Egyptian Coup: Why?

You must be aware of the rising death toll and the looming confrontation between the Muslim Brotherhood and the Egyptian army.

Needless to say, this is a total disaster.

Ever since the coup that ousted the democratically elected (but not very democratic) Muhammed Mursi, I have been wondering about the rationale for the military intervention.

It did not make any sense.

Economy in Free Fall

When I posted this piece minutes before the actual coup, I argued that it would be counter productive to oust Muhammed Mursi since none of the problems the army mentioned to justify the coup can be fixed by a new government. Egypt's economy is in terrible shape.

From just before 2011 to today: GDP growth is down (from nearly 6 percent to under 2 percent); unemployment is up (from 9 percent to over 13 percent); foreign exchange reserves are down (from $35 billion to just under $15 billion); the budget deficit has more than doubled (from nearly 110 billion Egyptian pounds to over 230 billion).

Tourism revenues were slowly going back to pre-Tahrir Square levels but after the coup and the ensuing social unrest they are dwindling again. And there is more bad news.

Tourism is down significantly due to security concerns; direct foreign investment has declined sharply; gasoline and power shortages bedevil the population; a slide in the Egyptian currency has raised prices of foreign goods such as food imports; wealth distribution is badly skewed; the nation's credit rating is cratering; the hidden "black" economy constitutes as much as 40 percent of Egyptian economic activity.

A Divided Society

Perhaps the biggest question is how the army can hope to govern a country where the Muslim Brotherhood and the Salafist al-Nour Party received over 70 percent of the votes in the last Parliamentary elections. Even if you assume that 20 percent of these votes were cast by non-Islamists who were motivated by the anti-corruption stance of Muslim Brotherhood, you will still have half the population against you.

Moreover, Egypt is a deeply divided society with several fault lines.

There are the pious Salafist rural masses who believe that, with its bikinis and alcoholic beverages, the tourism industry is eating away the country's soul. There are the rural and urban poor who live off state's subsides (one fourth of the budget) or Muslim Brotherhood's handouts. There are the unemployed youth who feel bitter about the lack of change, continued corruption and the dearth of opportunities in the country.

Then you have women, a majority of whom feel betrayed by the revolution. While the Islamists predictably threw them under the bus, the other political groups did not lift a finger for them (that is, other than to grope them in Tahrir Square). Sexual assault incidents are much higher than under Mubarak. And women have a harder time making their voice heard.

Minorities are also disillusioned.  From their perspective, the whole of last year looked like a fight between radical and moderate Islamists. Christians, secular or liberal forces were nowhere to be seen. There were many deadly attacks on Copts during Mursi government (the last one occurred just a couple of weeks ago). And the government was rather slow to react and did not appear impartial.

Regional Perspective

The coup was also a bad idea from the regional perspective. The Brotherhood is well organized in Syria and it controls a significant number of rebel brigades. Also, Mursi's administration was the most implacable foe of Bashar al-Assad:

The former president had made supporting the Syrian opposition in its fight against President Bashar Assad a cornerstone of his foreign policy. Cairo also is the official headquarters of the main Western-backed Syrian opposition group. 

Just weeks before Morsi was deposed on July 3, a senior presidential aide said authorities would not prevent Egyptians from traveling to Syria to join the rebel cause.

In that sense, a situation where Mursi remained President but was made more pliable would have been Obama Administration's first choice. As I mentioned, the US tried very hard to stop the coup. They wanted to find a way to keep Mursi in power and work with General Sisi. They went along with it when their efforts failed. Since then they have been working overtime to manage the crisis. Chuck Hagel has been calling General Sisi to get him to soften his approach and the Pentagon has just announced the suspension of the delivery of fighter planes to send a signal.

This is understandable since (in my humble opinion) the Mubarak regime change was done to change subtly the balance of power between Israelis and Palestinians and to coax Netanyahu to negotiate in earnest. All with a view to bring stability to this strategically important region. And Mursi adhered to the script and never challenged Camp David accords. With Mursi gone and a caretaker government under military supervision, the incentive for Netanyahu to pursue peace is much weaker.

This is not all.

On Syria, the new Egyptian government has already made a u-turn:

In his first public comments since becoming Egypt's top diplomat, Nabil Fahmy said Cairo continues to support the Syrian uprising but that Egypt has no intention of supporting a jihad or holy war in Syria.
"Everything will be re-evaluated," Fahmy told reporters in Cairo.

Perhaps the most important implication of the military intervention was how it disrupted certain alliances and changed the power balance between Saudi Arabia and Qatar. And wherein lies a possible explanation for the coup.

Saudi Arabia vs Qatar

Qatar was the main backer of Mursi's government. The former Emir gave him $8 billion to enable him to say no to the IMF package (IMF was going to give $4.5 billion). The other major Friend of Mursi (FOM) was the Turkish Prime Minister Erdogan. He gave Mursi another $2 billion in loans and visited Cairo to hold rallies to bolster the Egyptian president's popularity.

Tellingly, Saudi Arabia was not in that picture. Sure they were friendly to Mursi. But they did not like his administration. That's because, since 9/11, the House of Saud considers the Brotherhood a dangerous organization and the main source of radicalization among Saudi youths. As soon as the coup was announced King Abdullah personally called General Sisi to offer his support and pledged a very generous financial package: "Saudi Arabia, Kuwait and the UAE have jointly provided Egypt's military regime with grants and loans worth US$12 billion."

It may not be surprising to see Kuwait and UAE get behind Saudi Arabia. But curiously, Qatar's newly minted Emir, Shaikh Tamim bin Hamad al Thani also expressed his support for the new government. This is a radical departure for Qatar. The current Emir's father, Hamad bin Khalifa Al Thani and the previous Prime Minister and Minister of Foreign Affairs, Hamad bin Jassim bin Jaber Al Thani were staunch supporters of the Muslim Brotherhood. Besides giving a lot of money to Mursi, they financed the bulk of the Syrian uprising and led the Arab coalition against al-Assad.

Think about this for a minute.

Suddenly, the previous Emir, who is just 61 years old, abdicates in favor of his young and inexperienced son. The young Emir, instead of waiting for a few months to be mentored by the experienced and respected Prime Minister, promptly and brutally gets rid of him (he even fired him from the Qatar Investment Authority). Then, literally within days, a coup takes place in Egypt and the man to whom Qatar gave $8 billion is removed from power. And the new Emir, far from throwing a fit like Mursi's other patron, Erdogan, declares his support for the new government because "he respects the wishes of Egyptian people."

To me, all of this indicates that Qatar's joy ride in the region is over. Saudi Arabia seems to have flexed its muscles to make sure that it is the only leader of Sunni Islam in the region.

I am not sure about their ultimate motive. Maybe they did not like the idea of democratically elected political Islam as they much prefer the Al Saud-Al Wahhab division of labor. Maybe they were concerned about the Brotherhood's success in Egypt and potential success in Syria. And they saw that as a threat to their dominance. Maybe it is a combination of all these things as they are afraid of the Arab Spring turning into a real force for change.

In any case, what I would be curious to see is how the Syrian situation unfolds in view of the theory of Pipelineistan.

I am sure this was Qatar's soft belly.