Egyptian general-turned-president Abdul Fattah Al-Sisi would likely be the first to admit that an iron fist is no guarantee for retaining power. Not because of the fate of the country’s longest ruling autocrat, Hosni Mubarak, who was toppled in 2011 by a popular revolt.
But because Mr. Al-Sisi’s iron fist has not squashed resistance, nor has it enabled him to properly deliver badly needed public goods and services.
Mr. Al-Sisi has, however, not concluded in advance of elections expected next year that he should perhaps loosen the reigns, reduce the role of the military in the economy that is drowning out much of the private sector, and opt for economic policies that are not centred on huge, white elephant infrastructure projects but instead target job creation and lifting millions out of poverty.
Instead, backed by the United Arab Emirates and Saudi Arabia, Mr. Al-Sisi is tightening his grip on youth groups and sports clubs that were at the core of the 2011 revolt. He is also believed to be attempting to ensure that credible presidential candidates are prevented from running in the election for which he has yet to declare himself a candidate.
Mr. Al-Sisi’s failed policies, insistence on repressive state-centred control of public life, and electoral processes that are everything but free and fair, raises questions about the sustainability of UAE-Saudi-led counterrevolution that aimed to roll back the achievements of the 2011 popular Arab uprisings in which the leaders of Tunisia, Egypt, Libya and Yemen were overthrown. Mr. Al-Sisi came to office in 2013 in a UAE-Saudi backed military coup that toppled the country’s first and only democratically elected leader.
Egypt has proven resistant to the policy formula adopted by the UAE and Saudi Arabia at home and advocated elsewhere in the region. The two Gulf states have embraced economic reform and greater social freedom while employing repression to retain ever tighter political control. Repression and absolute political control appears to be the only aspect of the UAE-Saudi formula that Egypt has wholeheartedly adopted.
Mr. Al-Sisi’s policies forced US president Donald J. Trump, who has deemphasized human rights in his administration’s policy and is a fan of the Egyptian leader, to cut off some military aid earlier this year in compliance with US law.
The Washington Post, commenting in an editorial on last month’s jihadist attack on a Sufi mosque in the Sinai that killed more than 300 people, effectively described Mr. Al-Sisi as part of the problem rather than part of the solution. “The regime has used terrorism as a pretext for the most severe repression in Egypt’s modern history,” the Post said.
Former Egyptian prime minister and senior air force commander Ahmed Shafiq, potentially Mr. Al-Sisi’s most serious challenger, charged this week that the UAE had barred him from travelling to his home country. UAE minister of state for foreign affairs Anwar Gargash denied the charge but acknowledged that his country had “severe reservations about some of his (Mr. Shafiq’s) positions.”
Mr. Shafiq moved to the UAE in 2012 after he was charged with corruption and acquitted in the wake of his defeat in presidential elections that were won by Muslim Brother Mohammed Morsi, whom Mr. Al-Sisi forced out of office a year later.
Despite being financially dependent for support from the UAE and Saudi Arabia, Mr. Al-Sisi has differed with them on policies towards Iran and Syria, but joined the two states’ six-month-old diplomatic and economic boycott of Qatar because of its support for the Muslim Brotherhood.
In a move that is likely to provoke ire in the United States, Egypt and Russia this week agreed on a draft agreement that would allow the Russian air force to operate from Egyptian bases. The agreement would permit the UAE and Saudi Arabia to enhance arm’s length military cooperation with Russia, particularly in Libya where they support controversial military commander Khalifa Haftar.
Mr. Al-Sisi, following years of failed efforts to forge a politically controlled dialogue with Egyptian youth, has launched a two-pronged effort to control youth and sports organizations, potentially alongside Mr. Shafiq, the greatest threat to his continued rule.
Militant soccer fans, who played a key role in toppling Mr. Mubarak and student protests against Mr. Al-Sisi that were brutally repressed in 2013 and 2014, rejected several overtures by the president and have in recent months again witnessed the blunt side of his rule.
Hundreds of ultras — battle-hardened, anti-authoritarian fans opposed to the commercialization of soccer — were arrested in recent months for wearing jerseys with the number 74 on them in commemoration of supporters of storied Cairo club Al Ahli killed in 2012 in a politically loaded soccer brawl in the Suez Canal city Port Said. The incident, the worst in Egyptian sporting history, was widely seen as an effort by security forces that got out of hand to teach fans a lesson.
Another 500 members of Ultras White Knights (UWK), the militant support group of Al Ahli arch rival Al Zamalek SC, were arrested in July as they tried to attend their team’s match against Libya’s Al Ahli Tripoli. Many have since been released.
Egypt’s parliament last month approved in principle a new law governing youth and sports organizations that although portrayed as a gift to Egyptian youth bans clubs from engaging “in any political or partisan activity or promoting any political or partisan activity” or even “promoting any ideas or political objectives.”
Many Egyptian clubs, including Al Ahli and Zamalek were founded in the early years of the 20th century as politically motivated groups and have retained their aura despite having long moved on. Al Ahli was established as an anti-monarchical, anti-colonial, and pro-republican club while Zamalek identified itself as pro-monarchy and pro-British.
Parliament’s gift was in advance of a World Youth Forum in the Red Sea resort of Sharm el-Sheikh, one of several such gatherings intended to give Egyptian youth a sense of participation, however limited, by connecting them to policymakers. While the law banned discussions where youth gather, the forum was held under the motto of “we need to talk.”
Saudi Arabia signalled the significance it attributes to control of sports clubs by having its ambassador in Cairo attend this week’s election of soccer icon Mahmoud Al-Khatib as Al Ahli’s president.
The absence of senior Egyptian government officials was likely intended to avoid attracting intention to the fact that the government, in violation of world soccer body FIFA rules, owns a majority of the country’s premier league clubs, and to its increased political control of the sport. FIFA has long looked the other way in countries like Egypt and Iran.
Mr. Al-Sisi’s tightening of the reins comes in advance of Egypt’s participation for the first time in 28 years in World Cup finals in Russia in 2018. Football success in the Middle East often equals heightened emotions in a soccer-crazy part of the world and amounts to a double-edged sword for autocrats.
Identification with successful teams offers autocrats an opportunity to polish their tarnished images, certainly if success sparks nationalist fervour. Yet, heightened soccer-driven emotion can also result in anti-government protest, one reason Egyptian stadiums have largely been closed to the public for the last six years. The new law governing youth and sports organizations is unlikely to reduce the risk of stadiums again becoming platforms of protest if, and when, the ban is lifted.
Battling for the Future: Arab Protests 2.0
Momentous developments across Arab North and East Africa suggest the long-drawn-out process of political transition in the region as well as the greater Middle East is still in its infancy.
So does popular discontent in Syria despite eight years of devastating civil war and Egypt notwithstanding a 2013 military coup that rolled back the advances of protests in 2011 that toppled Hosni Mubarak and brought one of the country’s most repressive regimes to power.
What developments across northern Africa and the Middle East demonstrate is that the drivers of the 2011 popular revolts that swept the region and forced the leaders of Egypt, Tunisia, Libya and Yemen to resign not only still exist but constitute black swans that can upset the apple cart at any moment.
The developments also suggest that the regional struggle between forces of change and ancien regimes and militaries backed by the United Arab Emirates and Saudi Arabia is far from decided.
If anything, protesters in Algeria and Sudan have learnt at least one lesson from the failed 2011 results: don’t trust militaries even if they seemingly align themselves with demonstrators and don’t surrender the street until protesters’ demands have been fully met.
Distrust of the military has prompted an increasing number of Sudanese protesters to question whether chanting “the people and the army are one” is still appropriate. Slogans such as “freedom, freedom” and “revolution, revolution” alongside calls on the military to protect the protesters have become more frequent.
The protests in Algeria and Sudan have entered a critical phase in which protesters and militaries worried that they could be held accountable for decades of economic mismanagement, corruption and repression are tapping in the dark.
With protesters emboldened by their initial successes in forcing leaders to resign, both the demonstrators and the militaries, including officers with close ties to Saudi Arabia and the UAE, are internally divided about how to proceed.
Moreover, neither side has any real experience in managing the crossroads at which they find themselves while it is dawning on the militaries that their tired playbooks are not producing results.
In a telling sign, Sudan’s interim leader Abdel Fattah Abdelrahman Burhan praised his country’s “special relationship” with Saudi Arabia and the UAE as he met this week with a Saudi-Emirati delegation at the military compound in Khartoum, a focal point of the protests.
Saudi Arabia has expressed support for the protests in what many suspect is part of an effort to ensure that Sudan does not become a symbol of the power of popular sovereignty and its ability to defeat autocracy.
The ultimate outcome of the dramatic developments in Algeria and Sudan and how the parties manoeuvre is likely to have far-reaching consequences in a region pockmarked by powder kegs ready to explode.
Mounting anger as fuel shortages caused by Western sanctions against Syria and Iran bring life to a halt in major Syrian cities have sparked rare and widespread public criticism of president Bashar al-Assad’s government.
The anger is fuelled by reports that government officials cut in line at petrol stations to fill up their tanks and buy rationed cooking gas and take more than is allowed.
Syria is Here, an anonymous Facebook page that reports on economics in government-controlled areas took officials to task after state-run television showed oil minister Suleiman al-Abbas touring petrol stations that showed no signs of shortage.
“Is it so difficult to be transparent and forward? Would that undermine anyone’s prestige? We are a country facing sanctions and boycotted. The public knows and is aware,” the Facebook page charged.
The manager of Hashtag Syria, another Facebook page, was arrested when the site demanded that the oil ministry respond to reports of anticipated price hikes with comments rather than threats. The site charged that the ministry was punishing the manager “instead of dealing with the real problem.”
Said Syrian journalist Danny Makki: “It (Syria) is a pressure cooker.”
Similarly, authorities in Egypt, despite blocking its website, have been unable to stop an online petition against proposed constitutional amendments that could extend the rule of President Abdel Fattah el-Sisi until 2034 from attracting more than 320,000 signatures as of this writing.
The petition, entitled Batel or Void, is, according to Netblocks, a group that maps web freedom, one of an estimated 34,000 websites blocked by Egyptian internet service providers in a bid to stymie opposition to the amendments.
Mr. El-Sisi is a reminder of how far Arab militaries and their Gulf backers are potentially willing to go in defense of their vested interests and willingness to oppose popular sovereignty.
Libyan renegade Field Marshall Khalifa Belqasim Haftar is another, Mr. Haftar’s Libyan National Army (LNA) is attacking the capital Tripoli, the seat of the United Nations recognized Libyan government that he and his Emirati, Saudi, and Egyptian backers accuse of being dominated by Islamist terrorists.
The three Arab states’ military and financial support of Mr. Haftar is but the tip of the iceberg. Mr. Haftar has modelled his control of much of Libya on Mr. El-Sisi’s example of a military that not only dominates politics but also the economy.
As a result, the LNA is engaged in businesses ranging from waste management, metal scrap and waste export, and agricultural mega projects to the registration of migrant labour workers and control of ports, airports and other infrastructure. The LNA is also eyeing a role in the reconstruction of Benghazi and other war-devastated or underdeveloped regions.
What for now makes 2019 different from 2011 is that both sides of the divide realize that success depends on commitment to be in it for the long haul. Protesters, moreover, understand that trust in military assertions of support for the people can be self-defeating. They further grasp that they are up against a regional counterrevolution that has no scruples.
All of that gives today’s protesters a leg up on their 2011 counterparts. The jury is out on whether that will prove sufficient to succeed where protesters eight years ago failed.
As Marsha Lazareva languishes in jail, foreign businesses will “think twice” before investing in Kuwait
IF THERE IS one thing to glean from the case of Marsha Lazareva, it’s that foreign businesses must now think very carefully before investing in Kuwait.
For more than a year, Lazareva, who has a five-year-old son and is one of Russia’s most successful female investors in the Gulf, has been held in the Soulabaiya prison by Kuwaiti authorities. Those authorities claim she ‘stole’ half a billion dollars, a claim she strenuously denies.
Human rights groups and prominent officials, including the former FBI director, Louis Freeh, and Jim Nicholson, former Chairman of the Republican Party and former US Ambassador to the Vatican, have called for her release and expressed concerns about the apparent absence of due process in a country where Lazareva has worked for over 13 years. Both Freeh and Nicholson visited Kuwait in recent weeks with Neil Bush, son of the late President George H. W. Bush. Bush has said Lazareva’s incarceration ‘threatens to darken relations between the U.S. and Kuwait, two countries that have enjoyed a long and prosperous relationship.’
Russian officials have been equally concerned. Vladimir Platonov, the President of the Moscow Chamber of Commerce and Industry, confirmed that a single witness gave testimony in Kuwaiti court, and only for the prosecution. ‘I myself worked in prosecution for more than eight years, and I cannot imagine any judge signing off on an indictment like this,’ he said. ‘One fact of particular note is that Maria was given 1,800 pages of untranslated documents in Arabic.’
Serious questions surrounding the safety and future viability of investing in Kuwait are now being raised. Through The Port Fund, a private investment company managed by KGL Investment, Lazareva has contributed hundreds of millions of dollars to local infrastructure and economic development projects during her time in the country. Until 2017, when a Dubai bank froze $496 million without cause, she had worked largely unobstructed.
But as things stand, more foreign investment is unlikely to be forthcoming. Jim Nicholson has said that the ‘imprisonment and harassment’ of Lazareva ‘threatens’ U.S. support. adding that the ‘willingness of the U.S. to do business with Kuwait’ is based on ‘its record as a nation that respects human rights and the rule of law’. Mark Williams, the investment director of The Port Fund and a colleague of Lazareva’s, has called on international investors to ‘think twice before doing business in this country’.
These comments will surely concern the Kuwaiti government, who said last year that FDI was ‘very crucial’ to the success of its Kuwait Vision 2035 road map. In September 2018, the FTreported that the government planned to reverse its traditional position as an investor in order to diversify its economy, carrying out a series of reforms designed to facilitate foreign investment and assist investors.
But despite these changes, which have propelled Kuwait to 96th—higher than the Middle East average—in the World Bank’s ‘Ease of Doing Business’ report, investors may be unwilling to take the risk so long as Lazareva remains in jail. Lazareva’s lawyers have accused Kuwait of violating international law by breaching a long-standing bilateral investment treaty with Russia. Lord Carlile of Berriew, QC has brought the case to the attention of the British public and the EU, writing in The Times that ‘there is no evidential basis to justify any claim of dishonesty, corruption or any other criminal wrong’. He added: ’Anyone thinking of doing business in Kuwait should read on with mounting concern.’
What’s worth remembering is that Kuwait is an important, long-standing ally of the UK, and a country generally seen as stable and fair. It is equally a major non-NATO ally of the United States, where there are more than 5,000 international students of Kuwaiti origin in higher education. But these relationships, and the investment to which they have historically led, have been cast into doubt. And it now seems certain that relations will continue to sour so long as Marsha Lazareva languishes in Soulabaiya.
Economic reform in the Gulf: Who benefits, really?
For Gulf leaders, long-overdue economic reforms were never going to be easy.
Leaders like the crown princes of Saudi Arabia and the United Arab Emirates, Mohammed bin Salman and Mohammed bin Zayed, quickly discovered that copying China’s model of economic growth while tightening political control was easier said than done. They realised that rewriting social contracts funded by oil wealth was more difficult because Gulf Arabs had far more to lose than the average Chinese. The Gulf states’ social contracts had worked in ways China’s welfare programmes had not. The Gulf’s rentier state’s bargain—surrender of political and social rights for cradle-to-grave welfare—had produced a win-win situation for the longest time.
Moreover, Gulf leaders, struggling with mounting criticism of the Saudi-UAE-led war in Yemen and the fall-out of the killing of journalist Jamal Khashoggi, also lacked the political and economic clout that allowed China to largely silence or marginalise critics of its crackdown on Turkic Muslims in the troubled northwestern province of Xinjiang.
The absence of a welfare-based social contract in China allowed the government to power economic growth, lift millions out of poverty, and provide public goods without forcing ordinary citizens to suffer pain. As a result, China was able to push through with economic reforms without having to worry that reduced welfare benefits would spark a public backlash and potentially threaten the regime.
Three years into Mohammed bin Salman’s Vision 2030 blueprint for diversification of the economy, Saudi businesses and consumers complain that they are feeling the pinch of utility price hikes and a recently introduced five per cent value-added tax with little confidence that the government will stay the course to ensure promised long-term benefit.
The government’s commitment to cutting costs has been further called into question by annual handouts worth billions of dollars since the announcement of the reforms and rewriting of the social contract to cushion the impact of rising costs and quash criticism.
In contrast to China, investment in the Gulf, whether it is domestic or foreign, comes from financial, technology and other services sector, the arms industry or governments. It is focused on services, infrastructure or enhancing the state’s capacities rather than on manufacturing, industrial development and the nurturing of private sector.
With the exception of national oil companies, some state-run airlines and petrochemical companies, the bulk of Gulf investment is portfolios managed by sovereign wealth funds, trophies or investment designed to enhance a country’s prestige and soft power.
By contrast, Asian economies such as China and India have used investment fight poverty, foster a substantial middle class, and create an industrial base. To be sure, with small populations, Gulf states are more likely to ensure sustainability in services and oil and gas derivatives rather than in manufacturing and industry.
China’s $1 trillion Belt and Road initiative may be the Asian exception that would come closest to some of the Gulf’s soft-power investments. Yet, the BRI, designed to alleviate domestic overcapacity by state-owned firms that are not beholden to shareholders’ short-term demands and/or geo-political gain, contributes to China’s domestic growth.
Asian nations have been able to manage investors’ expectations in an environment of relative political stability. By contrast, Saudi Arabia damaged confidence in its ability to diversify its oil-based economy when after repeated delays it suspended plans to list five per cent of its national oil company, Saudi Arabian Oil Company, or Aramco, in what would have been the world’s largest initial public offering.
To be sure, China is no less autocratic than the Gulf states, while Hindu nationalism in India fits a global trend towards civilisationalism, populism and illiberal democracy. What differentiates much of Asia from the Gulf and accounts for its economic success are policies that ensure a relatively stable environment. These policies are focused on social and economic enhancement rather than primarily on regime survival. That may be Asia’s lesson for Gulf rulers.
Author’s note: first published in Firstpost
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