You Must View The Situation In Egypt Through The Military Lens

I’m on my way down to Charlotte today for the Market Technicians Association meeting taking place this weekend, but my flight is severely delayed.  No matter, I have my laptop and 4G wireless card (hey look at that it actually works!), so I’ve got a few minutes to write.

Without getting into the deep philosophical underpinnings of what is taking place right now throughout the Middle East, I will do this when I get a chance because it is extremely important, for now I will just comment specifically on Egypt.

A few things to remember to understand what is taking place over there and how this may all unfold.  The military in Egypt is extremely secular and extremely powerful.  Not in military power terms, in cultural influence terms.  Not only that, but the military is ingrained deeply in the Egyptian economy, they make refrigerators and toasters for god sake.  The Egyptian economy is a command economy for the most part.  We must look at the situation over there always through the lens of, how does this effect the military’s role in Egyptian society.

That being said, because the military is so secular and non political in nature, we must balance our thoughts that they are afraid to lose their grip on society with their fear of standing in the way of secular demonstrations against Mubarak.  The Egyptian military is loyal to Mubarak in so far as he preserves the status quo over there.  But as I have been writing on Twitter for several months now, Mubarak is about to step down and deep questions developed as to who would take political leadership of the country afterwards.

Mubarak would like to see his son step in, obviously.  But his son is known as a rather liberal reformer over there.  The military is not thrilled with this as they stand to lose a great deal of power if and when he takes control.  The situation internally has been tense over there for months, and now it is spilling out into the public.  Yes, the Tunisia revolution has a major part to do with what is taking place in Egypt, as does the tipping point in social networking and communication which is allowing this to take place.

But more than anything it is the timing of Mubarak preparing to step down and a country confused as to where it goes afterward with its political leadership.  Mubarak is the beneficiary, as sad as that might sound, of Sadat having been assassinated after signing a ground breaking peace agreement with Israel which has amazingly held in place for over three decades.  Egyptians see an opening here, the first one in over 30 years, to change their government.

So the biggest question is, does the military remain loyal to Mubarak who they know is on his way out, thinking that his son is on the way in?  Do they even want his son in power?

My answer to those two questions is probably a no.  I doubt the Egyptian military as secular as they are and so ingrained in society takes a heavy hand with the population.  Then the question becomes, how far is the crowd willing to take this if Mubarak doesn’t step down now and call for democratic elections and heavy social and economic reforms which are much needed.  I can’t answer that with any educated guess.

As for the United States’ role in all of this.  Egypt is the second largest benefactor of American foreign aid in the world.  This is largely due to the agreement signed in the Camp David Accords.  Egypt is the lynchpin that holds that region together, they are charged with securing one side of the Gaza border, the are a relatively secular state sitting between Israel and the Arabian Peninsula.  My feeling is that the US government is more likely to throw the breaks on what is starting to seem like a runaway train in the region than stoke the fire and let the chips fall where they may.  Believe me, even with a very smart White House who above all other things is probably the most qualified to handle a situation like this, I don’t believe they are willing to gamble here.

The threat of winding up with the Muslim Brotherhood taking control of this revolution and forming an Islamic state on the souther border of Israel is something I don’t believe they are willing to watch happen.  Frankly I don’t believe it will, but don’t think our government is going to play the odds there.  The biggest mistake I think they can make at this point is being seen as propping up Mubarak too much, that would allow the Muslim Brotherhood to step in and denounce the west.  This is exactly the mistake we made with the Shah in Iran, and we are still paying for that monumental blunder.  This revolution is born of secular roots, you don’t want to give the extremists any room to co-opt it and turn the message into something it’s not.

It will be interesting to watch over the next few days, and I will have a larger comment about what is taking place in the region next week.

If you’re going to be in Charlotte at the event this weekend make sure to let me know.  Have a great weekend everyone.

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Update: 2PM EST 1/29

As expected the Egyptian military refuses thus far to take commands from Mubarak to break up the protests.  Mubarak dissolves his government but refuses to step down.  I have the feeling this is not even his game anymore, regional powers don’t want an disorderly exit for fear that they may be next.  One thing is for sure, there will be reforms coming and Mubarak will be out by end of the year.  The question now is, who fills the power vacuum and how much influence do we have over it.  Obviously the US is doing everything it can to promote moderate voices behind the scenes, within the Egyptian military and political structure.  Frankly, the best thing that could happen right now is that Mubarak steps down and leaves a top general in power to oversee free elections.  Thus, the neighborhood doesn’t freak out that the whole system had been toppled, there isn’t anarchy in Egypt, and they still get their reform.  The military is a trusted and secular institution over there, and although there is still some fear on my end that they are resigned to give up there central role in society, it’s probably better than anarchy.

Extremists voices continue to stay silent throughout this as the Muslim Brotherhood knows they stand to completely lose their place in Egypt if they are seen as trying to co-opt this revolution and turn it into something non secular.  This is a great thing as they will be forced to be a part of any new moderate secular government elected fairly.  Democracy has a way of liberalizing extremists as they see it’s easier to get a little bit of their way by playing within the rules than none of it by playing outside of them.

You’ve got to wonder what’s going through the heads of the Kings Abdullah in Jordan and Saudi Arabia.  Two Middle Eastern governments have fallen in two weeks and protests are beginning to spread through the region.  Iran has got to be licking its chops here as they see the opportunity to spread their tentacles even further through the region.  For this reason I don’t believe the US will let Saudi Arabia fall, there is just too much at risk there with Iran, they would just love to have that Saudi oil and we just don’t have the will to fight a ground war right now to protect it.  The Saudi government will stand, the Jordanian one, ehhhh.  The Jordanian leader is an extremely smart man, western educated at Princeton and very liberal.  Frankly I don’t believe his government falls either, there is too much risk there to Israel, they will probably prop him up the best they can.

Egypt was ready to go, the rest of the region is not, and it would not be healthy if they did.  You don’t want all out anarchy in the region and the opportunity for Iran to consolidate power within the political structures and social structures of these countries, you don’t want more Lebanons.  I’m all for democracy and what not, but democracy is an means to an end, not an end in and of itself.  Remember, there’s a bid difference between a democracy, and a liberal democracy, there is a huge gap between the two.

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Update 3:00 PM EST 2/2

Last night’s speech by President Obama was interesting, he made it very clear that he wanted Mubarak out, now.  Go back and listen to his emphasis on the word NOW.  Insiders are saying that he had a very candid 30 minute conversation with Mubarak yesterday in which he pretty much told him it’s time to scram.  Very interesting, and I think a smart play on Obama’s part.  He has to walk a very fine line here, especially the signals he is sending towards the rest of the region.  If it looks like he is abandoning this guy, and our long relationship with him after a few days, what does that say to Jordan?  If he plays his hand wrong here we could lose the cooperation of many of these dictators, and then where are we?  I’ve got to commend him, Obama has done everything right here, not a surprise in my mind.  He might not be a great politician, but Obama is one hell of a statesman.

More importantly though, it looks today like Mubarak has cut a deal with the Egyptian military.  I have said all along, read above, that the outcome here hinges almost solely on the military.  While they are extremely secular and wouldn’t mind seeing a democratic state, they are also very scared of losing power within both the government and economy.  Mubarak has announced that he will not run for another term in September, that was already the case, nothing has changed here.  What has changed is the fact that his son probably won’t be allowed to run either for fear of looking like a dynasty is being formed and nothing has changed.  His son though, ironically, was seen as a liberal reformer in the region, and the military was weary of that.

So you’ve got a lot of cross currents here, the military not wanting to give up power to liberal reformers, and Mubarak trying to preserve his dignity by not being swept out of office by the mob or the military.  So it seems he has cut a deal.  The military does not want to see their power eroded overnight with the writing of a new liberal democratic constitution, and thus, they need Mubarak now to stay in power so that they can influence that process over the next 6-8 months.

So Mubarak sends his thugs into the streets and the military stands by in order to say to the people, get out of the streets and stop fighting after there has been some chaos.  The military saves face, and Mubarak gets to stay in power.

So Mubarak is gone in the fall, no doubt about that.  The bigger question now is, and has always been, how much power is the military willing to cede?  This is the million dollar question that no one can answer, this is the real society transforming question.  Without the military you can not transform the economy, they are too ingrained.  Who speaks for the military at this point, who is cutting deals with Mubarak?

Now the nice part is that both the Israeli and US military have great relationships with the Egyptian military, far better than on the political side.  And we do provide the Egyptians with a hell of a lot of heavy weapons platforms.  I would believe that we have some pretty good pull on that front.

I have said throughout this that the best course of action would most likely be to see a military takeover of the government, now.  They are going to have a heavy hand in the writing of a new constitution in any case, why not just let them control it and get the country back to working order?

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Update 11:00 AM EST 2/10

It was bound to happen eventually, as I’ve been writing for weeks, the military is effectively throwing Mubarak out of power, he will most likely step down tonight, or will be removed (seems that is the ultimatum given by the military).  The military was sick of seeing their economy rot, and above all else, they are a pragmatic secular body.  The problem now, is the fact that Egypt will in effect be run via military rule for the unforeseeable future.  Omar Suleiman, the former intelligence chief and someone who has very close ties to the United States, will take power for the time being supposedly it seems.  But have no doubt, the military is calling the shots here.

For the past 6 months the biggest question has not been, will Mubarak go, that was going to take place one way or another.  The bigger question was, who takes power in his absence and will they liberalize the economy and social structure.  Frankly the military wasn’t concerned with democracy, or social liberalization.  They were above all else concerned with a quiet transition and to someone who would uphold their influence, particularly in the economy.  For this reason, they weren’t thrilled with Gamal Mubarak as the next leader of Egypt.  He was seen as a reformer who understood that Egypt’s economy needed to be transformed, which would require the military to hand over influence there.

So, here is where the path really gets dark.  Will the military cede power to write a new liberal democratic constitution and effect needed economic reforms, or do they harden and maintain power?  Honestly, your guess is good as mine, and I don’t believe the US has much influence over that decision.

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