaps right to be concerned.
Additionally, in a dramatic scene fit for inclusion in a political thriller, Omar Suleiman reversed his decision not to run and submitted his candidacy papers less than an hour before the 9 April deadline. Suleiman is a stalwart of the old regime; he was Mubarak's right hand man, the director of internal intelligence, a friend to Israel, and a sworn enemy of the Islamists. But unlike Mubarak's other confidantes, who have been arrested, several signals hint at possible military support for Suleiman, including a military escort when he filed his papers. Even though SCAF denies that Suleiman is their candidate, the optics and timing suggest his candidacy is intended at the very least to send a message to the Muslim Brotherhood. While Suleiman is not popular, SCAF still has strong influence over Egypt's courts and other resources that will help his candidacy, like the state-controlled media.
But the comedy of errors continues. Critics of Hazem Salah Abou Ismail, a hardline Salafist and the only candidate with an explicitly anti-U.S. platform, recently revealed that his mother was a U.S. citizen at the time of her death in 2008 and apparently had even registered to vote in California. Under Egypt's tough electoral laws, he is now technically disqualified from competing in the election. It is also possible that Khairat el Shater, the Muslim Brotherhood's senior policy chief and presidential candidate, will also be disqualified based on his felony conviction during the Mubarak era.
The tragedy is that this maneuvering may mean nothing. Egypt's economy is suffering and none of the candidates has outlined a real rescue plan or a vision for the future. Economic collapse would change the calculus completely, given the likelihood for widespread societal discontent.
Hani Sabra is an analyst with Eurasia Group's Middle East and North Africa practice.
John Watling is a senior editor with Eurasia Group.
Peter Macdiarmid/Getty Images
By Hani Sabra and Willis Sparks
Some of the outsiders inspired by last year's protests in Tahrir Square and the power of ordinary Egyptians to oust their long-time dictator expressed surprise when the country's transitional government began in December to target prominent NGOs as agents of foreign (read Western) governments. They shouldn't be. So far, the great lesson of Egypt's ongoing "transition" is that it remains awfully hard for old dogs to learn new tricks.
Egyptian authorities are now prosecuting more than 40 people for operating NGOs without licenses and for receiving "illegal foreign funding." Among the accused are 19 Americans, including the Washington-based International Republican Institute's Sam LaHood, son of U.S. Transportation Secretary Ray LaHood.
The case is but one example of how far Egypt's revolution has unraveled. A year ago, after Hosni Mubarak's exit, even those Egyptian activists least willing to trust the Supreme Council of the Armed Forces (SCAF) believed that the generals understood that the country could not continue as it had for six decades, that power had to be shared, and that democracy demands much more than the conduct of hastily arranged elections.
The activists, and the rest of the country, watched the generals leap aboard the "January 25 Revolution" bandwagon and salute the struggle's young martyrs. Protesters believed they had an unspoken understanding with SCAF that the military would retain some political influence -- and some of the commercial assets they had amassed over the years -- in exchange for a willingness to pass political power to a pluralist civilian government following a period of transition, to reform state institutions, and to respect the rights of citizens to organize.
In the months that followed, minds changed and understandings evaporated. When the military killed more than two dozen Egyptian Christian activists in October, the illusion was publicly shattered. Clashes between activists and security forces in November and December upped the stakes. As 2011 drew to a close, it became clear that SCAF generals, who first rose to prominence via the intensity of their loyalty to Hosni Mubarak, shared their former leader's authoritarian worldview.
Over the course of 2011, SCAF froze out the protest leaders and struck a separate deal with the Muslim Brotherhood, one that gives various Islamist parties a dominant position in crafting Egypt's domestic policy while leaving the army in charge of foreign policy and key segments of Egypt's economy. Islamist parties, including the Muslim Brotherhood, won about two-thirds of seats in recent parliamentary elections. The protesters, now marginalized, are becoming more confrontational.
The crackdown on NGOs reveals the understandings that are implicit in the Muslim Brotherhood-SCAF understanding. Credible allegations have emerged that Islamist groups have received foreign funding too, from Gulf Arab countries, but SCAF has taken virtually no action against them. It's the groups that lobby for human rights -- and who have criticized SCAF -- that have been targeted.
If these NGOs have indeed broken laws, they are Mubarak-era laws. SCAF has changed the rules on elections and the formation of political parties, but their unwillingness to tolerate civil society shows the limits of their willingness to change.
The generals' inflexibility bodes ill for Egypt's future. The Brotherhood, eager to finally enjoy a share of formal power, has become the army's enthusiastic partner. But neither group appears to recognize that elections alone will not guarantee stability. Their broader public popularity and the power of state television ensure that, especially outside of Egypt's largest cities, the military and Muslim Brotherhood represent the "silent majority."
But the vocal minority will keep pushing back, and the potential for violence is on the rise.
Hani Sabra is an analyst in Eurasia Group's Middle East practice. Willis Sparks is an analyst in the firm's Global Macro practice.
Jeff J Mitchell/Getty Images
Today, we turn to risk #8 in our series of posts on Eurasia Group's Top Risks for 2012 and answer the most common questions we've gotten about it.
Here's a summary:
Egypt's twists and turns: The military has clung to power longer than expected -- sometimes resorting to violence to defend it -- and it appears unlikely to withdraw from politics even after presidential elections in mid-2012. Secular revolutionary activists have grown increasingly disillusioned with the direction of the transition, and a deteriorating economy is making matters worse. The country's importance for the Arab world and its peace treaty with Israel make it crucial for regional stability.
Q- Why has Egypt's post-Mubarak transition taken a turn for the worse?
A- The ruling Supreme Council of the Armed Forces (SCAF) remains Egypt's dominant political actor, and it has underestimated the revolutionary activists who instigated Hosni Mubarak's removal and their commitment to civilian leadership of the country. The military is only now beginning to recognize the activists' determination to push past the removal of Mubarak and to insist on a more fundamental political reform. Dissatisfaction with the political system and the economy is growing. The military has focused on building a relationship with Islamist political parties, who have been more willing than secular activists to share power. But even this accommodation may begin to fray, as some Islamists begin to doubt that they can ever gain true decision-making authority as long as the military maintains its grip on power. The anniversary of last year's uprising, the writing of a new constitution, the Mubarak trial, and the presidential election are all potential flashpoints to monitor in the first half of the year.
Q- Who are the Islamists? How diverse are the constituencies that make up this broad group?
A- The "Islamist" label in Egypt encompasses a large segment of the population. (Islamists won more than two-thirds of seats in lower house elections). Within this label, there are different, often competing, visions of Egypt's future. The Muslim Brotherhood represents the conservative, organized, and largest sector that has worked with the military to this point. Its leadership, and much of its support base, is largely made up of middle-class professionals or those who aspire to join the middle class: doctors, lawyers, engineers, and others who want Egypt to maintain its Islamic foundations. The Salafi wing, represented by the Nour party, which performed better than expected in elections, is fundamentalist and more radical. Al-Wasat, which won only a handful of seats, represents the most moderate wing of political Islam. By choosing to work with the Muslim Brotherhood, the military council believes it can manage its power, while scaring the non-Islamist population with the possibility of a Salafi rise in the absence of military control.
Q- What's going on in Egypt's economy? How will it affect the political transition?
A- Egypt is quickly running out of foreign reserves as it continues to prop up its currency, which has been under pressure from capital flight. Negative headlines about the political transition will likely exacerbate this trend, especially since tourism, a critical element of Egypt's economy, will suffer. Egypt will conclude a loan arrangement with the IMF, but it will come with strings attached. Fearing public criticism, the military leadership turned down an IMF loan with relatively favorable terms shortly after Mubarak's ouster; worsening investor sentiment will ensure that the latest loan offer will come with more stringent terms. Finally, reforms such as currency devaluation and a reduction in costly energy subsidies will be tough to implement. Doing so could further choke growth and push food prices higher. Egypt's economy and political transition are interrelated, with negative developments in one fueling problems with the other.
Next up, the conflict within South Africa's ruling party.
Peter Macdiarmid/Getty Images
By Hani Sabra
Ballot counting continues as Egypt's first round of elections, in which a third of the country voted, comes to a close. We now know that the Muslim Brotherhood's Freedom and Justice Party, with the weight of an 83-year old organization behind it, will come out on top. But the real surprise has been the success of the more hardline, ultraconservative Salafi Nour (Light) Party. Nour could capture roughly a quarter of the seats in the first round, and there's no reason to believe that it can't replicate that performance in the upcoming two rounds.
Nour's success unsettles many moderate Egyptian Muslims, liberals, and Christians who fret about the potential impact on their personal lives. How will an Islamist-dominated parliament approach banking, tourism, and foreign investment? But Nour has probably unsettled the Muslim Brotherhood too. The upstart Salafis, who until recently did not participate in politics -- many of them still say that democracy is "kufr" (non-belief) -- have encroached on the Muslim Brotherhood's traditional territory. Thus, an increasingly critical question in post-Hosni Mubarak Egypt is not how the liberals will fare against the Islamists; that's already been answered. Rather, it is: Who wins the right to speak for Egypt's Islamists?
There are roughly three main Islamist political trends in Egypt, and together they will form a supermajority in parliament. The Muslim Brotherhood represents the right-wing, conservative, pragmatic wing of the movement. The rising Salafis represent the more reactionary, uncompromising wing, and parties like Al-Wasat (The Center), who will be by far the smallest Islamist party in parliament, represent a third trend that seeks to emulate Turkey's ruling Justice and Development Party (AKP). The three groups have legitimate reasons to believe they can seize the Islamist mantle and settle the question of who speaks for Islam.
With their electoral success and their unparalleled organizational skills, the Muslim Brotherhood is in a strong, but delicate, position. It remains unlikely that Egypt will have an Islamist-only parliamentary coalition, and electoral success strengthens the Brotherhood's hand with non-Islamists parties, because it allows the Brotherhood essentially to dictate the terms of any parliamentary coalition that excludes Salafis. Non-Islamist parties may dislike the Brotherhood, but they understand that its leadership is essentially pragmatic and unlikely to introduce radical changes that impact the economy or peoples' personal lives in the short term. The Brotherhood leadership has spokesmen who shave their beards and talk up the need for foreign investment. It also includes a senior Christian member.
But the Brotherhood has to move carefully and can ill afford to alienate the Salafis. For rank-and-file Brotherhood members, the line between a Brother and a Salafi is blurry. It's almost certain that potential FJP voters chose Salafi candidates or parties at the ballot box. And more Brothers could jump ship if the Salafis illustrate that they better represent "true Islam."
The Brotherhood is in a complicated position, trying to hew to the right in the provinces, while behaving "moderately" in Cairo and outside Egypt. In some cases, the Salafis and the Brotherhood will collaborate, but it will likely be a more competitive (and unpredictable) relationship.
Hani Sabra is an analyst in Eurasia Group's Middle East practice.
AMRO MARAGHI/AFP/Getty Images
By Hani Sabra
On Oct. 1, Egypt's ruling supreme military council and
several large political parties struck a deal on a new electoral law that
effectively restores the military council's relationship with the Muslim
Brotherhood and extends the Brotherhood's electoral advantage. The agreement
also means that the presidential election may be held 18 months from now. While
the presidential election's timing may be a point of contention in 2012, political
tensions are also set to rise in the first quarter next year if Egypt's
revolutionary youth activists -- who have lost faith in the transition process and
who have been shut out of the conversation with the military council-decide to return
to the streets in protest on the anniversary of the revolution.
The new law, finalized a day after street protests in which the Brotherhood did not participate, is a clever move by the military. Without getting bogged down in the minutiae of the new legislation, it effectively benefits established political groups such as the Muslim Brotherhood and the Mubarak-era National Democratic Party (NDP). But the changes will hinder the newly established liberal secular political parties, who are still finding their footing. (The new liberal parties were pushing for the whole parliament to be elected through PR.) Under the new system, the Brotherhood's electoral alliance, which includes the old liberal Wafd party, is likely to dominate parliament. The military council will not get as weak a parliament as it would have liked, but the council made the changes to the electoral law in part to appease the Brotherhood, which had threatened to rejoin protests.
The Wafd-Brotherhood alliance is becoming a very convenient partnership. The Wafd is not very popular, but along with the NDP and the Brotherhood, it is the only other party with wide spread name recognition. The Brotherhood is the dominant figure in the partnership, but the Wafd provides the Brotherhood with the cover of a secular, respected ally. If the Brotherhood-Wafd alliance scores a victory in parliamentary elections, it is likely that high-profile government positions will be held by senior Wafd party members, undermining any charges of an Islamist takeover.
The military council may have secured its short-term goal,
but the continued alienation of the youth groups means a tricky, complicated
transition in the medium term. The military council did not consult with any of
the revolutionary youth activists or groups on the electoral law. In fact, the
council now has an overtly hostile relationship with groups such as the April 6
Youth Movement and the Revolutionary Youth Coalition, the groups that organized
the anti-Mubarak protests earlier this year.
These activists no longer view the transition as credible. They are less concerned with election results than they are about the transparency of the process. Many of the young protestors now believe that they have been frozen out the new power deal in which the Brotherhood runs parliament, the Wafd runs the government, and the military maintains the presidency. In part this is based on the fact that Egypt may be without an elected president until 2013, leaving Field Marshal Hussein Tantawi in control of the country for the next year and half. Tantawi's popularity has plummeted among the revolutionaries since his testimony at former president Hosni Mubarak's trial. Suspicions were also raised when he donned civilian clothes for a visit to downtown Cairo, a move that many young activists perceived as an attempt to build a public profile ahead of efforts to take a clearer leadership role.
Hani Sabra is an analyst with Eurasia Group's Middle East practice.
KHALED DESOUKI/AFP/Getty Images
By Hani Sabra
The chance of a confrontation between the ruling military council and Egypt's revolutionary activists in the country's turbulent political transition is rising. This is because the military council has failed to address activist concerns, particularly their calls for speedy trials of former regime officials and security sector reform. Despite the growing tensions, the two sides will likely achieve a short-term deal, but risks are growing.
Until recently the military council and the activists that led the occupation of Tahrir Square made efforts to appear as partners in the transition. The two sides still need each other, but the hostility is no longer hidden. Egypt's secular leaning "youth" activists are less concerned with electoral politics and are more focused on making a cleaner break from the Mubarak-era, including jail for human rights violators -- something the military wants to avoid. Frustration among the activists was accelerated by recent court rulings that delayed trials or exonerated police officers accused of killing protestors. A late June clash between police and activists in Tahrir Square also raised the stakes.
The council had gambled that it could avoid reforms while directing the transition unimpeded. It hoped that the activists were no longer capable of mobilizing large numbers of protestors, something that activists have shown is a false premise. A long planned demonstration on July 8 was well attended, and the reinvigorated activists have articulated a more specific set of demands. These include speedier trials for police accused of killing protestors and Mubarak-era regime figures, an end to military tribunals, and limits to the military council's power. The military council is unlikely to respond positively to all demands, but it will likely make new overtures in order to avoid a confrontation, especially in light of the July 8 protest and the fact that the activists remain popular with a substantial segment of the urban population.
The activists, however, did not secure the same level of support that they did in January and February. Hosni Mubarak is gone, summers are extremely hot, and many people have tired of protests. But the activists have proven that the military council must contend with them, even as the broader Egyptian public has begun to sour on the council.
The military council likely believed that their tacit understanding with the Islamists would split the opposition and limit the efficacy of protests, but they misread the situation. The Islamists are organized, powerful, and will do well in elections. But the more secular activists have the support of the intellectuals, some of the middle class, and retain the capacity to mobilize a large force of people. In addition, many Islamists, particularly the younger ones, remain suspicious of the military council and continue to participate in protests.
A key signal will be developments regarding Prime Minister Essam Sharaf and his cabinet. Sharaf, who was the activists' choice for the job, has seen his legitimacy wane over the past few months and many now perceive him as a stooge of the military council. His first overture to the activists on July 9 was not well received. But if Sharaf quits and the council appoints some more amenable, the risk of instability will rise sharply.
Hani Sabra is an analyst with Eurasia Group's Middle East practice.
MOHAMED HOSSAM/AFP/Getty Images
By Willis Sparks
The unrest now rattling North Africa and the Middle East generates new headlines each day. Today, it's an announcement from Morocco's King Mohammed VI that important constitutional reforms are on the way. It's a report that Qaddafi loyalists have pushed rebels from a couple of important port cities in eastern Libya and news that France has become the first country to recognize the rebels as Libya's legitimate government. It's the news that the Gulf Cooperation Council has promised to provide $10 billion each to member states Bahrain and Oman to help restore confidence in their stability amid ongoing protests.
But beyond the Middle East, the upheaval is producing a lengthening list of winners and losers. Here are a few of them:
Security hawks within China Security Ministry and military
The Chinese Communist Party leadership is a pretty risk-averse group, and recent turmoil in North Africa and the Middle East has strengthened the argument of those within the security forces and People's Liberation Army who say Beijing must never underestimate the dangers of quickly evolving technological and foreign policy challenges. Given the threat to Arab autocracies splashing across the headlines, we can expect China to devote still larger volumes of state resources to monitor social networking and other tools of modern communication -- and to further develop cyber capabilities generally. And just as the British military was able to evacuate British nationals from Libya, and with more Chinese than ever working abroad in sometimes volatile places, China's military will be in stronger position to win the extra resources it wants to assert China's interests abroad.
Four months ago, Cote d'Ivoire's President Laurent Gbagbo stood for re-election against challenger Alassane Ouattara. The United Nations, the African Union, and the European Union agree that Ouattara won a fair contest. But Gbagbo has refused to accept defeat, and efforts at mediation have gone nowhere. The defeated incumbent has shrugged off international pressure for a graceful exit -- or any exit -- and hundreds of people have been killed in the resulting violence. With so much attention on events in the Arab world, there's not much international consensus on what to do about Gbagbo. Cote d'Ivoire is the world's leading producer of cocoa. That might boost international attention if so many of us weren't staring at the price of oil these days.
Turmoil in the Middle East and North Africa, particularly among major energy producers like Libya, Algeria -- and in Bahrain and Yemen, which border the biggest oil producer of them all -- has helped push oil prices past $100 per barrel. That's good news for ethanol producers in the United States, who will profit from a widening separation between prices for ethanol and gasoline.
Russian arms dealers
Russian weapons dealers have seen the door close (at least temporarily) on a Libyan arms market worth some $2 billion. Yesterday, Russian President Dmitry Medvedev signed a decree that prevents Russian firms from providing the Libyan government with "all types of arms and related materials, including weapons and ammunition, combat vehicles and military hardware." The move was intended in part to ease international pressure for imposition of a no-fly zone in Libya or any other form of direct military intervention there. We don't know how long the ban will last, but money will be lost in the near term.
Until earlier this week, there was an 11,000-seat football stadium in the eastern Libyan town of Benina named for Venezuelan President Hugo Chavez. But the support Chavez has offered the embattled Qaddafi has angered the Libyan rebels who now control Benina, and they have renamed the arena Martyrs of February Stadium.
Willis Sparks in an analyst in Eurasia Group's Global Macro practice.
ROBERTO SCHMIDT/AFP/Getty Images
By Roberto Herrera-Lim
Protestors depose an authoritarian leader. Crowds revel in the streets. Optimism is high. What we just saw in Egypt happened in the Philippines in 1986, when strongman Ferdinand Marcos was ushered out, and in Indonesia in 1998, after the ouster of former president Suharto. But years after shaking off their autocrats, both countries remain stifled by vested interests and corruption, and progress will continue to be glacial.
Last week, around the same time that the Internet activist Wael Ghonim was reinvigorating Egypt's protesters, a former Philippine defense secretary apparently shot himself, fatally, in the chest. The retired general was embroiled in a scandal involving kickbacks and alleged golden parachutes. Such turbulence is nothing new for the Philippines. Since 1986 the country has produced at least half a dozen coup attempts. Claims of election fraud and shady deal-making have been common and destabilizing.
In Indonesia, President Susilo Bambang Yudhoyono's reform efforts are stymied by fierce battles with Suharto-era politicians such as Aburizal Bakrie, one of the country's richest men and the leader of the opposition Golkar party. Yudhoyono lost his credible finance minister, Sri Mulyani Indrawati, after Golkar wrongly accused her of complicity in a supposedly mishandled bank bailout.
Both countries are better off than they were under despots. There is more freedom, and economic growth has enlarged their middle classes. But the sense of lost opportunity is palpable. The revolts that shook the Filipino and Indonesian political systems sidestepped and maybe even reinvigorated powerful economic and bureaucratic interests. After Marcos was forced out, new president Corazon Aquino simply gave the businesses that Marcos had seized back to her allies. And anyone attending the country's first senate session in 1987 might have done a double-take: The old but now wrinkled pre-Marcos oligarchy had returned. In Indonesia, the dynamics were essentially the same, although of the more recent Golkar vintage.
Growth and reform have come painfully slowly as a result. Investors complain of all types of corruption, from petty payoffs to interference in major deals, and citizens sometimes question whether the fight was worth it. In 2003, I met with Jose Almonte, a retired Filipino general who had participated in the revolt against Marcos and staunchly believed that the country should have a more level playing field. I asked him what unfinished reforms kept the country unstable, the military politicized, and economic growth uneven. He replied, "Too many to count."
Many Filipinos are frustrated with their country's incomplete transformation, but maybe there is hope. Computerized elections in 2010 significantly reduced questions about legitimacy. While President Benigno Aquino III is unlikely to target vested interests directly, his aim of improving regulation and tackling corruption could ultimately lead to stronger democratic institutions. In Indonesia, meanwhile, the battle between Yudhoyono and Golkar will intensify before the 2014 elections, limiting the scope for substantive policymaking. The real promise is after the elections, if Golkar's power diminishes and Yudhoyono's anti-corruption and reform programs take root. Then the last vestiges of Suharto's reign might finally take their bow.
Roberto Herrera-Lim is a Director in the Eurasia Group's Asia practice.
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By Eurasia Group's Middle East practice
Egyptians are hardly the only people in the Arab world burdened with an economic system that provides them few opportunities and a political system designed to frustrate their aspirations. Just as upheaval in Tunisia captured the imaginations of Egyptians, so the rest of the Arab world is watching as protection of privilege collides with demand for change in the heart of Cairo. Particularly if Hosni Mubarak is forced from power, other authoritarian regimes in the region will be at risk. The most vulnerable are Jordan, Yemen, Algeria, and Bahrain.
In Jordan, the only other Arab government to sign a peace treaty with Israel, King Abdullah faces a serious surge of dissent. His regime is not yet at risk, but if Egyptian protesters are able to force Mubarak from power, Jordan's opposition will demand fundamental and immediate political reform. In recent weeks, thousands of protesters have demonstrated against economic conditions and the monarch's monopoly hold on political power. Abdullah responded by sacking unpopular Prime Minister Samir Rifai and replacing him with Marouf Bakhit, a loyal member of the country's East Bank elite and most recently the king's special advisor on security issues.
Jordan's Muslim Brotherhood has much broader and deeper public support than its counterpart in Egypt. In addition, divisions between Jordan's royal family and tribal leaders on one side and Jordanians of Palestinian descent on the other are growing. The country's large gap between rich and poor and the government's unwillingness to tolerate dissent make Jordan a country to watch if things in Egypt get much worse.
Yemen's stability faces even greater challenges. Its government faces a secessionist movement in the south, a dormant conflict with Houthi rebels in the north, and al Qaeda in the Arabian Peninsula. In most of the country, the Yemeni government is not fully in charge. Unlike the spontaneous uprisings in Egypt and Tunisia, recent protests in Yemen have been organized by the country's largest opposition movement. But if angry, unemployed youth decide to join the protests, Yemen's government could find itself in real trouble.
Like Hosni Mubarak, Yemeni President Ali Abdullah Saleh has been in power for more than 30 years. And like Mubarak, he has moved to limit pressure on his government by declaring on Wednesday that he won't run for another term in 2013 and won't pass the presidency to his son, Ahmed. It remains to be seen whether these concessions will be enough to deflect calls for his immediate resignation.
Pressure is also mounting on the Algerian government. Long-standing economic and political grievances have fueled a recent burst of public unrest, and in the wake of the events in Tunisia and Egypt, opposition parties and civil society organizations have shifted their demands from economic to political reform. About 70 percent of Algerians are under the age of 25, and the majority of young men are unemployed. A few government officials and businessmen control the vast majority of the proceeds from the country's oil wealth. Widespread demonstrations could upset the delicate balance of the country's political and economic structure and possibly provoke divisions within the ruling elite over how to respond.
As in all these
countries, President Abdelaziz Bouteflika has offered concessions intended to
bolster his popularity, including an offer on Thursday to end a 19-year state
of emergency in the country. Public calls for political freedoms and possibly
early elections will dominate an opposition march scheduled for Feb. 12,
and uncertainty over who and what will follow Bouteflika will create tremendous
political uncertainty. If the unrest can't be managed, it's possible that key
military figures will abandon Bouteflika or that junior officers might move
against the old guard.
Finally, public frustration in Bahrain, a majority Shiite country ruled by a Sunni monarch, could reach the boiling point if the al-Khalifa family cannot tamp down recent sectarian tensions. Bahrain saw significant unrest last summer and fall in the run-up to parliamentary elections, and Shiite youth clashed with Sunni security forces in nightly riots. There's also a small risk that Iran would exploit further confrontations by providing material support to Bahrain's Shiite population. That's a move that would have serious repercussions for security across the region.
Ayham Kamel, Mohammed El-Katiri, Hani Sabra, and James Fallon are analysts in Eurasia Group's Middle East practice.
Salah Malkawi/Getty Images
By Eurasia Group's Middle East practice
Predictions of coming market booms in the Middle East have a long history of proving overly optimistic, but there are reasons to believe that this year will be different. Clear positive signs are emerging in several countries and in multiple sectors. At the macro level, the region will benefit from upward pressures on energy prices and from the broader phenomenon of large-scale capital inflows into emerging markets.
Many countries in the Middle East -- including the United Arab Emirates, Iraq, Saudi Arabia, and Egypt -- are positioned to take advantage of these trends. Despite Dubai's drawn-out and still incomplete recovery, the UAE will remain the region's most dynamic economy. Investment in energy, petrochemicals, infrastructure, real estate, and education will drive its growth. Politically, Abu Dhabi has strengthened its influence and economic coordination between the emirates is now the norm. Dubai's financial troubles may not be completely over, but the economic and political situation in the UAE will continue to improve in 2011, in part because Abu Dhabi remains in a strong fiscal position.
Iraq will see massive new investment in its oil sector and infrastructure building. The country's myriad challenges cannot be underestimated, and the risk of sliding back toward violence remains, but Iraq now has a viable path forward. Its new government, led by Prime Minister Nouri al Maliki, has representation from all of Iraq's ethnic, sectarian, and political groups; and project work on the country's massive southern oil fields is set to ramp up quickly.
Infrastructure and energy investment will drive growth in Saudi Arabia, which is poised for a strong 2011. Saudi officials are justifiably confident about the direction of their economy. Riyadh is attempting to manage global oil prices unilaterally and does not want prices to rise to unsustainable levels; it would not want to be blamed for contributing to a double-dip recession if the global economy slows again.
Egypt, despite political uncertainty ahead of its September 2011 presidential election, will build on years of strong growth -- buoyed by investment in the energy sector, tourism, remittances, and increased traffic through the Suez Canal. Unemployment, however, will remain one of the top socioeconomic concerns, and something that opposition parties will try to seize on in order to gain popularity.
One of the most interesting political developments in the region will be Turkey's continuing emergence as a significant economic and diplomatic regional player. Long aligned with Israel, and more politically oriented toward Europe than the Middle East, Ankara is in the midst of a significant rebalancing. The effects of a more active Turkey in the Middle East will become clearer during 2011. Economically, Turkish businesses will look to invest and work in countries and regions that Western firms view as too risky, such as Iraqi Kurdistan. Politically, Turkey could emerge as an intermediary between the West and Iran, as well as a regional counterweight to the Islamic Republic.
This post was written by analysts in Eurasia Group's Middle East practice.
KARIM SAHIB/AFP/Getty Images
By Hani Sabra
As President Hosni Mubarak recovers from gallbladder removal surgery in Germany, he's probably
spending some time thinking about former IAEA director Mohamed ElBaradei. A day
before his operation, Mubarak commented on ElBaradei's potential presidential
candidacy and said that Egypt does "not need a new national hero." That's a
significant statement considering that the 81-year-old president usually lets
his subordinates respond to issues like this one. Mubarak's sharp comments
indicate that ElBaradei's recent rhetoric has clearly unsettled him. And
looking ahead, the political temperature in Egypt will get increasingly hotter
between now and 2011, when presidential elections are scheduled to take place.
First, some context: As things stand now, ElBaradei actually can't run for president. He must be one of the leaders of a "recognized" political party in order to participate. When Mubarak engineered constitutional amendments in 2007, they were designed to ensure that members of "unrecognized" parties like the Muslim Brotherhood would be unable to field independent candidates in elections -- as it did with great success in the 2005 parliamentary elections. ElBaradei prefers to run as an independent, and he is wary of the baggage attached to being identified with one of the ineffectual "legal" parties. Given this, and the fact that the Egyptian authorities will almost certainly not heed ElBaradei's call for constitutional amendments that would make it easier for him to run, ElBaradei is unlikely to enter the presidential race in 2011. Even if he does join a party and somehow manages to participate, an opposition candidate stands virtually no chance of victory. Mubarak will likely run and will certainly win if he does. Meanwhile, his son Gamal will continue to raise his profile and likely take the reins when his father dies. (The longer that Mubarak lives, the less chance that aging security establishment figures like Omar Suleiman have to become president.)
Still, ElBaradei isn't just a passing fad. Mubarak can't simply imprison him a la Ayman Nour. He's a Nobel Peace Prize winner, and his mistreatment would put Egypt under a great deal of unwanted pressure and scrutiny. At the very least, ElBaradei will continue to be a thorn in the government's side. And since returning to Egypt for vacation last week, he has gone on the offensive. Despite almost certainly receiving calls from friendly ruling National Democratic Party members telling him to cool it, ElBaradei has refused to temper his statements about Egypt's calcified political system. He has met with his supporters and heavyweights like Arab League Secretary General Amr Moussa (who was previously Egypt's popular foreign minister) and continues to talk about what he perceives as Egypt's failings because of its authoritarian political system. ElBaradei will continue to be a popular force in Egyptian politics. But several thousand Facebook fans do not make him a viable presidential candidate.
Hani Sabra is a Middle East analyst at Eurasia Group.
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The Call, from Ian Bremmer, uses cutting-edge political science to predict the political future -- and how it will shape the global economy.