Egypt 2020: A Journey to the abyss

The 2020 parliamentary elections in Egypt were held on 24–25 October and 7–8 November to elect the House of Representatives. For weeks, even in the smallest village, the streets and squares were again wallpapered with the smiling, photo-shopped portraits of the same people, with the same slogans, as if nothing had changed in this country since the uprising almost a decade ago.

In summary

– The economy is on the verge of collapse, insolvency, inability to service the debts, not to mention paying them off.

– There is no strategy whatsoever to deal with the expected water shortage after the complete failure of negotiations on the construction of the “Renaissance Dam” in Ethiopia.

– Except for propaganda and data manipulation, there is no strategy to counter the escalating Corona crisis. On the contrary, at a time when all countries affected by Corona are trying to alleviate the economic burden of the crisis on the lowest strata of society through subsidies and financial injections, the Egyptian government is raising the prices of all items that painfully affect the weak, bread, electricity, fuel, public transportation, a flood of new taxes and price increases on all government services, let’s not even talk about education and health care. Even before Corona, these had become a privilege of the rich.

– Education is the basis of all development. The estimated amount needed to solve the problem of class overcrowding is EGP150 billion. What does this amount mean in terms of government spending in other areas?

Prime Minister Madbouly has announced that state projects have been implemented at a cost of more than 4 trillion pounds over six years, which means that the amount needed for the development of education is only 0.004% of this expenditure. So, the problem is not lack of resources, but misuse and waste of resources. It is due to the economic and social policy in favour of a certain class.

– According to the Central Bank, Egypt’s foreign debt increased by almost 12.2 percent in the last three months of fiscal year 2019/2020 and stood at US$123.49 billion at the end of June, compared to US$111.29 billion in March, an increase of US$12.2 billion.

– Due to the economic policies imposed on Egypt by the International Monetary Fund and the World Bank, the poverty rate rose from 25.2% in 2010/2011 to 26.3% in 2012/2013 and 27.8% in 2015, then jumped to 32.5% in 2017/2018, which means that 32.5 million Egyptians are poor according to the “national poverty line” (EGP736 per month and person, about US $45). The national poverty line is about 60% of the UN-defined limit (Poverty Line).

– The Severe Poverty Line also decreased from 4.8% in 2010/2011 to 4.4% in 2012/2013, then rose to 5.3% in 2015 and reached 6.2% in 2017/2018, which means that 6.2 million Egyptians – according to the national severe poverty line of 491 EGP (about US$25) per month and person – are extremely poor and not able to meet their basic needs.

– According to the World Bank, the percentage of the world’s poor, calculated on the basis of the severe poverty line of US$1.9 per person per day, fell from 36% in 1990 to 10% in 2015. By contrast, it has risen steadily in Egypt, so that the official poverty rate reported in Egypt is currently more than three times the global poverty rate.

– On several occasions, the Egyptian Initiative for Personal Rights (EIPR) has called on the Egyptian government to limit the excessive use of the death penalty and to adhere to the Egyptian Mission’s proposal at the 36th session of the Human Rights Council to suspend the death penalty-albeit only temporarily-until a broader social debate on its abolition. However, the reality of the death penalty in Egypt is getting worse and worse. The number of persons whose death penalty was carried out in October 2020 (53 persons) exceeds the sum of all executions in the last three years.

– In an escalation against the EIPR, the public prosecutor’s office ordered the imprisonment of its head. Mohamed Bashseer was arrested by security forces on November 15 after midnight from his home and held. There was subsequently the arrest and release of two more EIPR workers and there is the continued incarceration of more than 10 months of Patrick Zaky. These detentions are a new link in a series of targeted intimidation measures against human rights activists. This is not separate from the overall authoritarian and oppressive climate that affects all of the constitutionally and internationally guaranteed rights and freedoms. The allegations are based on general, and misleading terms enshrined in Egyptian law.

The Constitution of 2014

In January 2014, the new constitution was adopted by a large majority (98.1%) of voter turnout (38.6%). And although I have some criticism of some articles of this constitution (too much space for clergy and military), one has to admit objectively that this was the best constitution Egypt ever had. It reflected the balance of power in 2014 between revolution and counterrevolution.

Unfortunately, this balance of power in favour of the democratic forces at the time did not last. Immediately after the presidential election, which Sisi won with practically no real competitors, the military leadership began dismantling the constitution. After a revolutionary surge, which began with the uprising of 25 January 2011, the construction of a dictatorship first requires the complete disregard of the constitution. Especially the articles guaranteeing freedoms were disregarded.

Although nothing can remain hidden in the digital age, a “democratic” image is needed for the outside world. To this end, Egyptian voters were twice chased to the ballot boxes with the whip, all numbers were fudged, and all “public” and private media were mobilized for a show. In March 2018 for the Sisi re-election, and in April 2019 for the referendum on the constitutional amendments.

The first re-election showed the political decision of the state leadership to stop any political debate, i.e., to conduct election campaigns without any debate on any issue, zero discussion in the whole society, although many issues have stretched society to the limits. This is only possible by preventing a real election campaign. And this is how it was done.

The five brave candidates were eliminated immediately after their candidacy was declared – between arrest and threat. Then a tailor-made candidate was pulled out of the sleeve who had campaigned for Sisi in his own election campaign. With a voter turnout of 41.16%, Sisi won with 97.08% and thanked the people. 

The second farce was the referendum for constitutional changes. With a turnout of 44.33%, the Egyptians – allegedly – reversed the most important achievements in their constitution of five years before. Suddenly, the president is not only allowed to remain in office for two legislative periods, but until 2030, the president appoints the boards of all courts and the attorney general, extensive expansion of the powers of the military in state leadership, the economy and military justice, including completely unfounded immunity, and much more.

This happened in the following scenario:

  • Sisi began to criticize the constitution in strange statements that completely contradicted his earlier statements in which he praised the constitution.
  • The youth of the revolution at that time and also public figures were suddenly arrested on terrorism charges and mistreated in the prisons. These people had absolutely nothing to do with terrorism, but the regime decided to punish them for their courage to express their opinions. The regime has pursued two goals: Firstly, to launch a pre-emptive strike against them so that they do not object to any manipulation of the constitution, and secondly, to make an example of them to those who dare to object to Sisi’s will to change the constitution.
  • Since the secret services completely control the media, only hypocrites and charlatans could be seen on the television channels. They directly demanded the amendment of the constitution, others begged President Sisi to remain in office for further periods until he completed his successes (!), while the president himself announced that the constitution is not a holy book and that it is only natural that it be completely supplemented or amended.

The elections 2020

For the first time, elections are being held under a new electoral law adopted after the 2019 constitutional amendments. The Egyptian parliament consists of 568 members, of which 284 are elected directly and 284 in closed ballot lists. The closed electoral list system means that if 4-5 lists compete in a constituency, the list with the majority wins all seats, no matter how many votes the other lists have received (i.e., the winner takes it all). The President of the Republic has the right to appoint up to 5% of the MPs.

The parliamentary elections, which began their first phase on October 24 and lasted until mid-November 2020, coincided with the outbreak of the Corona pandemic and the stagnation of the national economy. On this occasion, however, the treasury of the “Long Live Egypt” fund set up by Sisi will be revived and padded with approximately EGP 10 billion (approx. US$640m). These are the “donations” imposed on the candidates, who receive support from the state apparatus, which guarantees their seat in Parliament and grants them the immunity and many other privileges resulting from it.

In fact, on the first day of the elections, the government seemed to instruct, even force, the employees and servants in the administrative apparatus to vote to increase the percentage of voters. The “National Security Agency” – formerly State Security (SS) – instructed its networks of extended families, mayors and village leaders to mobilize voters.

The extremely conservative “Future of the Nation” party, loyal to the regime, held the lion’s share of seats in parliament. It took the lead in the scene to accept direct election candidates and list candidates in all constituencies of the Republic. It called on all candidates who wished to enlist its support to “donate” contributions of between EGP 5 and 25 million, depending on their chances of success. In the competitive struggle, many have far outbid or had to outbid this amount.

Since the only criterion for inclusion in the circle of beneficiaries is the amount of financial contributions, this resulted in an overwhelming majority of deputies from the rich and super-rich, at the expense of natural leaders and public figures.

The Political Money

In almost all constituencies, political money or the purchase of votes from the poor played a decisive role. This took place under the eyes, indeed with the participation, of all the relevant authorities. In the second phase of the parliamentary elections, the price of a vote in some districts in Cairo reached EGP 500 (about US$31), and the trend was rising toward the end of the vote.

In these second parliamentary elections since the fall of the late President Morsi, according to observations in the press and parties, as well as on videos in social media and also from our own observation, there is confirmation that “political money” dominated these elections.

The first form: Distribution of money to every voter who votes for candidates on the “Patriotic List”, which includes 12 parties led by the government-affiliated “Future of the Nation” party. These are sums of 50 to 200 pounds (US$3.2 to 8.8) from people who call themselves representatives of a candidate.

The second form of this political money went into the distribution of boxes of food such as rice, sugar, oil and tea, on which “The Future of the Nation Party” is written. This was repeated in the 2015 parliamentary elections and the recent Senate elections, as well as in the presidential elections and votes on constitutional amendments.

The Economist published a report on October 22 under the title ‘Another sham election highlights Egypt’s problems’. It stated that ‘Even by the standards of Egypt, where votes are routinely bought and opposition candidates imprisoned, this contest seems especially undemocratic.’ The regime has eliminated most of its critics, with candidates competing only to see who supports the regime most, while wealthy businessmen pump money into state-supported parties.

The Economist added that ‘some seats on the electoral lists were sold for millions of Egyptian pounds (tens of thousands of dollars), so much so that even one of the pro-state newspapers ridiculed this payment in a cartoon depicting a member of parliament carrying his own chair to parliament because the seats in it were too expensive for him.’

If the candidacy is only for the richest, the vote only by the poorest, paid for by donations or bribes, and the middle class is absent or increasingly reduced, a parliament, with its two chambers, will emerge, as an expression of the imbalance in government policy, which will drastically widen and deepen the gap between rich and poor. By corrupting a more just legal system originally provided for by the new constitution, the new rulers have created a hopeless situation, socially, politically, economically and legally. Egypt stands at the abyss.

Why does the West support the Sisi regime?

The Egyptian regime is pursuing an economic strategy that inevitably leads to a collision between urgently needed domestic demands for democratization and international interests. In other words, the Sisi regime is pursuing an unwavering policy that is rooted in the global financial system in order to combine its stability with the economic interests of international organizations, Western countries and big corporations.

Although the regime merchandises itself internationally as a bulwark against terrorism and illegal immigration flows, this interpretation often obscures its economic strategy. It is a policy based on heavy indebtment, which involves international parties in the repression practiced by the regime and leads to deepening of the poor-rich polarization and, consequently, destabilization and violent extremism.

Due to strong support for the global financial system, the regime in Egypt finds protection in many ways, but is also in an extreme state of dependence:

First, increasing dependence on external loans to finance government operations and major infrastructure projects. This includes an increase in long and short-term government bonds and “hot money”. Second, a huge increase in arms deals since 2014, making the regime the third largest arms importer in the world between 2015 and 2019. Finally, the high level of foreign direct investment in the Egyptian oil and gas sector has linked long-term Western investment to the stability of the regime.

These factors are directly responsible for Egypt’s repression of the population and constitute obstacles to democratization. Ultimately, this economic strategy exacerbates long-term challenges with profoundly destabilizing effects. If international capital flows are used to finance military control over the Egyptian economy, the security apparatuses can gain greater control of the state, which in political terminology means dictatorship.

Egypt relies heavily on debt to create forms of financial dependence between the regime and international parties. The regime has borrowed enormous sums. This sharp rise in debt was accompanied by an accelerated increase in foreign holdings of short-term Egyptian government bonds, which rose from US$60 million in mid-2016 to US$20 billion in October 2019.  The regime was able to attract this short-term capital through interest rate offers that are the highest of any financial market in the world among other emerging markets. The yield on these funds, financed by international borrowing from the Egyptian government, reached about 13% in July 2020. Egypt thus deserves the title of “Emerging Markets Favourite”, as reflected in investor demand for a US$5 billion Eurobond issue. This is considered the largest public spending in Egyptian history.

Heavy borrowing has serious consequences for Egypt and the international community. On the one hand, in the global financial system, there is an urgent need for the survival of the Egyptian system, as the repayment of its high international debt depends on it. Therefore, the regime is to a certain extent immune to international pressure to reduce its repression, because turbulence in Egypt would have a direct impact on government revenues, increasing the likelihood of its default.

In other words, international creditors thus indirectly bear responsibility for the use of public funds to enrich the military elite through mega-infrastructure projects. These projects are financed both directly and indirectly by international financial actors (including regional allies such as the Gulf States and international organizations such as the IMF).

Egypt is economically shaken, not threatened militarily by any country and has one of the largest armies in the world. For military-strategic reasons, there is therefore no need at all for further development of its military clout. Nevertheless, the regime is pursuing a policy in the opposite direction. The regime’s expenditures for huge arms purchases from 2014 onward play a key role in consolidating its international security network. The volume of arms imports tripled between 2014 and 2018 compared to the period 2009-2013, an increase of 206%. There are no signs that this wave of arms purchases has subsided, as the regime held talks with Italy in June 2020 to conclude a major arms purchase contract worth US$9.8 billion. The Western arms industry is the main source of arms Egypt receives. At the top of the list are France, Germany, Russia and the USA. France alone covered 35% of the regime’s arms requirements between 2015 and 2019.

The arms deals include not only conventional weapons, but also the purchase of surveillance equipment and crowd control devices that are used to directly suppress protests. It is difficult to verify the sources of funding for these transactions, as they are not included in the official figures of the defence budget. However, there is evidence of the use of external loans, partly for this purpose.

In 2015, for example, an arms deal worth €5.2 billion, which included 24 Rafale fighter planes, was partly financed by a €3.2 billion loan from the French government. This means that French taxpayers lent €3.2 billion to the Egyptian regime, which Egypt’s poor will pay back including interest, i.e. Egyptian public funds were spent to finance the profits of the French arms industry.

The arms deals have made the regime one of the main customers of Western arms manufacturers, effectively linking the survival or protection of the regime with the interests of the Western arms industry.

In summary, the transformation of the regime into a major arms importer has two main consequences: the oppression of the Egyptian people by its regime and the futility of international humanitarian efforts to democratize Egypt.

First, the entanglement and accountability of Western countries and their arms industry, as the main supplier of surveillance and mass control, in suppressing popular protests. Second, the potential of Western countries to condemn and address human rights violations is thus automatically prevented.

There is a very sad and enlightening example of this, among countless others: Italy continued to supply weapons to the Egyptian regime, even after suspicions rose in December 2018 that five members of the Egyptian security forces were involved in the torture and death of the Italian student Giulio Regeni in 2016. This well-founded suspicion was substantiated by an official demand of the Italian public prosecutor’s office. Nevertheless, Italian arms sales to Egypt tripled in 2019, and the planned arms deals between Italy and Egypt for 2020 amount to €11 billion.

Other factors in international  tolerance of undemocratic conditions in Egypt are the increasing foreign direct investment in the Egyptian oil and gas sector. The Egyptian regime is currently the first target for foreign direct investment in Africa. The value of these investments reached US$9 billion in 2019.  Most of the investment is in the oil and gas sector, which received a major boost following the discovery of the Zohr gas field in 2015, the largest in Egypt and the Mediterranean region.

The Zohr field is jointly owned by the Italian state-owned company Eni, BP (UK) and Russneft (Russia). The share of Eni is 50%. Eni’s total investments in this sector between 2015 and 2018 amounted to US$13 billion.  These steadily increasing foreign investments in the oil and gas sector reflect a deliberate policy of the regime. On August 31, President Sisi announced his support for the expansion of Eni’s investments. In view of these investments, international energy companies have a greater interest in the survival of the Egyptian regime, so investments in the billions are linked to the continuity of the regime.

As a result of this calculated policy, the regime becomes the main beneficiary of the transfer of wealth to the military elite. The middle and lower classes, the normal citizens of this state, fall by the wayside and do not benefit from the enormous financial flows. The military elite accumulates profits through interest on loans, arms deals, corruption in the mega-infrastructure projects – mostly wasteful and unnecessary – and oil and gas revenues, while the national debt is financed by the Egyptian taxpayer.

It is therefore clear that international humanitarian demands for democratization collide with international financial interests, which in turn ensure the survival of the Egyptian regime of injustice through their abundant support.

A version of this blogpost originally appeared on the Tlaxcala website (the international network of translators for linguistic diversity) and can be found here.


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