Now in his eighties, Egyptian president Hosni Mubarak has ruled Egypt with an iron fist since 1981; he has turned Egypt into a police state rivaling Syria’s or Tunisia’s, with a security force numbering nearly two million.

As Egyptian president Hosni Mubarak enters his twenty-eighth year in power, Egypt’s future is more uncertain than ever. Egyptian society is stagnant, and while Egyptians are proud of a heritage that goes back millennia, they are pessimistic about the future of their country,[1] unsure whether Egypt can weather peacefully an economic downturn and a troubled transition upon the incapacitation or death of its octogenarian leader. Indeed, at a time when the Obama administration is once again basing U.S. policy toward the Middle East on the assumption of the Egyptian government’s durability, many Egyptians—most prominently outspoken Egyptian journalist Abdulhalim Qandil—argue that Mubarak’s regime is on the verge of collapse.[2]

The Egyptian economy is in trouble. Egyptian unemployment, according to international organizations, hovers above 20 percent, almost twice the official Egyptian government estimate;[3] underemployment is epidemic. According to Transparency International, Egypt ranks in the bottom tier of Arab states for high levels of perceived corruption.[4] The inflation rate continues to increase,[5] increasing pressure on the unemployed, poor and elderly. Food riots erupted in April 2008 as the annual rise in food prices topped 20 percent.[6] The gap between rich and poor is also growing. Perhaps three million Egyptians live in swank upper class villas in neighborhoods such as Ar-Rihab, Ash-Shuruq, Sharm el-Sheikh, Marina, and Muqattam Heights while 44 percent of the country subsists on less than $2 per day.[7] Less than 20 percent of Egyptians own nearly 80 percent of the country’s wealth.[8]

Mubarak and his National Democratic Party cannot shirk accountability as they have been in sole control of the economy for more than a quarter century. When Mubarak took power, the Egyptian economy was in a much better shape. Government public revenues were 8.3 billion Egyptian pounds (E£) in 1981. From 1986 to 1987, expenditures nearly doubled, from E£ 13.2 billion to E£ 22.2 billion. Budget deficits increased from E£ 4.9 billion in 1985-86 to E£ 8.7 billion in 1986-87. American economist Ibrahim M. Oweiss, an expert on the Egyptian economy, concluded that since the mid-1980s “the Egyptian economy has essentially stagnated.”[9] The growth rate of gross domestic product per capita has been approximately zero.[10] Mubarak has been unable to make the reforms necessary to address unemployment, inflation, housing, food crises, and Egyptians’ other urgent needs.

Over the past decade, the Egyptian pound has lost almost half its value against the U.S. dollar. A recent report by Goldman Sachs suggests a greater devaluation may be on the horizon. “Without a further depreciation in the Egyptian pound, the Central Bank of Egypt would risk further big losses in the foreign exchange reserves and only delay the inevitable adjustment that is needed,” the report found.[11] Should devaluation occur, the cost-of-living would increase because of Egypt’s dependence on imports for many goods and services. This in turn would drive below the poverty line the many million Egyptians struggling to keep their families afloat.

Cairo should also be concerned over its foreign exchange reserve, which has fluctuated significantly. Between 1997 and 2001, it declined by half from US$30 billion to $15 billion before recovering to $31 billion in 2008.[12] However, after the bread riots in April 2008,[13] the Egyptian government may not have the political will power to devalue its currency and so risks depleting its foreign exchange reserves, which, in turn, could constrain its ability to stabilize its own currency.

There is very little indication that the Egyptian government can turn the situation around. Annual growth is not enough to absorb new entrants into the labor market.[14] According to former Egyptian trade minister Ahmad Guwaili, the Egyptian education system does not prepare students adequately for the needs of the labor market.[15] Those who do succeed often leave the country to pursue more lucrative opportunities abroad. According to the U.N. International Labor Organization, to halve the $1-a-day working poverty by 2015, gross domestic product (GDP) must grow at 4-5 percent a year, and to halve the $2-a-day working poverty by 2015, GDP must grow by 8-10 percent a year. Egypt’s growth rate is closer to 3 percent for this year and will contract to 2.4 percent in 2010.[16] Nor has Egypt’s productivity moved in tandem with GDP, an unusual pattern, which the International Labor Organization attributes to increases in oil revenues accompanied by “stagnant productivity.”[17]

Egypt has an overwhelmingly young population: 37 percent of the population is below fifteen-years-old, and 58 percent is younger than twenty-five,[18] and the working-age population is increasing by 3 percent per year. A quarter of young men and a whopping 59 percent of young women are unemployed.[19] The Mubarak regime has done little to increase employment, especially among youth. Ninety percent of the unemployed are between fifteen and twenty-four.[20] One writer in the Egyptian weekly Al-Ahram expressed his frustration with the current labor situation:

The problem transcends the economic and can have profound social ramifications since many Egyptian men can neither afford to rent nor purchase an apartment, let alone marry,[22] a dangerous phenomenon in a country that in the recent past, has had to battle an insurgency of young men recruited by violent Islamist groups. Amidst this affordable housing crisis, developers have constructed luxury complexes for the affluent, a jarring irritant to the dispossessed. Even if the young and unemployed do not turn to Islamism, either for lack of conviction or because of the effectiveness of the state security apparatus, their despair and frustration can manifest itself in a high rate of drug and alcohol use, divorce, domestic violence, sex crimes, and prostitution, all of which compound Egyptian social and economic problems.[23]

Edward S. Walker, Jr., who was the U.S. ambassador to Egypt from 1994 to 1997, and subsequently served as assistant secretary of state for Near Eastern affairs, criticized

Although Egypt tolerates a number of opposition parties—the Arab Socialist Party (Hizb Misr al-Arabi al-Ishtiraki), the Liberal Party (Hizb al-Ahrar), the Progressive National Unionist Party (Hizb at-Tajammu’ al-Watani at-Taqadummi al-Wahdawi’), the New Wafd Party (Hizb al-Wafd-al-Jadid), Tomorrow Party (Hizb al-Ghad), Kifaya, and the Democratic Front Party (Hizb al-Jabha al-Democrati—Mubarak handpicks high-level officials from within his National Democratic Party to serve in all high level and most mid-level posts. After decades of democratic drought, opposition parties are ineffective and have little organization capacity. When they do organize, they face a lack of resources and oppressive government tactics. Mubarak’s government owns the media, and so even the best organized opposition receives little public exposure.

When the ruling party does abuse its power or flout the constitution, Egyptians have little recourse. According to the U.S. State Department, the Egyptian executive branch interferes with the judiciary. Senior officials can operate with impunity regardless of the law. Nowhere is this more apparent than with regard to judicial oversight of elections. By law, the judiciary in Egypt is required to supervise elections, but many judges report government pressure to legitimize fraud. Since the 2005 presidential elections, judges have led protests and sit-ins protesting against the government’s decision to prosecute two senior colleagues: Hisham Bastawisi and Mahmud Mekki, members of the Court of Cassation, Egypt’s highest appellate court, who sought an inquiry into fraud in the presidential elections and have asked for electoral and political reform.[25] Egyptian-American sociologist Saad Eddin Ibrahim, an increasingly strident critic of the regime, suggested that the

Ibrahim criticized Mubarak’s use of the Emergency Law, first imposed in 1981, which gave the security forces broad powers to search without warrants and detain indefinitely without charge. While Mubarak promised an end to the emergency regime, the National Democratic Party-dominated parliament simply wrote its provisions into “reformed” anti-terror legislation.[27]

As the Bush administration abandoned its freedom agenda after the Hamas victory in Palestinian elections and with Secretary of State Hillary Clinton openly acknowledging in the context of China that the Obama administration would prioritize human rights concerns even less, the Mubarak regime appears to feel itself having carte blanche to curtail civil liberties. The State Department’s 2008 human rights report found that Cairo’s respect for freedoms of press, association, and religion all declined over the year. The Egyptian government continues to restrict other civil liberties, particularly freedom of speech, access to the Internet, and freedom of assembly, as well as to crackdown on the activities of nongovernmental organizations,[28] such as Ibrahim’s Ibn Khaldun Center for Development Studies.

As a result, there is a dangerous political void in Egypt. The average Egyptian citizen feels that his voice is not heard.[29] While Egypt nominally allows multiparty elections, polling brings no change. The International Crisis Group called the 2005 elections “a false start for reform” and noted “presidential elections are merely symbolic so long as the opposition is too weak to produce plausible candidates.”[30] U.S. abandonment of demands for reform and the embrace of Mubarak and his son Gamal by both the Rice and Clinton state departments have encouraged the Egyptian leadership to accelerate its crackdown on dissent and raised the Egyptian public’s cynicism toward the United States.

Such cynicism was compounded by the long-delayed 2008 municipal elections considered a sham by both Egyptian and outside observers. Not only independent candidates close to the outlawed Muslim Brotherhood, but also politicians from registered opposition parties reported difficulties registering in an apparent government campaign to prevent opposition candidates from participating in the elections. More than 3,000 candidates, whose registration the government prevented, sued the government. Although the courts ruled in favor of the candidates in 2,664 cases, the government refused to implement the rulings.

On March 30, Human Rights Watch issued a statement questioning the legitimacy of the elections in which, subsequently, National Democratic Party candidates won 92 percent of the seats. There were only nine women in the People’s Assembly (out of 454 total seats) and twenty-one in the upper-level Shura Council (out of 264). Only three women received portfolios—for the ministries of International Cooperation, Manpower and Immigration, and Families and Population—in the thirty-two member cabinet. Christians are as underrepresented as women. Copts may represent 8 to 12 percent of the population but received less than 2 percent of the seats in the People’s Assembly and Shura Council.[31] The Carnegie Endowment for International Peace described the elections as “a step backwards for Egyptian politics,” and the Egyptian Organization for Human Rights did not monitor the elections because of citizens’ reluctance to participate and the elections’ lack of competitiveness.[32]

The danger for the West is that dissatisfaction that already manifests itself in general anti-Western and very specific anti-American sentiment could be the precursor to even more virulent anti-Western Islamism. It is possible to find parallels in Egypt to pre-revolutionary Iran. Years before the Islamic Revolution in Iran, young Iranians were applauding Jalal al-e Ahmad’s Westoxification, a strident condemnation of Western influence on society.[33] As former French diplomat Eric Rouleau noted more than a decade ago, the rise of political Islam in Egypt should not surprise,

Unlike Gamal Abdel Nasser and Anwar Sadat, Mubarak has never appointed a vice-president. Mubarak has been polishing his son Gamal to be his successor, a mockery of Egyptian republicanism and democracy.[35] Egyptians are enraged that they appear ready to follow the path of Syria, in which a president, who came to power in a military coup, installed his own son as successor. If Gamal takes power, Egyptians fear he would continue his father’s policy of enriching the elite, suppressing the poor, all while ignoring effective reform. Mubarak has ruled Egypt with an iron fist; he has turned Egypt into a police state rivaling Syria’s or Tunisia’s with a security force infrastructure that numbers nearly two million.[36] Indeed, many U.S. analysts acknowledge Egypt’s instability. “It will rock the world,” wrote Michelle Dunne, a Carnegie Endowment for International Peace scholar. “Octogenarian Mubarak, will leave office, either by his own decision or that of providence, probably within the next three years.”[37]

Instability in Egypt after Mubarak’s incapacitation or death may become an international security concern. There is no clear chain of command or civil society base to facilitate the transfer of power to the next president. According to Thomas Barnett, a national security analyst and former professor at the U.S. Naval War College, the insecure succession could create a vacuum in which the Muslim Brotherhood could rise:

Meanwhile, there are already signs of discord between Washington and Cairo. Citing Mubarak’s cold peace with Israel and dealings with terrorist supporting states on its borders, Robert Satloff, executive director of the Washington Institute for Near East Policy, told the U.S. House of Representatives’ Committee on International Relations, “The foundation of the bilateral relationship has eroded. Divergences have emerged over a wide range of Egyptian policies.”[39] Equally alarming is the rise of anti-American and anti-Semitic conspiracy theories in Egypt’s state media and society.

Obama will find himself facing a difficult choice when instability strikes the largest Arab country. Every Egyptian leader since Nasser has arisen from the military. Would an ambitious general stage another coup? Perhaps under populist pressure, would a new regime or junta scrap the Camp David accords as some judges demanded during the July 2006 Israel-Hezbollah war?[40] Or is it possible that the Muslim Brotherhood may gain strength, even paramount control? Populism—Islamist or otherwise—should be a concern given a moribund economy and growing disparity between classes and the amount of military equipment and even nuclear technology that the U.S. government has provided Egypt. If the Muslim Brotherhood were to achieve power in Egypt, the destruction of Israel would again be the unifying principle for governments in the region.

[1] John R. Bradley, Inside Egypt: The Land of the Pharaohs on the Brink of a Revolution (New York: Palgrave Macmillan, 2008), pp. 209, 213-4.
[2] Abdulhalim Qandil, Al-Ayyam al-Akhira (Cairo: Dar Ath-Thaqafa al-Jadida, 2008), “Introduction.”
[3] Daily News Egypt (Giza), Feb. 15, 2009.
[4] “2008 Corruption Perceptions Index,” Transparency International, Berlin, accessed Apr. 22, 2009.
[5] MarketWatch (Dow Jones & Company, Inc., New York), Apr. 11, 2008.
[6] International Herald Tribune (Paris), Apr. 6, 2008.
[7] “Human and Income Poverty: Developing Countries,” Human Development Report 2007/8. (New York: U.N. Development Programme, 2007), p. 240.
[8] Khalil al-Anani, “Union of Dictatorships,” Islamists Today, Aug. 20, 2008; Daily News Egypt, Aug. 26, 2008.
[9] Ibrahim M. Oweiss, “Egypt’s Economy: The Pressing Issues,” Georgetown University, accessed Mar. 13. 2009.
[10] Alan Richards, “Economic Roots of Instability in the Middle East,” Middle East Policy, Sept. 1995, pp. 175-87.
[11] Bloomberg.com, Feb. 18, 2009.
[12] Asharq al-Awsat (London), Jan. 14, 2002.
[13] Associated Press, Apr. 10, 2008; ABC News, Apr. 10, 2008.
[14] Al-Ahram (Cairo), Jan. 26, 2006; Al-Hayat (London), Jan. 16, 2008.
[15] Nimrod Raphaeli, “Unemployment in the Middle East: Causes and Consequences,” Inquiry and Analysis, no. 265, Middle East Media Research Institute (MEMRI), Feb. 10, 2006.
[16] International Herald Tribune, Feb. 24, 2009.
[17] World Employment Report 2004-2005 (Geneva: U.N. International Labor Organization, 2004), p. 30.
[18] Michelle Dunne, “A Post-Pharaonic Egypt?" The American Interest, Sept./Oct. 2008.
[19] BBC News, Feb. 16, 2005.
[20] “Egypt,” U.N. International Labor Organization, May 22, 2006.
[21] Al-Ahram Weekly (Cairo), Nov. 8-14, 2007; Ash-Sharq (Doha), Nov. 9, 2007, in the MEMRI Economic Blog, Nov. 9, 2007.
[22] Egyptian Gazette (Cairo), Oct. 20, 2007.
[23] Agence France-Presse, Oct. 3, 2007; Mohamed Talaat el-Harawi, “U.S. State Department: Egypt Is a Transit Country for Human Trafficking,” U.S. Copt Association, Jan 20, 2009; “Country Narratives: Egypt,” Trafficking in Persons, 2008 (Washington, D.C.: U.S. State Department, 2008), pp. 111-2.
[24] “The Future of Egypt,” panel discussion with participants from U.S. Department of State International Information Programs, Washington D.C., Public Affairs Office at the U.S. Embassy in Israel, and the Global Research in International Affairs, Apr. 6, 2006.
[25] BBC News, Apr. 20, 2006.
[26] The Daily Star (Beirut), June 16, 2005.
[27] The Daily Star, June 16, 2005; BBC News, May 26, 2008.
[28] “2008 Human Rights Report: Egypt,” 2008 Country Reports on Human Rights Practices (Washington, D.C.: U.S. State Department, Bureau of Democracy, Human Rights, and Labor, Feb. 25, 2009).
[29] Maye Kassem, Egyptian Politics, the Dynamics of Authoritarian Rule (Boulder: Lynne Rienner Publishers, 2004), pp. 87, 90, 109.
[30] “Reforming Egypt: In Search of a Strategy,” International Crisis Group, Oct. 4, 2005.
[31] “2008 Human Rights Report: Egypt.”
[32] Cited in “2008 Human Rights Report: Egypt.”
[33] Jalal al-Ahmad, Gharbzadagi [Westoxification] (Tehran: 1962).
[34] Eric Rouleau, “Egypt’s Islamists caught in a bind,” Le Monde Diplomatique (Paris), Jan. 1998.
[35] Daniel Sobelman, “Gamal Mubarak, President of Egypt?” Middle East Quarterly, Spring 2001, pp. 31-40; Gamal Mubarak, “We Need Audacious Leaders,” interview, Middle East Quarterly, Winter 2009, pp. 67-73.
[36] The Daily Star, June 16, 2005.
[37] Dunne, “A Post-Pharaonic Egypt?”
[38] Thomas P. M. Barnett, “The Country to Watch: Egypt,” Esquire, Oct. 2006.
[39] Robert Satloff, “U.S. Policy towards Egypt,” testimony to the U.S. House Committee on International Relations, Apr. 10, 1997.
[40] YNetNews.com, Aug. 4, 2006.