, Saad Hariri s Dilemmas Steven Heydemann
The Manufacture of Illusion Dr. Mufid Shihab, Egyptian Minister of Parliamentaryand Legal Affairs
Lesson Learned? Manuel Almeida
THE AGING
G R O UP Political Succession Issue 1528, 17 October 2009
and the Future of the Muslim Brotherhood
Editorial
Dear Readers,
EstablishedÊ by HishamÊ andÊ MohamadÊ AliÊ Hafez Editor-Ê in-Ê cheif Ê ADELÊ AlÊ TORAIFI
ManagingÊ Director TARIKÊ ALGAIN
w
elcome to THE MAJALLA Digital. This week our issue is bringing you coverage and analysis on the question of succession for the Muslim Brotherhood. Stephen Glain has written an enlightening feature on the subject of the Future of the Muslim Brotherhood and how succession might affect it. As a complement to his article, we have invited Dr Jihad Aodah, a member of the ruling National Democratic Party in Egypt, and Professor Mohamed Habib, the first deputy of the Muslim BrotherhoodÕ s Supreme Leader, to participate in a debate regarding succession in Egypt. We ask our contributors to assess what would happen in Egypt if Gamal Mubarak succeeded his father. Our contributors provide insightful analysis on to the political regime in Egypt and explain what advantages and disadvantages succession might bring about for the country. The issue also addresses the economy with Mohamed Sulaiman explaining which sectors are leading the GCC markets after the financial crash. Similarly, Daniel Caparelli points to the promising opportunities for reform that have come about in the aftermath of the crisis. As always we welcome and value our readerÕ s feedback.We invite you to take the opportunity to leave your comments on our website or contact us if you are interested in writing for our publication.
TheÊ MajallaÊ Magazine HHÊ SaudiÊ ResearchÊ &Ê MarketingÊ (UK)Ê LimitedÊ ArabÊ PressÊ House 182-184Ê HighÊ Holborn,Ê LONDONÊ WC1VÊ 7AP DDI:Ê +44Ê (0)20Ê 7539Ê 2335/2337,Ê Tel.:Ê +44Ê (0)20Ê 7821Ê 8181,Ê Fax:Ê +(0)20Ê 7831Ê 2310
Sincerely,
Adel Al Toraifi Editor-in-Chief
Cartoon
Ç The Muslim Brotherhood and the rocky road to successionÈ
Issue 1528
05
Contents 08 Geopolitics , SaadÊ Hariri sÊ Dilemmas
09 InÊ Brief AroundÊ TheÊ World Letters QuotesÊ OfÊ TheÊ Week MagazineÊ RoundÊ Up
18 Features TheÊ AgingÊ Group
21 Debate TheÊ CallÊ ofÊ LeadershipÊ inÊ Egypt
25 Ideas WhoÊ WillÊ ComeÊ Next?
THEÊ MAJALLAÊ EditorialÊ Team
THEÊ MAJALLAÊ EDITORIALÊ TEAM
LondonÊ BureauÊ ChiefÊ ManuelÊ Almeida CairoÊ BureauÊ ChiefÊ AhmedÊ Ayoub EditorsÊ StephenÊ Glain PaulaÊ Mejia DinaÊ Wahba WessamÊ Sherif EditorialÊ Secretary Jan Singfield Webmaster MohamedÊ Saleh Translation SherifÊ Okasha
17 October, 2009
06
32 People Interview
TheÊ ManufactureÊ ofÊ Illusion: Dr. Mufid Shihab, Egyptian Minister of ParliamentaryÊ andÊ LegalÊ Affairs
IssueÊ1528,Ê17ÊOc toberÊ2009
Profile
TheÊ TalkÊ ofÊ theÊ Poor: GamalÊ Mubarak:Ê CallsÊ forÊ reformÊ andÊ accusationsÊ Ê ofÊ politicalÊ inheritance
Submissions ToÊ submitÊ articlesÊ orÊ opinion,Ê pleaseÊ email: editorial@majalla.com Note:Êa llÊa rticlesÊs houldÊn otÊe xceedÊ800Ê wordsÊ
39 Economics ArabÊ Economics AÊ TimeÊ forÊ Recovery InterntionalÊ Investor AnÊ OpportunityÊ ForÊ Reform Markets AllÊ WeightsÊ areÊ Calculated
30
Advertising
ForÊ advertisment,Ê sponsorshipÊ andÊ digitalÊ edition,Ê pleaseÊ contact
45 Reviews Books
ShiftingÊ Paradigms:Ê NewÊ waysÊ ofÊ understandingÊ globalÊ politics
Reports
TheÊ HumiliatingÊ WarsÊ ofÊ AmericaÊ
Mr.Ê WaelÊ AlÊ Fayez w.alfayez@alkhaleejiah.com Tel.:Ê 0096614411444 M.:Ê 00966505475131 F.:Ê 0096614400996 P.O.BOXÊ 22304 RiyadhÊ 11495,Ê SaudiÊ Arabia
Readings
50 TheÊ PoliticalÊ Essay LessonÊ Learned? London Office:
HHÊ SaudiÊ ResearchÊ &Ê MarketingÊ (UK)Ê LimitedÊ ArabÊ PressÊ HouseÊ 182-184Ê HighÊ Holborn,Ê LONDONÊ WC1VÊ 7APÊ DDI:Ê +44Ê (0)20Ê 7539Ê 2335/2337,Ê Tel.:Ê +44Ê (0)20Ê 7821Ê 8181,Ê Fax:Ê +(0)20Ê 7831Ê 2310 E-Mail:Ê editorial@majalla.com
Cairo Office:
14Ê El-HegazÊ St.Ê MohandessienÊ -Ê Giza.Ê Egypt Tel.:Ê +2Ê 02Ê 333Ê 88Ê 654,Ê Fax:Ê +2Ê 02Ê 333Ê 88Ê 654 E-Mail:Ê editorial@majalla.comÊ
16 Issue 1528
Saudi Arabia Office: HeadÊ Quarters P.O.Box:Ê 478Ê RiyadhÊ 11411 SaudiÊ Arabia Tel:Ê Ê +966-1-4419933 Fax:Ê Ê +966-1-4429555
Subsriptions ToÊ subscribeÊ forÊ theÊ digitalÊ edition,Ê pleaseÊ contact:Ê subscriptions@almajalla.com ToÊ subscribeÊ forÊ kindleÊ edition: kindle@almajalla.com
Disclaimer TheÊ articlesÊ inÊ AlÊ MajallaÊ doÊ notÊ representÊ anyÊ consensusÊ ofÊ believs.Ê WeÊ doÊ notÊ expectÊ thatÊ ourÊ readersÊ willÊ sympathizeÊ withÊ allÊ theÊ sentiments they find here, for some of our writers will flatly disagree with others.
AlÊ MajallaÊ ©Ê 2009Ê HHÊ SaudiÊ ResearchÊ andÊ MarketingÊ (UK)Ê Limited.Ê AllÊ rightsÊ reserved.Ê NietherÊ thisÊ publicationÊ norÊ anyÊ partÊ ofÊ itÊ mayÊ beÊ reproduced,Ê storedÊ inÊ aÊ retrievalÊ system,Ê orÊ transmittedÊ inÊ nayÊ formÊ orÊ byÊ anyÊ means,Ê electronic,Ê mechanicalÊ photocopying,Ê recordingÊ orÊ otherwise,Ê withoutÊ priorÊ permissionÊ ofÊ HHÊ SaudiÊ ResearchÊ andÊ MarketingÊ (UK)Ê Limited.Ê PublishedÊ everÊ week,Ê exceptÊ forÊ twoÊ issuesÊ combinedÊ periodicallyÊ intoÊ oneÊ andÊ occasionalÊ extra,Ê expandedÊ orÊ premiumÊ issues.Ê ForÊ digitalÊ subscriptionÊ inquiriesÊ pleaseÊ visitÊ www.majalla.com/ subscriptions.
07
, SaadÊ Hariri sÊ Dilemmas Geopolitics
Governing Lebanon in the face of Domestic and Regional Obstacles Even if Saad Hariri overcomes all the difficulties that face him, a serious question will remain : Can Hariri protect himself and his government from the influence of Hezbollah and its ability to obstruct Lebanon’s search for stability? Can he put an end to the problems that might push the regional powers to intervene in Lebanon,s domestic affairs?
S
o much drama. So few surprises. No one expected that it would be easy to form a government after Lebanon’s elections on June 7. It was clear from the beginning that Saad Hariri and his allies would exploit their electoral win to claim a national mandate, fend off Hezbollah’s demand for a blocking third, and free themselves to govern as a majority coalition. It was also clear that as the front man for March 8, Michel Aoun would use every available means to offset the coalition’s defeat and preserve Hezbollah’s veto power over Lebanon’s political agenda. Each hoped that the other side would blink first. Both are now pointing fingers of blame at the other. Given the stakes, and given the conflicting regional influences that circulate through Lebanese politics, it is hardly unexpected that Hariri would fail in his initial efforts. What is less clear, however, even as Hariri returns from Saudi Arabia to resume his role as Prime Minister, is whether this second round will be any more successful. On balance, the signals are not positive. The experiences of the past three months have highlighted two underlying dilemmas that Hariri faces as he begins this second round of negotiations. These dilemmas, however, are not entirely of Hariri’s own making. They result from regional factorsÑe specially the impact of Syrian-Saudi rapprochement on Hariri’s influence at home. They also result from a fundamental asymmetry in Lebanese politics. Whether Hariri is able to resolve these dilemmas will in large part determine not only the fate of the current negotiations, but the trajectory of Lebanese politics in the years ahead. Hariri’s first dilemma is that he cannot govern unless he is able to rule, and he cannot rule on his own. The asymmetry is that his opponents do not face the same constraint. With its control over a vast non-state apparatus, its powerful military capability, and the legitimacy it derives from its support for Ò resistance,Ó Hezbollah can rule without governing. To do so has consequences. It means that Hezbollah will remain a sectarian veto player rather than a 17 October, 2009
Steven Heydemann truly national political party. It ensures that Hezbollah’s principal source of influence will remain its capacity to disrupt, to impede, and to delay. Seen in this light, Hassan Nasrallah’s appeal for patience and calm in his speech of September 18 takes on new meaning. He stressed the need to avoid Ò dragging the country into political, sectarian, and security tensionsÓ even if Ò reaching a deal over the cabinet . . . takes some time.Ó Yet we have to recognize that time does not treat all actors equally. For veto players time is an asset. It rewards obstructionist behavior among those who win simply by avoiding defeat. On the other hand, time is a liability for incumbents like Hariri, who faces sharp and growing cleavages in his coalition. Time is not Hariri’s friend. Is there a way out of this dilemma? Can the current stalemate be overcome within the current 15-10-5 formula, an arrangement which, in any case expands the role of Lebanon’s President well beyond the limits established at Ta`if? Does everything now rest on Syria and Saudi Arabia?
Two possibilities come to mind, neither of which offers much reassurance. The first is that these dilemmas will not be resolved, Lebanon will remain without a government indefinitely, and no one will pay much attention. Based on economic indicators, this is already happening. Even as the cabinet crisis deepens, foreign investment is strong and projections for Lebanon’s growth rate in 2010 have increased to 6 percent. The second possibility is more likely, but poses a second key dilemma for Saad Hariri. As frequently happens
in Lebanon, domestic stalemates become regional problems. Now, as in previous crises, appeals for regional engagement are increasing. Should tensions escalate further, the prospects increase that Saudi Arabia and Syria will be drawn into brokering a Lebanese government. Indeed, Syrian-Saudi rapprochement make it all the more likely that a brokered arrangement will be the way out of Lebanon’s stalemate. The dilemma is that Hariri himself is likely to have less influence over the outcome of this negotiation than he would if Syria and Saudi Arabia were at odds. Moreover, the regional escape hatch for Lebanon is a mixed blessing. Not least, it creates a huge moral hazard. The willingness of regional actors to intervene during moments of crisis encourages local actors to push Lebanon to the brink. It further weakens political institutions. And since regional powers understand this game, they are unlikely to act until they are certain that local actors have truly exhausted any possibility of reaching a settlement. In the past, violence has been the indicator that Lebanon has reached this point. To avoid such a fate this time will require that all Lebanese actors step back from the brink and find ways to compromise. Regional actors, along with the U.S. and France, all have an interest in encouraging compromise. Yet Lebanon’s leaders offer little indication that they are in a compromising mood. Positions on all sides have hardened in recent weeks. How close to the brink are Hariri, Nasrallah, Aoun, Berri, and Jumblatt willing to take Lebanon? At the moment, it seems unlikely that the current stalemate will dissolve into violence. Negotiations have not yet run their course. But in the absence of compromise, that point is not terribly far off.
Vice President of the US Institute of Peace and a visiting Professor at Georgetown University in Washington 08
Issue 1528
09
17 October, 2009
InÊ Brief AroundÊ TheÊ World
Letters
QuotesÊ OfÊ TheÊ Week
MagazineÊ RoundÊ Up
RussiaÊ
U
.S. Secretary of State Hillary Rodham Clinton met with Russian leaders in Moscow to acquire their support in pressuring Iran to demonstrate its nuclear program is peaceful. In talks with RussiaÝ s president and foreign minister, Clinton tried to gauge MoscowÝ s willingness to back specific measures that could be imposed on Iran if it fails to comply with Issue 1528
international demands. Following the talks, Foreign Minister Sergey Lavrov said that under current conditions the threat of sanctions against Iran would be counterproductive. Meanwhile, Clinton said the U.S. agreed it was important to pursue diplomacy with Iran. At talks with Medvedev, Clinton failed to secure support for tougher sanctions on Iran
despite ObamaÝ s decision to scrap Bush-era plans for a missile shield in central Europe, a concession to Russian concerns which Washington hoped might spur Moscow to back the American position on Iran. Beyond Iran, Lavrov said the U.S. and Russia have made Çc onsiderableÈ progress toward reaching agreement on a new strategic arms treaty. 11
InÊ BriefÊ -Ê AroundÊ TheÊ World
AroundÊ TheÊ World
1Ê SaudiÊ Arabia Two suspected members of alQaeda were killed and a third was arrested in a gunfight in Saudi Arabia that also resulted in the death of a policeman. An interior ministry spokesman said the early morning shootout took place at a police checkpoint in Jizan province on the southern border with Yemen.
8
10
3Ê Israel The Israeli Foreign Ministry filed a complaint at the U.N. Security Council accusing Hezbollah of violating a U.N. weapons embargo in southern Lebanon. The Israeli military has already asked UNIFIL, the peacekeeping force in southern Lebanon, to open an investigation after a shell exploded in a home in the southern Lebanese village of Tayr Filsi.
4Ê Yemen
2Ê Syria In a ministerial Turkish-Syrian meeting, Syria’s foreign minister said that Syria supports Turkey’s decision to cancel scheduled military maneuvers with Israel and other European countries due to continued Israeli aggression in Gaza. The Turkish minister also expressed his country’s wish to build strong strategic relations with Syria. 17 October, 2009
Separatists in southern Yemen used the anniversary of an uprising against colonial Britain power to press their claim for independence, while President Ali Abdullah Saleh promised to crush rebels in the north. Meanwhile, Yemeni government forces claimed they killed another 59 fighters in their battle against Zaidi Shi’ite rebels, near the northern town of Saada.
5Ê Somalia A high level delegation from the United Nations led by undersecretary general for safety and security Gregory B. Starr arrived in Mogadishu where they held crucial talks with a. The two sides discussed ways to push forward the reopening of UN offices in the lawless capital
12
InÊ BriefÊ -Ê AroundÊ TheÊ World
8Ê USÊ
9 7
2
3 1 4
6
9Ê Poland
5
6Ê Pakistan Several gunmen attacked three security sites in the eastern Pakistani city of Lahore while a suicide bomb attack killed 31 people in a northwestern town. The strikes were part of an escalating wave of terror aimed at foiling a Pakistani planned offensive into the militant heartland on the Afghan border. Issue 1528
President Barack Obama is dispatching an additional 13,000 US troops to Afghanistan beyond the 21,000 he announced publicly in March. The additional forces are primarily support forces - such as engineers, medical personnel, intelligence experts and military police. These additions bring the total buildup Obama has approved for the war-torn nation to 34,000.
Polish president Lech Kaczynsk has signed the European Union’s reform treaty into law, leaving the Czech Republic as the only country still to ratify the document. The deal seeks to strengthen the bloc’s institutions after its rapid expansion eastward, and must be ratified by all 27 EU nations.
7Ê Japan
10Ê Switzerland
Defense Minister Toshimi Kitazawa said Japan would pull out its two naval ships from the Indian Ocean operation when their current mandate expires in January. The refueling mission began in 2001. New Prime Minister Yukio Hatoyama has opposed the mission, saying Japan should take other measures to help Afghanistan restore peace.
After a century of enmity between Turkey and Armenia, , Armenia s ambassador to Switzerland and a Turkish delegation met in Zurich to sign an accord to establish diplomatic relations. Officials said that U.S. Secretary of State and Swiss mediators helped the two sides clear a last-minute dispute over the final statements they would make. 13
InÊ BriefÊ -Ê QuoteÊ OfÊ TheÊ Week
Ê MagazineÊ RoundÊ Up
Quates
OfÊ TheÊ Week Ç They will lead to economic catastrophes and destroy basic services, like health and educationÈ Gordon Brown British Prime Minister predicting the scenario of a Conservative Party government led by David Cameron. Ç He who reverts from Union is like who reverts from IslamÈ Ali Abdullah Saleh The Yemeni president in reference to Houthis in the North of the country.
Ç We welcome new sanctionsÈ Saeed Jalili , A defiant statement by Iran s chief nuclear negotiator, pertaining to the American and European warnings of sanctions.
«We,re concerned with finding reasons for this explosionÈ Hussein Al Haj Hassan Statement by the Hezbollah representative in the Lebanese parliament, in reference to the explosions in the south of the country. 17 October, 2009
1
MagazineÊ
RoundÊ Up 1Ê BusinessÊ Week The Lost Generation
The Business Week sheds light on unemployment as a manifestation of the current economic context. Ç Bright, eagerÑ and unwantedÈ is how Business Week described fresh graduates and college drop outs who are on an endless job hunt, leading to permanent damage to their yet to be born careers. On the other hand, the unemployment dilemma has also had an effect on the employers who are missing out on youthful and promising workforce. Action is direly needed to create employment, otherwise, a brutal battle of jobs will be witnessed when recovery comes. 14
3
2Ê Ê TheÊ NewÊ Yorker
Your Brain on Football
2
This week, the New Yorker provides insight into American sports culture. Drawing a parallel between Michael Vick, an American Football star that was recently convicted for abusing his dogs, and the brutality of the sport itself on athletes, the weekly magazine claims that the difference is not significant. Research conducted on former football players indicates that they are more likely to develop a Ò nongeneticÓ version of dementia, as a result of the regular collisions they incur during a life-time of intense games and practices.
4Ê Newsweek
Silvio, it,s Time to Go
3Ê Ê Time New Rights, and Challenges, for Saudi Women The Saudi woman is on the cover of the latest Time magazine. The feature explores the changes in the Saudi society and presents the views of many Saudi working women who have in recent years gained more attention for their dedication and achievements. This new generation of women is promising to change how Saudi women are perceived both inside and outside Saudi Arabia.
«Il Cavaliere», the Italian prime minister should be taking his final steps out of office , according to Christopher Dickey. Dickey argues that Berlusconi s strategies are , heaving Italy backwards. Aside from Berlusconi s involvement in several scandals, he was recently declared partially responsible in a corruption case. Furthermore, the constitutional court abolished a law giving the prime minister immunity from criminal prosecution. This in turn will subject the Berlusconi to further trials for bribe paying and investigations that link him to organized crime. To Dickey, Ç Just , because he can stay in power, doesn t mean he shouldÈ .
CoverÊ ofÊ theÊ Week
CoverÊ OfÊ TheÊ Week
The Battle over Cloud Computing The Economist describes the tendency in the computer industry to follow a big new idea with a big fight over which company will develop it in the most popular way. Cloud computing is the latest example of this technological search for hegemony. The idea, they explain, is that computing will be increasingly delivered as a service over the internet, from vast warehouses of shared machines Ð in a similar way as many services already do, such as e-mail, calendars and photo albums. This matters because the more you store on the web, the less significant your personal computer becomes. Issue 1528
15
InÊ BriefÊ -Ê Letters
Letters
IranÊa ndÊt heÊt aqyyaÊ diplomacyÊ The Iranian situation does not involve any normalization.It rejects negotiations as long as they are related to the nuclear file.Thus the writer rightly believes Iranian cooperation could be a part of a major strategic maneuver. Mohamed Al-Sayed-Cairo
TheÊCos tsÊofÊNon interventionÊ inÊY emen Non-interference in Yemeni affairs will be detrimental to the interests of neighbouring Arab countries such as Saudi Arabia which shares the Yemeni borders.Therefore any internal threat in Yemen will be reflected on the security and stability of KSA.Should Yemen turn into a failed state,Suadi Arabia will be a great loser. Jasim Ali-KSA
OscarÊOba ma I cant agree more with the writer.ItÝ s really strange that a Nobel Prize should be awarded to a US president who has not yet completed his first year in office. The Obama effort which the Nobel Prize panel claimed was the motive behind their decision is still an unfulfilled proposal. Ahmed Elyoua-Egypt
17 October, 2009
16
g Comin Soon
Introducing Iphone Mobile Apps
Features
17 October, 2009
18
THE AGING
PA R T Y
PoliticalÊ SuccessionÊ andÊ theÊ FutureÊ ofÊ theÊ MuslimÊ Brotherhood By Stephen Glain Issue 1528
19
Features
The Aging Party PoliticalÊ SuccessionÊ andÊ theÊ MuslimÊ Brotherhood The Muslim Brotherhood has been a fixed, if at times shadowy coordinate in a region molten with change since it was partitioned under Franco-British rule after World War I. With Supreme Guide Mohammed Mahdi Akef’s announcement that he will not seek a second term when his current one expires in January 2010, the Brotherhood’s leadership is opening up to a younger generation of members and setting the stage for a floor fight over the movement’s future course.
Mohammed Mahdi Akef, the Supreme Guide of The Muslim Brotherhood who is well past the age of 80. 17 October, 2009
20
Features
T
he longevity of the Egyptian-based Muslim Brotherhood is perhaps the most successful high-wire act in a region all too familiar with lethal missteps. Founded eight decades ago in response to a Western imperial thrust across the Middle East, the worldwide Islamist group remains the most popular and viable political movement in the Arab world - despite government crackdowns, diplomatic isolation, and internal schisms. For pious Muslims, the Brotherhood Ð Ikhwan in Arabic Ð is an enclave of orthodox mores. Among the impoverished and disenfranchised of all faiths, it is a patronage system that delivers where state institutions have failed. For Syria, Egypt, Israel, and Israel’s allies in the US government, it is a lurking threat to be subdued or destroyed. Often swept up by events beyond their control, Brotherhood members have endured long stretches of persecution and exile followed by interludes of political triumph. Despite attempts by its detractors and pro-Israel groups in Washington to tag it as a terrorist movement, established experts like Diaa Rashwan of Cairo’s Al Ahram Center for Political and Strategic Studies say the Brotherhood’s embrace of peaceful change is sincere. The Muslim Brotherhood, like Hamas, its loosely-affiliated chapter in Palestine, opposes Israel and the 1978 Camp David Peace accords, which earns it enmity and isolation from Washington. Indeed, members of Congress and the White House have all but ignored Cairo’s abysmal human rights record precisely because they regard Mubarak as a bulwark against the prospect of a Brotherhood-led, Islamist-controlled Egypt. As a political group, the Muslim Brotherhood is officially banned but its members are allowed to campaign as independents. Just three years ago, the Ikhwan emerged from national elections in Egypt with 88 seats in Parliament, or about twenty percent of the legislature. Its success was followed by similar electoral victories by its subsidiaries from Morocco to the Persian Gulf. In April 2007, a leading US legislator met with a senior Brotherhood Issue 1528
member at the home of the US ambassador to Cairo, which was interpreted as a sign that Washington was conceding Ikhwan’s centrality to the Arab world. However, the meeting yielded little in the way of a sustained dialogue, and it is unlikely US President Barack Obama will authorize a warming of ties with the group. A battle for the very soul of the Ikhwan is raging within its ranks, triggered in part by a peaceful but pivotal leadership succession in Cairo at a time when the group is struggling to survive a war waged against them with US complicity by the regime of President Hosni Mubarak. Geopolitical factors, meanwhile, are roiling the group’s affiliates in Jordan and Syria even as political Islam in general is on the defensive throughout much of the Middle East. With much of the region in play – Obama’s speech in Cairo earlier this year only intensified events convulsing the region Ð the Ikhwan in Egypt finds itself at another of its many inflection points. Its Supreme Guide, the 80-year old Mohammed Mahdi Akef, has announced he will not seek a second term when his current one expires in January 2010, opening up the Brotherhood leadership to a younger generation of members and setting the stage for a floor fight over the movement’s future course. Meanwhile, Egypt is preparing for national elections in Fall 2010, which may or may not install Gamal Mubarak as scion to his father’s rule, a filial transition the Ikhwan has said it would oppose Ð at least until recently. The Society of the Muslim Brothers, as it is formally known in English, has been a fixed, if at times shadowy coordinate in a region molten with change. It was founded in 1928 by Hasan Al Banna, the eldest of five sons who from an early age was devoutly Sufic and heavily involved in religious orders. After graduating from college he accepted a teacher’s position with the state school system in Isma’iliyya, a city near the Britishcontrolled Canal Zone. One day, so the story goes, Al Banna’s students insisted he lead them on a journey to restore Arab dignity after years of
foreign domination. Deeply moved, Al Banna accepted the challenge and announced they were all Ò brothers in the service of Islam.Ó The name stuck. Al Banna’s was a lay revolution that challenged the entrenched religious and bourgeois elites. Farid Abdel Khalek, an Ikhwan charter member, first heard Al Banna speak at a religious event in 1942. Ò He spoke not of theory but of real life,Ó said the 93-year-old Abdel Khalek in a 2006 interview. Ò He spoke of Islam as a civilization, how the umma had been suffering from imperialism and occupation and backwardness since the end of the caliphate. He was talking to me. There was a connection between us.Ó The Ikhwan allied briefly with Gamal Abdel Nasser in his revolution against the British-supported monarchy and attacked him afterward for his refusal to hold elections. In 1964, the radical intellectual Sayyid Qutb led a splinter group of Ikhwan members in a failed coup against Nasser. Qutb was arrested and executed and in the crackdown that followed mainstream Ikhwan leaders emigrated. Those emigrants were expected to internationalize the movement. Anwar Sadat, who succeeded Nasser after his death in 1970, revived the Ikhwan as a counter-weight to the growing leftist movement of the 1970s, just as the US government had used the Islamists to challenge Nasser’s socialist-leaning Arab Nationalism a generation earlier. Under Sadat, and increasingly under Mubarak, the Muslim Brotherhood recast itself as a civic-minded proponent of peaceful change. It now operates a broadly based network of social services and charitable work that doubles as a formidable political machine. So entrenched is the Ikhwan in the life of average Egyptians that so-called Ikhwan representatives of Egypt’s organizations of civil society routinely lobby US legislators to soften their resistance to the group. But Congress has so far refused, preferring a civil Egypt to a religious one. In 2005, in response to US President George Bush’s campaign for a 21
Features democratic Middle East, Egyptians were allowed a shaft of political freedom. Elections were held and activists like Ayman Nour of the Al Ghad Party received enthusiastic support from Washington. But it was not secular groups that posted the biggest gains in the December polling but the Ikhwan, which won a quarter of the seats in parliament. Its triumph was followed two months later by Hamas’s election victory in Palestine. Bush’s romance with representative government in the Arab world ended when the Egyptian government fought the Ikhwan fiercely. Hundreds of Ikhwan members have been imprisoned and only a handful of those who filed to contest municipal elections in 2007 were allowed to campaign. In a move clearly aimed at the Brotherhood, parliament in 2007 passed a constitutional amendment that effectively prohibits members of religious parties from vying for legislative seats. Internal divisions within the Ikhwan are evident. Last year, it leaked the contents of a draft political platform that, among other things, would establish a religious council with veto power over parliament and ban women and non-Muslims from running for president. The draft outraged many Egyptians who, though religious, still cling to the country’s tradition of multiculturalism and tolerance, however faded it may be. Brotherhood leaders were obliged to emphasize the document was just a draft and liable to be amended. The looming departure of Akef, who cultivated the Ikhwan’s more activist role in Egyptian politics and civic affairs, has fuelled talk about where the group goes from here. In a June interview, the octogenarian leader dismissed as Ò idle talkÓ rumours that the group was fracturing between conservatives and reformers, or between those who would withdraw from political activity or intensify it. He told The Majalla whatever dissent that is expressed among the members is respectful and healthy so long as it Ò is not in contradiction with the laws of Islam.Ó Yet as the succession enters its critical final phase, analysts are 17 October, 2009
watching closely for any sign of friction among Ikhwan leaders. In April, when Mohammad Habib, Akef’s number 2 and a possible successor, was quoted as saying the Brotherhood would not confront the regime Ò single handedly,Ó it was interpreted as a concession to Gamal as he positions himself for his father’s job. Habib’s “semi-cordial” language, as it was described in the press, fuelled speculation about what the Ikhwan might expect in return. Some analysts suggested the moderate Habib may have been angling for a security guarantee, assuming the group remains active politically. Hardliners in the group, however, reacted against Habib’s remarks as the language of
As a political group, the MuslimÊ BrotherhoodÊ isÊ officially banned but its members areÊ allowedÊ toÊ campaign as independents. betrayal, while others are arguing for a return to the Ikhwan’s core mission of religious education and indoctrination. In his interview with Majalla, Akef suggested his successor would most likely be Egyptian, though the group’s bylaws allow for a nonEgyptian to serve as Supreme Guide. Either way, recent events illustrate how difficult it may be for the next Supreme Guide to reconcile the various conflicts that divide the Ikhwan movement. In August, a power struggle erupted within the Brotherhood’s Jordanian chapter, known as the Islamic Action Front, when its pro-Jordanian members demanded pro-Hamas ethnic Palestinians in the group relinquish their duel-membership in both the IAF and Hamas. Last month, it was reported that the Ikhwan’s Syrian wing, exiled from the country since
its revolt against the government was violently crushed in 1982, is in reconciliation talks with Damascus. According to an Italian news agency, Islamists from Jordan and Turkey are mediating a channel that could end with the restoration of the Syrian Ikhwan, or at least some of its leading cadres, in return for its commitment to embrace a moderate form of Islamism. For its part, the fiercely secular ruling Baath Party is reportedly drafting legislation that would revoke Law no. 49, which allows for the death penalty to be imposed on Ikhwan members. The spread of radical Islamist groups in Syria has become a growing concern for President Bashar al Assad and renewed ties with the Ikhwan might provide him with a powerful ally. It could be a mitigating factor, however, in Washington’s efforts to cajole Damascus back to the bargaining table as part of a regional peace deal with Israel. If nothing else, Bashar’s wooing of the Muslim Brotherhood after nearly three decades of estrangement is a measure of how indispensable the Ikhwan has become. Nevertheless, it is hard to blame those Brotherhood members who want to turn away from politics and return to the mosque. Having peacefully and fairly engaged Egyptian politics with great success three years ago, it has little to show for it except for government reprisals that are passively endorsed by the United States. Though the Muslim Brotherhood is not on the US list of terrorist groups, Washington has on occasion treated its members as such. In October 2006, Kemel Helbawy, a former member of the Muslim Brotherhood and a founding member of the Muslim Association of Britain, was removed from an airplane bound from London, where he is based, to New York, where he was to lead a conference on the Ikhwan and Islamism. Helbawy was informed by an official of the US Department of Homeland Security that he was prohibited from entering the United States because he did not have a visa Ð despite the fact that British citizens like the 80-year-old Helbawy are not required to apply for visas to travel to the US. 22
Features Less than a year later, there was a sign of a thaw in relations between Washington and the Ikhwan. In April 2007, senior US legislator Steny Hoyer, then the leader of the Democratic minority in Congress, met a prominent Brotherhood parliamentarian at the residence of the US ambassador in Cairo. The meeting, which was cleared by the State Department, represented the most senior-level contact between the Ikhwan and the US government since the 911/ terrorist attacks. Hoyer downplayed the significance of the meeting when asked about it by Newsweek and the Bush administration declined to build on the encounter, a measure of how radioactive are even moderate Islamist groups in Washington. Despite his historic speech to the Muslim world from Cairo, there is no sign the Obama administration is prepared to open a channel to the Ikhwan anytime soon. Obama is overwhelmed with opposition to its health care bill, the economy remains fragile and his efforts to jump-start the failed Middle East peace process is bogged down by recalcitrance on both sides. This is regrettable, according to a fraternity of experts in Washington who know the Arab world well, to say nothing of Egyptian dissidents and opposition leaders. “I’ve always thought it was a mistake that we don’t meet with the Muslim Brotherhood,Ó says Michelle Dunne, a senior fellow at the Carnegie Endowment for International Peace in Washington and a former Middle East specialist at the State Department and the White House. “It’s not a terrorist group and it should be enfranchised. Reaching out is difficult and delicate to do, but the US should be promoting political openness and dialogue.Ó
The prospect for US-Ikhwan engagement depends very much on the next Supreme Guide. Should a conservative become the new face of the world’s largest Islamist movement, the US may rue its neglect of Akef just as it regrets spurning relatively moderate Middle Eastern leaders who came before him, from Egypt’s Nasser to former Iranian president Mohammad Khatami. Issue 1528
23
Debate The Call of Leadership in Egypt TheÊ MuslimÊ BrotherhoodÊ andÊ theÊ PoliticalÊ Succession The controversy surrounding the issue of political succession to Gamal Mubarak, the son of the incumbent Egyptian President Hosny Mubarak, has taken several dimensions in Egypt and in the Arab world. Some see it as a symptom of a failed political system; others see it as an opportunity for Egypt to continue on the same path it has been on for some time. Gamal Mubarak has risen steadily to the top of the political ladder and became the leading figure in the ruling Nationalist Party. Though it looks clear that his rise to power in Egypt demonstrates that his father is keen to hand power to him, the young Mubarak repeatedly emphasises that he abides by the rules of democracy, shunning speculations that he is being prepared to seize power after his father.
Issue 1528
25
Debate
Succession Rumours Gamal Mubarak : a political issue of a civilian nature
Political change in Egypt is the result of an accumulative reform processes. The ruling party in Egypt is taking concrete steps towards change. But others, with certain ideologies, only see what is negative in Egypt. Dr. Jihad Aodah
T
here are several approaches to understanding the status of Gamal Mubarak, in the context of political development in Egypt. The first involves developing a system for assessing the general condition of democracy in the country. Is it making progress or is it deteriorating? There is a political rule that says that the nature of political and social opposition is linked to the progress or deterioration of the general condition of democracy. If there is progress in democracy, political opposition tends to express itself differently than when democracy is deteriorating. Whenever we see the political leadership seeking a constitutional change key to resolving political crises, we can be certain that democracy is progressing.
actively in political and economic life. Citizenship cannot be understood as a mere mechanism, but, more importantly, as an economic mechanism that allows Egyptians to participate in the various political activities inside the country. That was made clear in the way the NDP,s rhetoric for the presidential and parliamentary elections was drafted. But because the public political culture in Egypt has become contaminated by ideologies calling for segregation between citizens, on grounds of religion, belief, sex, and other criteria, the NDP often failed to win votes. The party faces a huge cultural struggle ahead of it, in order to steer society back to the traditional Egyptian tolerance which has suffered from defeats and foreign penetrations.
Egypt is in a state of constitutional advancement. However, achieving such advancement not only requires a political will to amend the constitution towards democracy, it also requires that the debate over constitutional advancement become a discussion about the technical details of that process. The political leadership is trying to transfer the constitution into a democratic constitution. But are the political and social forces ready for a democratic system? Are they able to enter into a dialogue about the technical aspects of such a system, based on material and symbolic interests? The fear that society might not be able to accept constitutional reform, comes from the fact that the Egyptian political community is still completely immersed in the sharp ideological conflict about what is religiously permitted, halaal, and what is not, haraam. The society is torn by subsidiary issues and religious trivia. Reducing the scale of the ideological struggle in politics might open the door for a serious dialogue about constitutional reform.
Thirdly, the concepts of struggle must be viewed as a group of different concepts. Struggle in our view does not primarily mean the victory of one class over another class, or that of a religion over another religion. Struggle in our view is centred mainly on how a citizen could overcome his immediate circumstances for the sake of his long term choices. In our view, the citizen is the centre of struggle, and progress on the path of rational choice is his primary goal. We have a unique vision about the citizen that leads us in our view of struggle. We don’t see the citizen in terms of what he has to be, but we see him within the framework of liberating his movement and behaviour of the surrounding environmental constraints, in order to open the doors of human creativity in all fields, whether large or small, in front of him. Our practical goal is to reform the environment of the Egyptian citizen for the sake of liberating him and pushing him towards progress. Our liberation mechanism is based on three things:
Secondly, the National Party is evolving from the concept of national identity arising from the general public, to the concept of party identity, which is based on two main principles: citizenship and integration with the rest of the world. This does not mean that the party has no other goals or different issues of concern. It only means that these two principles are the ones that politically differentiate the party,s practical dynamics from those of other parties engaged in the political competition. Citizenship means having equal rights and duties. This paves the way for Egyptians to participate 17 October, 2009
We believe that the advancement of the citizen is the road to the country,s advancement. And here comes our perception of the role of a political party. A political party is the mechanism that converts the growth of citizen,s awareness of the reality, limitations, abilities, opportunities, and rights, to a general growth of the country as a whole. We believe that the citizen is the main beneficiary form the overall growth of the country. It expands his opportunities for creativity, freedom, and justice. Finally, one of the important innovations that the new National Democratic Party is adopting is the fundamental concept of a civil society. Civil society can be defined as: ÂŤA society based on political, economic, social and cultural institutions, each working in its respective field in relative independence from the authority of the State, in order to achieve multiple purposes.Ăˆ These institutions are committed to the values and standards of respect, consensus, and tolerance. The concept of civil society refers to the institutional and contractual nature of the civilian structure, which should characterize the body-politic. In a civil society the state gives the individuals an independent legal entity. This meaning reflects a society based on democracy, political pluralism, human rights, rotation of power, and the sovereignty of the people. Civil society refers to the group of institutions that are characterized as: non-governmental, non-profitable, and non-suppressive.
First, the citizen,s recognition of his limitations and aspirations. Second, building a legal system that allows equal political representation of all the classes of the society, and monitors the way governmental and social institutions provide services to citizens and the way they administer justice.
These institutions are based on voluntary work. They do not have a religious basis, and can not be used as a tool for spreading political instability. On the other hand, it can be said that the institutions of civil society constitute an intermediary social level between the individual (the citizen) and the State (the authority). They work on enabling individuals to participate in public activities. Civil society institutions are the most important channels of political participation which support the path of democratic development and the building of a modern state. In this context, Egypt is moving slowly and firmly forward through cumulative change.
Third, building a general policy system that allows for short-term and long- term planning.
A member of the ruling National Democratic Party in Egypt
26
Debate
Political Malady in Egypt Political conditions in Egypt and the regime bequeathal issue Egypt is suffering from a despotic regime which has led to a great deal of corruption in all realms of Egyptian life. The regime bequeathal issue is a particular reflection of the absence of democracy and need for reform.
G
Professor Mohamed Al-Sayed Habib
overnments in developed countries gain their legitimacy through their respect of the free will of the people, their commitment to the constitution and their compliance with the rulings of the judiciary. In Egypt, however, there are so many gaps, and so many flaws surrounding these practices that the legitimacy of the government is regularly compromised. The regime in Egypt is based on tyranny, oppression, and autocracy. Its jurisdiction and powers are unlimited. There are legislative, judicial and executive institutions. Yet, the executive institutions dominate both the legislative and judicial ones.
trying hard to obtain it, but it is unlikely that they will be able to under the current circumstances. It is known that whenever the regime feels there is a party that has begun to unify its ranks, it does not leave it until it is ruined and has destroyed it from within by applying a stick-and-carrot policy. Thus, the regime has succeeded in completely eliminating party-political life.
The regime claims to have exercised democracy in a way that has never happened before in the history of Egypt. But everybody agrees that it is a nominal democracy. Real political pluralism does not exist, there is no rotation of power (it is not even allowed), and the forging of the will of the nation is going underway through referenda and parliamentary elections.
Article 76 of the constitution: The amendment of the wording of Article 76 of the constitution on the selection of the , republic s president is more like a tragedy, which is bequeathal of the regime. This is rejected by the Egyptian public as well as the Egyptian elite.
There are 24 political parties in Egypt, but they are no more than parties on paper which nobody knows anything about: no names, no addresses, and no programs. Even known parties, such as El-Wafd, El-Araby, El-Nasry and El-Tagammou (unionist) Party, have no influence and no presence in the Egyptian political life. This may be due to the constraints the regime places on them, preventing them from communicating with the public. Also, these parties do not represent a real opposition to the regime, and they are happy and content with the Ç crumbsÈ it throws to them. In addition, they suffer from continuous internal problems, and the lack of charismatic leaders. Their programs do not match the expectations and aspirations of the people. The ruling party refuses, through the Committee on the Affairs of Parties, to grant a Ç legalÈ permission for establishing a political party to any organization it considers a potential competitor, or to any party that is expected to make a real presence on the political arena. We have seen parties Ð still under establishment Ð that have failed, over a period of 13 years, to obtain such permission. They are still Issue 1528
The ruling party has been in power for nearly three decades. No rotation of power has materialized during this period. And, there is no hope in the foreseeable future that it will surrender its power under any circumstances.
This amendment came as an erratic step that was described by one scholar of constitutional law as a Ç constitutional sinÈ . The same article suffered another alteration during the constitutional amendment of 34 articles in mid-2007. These amendments made candidacy for this high office nearly limited to the son of the president, which is known as regime inheritance. The Muslim Brotherhood group rejected this inheritance altogether as it defames the reputation and dignity of Egypt. While many states advance towards democracy, we find that the regime in Egypt wants to drive us back more than half a century. In addition, the heir to the regime, who is Secretary of the Policies, Committee and Assistant Secretary of the ruling party, will implement an array of exceptional procedures and eccentric measures. He will also maintain the suppression of freedoms, parliamentary electoral fraud, false accusations directed at the opposition, in particular towards the Muslim Brotherhood. His measures will also include forming military courts to prosecute the leadership and cadres of the movement.
Moreover, we also have the marriage of wealth and power which will reflect negatively on the political, economic and social scene. The middle class has eroded completely and society became composed of few Ç superiorÈ elites who possess money and power, while the suppressed categories represent the majority of the Egyptian people who do not possess anything. This divide has led to the emergence of hundreds, even thousands of protest movements during the past two years. And, of course, problems are likely to escalate if the succession to the regime takes place. The Egyptian society now suffers from discontent and even turmoil. It is sufficient to look at the faces of the Egyptian people in public transportation, on the roads, in meetings and forums. You will notice immediately a sense of despair and frustration. Egypt is now facing a blocked political horizon, which resulted in a state of scientific, technological and civilizational backwardness. Moreover, there is general failure in addressing the problems of daily life from which the Egyptian public suffers, such as the bread crisis, unemployment, skyrocketing prices, low wages, plus the problems of education, health, environmental pollution, housing, and transportation etc. In addition, Egypt suffers the marginalization of its pivotal strategic role at the regional and international levels. In fact, these crises are the symptoms of a power crisis, manifested in the form of tyranny and corruption. Therefore, we believe that political reform is the realistic approach to amend these issues. Because the ruling regime in Egypt does not have An earnest desire for reform, and because the political, economic and social conditions in the country have deteriorated, no single political faction, regardless of its size or weight, can promote reform on its own. Thus, the situation requires unifying all efforts and the cooperation of all forces.
First deputy of , the Muslim Brotherhood s Spiritual Leader 27
17 October, 2009
Ideas
Who Will Come Next? Issue 1528
29
Ideas
Who Will Come Next? The Future of the Muslim Brotherhood in Syria The future of Syria’s opposition Muslim Brotherhood faces an increasingly entrenched Assad regime. Are reports of reconciliation with Damascus a sign of weakness or an opportunity to reestablish the Brotherhood’s former dominance over Syria’s Islamists?
2
009 is turning out to be a good year for Bashar al-Assad. Whilst foreign diplomats have flocked back to Damascus, quietly dropping previous talk of human rights and democratization, on the domestic front, rumours abound of a possible reconciliation with the long-exiled Muslim Brotherhood. Less than a year ago, the Brotherhood’s Londonbased secretary-general Ali Sadr al-Din al-Bayanouni was appearing regularly on Arab television calling for Ô regime change’ in Syria, in alliance with disaffected former Vice-President Abdul-Halim Khaddam. Yet now, following Bayanouni’s spring withdrawal from Khaddam’s National Salvation Front (NSF), a rapprochement with Damascus, where membership of the Brotherhood remains theoretically punishable by death, is no longer inconceivable. Is it an indication of the enduring appeal of the Muslim Brotherhood in Syria that Assad is still trying to co-opt Bayanouni after nearly thirty years in exile? Or is it a sign of weakness from a Brotherhood searching for domestic credibility after unwisely backing the unpopular Khaddam and years of exile? Though often mentioned in the same breath as its Egyptian, Jordanian and Palestinian equivalents, the Syrian Muslim Brotherhood remains a very different Islamist organization and any understanding of its future development must consider its unique recent past. Syria’s MB have spent the last thirty years in exile whilst Palestine’s Hamas obtained power, the Egyptian Muslim Brotherhood became a powerful 17 October, 2009
Chris Phillips
anti-government movement and the Jordanian Islamic Action Front (IAF) was co-opted as a Ô loyal opposition’. Despite forming in the late 1930s, inspired by their Brethren in Egypt, the Syrian Muslim Brotherhood were overshadowed by other political groups until the 1960s, when they launched a resistance against the new Ba’ath regime. This erupted into violent confrontation in the late 1970s and early 80s, which Hafez al-Assad’s regime met fiercely. A governmentled massacre in the city of Hama in 1982, left at least 10,000 dead, and marked the end of the Muslim Brotherhood’s power in Syria. Yet it would be wrong to see the subsequent Brotherhood-in-exile as monolithic. Since Bayanouni’s election to the leadership in 1996, the Brotherhood gradually moved towards a more democratic stance. In the 2001 Ô Pact of national honour’ announced in London, they rejected violence and the full application of Sharia law and declared the goal of a modern pluralist democratic state in Syria. Though Bashar al-Assad released many Muslim Brotherhood members as part of the short-lived ‘Damascus Spring’ after coming to power in 2000, his continued refusal to lift the 1980 ban on Brotherhood membership has kept Bayanouni exiled. The perceived weakness of Assad’s regime after the 2003 Iraq war and the 2005 withdrawal from Lebanon led to increased opposition both within and outside of Syria, in which the MB played a prominent role.
In signing the 2005 Damascus Declaration calling for political reform in Syria, the Brotherhood allied itself with a diverse coalition of leftists, liberals, former Ba’athists and Kurdish nationalists Ð a far cry from its violent conservatism of the 1980s. It was seemingly this desire to moderate and promote itself as a genuine alternative to the Assad regime that drove Bayanouni into the arms of an unlikely bedfellow: ex-Ba’athist Khaddam in 2006. So what explains Bayanouni’s volte-face and why are there reports of new back channels being opened with Damascus? According to an-Nahar’s Muhammad Sayid Rasas, the change in regional circumstances since 2006 has been a key factor. On the one hand, the retreat of President Bush’s democratizing agenda in the Middle East after the 2006 Israel-Hezbollah war deprived the NSF/ Muslim Brotherhood alliance of the external support expected to topple Assad. At the same time, the more accommodating stance of Barack Obama and the Ba’ath’s successful crackdowns at home have made the regime appear far more secure than it did three years ago. In a similar vein, Syria expert Josh Landis highlights that Khaddam failed to deliver what he’d promised Bayanouni. He was neither able to bring with him fellow regime defectors, splitting the ruling Ba’ath party, nor gain external support from Saudi Arabia, Lebanon or the US Ð to whom he had hoped to make the 30
Ideas
From left to right: Members of SyriaÝ s opposition National Salvation Front (NSF) leadership Nasser Hassan, Fadel alKhatib, Ahmed al-Juburi, Salah Badreddin, former Syrian vice-President Abdul Halim Khaddam, Ali Sadreddin Bayanuni (leader of the Muslim Brotherhood in Syria), (c)getty images
Brotherhood acceptable. On top of this, personal differences between the two leaders didn’t help, and things came to a head over the Gaza conflict of 2008/09 with Khaddam backing Egypt’s quiet approval of the Israeli offensive and Bayanouni, like most Syrians, supporting Hamas. The already unpopular Khaddam was described by Landis as a, ‘millstone around Bayanouni’s neck’ – outliving his usefulness and sullying the Brotherhood’s reputation. Yet whilst the NSF might have lost their importance to the Muslim Brotherhood, it doesn’t naturally follow that a break from the opposition would lead Bayanouni into reconciliation with Damascus. The rapidity of the two moves suggests the Brotherhood is more anxious than many believe. Though it is widely believed, and indeed feared by secularists, that an increased religiosity amongst Syrians in recent years would translate into a surge in support for the Brotherhood were they Issue 1528
to be legalized, there is no way of gauging what portion of the population currently back them. Having been abroad or underground for so long, and with an aging leadership, Bayanouni may fear that the younger generation will look elsewhere if the Brotherhood does not re-establish themselves in Syria soon. With Wahabbist and Shia mosques proliferating in recent years, not to mention underground violent jihadist groups, rivals to the Muslim Brotherhood are growing fast. After the disaster of backing Khaddam, and Assad looking stronger than before, Bayanouni may feel that accommodation with the regime is the only possible way to re-establish its previous dominance of Syria’s Islamists. With Bayanouni in his seventies and facing likely retirement after his term as secretary-general expires in 2010, he may feel time is running out to secure his legacy and the Brotherhood’s future.
2009 therefore finds Bayanouni bargaining with the Assad regime from a position of weakness. Whether these talks lead to a permanent reconciliation will depend on how much ground the MB is willing to give. Whilst Damascus would welcome the chance to co-opt the Brotherhood into a Ô loyal opposition’ like Jordan’s IAF as a way of channelling and controlling Islamist resistance, they would never accept the kind of widespread grass roots network present in Egypt or, even worse, Palestine. If Bayanouni feels the only way back is to become subservient to the regime, these talks might go somewhere. If he clings onto demands for the democratic and pluralistic ideals he has advocated in the past decade, the Muslim Brotherhood’s immediate future will remain in exile. An Associate of The Foreign Policy Centre and a columnist on Middle Eastern politics for The Guardian Online 31
People
17 October, 2009
32
TheÊ TalkÊ ofÊ the
Poor Gamal Mubarak: CallsÊ forÊ reformÊ andÊ accusations of political inheritance
Issue 1528
33
People - Profile
The Talk of the Poor Gamal Mubarak: Calls for reform and accusations of political inheritance Gamal Mubarak made his way through many difficulties to a status of a high-ranking official in the ruling Nationalist Democratic Party.
G
amal Mubarak originally pursued an economic career in London. However, it was not long before he was drawn to politics, despite a reluctance to do so at first. He joined the Nationalist Party in 2000, as a member in the Secretariat General. That same year, the Nationalist party experienced an unprecedented loss in the parliamentary elections that took place in 2000. Gamal then launched an outcry for reforming the party and changing its orientations. Many people believe that this outcry was the step for which Gamal Mubarak is still paying the price up till now. This step exposed the political failure experienced by the ruling party for many years, and embarrassed leaders who remained in their seats for years without any accountability or review. This situation rendered the party as a replica of power centres which came under the scythe of Sadat,s reform in the early 1970s. Thus they returned in another guise to open fire on the reform outcry sent by Gamal Mubarak. Although some figures who joined Gamal Mubarak,s outcry inside the party were motivated by the fact that he is the president,s son, and therefore keeping their ties with him was a permanent gain and a guaranteed means to achieve their personal interests, the majority joined his outcry out of a genuine desire for reform. Thus, they formed a supportive power for Gamal Mubarak in his internal battle which enabled him to continue the party change process. But on the outside, Gamal still suffered the effects of internally ill-intended leaks, whether true for false, on his political ambitions. In 2002, in order to complete his internal reform plan, Gamal formed the Policies, Committee to handle Çpol icy 17 October, 2009
makingĂˆ for the government, taking him to a new political phase. This phase was marked by an opportunity for further reform. Although, it also provided more
opportunities criticize him. relent, instead path towards reform.
for his opponents to However, he did not he continued and on a political and economic
In November 2007, during the 9th 34
People - Profile Congress of the party, as part of the party’s reform, Gamal Mubarak was promoted to Assistant SecretaryGeneral, Policies, Secretary, and a , member of the party s office. The promotion was one of the highest decision-making positions inside the party, and as a result talks concerning his succession rose anew, as many of his opponents claimed that the promotion was actual beginning on the path towards succession. Yet only a few opponents remained, despite their loud voice in the press. They might represent a considerable proportion of intellectuals and political elites, but they do not represent any significant proportion, or even a fraction of the political scene. In contrast, the political elite began looking at Gamal Mubarak from several perspectives. First: the party-political perspectives, the so-called ÇG amal Mubarak tideÈ worked magic inside the National Democratic Party (NDP). The party,s doors were no longer open to those who seek political gains, but Gamal introduced, within his reform program, the principle of Çt argeted membershipÈ. The latest membership report noted about 63,000 party members who hold advanced scientific degrees, such as masters and PhDs. This change affected membership rates in general until they reached now an unprecedented number, which is more than 3 million members. Part of this growing membership goes back to what has been achieved by the new stream of ideas represented by the Gamal Mubarak trend. Second, the general perspective of the past seven years in Egypt witnessed unprecedented reform initiatives, both politically and economically. According to the latest party report, the initiatives totalled a number of 103. Then followed the most important initiative, a program for the poorest villages, which brought development plans for the first time to deprived areas in Egypt. They are considered by Gamal Mubarak himself and those close to him to have significantly changed Egypt, either through wide constitutional amendments, which included 32 articles in an unprecedented step and the adoption of new principles Issue 1528
that were not recognized in Egypt, such as that of Ç citizenshipÈ. The initiatives also turned the referendum on electing the president into a free election with multiple competitions. The draft of comprehensive health insurance was also adopted. Through this program, Gamal Mubarak escorted government ministers in visits to those villages which have not been visited even by a low-key official before. But those visits which drew the attention of the people of those villages, were also used by opponents of Jamal Mubarak to escalate their attack on him, and considered them the last step towards assuming power. They considered the poorest villages, program only as an exposed move meant Ð as they claimed - to bring the successor closer to the hearts of the poor and create a an audience among the zero-income public whom he does not know anything about, simply because he was born to a rich family. He was thought only to appreciate the businessmen and the rich around him, while he recognizes the poor only through their electoral votes which he needs to decorate his way to the presidency in democratic attire. The prevailing tone now in a large sector of the Egyptian political society is that Jamal Mubarak is marching vigorously towards the presidency to succeed his father. It is strange enough that despite the constant and repeated denials from President Mubarak and also Gamal Mubarak of this theory, many people around the streets of Cairo swear that succession is imminent. Some even go further to assert that the year 2010 will not end until we find Gamal Mubarak taking the helm of Egypt according to a skilfully-drawn succession scenario. They allege that this scenario was catered by constitutional amendments and security measures that cleared the stage for Gamal Mubarak and made him the only knight after disposing of any strong potential rivals. Thus, he was deemed the only future option for the Egyptians who can choose between the status quo or allowing a banned group that is waiting for an opportunity to grab the rule. In contrast, a clear trend emerged recently that sees Gamal Mubarak as the best alternative and solution indeed
for the coming period. They argue that Gamal has be experience in running the country as well as dealing with crises as a result of his closeness to President Mubarak, his father. In addition to what he may have learned from his father, supporters believe that Gamal gained the necessary expertise from his role as head of the Policies, Committee. The Committee has proved over the past years to generate ideas for upgrading the economic and social levels.This upgrading resulted in a 7% growth rate along with an economic and financial reform that played the major role in sparing Egypt the devastating effects of the global financial crisis. Moreover, the standard of living has also increased during the past few years and public satisfaction with government performance has increased for the first time in many years. This was asserted by the last opinion poll conducted by the party on the level of public satisfaction with the government and party performance. The poll confirmed that about 78 % were satisfied, although to varying degrees. Supporters of the trend that advocates Gamal Mubarak assert that he proved to have a clear political and economic project for Egypt,s future, characterized by adopting innovative methods for development. The most important approach is to come closer to citizens and identify their problems by visiting the villages. This trend believes that the scenario of succession is an illusion harboured by opponents of the current regime, because the recent constitutional amendments have made access to the presidency through multiple competitor elections. Amid all this, the ordinary citizen waits for someone who would fulfil his dreams of a better standard of living, bringing him an easy access to food, employment, free medical treatment and decent social services. Whoever can achieve all this for the ordinary Egyptian citizen would be more worthy in his view to claim the presidency regardless of his identity, , even if he is the president s son. 35
People - Interview
TheÊ ManufactureÊ ofÊ Illusion
Dr. Mufid Shihab, Egyptian Minister of Parliamentary and Legal Affairs According to the Egyptian Minister of Parliamentary and Legal Affairs, the debate over succession is an illusion which private newspapers and satellite channels live in. The Muslim Brotherhood is an illegal organization. The NDP will not enter into a dialogue or make deals with it.
D
r. Mufid Shihab is one of the most prominent figures in the Egyptian Ç political kitchenÈ ; he is the Minister of Parliamentary and Legal Affairs and a member the political committee of the ruling National Democratic Party. In his capacity as a senior government official, he stresses that the «succession» file does not exist within the party or the government. He says that the matter is not being discussed in the corridors of power, because there was no intention for succession in the first place. Dr Shihab describes the talk about Ç successionÈ as a kind of political illusion that some political private newspapers and satellite channels live in. They use this word for the hope of raising their readers and viewers, excitement, which guarantees an increase in their sales records. He confirms that so far there is no intention for conducting early parliamentary or presidential elections. He made it clear that the stage is not being set for the arrival of Gamal Mubarak, and that all of this is just gossip and sayings that are very far from the truth. Majalla: During this period, there is 17 October, 2009
much talk about the future of governance in Egypt. Many have talked about the setting of the political arena for passing of the succession project. In your opinion, why all this talk about this subject now? Dr Mufid Shihab: I honestly do not know the reason for this. The observer of the situation in Egypt will notice that the ordinary citizen is not concerned with this matter. Egyptian citizens are more concerned with their own private problems and affairs, such as health, education and work. Public affairs, such as parliamentary performance and the situation in Palestine and Iran, come in the second place for them. The last thing they might wish to talk about , is Egypt s political future; because they know it is not worth arguing about right now. So the matter is not of interest to the ordinary citizen, but was invented by the private newspapers and satellite channels without proper justification to do so. Majalla: But it was noted that during this period talk about the future of governance was accompanied by secret disclosures and writings about the preparation of the
political arena for the implementation of the succession project? The same newspapers and satellite channels are the ones behind such disclosures and writings. They focus on this matter and forget all the other things that are of interest to the Egyptians. It,s as if 80 million Egyptians have nothing to worry about except this issue. But if they stopped for a minute and gave themselves a little time to think they will find that this subject is not a matter of importance or a topic for discussion at any level and, if some are trying to link it to the presidential elections, they must keep in mind that the time for such elections hasn,t come yet. When the time comes, the NDP will nominate the candidate it deems appropriate. Other parties will also nominate the candidates they see fit. At that time, we could start talking about the future of power in Egypt, but now the political situation is stable and good. Everything is clear and obvious, and there is no need for discussion or debate whatsoever. Majalla: Are there hidden sources of information within the party or the
36
People - Interview government that leaked this information? There are no such sources. But unfortunately there are those who have an interest in causing confusion. They are always looking for journalistic sensation. Majalla: But the object of sensation this time is Gamal Mubarak? Yes, because it is an issue that is sure to guarantee the highest level of excitement and attract the largest number of readers and viewers. Majalla: Let me ask you frankly. Is the stage now being prepared for Gamal Mubarak? What Stage? This kind of talk is illogical and completely untrue. The NDP does not think about such a thing. It was never discussed at any level; officially or unofficially. Any talk about this subject is nothing more than guessing and speculation. Also, the time is not appropriate for talking about subjects related to the presidential elections. Majalla: Even though the presidential elections will be held in less than two years? This is a very long period. It does not justify talking about anything regarding the presidential elections. When the time comes, and the date for elections approaches, then it might be suitable to open the door for discussion about this issue. I do not know why these people are trying to rush events. They insist on forcing us to open the files of certain issues ahead of schedule. If we are not talking about the Shura Council elections, with only 7 months remaining before its starting date, is it reasonable to talk about the presidential elections now. Majalla: The insistence on talking about it now, is due to the statements made by a number of NDP leaders. They asserted that 2011 is the «decisive year»,it was understood that they meant that it was the year for settling the presidential issue? What they meant by Ç The decisive yearÈ is that there is a lot of elections that will be held next year; the mid-term Shura Council elections in April, and after that the parliamentary elections in November. That’s what all these statements mean, and they mean nothing else. But, as usual, there are those who try to find something that is not there. They conclude what they like to be the truth. Majalla: Have things reached a point where those who talk about the succession file confirm the existence of rival wings within the ruling National Democratic Party on this matter? I am surprised by those who claim to know what,s going on inside the party, even Issue 1528
though they do not know anything. In all the time I have worked in the NDP, I did not feel that we are two wings divided on the issue, despite the differences we might have regarding some small details. A party with different approaches can not be considered a real party. Also, words like the old guard and the new guard have become repugnant and senseless words. Majalla: Speaking about allegations, it has also been said that the NDP has made a secret deal with the Muslim Brotherhood to pass the succession project in return for allowing them to enter the parliament? This is a kind of hollow talk. No sane person with a balanced mind can imagine it even being said. First of all, the succession illusion, as I have said before, does not exist except in the minds of those who try to make it an issue. The second thing is that the NDP does not recognize the Brotherhood. They are an illegal organization, and the NDP has a principle of not dealing with illegal organizations. It is inconceivable that the majority party might enter into a dialogue with an illegal organization. What is conceivable, on the other hand, is that the NDP will deal with this organization in accordance with the law. Safwat Al-Sharif, The Party Secretary General, denied the existence of any kind of deals between the party and the illegal organization of the Ç Muslim BrotherhoodÈ . And, if such a deal was ever made it will be null and void, and totally invalid. Majalla: The other side believes that the NDP has made an agreement with some of the opposition parties to give them the seats of the Muslim Brotherhood in the parliament in return for helping the party legalize the succession project? Despite such irresponsible talk, the normal situation is that only legitimate organizations and political parties should be allowed to have seats in the parliament. So, in the context of supporting a multiparty system and seeking a more tangible presence of other parties, I think that the NDP has taken a positive step in this regard. It should be interpreted as a good thing rather than a prelude to an evil plot that is being orchestrated in the dark, as some ill- intentioned people might like to think. The NDP does not work in secret. It believes that political parties should do their work under the eyes of the public, and not in secrecy. The national movement to support legitimate parties has been declared publicly. If anyone wants to ascertain this or has any doubts regarding it, he should ask the opposition parties themselves. Do these parties accept to take part in such sinister deals? Surely, the NDP cannot accept to be involved in such dirty games, as the other legal opposition parties can not accept to do so themselves.
Majalla: So it was not in the party,s intention to get rid of the Muslim Brotherhood in the parliament? We do not exclude anybody, but our goal is to make the parliament seats available only for legitimate organizations. In order to have a reasonable majority in a multi-party community, we must be more efficient. I think that the majority party has an indirect duty towards partisan political life. Its duty is to increase the representation of parties in order to make them more effective. Majalla: What do you mean by a reasonable majority? A majority like that found in all parliaments; between 60, 65 and 80 per cent Majalla: Is there a possibility of early elections, whether parliamentary or presidential? All elections will be held according to schedule; The Shura Council renewal elections in next April, the parliamentary elections in November of the same year; and then the presidential elections in 2011. Majalla: There has been talk about the possibility of President Mubarak calling for early presidential elections. President Mubarak did not announce anything in this regard. He did not talk about it. So, I have no answer for your question. Majalla: Are you comfortable with Egypt,s political future or concerned about it? Both. My concern is justifiable and does not mean a lack of trust. It is a positive concern. Egypt is facing severe challenges during the coming period, and I hope that the reform process does not get hindered by the conspiracies of the domestic and foreign powers trying to undermine it. Majalla: Some promoters of the succession scenario are talking about a vague or bad image of Egypt,s future. Some of them even think that things might amount to a revolution? First of all these people have build their perception on an illusion they invented and want to believe in. Second, their wishes of violence erupting in Egypt will not come true for two reasons, firstly there is nothing happening in Egypt that might lead to acts of violence and secondly, the good people of Egypt are kind people who hate violence and prefer to live safely and peacefully.
Interview Conducted by: Ahmed Ayoub - Cairo 37
17 October, 2009
Economics Arab Economics
InternationalĂŠ Investor
Markets
A Time for
Recovery
Issue 1528
39
Economics - ArabÊ Economics
A Time for Recovery After the Financial Crash – Which Sectors are Leading the GCC Markets Mohammed Sulaiman Focusing on the GCC’s reliance on oil production as an engine of growth, Dr. Sulaiman differentiates between being a global leader in oil production and being a global leader in energy production. By highlighting how the world’s largest oil consumers are taking alternative energy seriously, the implication is that the GCC should diversify its energy producing industry by developing alternative energy.
Saudi Finance Minister Ibrahim bin Abdel Aziz al-Assaf (L) and his Bahraini counterpart Sheikh Ahmed bin Mohammed al-Khalifa arrive at a ministerial meeting of the six Gulf states in the Saudi Red Sea port of Jeddah on (c)getty images September 8, 2009. 17 October, 2009
40
Economics - ArabÊ Economics
R
enewable energy is the most important emerging economic sector in the GCC Immediately following the onset of the global financial crisis, many leading sectors of the GCC economies were slowed dramatically. Real estate development was the most prominent of these, but others, such as financial services and industry, also suffered. What became clear as the crisis wore on is that these sectors did not represent true diversification from oil because they are driven by investment flows that are highly correlated with oil prices. Traditional non-oil sectors remain driven by oil Real estate, the second largest sector in the GCC to energy, has probably been the hardest hit sector in the region, followed closely by financial services. The six-country region has no less than three financial centers that are vying to become global centers of finance – Doha, Bahrain and Dubai. The GCC is also one of the most heavily banked regions in the world. In the aftermath of the global financial crisis, this sector has been one of the hardest hit. In addition to real estate and financial services, industrial output in the region has been hard hit. This is for several reasons. First, industry in the GCC is heavily weighted toward outputs that have real estate related applications, such as aluminium, ceramics and steel. The region does not produce a great deal of industry that is used for retail products, so the real estate downturn has also impacted industry. Another reason industry has been impacted is that both domestic and international demand have declined. It is clear from overlooking the aftermath of the global financial crisis that these sectors are not nearly mature enough to drive the region’s economies during downturns. They remain largely derivative industries that are driven by the business cycle, rather then being its drivers. Therefore, in the coming period where the region continues to search for a growth model that will drive sustainable diversification from reliance on oil revenue, these sectors do not appear to be the most attractive. Ironically, it appears that if the GCC is going to successfully diversify away from reliance on oil revenue in the coming period, it may do so by investing heavily in alternative energy. No sector offers more raw promise for the GCC in the current environment. The world’s appetite for oil is changing As a result, it is possible that the global financial crisis will lead to the emergence of new sectors of comparative leadership for the GCC. I believe these sectors will fall into two categories. The first is alternative energy, and the second is service sectors with inelastic demand curves that are driven by population and demographics. In my view, the first and clearly most important of these is energy. At present, the GCC is not a global leader in energy, it is a global leader in oil production. As the UAE and Saudi Arabia have both clearly and very publicly recognized recently, this distinction is Issue 1528
of critical importance. Worldwide, concerns about the environment are combining with political considerations to lead to a strong, renewed commitment to alternative energy. Both John McCain and Barack Obama stated while they were running for president that eliminating US reliance on oil imported from the Middle East is a goal that they would seek to accomplish within 10 years. Mr. Obama even went as far as to say, Ò this the most important issue that our future economy is going to face.Ó While these might have been shallow campaign promises, a question that remains to be answered, the prominence of the message spoke of its importance in American politics and is indicative of an initiative for change. Renewable energy is gaining ground There is now clear evidence of this commitment to reduce reliance on oil and focus on renewable energy. Worldwide, renewable energy installations for electricity have doubled from 2000 to 2007. In the United States, 10% of installed capacity and 9% of power generation came from renewable sources in 2007. Two of the fastest growing sources of energy in the US are also the cleanest - wind and solar. Their installed capacity grew by 45% and 40% respectively in 2007 from the previous year. Perhaps most striking is the shift in market share of new capacity to renewable sources. In the US, as recently as 2004, only 2% of new capacity additions for electricity were from renewable sources. In 2007, 35% of the added capacity was renewable. There is striking data as well that indicates that renewable sources of power generation are becoming increasingly economically viable. Wind, geothermal, biomass and hydropower are all competitive with fossil fuels. Only wave power and photovoltaic solar energy appear to be economically uncompetitive (in the absence of subsidies) given current technology. The European Commission has developed a roadmap, endorsed by the EU early this year, that includes a target of sourcing 20% of the EU’s energy needs from renewable sources by 2020. As of 2005, 11 of the EU’s 27 member states already drew more than 10% of their energy needs from renewable sources. Under the plan, by 2020, all of them will. While the United States and Europe do lead the growth in development of renewable electricity sources, China and India, surprisingly, both rank in the global top 5 countries in terms of installed renewable electricity capacity worldwide. China’s focus has been on small hydropower, while India’s has been on wind. China’s focus on renewable energy is particularly striking. China is spending 23 percent of its 4 trillion yuan ($585 billion) stimulus package to make its electricity grid ready for alternative sources, using advanced
electrical technologies from Zurich-based ABB Ltd. and American Superconductor Corp. The customer is always right So oil consumers are taking alternative energy very seriously. What this means for the current producers of oil is that in order to maintain their global leadership in energy production in the medium to long term, they had better start seriously and jointly taking leadership with respect to alternative sources of energy. If they do not, others will, and their leadership as suppliers of the world’s energy will be eroded Ð faster than they might expect. Fortunately for the region, it has all of the necessary prerequisites to do so. They have the infrastructure, networks, supply chain knowledge, and other information necessary to understand the needs of energy consumers and therefore develop and deliver viable alternatives that meet the needs of the market. Second, the oil producing countries have the financial capital that has come from high oil prices to invest. Third, as the current global energy leaders, these countries are also home to world’s leading minds on energy – supplying the human capital necessary for a serious alternative energy initiative. Finally, many of the natural and other resources needed are available. The region has begun to advance alternative energy projects in earnest. The Government of Oman has tendered the up-front consulting for a large concentrated solar power facility, and the UAE, of course, has committed very strongly to alternative energy through IRENA and Masdar. In addition, the UAE has also announced plans for the region’s largest solar plant and completed feasibility work on wind energy in Fujairah. Saudi Arabia is no stranger to alternative energy. In 1989, BP, the Al Ghosaibi family, and the Olayan group established BP Solar Arabia, which currently manufactures more than 15,000 solar power modules and systems per year. In addition, Saudi Arabia has an existing Solar Village project, solar powered water desalination plants, and a solar water heating project. In addition, Saudi has an existing 2 MW solar plant, and top government officials have identified solar research as the Kingdom’s highest research priority. I therefore expect some of the most important and lucrative regional investment opportunities of the next ten years to be in renewable energy. Regional demographics make energy a critical sector, and global dynamics make alternative energy a compelling investment opportunity.
An economist who is currently Senior Manager for Private Equity and Real Estate at the National Investment Funds Company and a Board Member of the Young Arab Leaders, UAE Chapter
41
Economics - InternationalÊ Investor
An Opportunity For Reform Gulf Financial Centres in the Wake of the Financial Crisis The Financial Centres of the Gulf have not been able to recover as quickly as their overall economies have. Underlying structural problems stand in the way of this recovery, particularly because of their high degree of liquidity and their volatile nature. Viable frameworks are necessary for regulatory reforms to be successful.
A
lthough the Gulf economies have weathered the Global Financial Crisis (GFC) relatively well, the same cannot be said about their financial centres. Stock markets in the Middle East are still on average 25 (Saudi Arabia) to 50 percent (Bahrain) below their pre-crisis levels, whereas the London, New York, Hong Kong and Singapore stock markets have largely recovered. The region’s shaky regulatory reputation, coupled with the shortage of capital that hit the region’s markets due to severe losses incurred by real estate investments, has made a quick recovery problematic. Despite this gloomy picture, the GFC offers a critical opportunity for the region to seriously improve its economic and financial systems. Financial crises are a well-known catalyst for reform since they increase the costs of inactivity by policymakers. As such, Gulf states are now presented with a valuable window of opportunity to tackle the endemic weaknesses in the financial structures and regulations that contributed so much to the severity of the region’s financial debacle. Despite the differences between the political institutions, levels of economic openness, diversification, and regulatory structures of the Gulf States, there is an evident trend of structural problems in most of the region’s financial centres. Policymakers need to focus on two main areas of reform which greatly contributed to magnifying the ripple effect of the GFC: the risk-prone nature of the economic and financial infrastructure, and the deficits in the region’s financial regulatory structure. First, Gulf financial markets are overly liquid and volatile. Most of the markets are dominated by a handful of big, often state owned, companies. The ensuing high risk attracts the attention of hedge funds, therefore, these markets also attract liquidity. Together, the lack of financial diversity and high liquidity end up magnifying volatility and instability, notably in the presence of external shocks such as the GFC. Furthermore, big players in these financial centres Ð mostly sovereign wealth funds and high net worth individuals Ð have a predilection for American and European (mostly German) real estate investments, which further increases systemic risk. These risk-generating structural circumstances not only render these markets highly vulnerable in normal times, 17 October, 2009
Second, although the region’s financial regulations are still considered weak by foreign standards, it is incontestable that encouraging steps have been made towards improving regulations in the past few years. Nonetheless, Gulf states must press further in their endeavours to implement and enforce Basel II, as well as to address the systemic risks unveiled by the GFC.
Daniel Capparelli
but also proved fatal in the wake of the GFC. Part of the solution to this problem lies not only in continuing present efforts at reform, but also in engaging in new reforms. A genuinely open economic and financial system would attract key foreign investment and much-needed (expatriate) skilled labour. Gulf countries by and large suffer greatly from skilled staff, regulatory deficits, and a lack of economic and financial diversity. Given the relatively low number of IPOs, especially when compared to Western or Asian financial markets, the Gulf markets must work to increase the number and diversity of listed companies. This will help create a balance between stable and liquid funds, and therefore help reduce volatility. A transition from a familyowned-company business structure to a further privatization of state-owned companies will be needed. More critically, Gulf countries must improve their Ò ease of doing businessÓ . This entails enhancing the ability of legal institutions to enforce property and contracting rights, reducing obstacles to setting up a business and reducing corruption. As shown in the latest World Economic Forum’s Global Competitiveness Report, Saudi Arabia, UAE and Qatar have made encouraging progress, but most of the region’s economies have shied away from reducing government involvement in the overall economy as well as in financial markets. Weak property and contracting rights, government ownership of stock exchanges, and control over vital board positions in regulatory bodies significantly reduces the perception of impartiality and credibility of these bodies. These issues are critical if markets are to grow and attract the interest of foreign and private entrepreneurs.
Regulatory changes therefore need to address systemic risk rather than cater to moral value concerns, such as present international initiatives to cap compensation practices. Yet the main challenge here is not to commit to new standards, but to create viable frameworks for their implementation and enforcement. The complexity of some regulatory structures and the need to reply on competent regulatory staff offers a clear example. One Basel II criteria implies calculating prudential reserves as a function of the weighted risks of a bank’s investment portfolio. Given the complexities of today’s financial instruments, the credibility of a regulatory body’s impartiality and competency must thus be without question. Yet, despite the regions acute lack of adequately trained specialists – which undermines the efficiency of financial institutions and regulatory bodies alike Ð most countries in the region maintain strict cross-border movement restrictions on qualified personnel. Given the fundamental complementary nautre of these policies, it is clear that the development of Gulf financial centres continues to be hindered by their insufficient, and sometimes contradictory, reform efforts. While reform incentives vary from country to country, the bottom line is that Gulf states should take advantage of the GFC to create a Ò continualÓ culture of reform. There are many benefits to be had, including the development of a regional hub which may eventually come to rival established financial centres in Europe and the US. Given the immensity of the task of developing these centres, Gulf states must be cautious to avoid undertaking piecemeal reforms and focus on comprehensive and continual reform programs. Researcher at the London School of Economics and Political Science and at the European Institute for International Political Economy
42
Issue 1528
17 October, 2009
Economics - Markets
Competitiveness index
SaudiÊ FirmsÊ Better Debt Levels In a recent report form Emirates Business ( 13 October 2009) it was reported that the debt level of Saudi listed real estate companies is lower than those of its peers. The lower debt levels are a consequence of operations tilting towards real estate management, and plot stales. Many Saudi real estate firms refrain from raising debt and operate on a cash basis, in order to remain compliant to Sharia. This strategy provides the industry with a significant room for expansion.
Switzerland has overtaken the U.S. as the worldÕ s most competitive economy, following the crash of the U.S. banking system. Countries with a large focus on financial services, such as the U.S., UK and Iceland, were the main losers of the crisis
A survey of more than 22,000 people in 20 countries found that just over four in 10 citizens (44% average) are satisfied with their government’s response to the financial crisis 87 China 68 Australia 63 Egypt 59 Brazil 57 Indonesia 56 Canada 55 Chile 49 U.S. 49 Russia 47 India 44 Kenya 39 Nigeria 36 Germany Satisfaction with actions 35 UK of national 32 Pakistan leaders to address 29 Turkey financial 27 France crisis 24 Philippines 18 Japan 9 Mexico
0
20
40
60
80
100%
Poll of 22,158 people between Jun 19 and Aug 17 by GlobeScan together with PIPA. Margin © GRAPHIC NEWS of error: ±2.2% to 4.8%
Gas Discovery in Egypt Dana Gas has discovered to more significant sources of gas in the Egyptian Nile Delta. Faraskur-1 and Marzouk-2 are expected to produce 86 billion cubic feet of gas combined to the company. These discoveries represent the 8th and 9th discoveries from the company’s drilling campaign in the delta. The Company, Dana Gas, is the sixth largest natural gas producer in Egypt, and is the Middle East’s largest regional private sector natural gas company. Issue 1528
Ranking Ranking 2009-10 2008-09
1 2 3 4 5 6 7 8 9 10
Switzerland 2 United States 1 Singapore 5 Sweden 4 Denmark 3 Finland 6 Germany 7 Japan 9 Canada 10 Netherlands 8
Source: WEF, 2009 Global Competitiveness Index
11 12 13 14 15 16 17 18 19 20
Hong Kong Taiwan UK Norway Australia France Austria Belgium Korea N. Zealand
11 17 12 15 18 16 14 19 13 24
© GRAPHIC NEWS
Chile-GCC Trade Agreement
The government of Chile aims to sign a free trade agreement with the countries of the Gulf Cooperation Council. This opportunity implies that the GCC can use Chile as a platform for their exports world wide. Dr. Shereef Ellaboudy, Assistant Professor at the University of Dubai, noted that this arrangement would be particularly beneficial to the UAE. 45
17 October, 2009
Reviews Books
Reports
Readings
Issue 1528
47
Reviews - Books
Shifting Paradigms: New ways of understanding global politics Why the New World Constantly Surprises Us and What We Can Do About It Joshual Cooper Ramo Little Brown and Company, March 2009 In his latest book, Joshua Cooper Ramo redifines the means by which the world should be studied. He argues that recent changes have altered the world order, and consequently previous mechanisms for understanding global politics no longer apply.
T
group and a force of evil.
he Age of the Unthinkable by Joshua Cooper Ramo attempts to establish a new paradigm for understanding global politics and international relations in a fastchanging world. It therefore marks a shift and rejects older models as obsolete ways of thinking.
democracy theory is also doomed since it postulates that democracies never wage war with one another. Consequently US bomber attacks on the elected government of Serbia in 1999 is counter-evidence provided by the author which disproves the theory.
Later he acknowledges that the age of the unthinkable is one in which states are not the only key players in world-politics and non-state entities like Hezbollah party have an effective role to play.
The Ò unthinkableÓ for Ramo, is any unpredictable event that defies the logic of mainstream science and cannot be interpreted within the framework of existing paradigms. Our age, the author argues, abounds with such events which, for better or worse, are reshaping the world.
For Ramo, what matters is therefore not just to prevent disaster but to have a vision of how to withstand stress without cracking when disasters actually take place. In other words, the key word in our world is not rational morality but creativity.
By incriminating groups who are on Ç the axis of evilÈ , he follows the same over simplistic attitude which he rejects, ignoring Hezbollah deep and noncriminal involvement in regional and local politics which needs to be considered.
Since the unthinkable by definition defies any paradigmatic regularization, it is not surprising that at the end of the day the author does not provide us with an alternative paradigm per se.
The question now remains: is the elusive nature of unthinkable phenomena a plausible excuse for treating them as irreducible residuals of science.
Two examples he gives of the unthinkable are the internet’s largest website, Google, and Hezbollah’s 500-men army’s deterrence of Israel’s 30,000 soldier army. In the age of the unthinkable, the link between cause and effect is lost. , Thus, Kissinger s historical paradigm of global politics is abandoned since it relies on history as a starting point for interpreting the present and predicting the future. The unthinkable does not conform to any historical precedent and represents what is called in science as "the irreducible unknown". According to Ramo, Dean Babst’s peaceful 17 October, 2009
Instead, he furnishes us with a method or strategy for coping with the unthinkable and neutralizing its dangers this strategy is resilience versus resistance. In other words, we should enhance our positive institutions already at work, making them resilient in case of calamity, rather than strain our nerves on sharpening passive defence systems and keeping hysterically alert to unexpected dangers. Sometimes self-contradiction on the author’s part looms. At the very outset, he rides the roughshod over Hezbollah party considering it a criminal
The author himself acknowledges that what were formerly one in a hundred year events are now monthly occurrences. Thus when irregularities occur regularly, they form a pattern and can be subdued to scientific investigation. One great psycholinguist once wrote on Ç The nonanomalous nature of anomalous utterancesÈ . Can we, by analogy, talk about a non-anomalous pattern of anomalous, that is, unpredictable events in today’s world? Perhaps this is a possibility that the author still needs to probe.
48
Reviews - Readings
Readings Books
Cover
In the Graveyard of Empires: , America s War in Afghanistan Seth G. Jones W.W. Norton & Co.2009 Jones revisits Afghan history, specifically the invasions by the British in the midand late19-th century and the Russians in the late20-th and he sheds light on why Pakistan continues to be a key player in the regionÝ s future.
Cover
Climate Change, Trade, and Competitiveness: Is a Collision Inevitable? Brookings Trade Forum provides comprehensive analysis on current and emerging issues of international trade and macroeconomics. Practitioners and academics contribute to this volume, with papers that provide an in-depth look at at climate policy and its impact on trade.
Think Tank Reports The War on Capitalism Jacob Mchangama Adam Smith Institute, 2009 In The War on Capitalism Jacob Mchangama argues that there is an emerging marked political bias towards state involvement in the economy, increased public spending and the limitation or even abolishment of free market initiatives.
Podcast Speaker: Muammar al-Qaddafi Presider: Richard Haas, President Council on Foreign Relations September 2009 The Libyan leader spoke at a conference of Council on Foreign Relations and discussed why Libya decided to give up its biological weapons program in 2003.
Issue 1528
49
17 October, 2009
Reviews - Reports
The Humiliating Wars of America Resourcing for Defeat: Critical Failures in Planning, Programming, Budgeting and Resourcing the Afghan and Iraq Wars. Erin K. Fitzgerald, Anthony H. Cordesman and Arleigh A. Burke Centre for Strategic and International Studies, Burke Chair in Strategy (28 August 2009) The study focuses on the funding of the two wars and highlights the fact that far more money was spent on Iraq than Afghanistan, where arguably more funding was necessary.
T
Ò I know that success only comes from a solid, sustained commitment of resources and attention,Ó said Crocker.
he American occupation of Afghanistan and Iraq has turned out to be more costly and murkier than was initially thought. Writing in Newsweek under the title of Ò Eight Years OnÓ , Ryan Crocker, the once prominent ambassador to Iraq during the Bush administration, discusses the trenchant difficulties which the U.S. faced in the wars in Afghanistan and Iraq. Crocker’s article coincides with a study by the Centre for Strategic and International Studies (CSIS) Ò Resourcing for Defeat: Critical Failures in Planning, Programming, Budgeting and Resourcing the Afghan and Iraq WarsÓ . Crocker assesses the last eight years of his diplomacy in places that fatigued America and reduced its stature as a superpower on the international stage. From what looked like a promising beginning, the war in Afghanistan increasingly turned into a nightmare from which the U.S and their allies are yet to awake. Scenes of mayhem in Iraq suggest that st American wars of the 21 century are far from over and far from being winnable. In a similar fashion to Crocker’s analysis of the two wars, the CSIS report highlights the staggering figures which have been spent on Iraq, and suggests that had they been spent on Afghanistan, the situation would have been much different today.
Crocker additionally highlights the contradictory attitudes with which the U.S. treated their adversaries and allies, leaving many diplomats like Crocker befuddled. Iran which enthusiastically supported the war on Afghanistan, cooperating with American diplomats behind closed doors until Bush declared Iran part of Ò an axis of evilÓ .
not specify the type of construction project that should have taken place. Its focus is more on the spending that has gone to the military rather than the civil arenas. The study mentions that Ò in total, outlays for operations in Iraq and Afghanistan amounted to roughly $145 billion last year. Outlays in 2009 could total approximately $160 billionÓ .
But instead, more money was spent on the unnecessary and costly war in Iraq with no tangible positive results.
This situation, entailing a constant pouring of money in areas of comparatively low importance resulted in grave consequences.
Ò The Bush Administration simply did not fund the war it had to fight”, says the CSIS study. The costs of the two wars have reached up to $915 billion, Ò with 687 billion going to the Iraq War and $228 billion going to Afghanistan.Ó
For example, despite the incredible amount of money spent on Iraq and Afghanistan, poverty was constantly on the rise, turning the population of these countries ardently against the U.S. and its allies.
The report explains that Afghanistan needed far more money than it received, particularly in comparison to the funding that Iraq acquired. This suggests that American political and economic interests in Iraq were more advanced than those in Afghanistan, though the war in Afghanistan received much more international support. Crocker and the CSIS highlight that the money in Iraq and Afghanistan was not spent wisely, focusing on military operations rather than development projects for the longterm benefit of the local populations.
Crocker hints that only with charitable benevolence could America have won the hearts of the locals, giving the example of their positive reaction when Pakistan was hit by a massive earthquake and America quickly dispatched Chinooks to help victims.
Despite criticisms the study provides, it does Issue 1528
The Bush Administration relied heavily on military operations, and insurgents capitalized on the impact this had on the morale of American troops and their allies. Both, the CSIS and Crocker, highlight the necessity of constant attention to Afghanistan:
This complicated and hardened the American involvement in Afghanistan. Iran played its cards in Afghanistan by reinstating the Afghani leader Hekmatyar back into Afghanistan, with the result being, Ò today his Hezb-i-Islami organisation is one of the deadliest insurgent forces in eastern Afghanistan, where U.S. troops have taken their highest casualties since 2001.Ó The CSIS report and Crocker’s article demonstrate the heavy legacy that Bush left for Obama to shoulder, particularly in Afghanistan. Ò Three years of underfunding the Afghan conflict have created a dilemma for the Obama administration where it must now pay far more to compensate for a past Administration’s grand strategic failures or risk losing the war in AfghanistanÉO bama must now deal with two badly damaged and budgeted warsÓ Yet, despite the insight that the CSIS report and Crocker’s article provide, both fail to offer concrete solutions to the problems the U.S. and its allies in Afghanistan and Iraq face today. They are not radical enough in their assessment of the two wars, dealing with consequences rather than origins and rationale. They emphasise the consequences of the military aspects of the wars rather than the rationale for them, when it is the clear that the U.S. lost because its wars were conducted arrogantly and with no respect or recourse to international law. The failures of America in Iraq and Afghanistan were not only military failures; they were also failures of leadership and failures of compliance and respect to international law. To read the full report see: http://csis.org/publication/resourcing-defeat-0
51
The Political Essay
LessonÊ Learned? Why Brussels should be thankful for the financial crisis
The second Irish referendum on the Lisbon Treaty was a crucial event for the EU project. In these decisive times for Europe and the wellbeing of Europeans, the EU’s greatest achievements seem to have been forgotten. This is an old problem, which Brussels has traditionally failed to tackle.
F
rom time to time, and for the worst reasons, we are reminded that Ò history is too important to be left to the historiansÓ . On the 2nd of October, the EU Lisbon Treaty was subject to a referendum in Ireland for the second time in a little over a year. This approval of the treaty is crucial for a better definition of the EU’s international role, to put an end to national vetoes on various key policy areas, and speed up EU’s decision-making process. In spite of the Ò yesÓ victory, judging by the issues that have occupied the debate in Ireland in these decisive times for the European project, it seems that what the EU has done for Europe and Europeans has been forgotten. Several concerns from the Irish were pointed out as decisive in the Ò noÓ in 2008’s referendum. In spite of the EU’s concessions, these concerns remained until the latest referendum. Taxation independence, the right to keep its own EU Commissioner and maintaining its antiabortion laws are among the primary causes of reluctance. Libertas, the first pan-European party which was crucial in the Ò noÓ campaign last year, drives itself by slogans such as Ò unelected and unanswerable elites in Brussels are making laws behind closed doors that change our lives, and threaten our jobs. It must stop.Ó In a community of democracies, it is striking that the only EU member state out of the twenty seven which held a referendum on the Lisbon Treaty rejected it. It took a second referendum, and plenty of pressure from different sources, to almost force the approval of the Treaty. Also, it is ironic that less than one per cent of the EU’s total population was delaying and potentially threatening the evolution of the whole EU project. The reason for this stalemate is the detachment and alienation of EU citizens from the EU project, and from what goes on in Brussels. This is an issue which EU policy makers have traditionally failed to tackle. The EU does have major problems. Its complexity, its overly bureaucratic 17 October, 2009
as a first step for European integration. Coal and steal were, at the time, the two crucial resources of any war effort. Uniting the steal and coal productions of Italy, France, Germany, Holland, Belgium and Luxembourg was an assurance against this recent and dark past. The EU’s contribution to member states’ success such as Ireland’s should also be remembered more often.
Manuel Almeida character and, definitely, its difficulty to reach out to EU citizens are top of the list. These EU characteristics only add to the image of the EU as a political project where the big decisions, with great influence over citizens’ lives, are made by a small elite. The status of the European Parliament only aggravates this issue. It is an ill institution by any criteria, but especially when considering that its main reason for being is representing the interests of EU citizens. Saving Europe from its dark past of war is the primary and most valuable aim of the EU project. Sadly, it seems to be also the most easily forgotten one. The EU has rendered armed conflict within its borders virtually impossible. There are still conflicts, but the EU is not defined by the absence of conflict within it, but by its ability to bring about a peaceful resolution to these conflicts. This, together with the creation of a zone of prosperity that became the world’s biggest economic bloc which allows Europe to compete with challenges such as Asia’s rise, are the EU’s most valuable achievements. To drive forward such an ambitious political enterprise, political figures including the likes of Jean Monnet or Robert Schuman, have searched for the best way of escaping Europe’s dark past of blind nationalism, war, and destruction. With the goal of designing a European future different from its past, they created the European Coal and Steal Community
Until the 1970s, and before joining the EU, Ireland was one the poorest countries in Europe. It is common to hear stories from older generations of Irish people of how they spent years feeding themselves with milk and potatoes only. Ò The Irish miracleÓ was one of the greatest stories of success in Europe, the brightest example of the economic and social benefits of EU membership. This factor, quite absent from the first referendum, was ultimately decisive in the 2nd of October result. In hand with the terrible effects of the economic crisis, the benefits of economic stability that EU membership and belonging to the Euro currency club provide were finally acknowledged. This was so for the worst reasons, and in this regard, Brussels should be thankful for the effects of the financial crisis. Not to argue that, if the Ò noÓ in Ireland had won, the EU would either disappear of collapse. However, this failure of EU leaderships to connect to its citizens, and in particular with the referendum, the failure to spread the message about the EU’s greatest achievements for Europe in general and the Irish in particular, can have appalling consequences. Another Ò noÓ victory would have possibly created the biggest political crisis in EU history. If this had happened, the blame would not be Ireland’s. Rather, the finger should be pointed at Brussels, and at the state of the European Parliament.
52
Issue 1528
17 October, 2009
