Contributing writer Li Zhenjie.
On December 12, the three-day first round of voting in Egypt** ended. Whether the 69-year-old Sisi can win a third term will be the biggest attraction of this time. Given the disparity in strength between Sisi and the three candidates, including Zahran, chairman of the Egyptian Social Democratic Party, Yemamai, chairman of the Egyptian Waft Party, and Hazim, chairman of the Egyptian Republican People's Party, observers generally believe that there is almost no suspense that Sisi will win the election, and there is a high probability that he will be re-elected until 2030. In the final analysis, in the dual context of the Palestinian-Israeli conflict and the economic crisis, Egypt's path choice can only be within a "limited framework", and the biggest challenge for the candidate is not the first to be the first to be the first, but the structural "old challenges" that it will face in the next six years of its term.
On December 10, 2023 local time, in Cairo, Egypt, Egypt's Abdel Fattah el-Sisi voted for the ** election at a polling station. Observers generally believe that Sisi will most likely be re-elected until 2030. Courtesy of Visual China.
Sisi** "Too big to fail".
In recent years, Egypt's influence in the Arab world and the Middle East has gradually declined, its traditional pillar industries have been frequently trapped, the internal driving force is seriously insufficient, and the economic and social problems continue to be unsolved. However, in the past two months, by actively playing the role of mediator in the new round of the Palestinian-Israeli conflict, both Egypt and Sisi** have been able to boost their regional and international influence to a certain extent. Although this is a "new opportunity" ushered in by Egypt, it also reflects the long-term and complex nature of the internal and external environmental tests faced by Egypt.
At the political level, Egypt has always been regarded as one of the most suitable mediators on the Palestinian-Israeli issue, or the best implementer of the international community's mediation plan, based on factors such as its proximity to both Palestine and Israel, its good relations with Israel, Fatah, and Hamas, its greater political influence on the Middle East issue, and its rich experience in Palestinian-Israeli mediation. In the current round of the Israeli-Palestinian conflict, Sisi has continued to be a reliable political partner, an active and pragmatic mediator, and an important window for providing humanitarian supplies to Gaza refugees, which has also accumulated a good international reputation for him.
At the security level, the complexity of the regional situation further highlights the importance of stability in Egypt. In addition to Syria and Lebanon, the Red Sea is also becoming a new battlefield for the Houthis to wage an unconventional war against Israel. In addition, Egypt's other two important neighbors, Sudan and Libya, remain mired in disorder. Against this backdrop, it is the consensus of the policymakers of the major powers and the Egyptian people that Egypt, which is the world's most populous country in the Middle East, cannot fall into chaos.
At the economic level, Sisi's positive actions on the Palestinian-Israeli issue and European countries' concerns about a new round of refugee flows have also won Egypt's expected economic assistance. According to foreign media reports, the European Commission recently announced that the scale of investment in Egypt will be as high as 9 billion euros, and the International Monetary Organization has also announced that it is considering doubling the loan to Egypt. These planned investments and loans are undoubtedly a shot in the arm for the Egyptian people who are in the midst of an economic crisis, and Sisi has thus demonstrated his responsibility to the domestic society.
The new ** domestic and foreign affairs are facing daunting challenges.
Compared with the country itself, the long-term difficulties and challenges in Egypt's domestic and foreign affairs are still far greater than the temporary opportunities arising from the Palestinian-Israeli conflict.
Egypt's currency, the Egyptian pound, has depreciated by more than 50% since the beginning of 2022, and inflation is basically close to 38% so far this year. Thirty per cent of Egypt's population still lives in poverty, and another 30 per cent is likely to fall into poverty. In addition, Egypt is facing huge pressure to repay its external debt. According to statistics, Egypt's total external debt has reached 165.3 billion US dollars, and Egypt needs to repay 71.6 billion US dollars in the principal and interest of its external debt in the next three years, and 29.2 billion US dollars in 2024 alone, accounting for about 20% of the total external debt.
In recent years, in order to stabilize the foreign exchange market, the Central Bank of Egypt has had to use foreign exchange reserves to intervene in the exchange rate and support the Egyptian pound, but this has also greatly accelerated the consumption of foreign exchange reserves. Egypt** has almost depleted its foreign exchange reserves to repay its foreign debt, and there is little foreign exchange left to import essential goods such as fuel and food.
In the absence of endogenous motivation, Egypt** usually relies on external bailouts to save its own economy, which not only tends to lead to a vicious circle in the country's operation, but also leads to a decline in public trust in **, which in turn affects the effective cooperation of all parties in society. In the shadow of the current intensification of regional conflicts, foreign capital has withdrawn from Egypt to varying degrees. Against this backdrop, avoiding involvement in external conflict and salvaging the economy will also be two inescapable problems for the winners.
Egypt's road to change is long and difficult.
According to Egypt, there is widespread speculation that the Central Bank of Egypt will respond to the call of the International Monetary Organization in the next few weeks to initiate a new round of currency devaluation. Sisi met with International Monetary Organization Managing Director Georgieva on the sidelines of the COP28 summit in Dubai on November 30, interpreting this as a sign that Sisi may launch a new round of economic reforms after winning re-election.
Since 2016, Sisi has implemented a series of economic reforms, but Egypt's structural shortcomings have been difficult to resolve. If Sisi can really usher in a "third term", then he still needs to carry out practical and effective reforms in many aspects and adjust policies in a timely manner to ensure political stability and achieve his governing goals.
First, the new needs to initiate a limited reform process through internal elites, allowing civilian leaders to appear in certain areas with independent power bases, while limiting the excessive expansion of military power, curbing the process of militarization of the economy, and stimulating socio-economic vitality. At the same time, the new government needs to continue to promote "national dialogue" and avoid confrontation between the military and ordinary people.
Second, the new government needs to actively improve its economic structure, develop a diversified economy, and avoid over-reliance on highly fragile and sensitive industries. After experiencing the multiple blows of the new crown epidemic, the Russia-Ukraine war, and the Palestinian-Israeli conflict, the tourism industry, which was once the main pillar industry of Egypt, has suffered serious losses. To ensure sustainable economic development, Egypt needs to actively explore more resilient economic growth poles in the future.
Third, Singapore needs to give full play to its diplomatic wisdom and properly handle the Palestinian-Israeli issue, on the one hand, to avoid the spillover effects of the Palestinian-Israeli conflict affecting Egypt's security and stability, and on the other hand, it should work with the international community in a positive and pragmatic manner to promote the political settlement of the Palestinian-Israeli issue, enhance its international reputation, and strive for external economic assistance in this way.
Fourth, the new ** needs to do its best to curb the deepening of the economic crisis and the loss of popular support. In fact, with the relocation of Egypt's ** department to the new capital, ** away from the population has become an objective fact. In this context, if the economic crisis continues to spread, it will endanger political stability, so the new ** must remain vigilant and restrained in this regard.
Although this is a time when Egypt is boosting its regional and global influence over the Palestinian-Israeli issue, it is unlikely that Sisi will regain the status and support he received when he was first elected in 2014, no matter what measures he takes to deal with the current political and economic challenges. It remains to be seen whether the current "new opportunities" and the "old challenges" of the future will drive him away from his current relatively cautious path, but the only constant is Egypt's complex structural shortcomings, which will take years to unravel.
About author:Li Zhenjie is an associate researcher at the Institute of Circum-Mediterranean Research and the Research Center for Economic, Trade, Industry and Investment, Zhejiang University of Foreign Chinese
*: China Youth Daily client.