Larry LaRocco, D-Idaho, served two terms in the U.S. House of Representatives. He lost his bid for U.S. Senate in 2008 to Sen. Jim Risch. LaRocco is traveling in Egypt and filing dispatches to the Statesman this week.
Background: I am traveling with Former Congressman Scott Klug ( R-WI) and Paul S. Ryan, Senior Counsel, Campaign Legal Center, Washington, D.C. Scott and I entered the House together in 1991 and we have co-chaired for the past 3 year the Legislative Fellows Program from North Africa on behalf of the US Association of Former Members of Congress (www.usafmc.org ). The USAFMC is a partner with the non-profit Legacy International. The Campaign Legal Center has made presentations to the incoming fellows from North Africa over the past few years on campaign laws in the US and how it affects the confidence in the election process.
For older posts, see below.
Tuesday, March 12: Cairo
This was a full day discussing the economy, five hours of meetings at the University of Cairo followed by dialogue with former "legislative fellows" from Egypt who spent one week in Washington, D.C. last November.
A subtle breeze blew over the Nile River as we boarded our van for an early meeting with the CEO of the American Chamber of Commerce in Egypt. This commute flowed effortlessly on a crisp and sunny morning. The smog was not hugging the streets as usual and the acrid blend of fumes and smoke was gladly absent. The air pollution was clearly on hold for a few hours thanks to a slight breeze. Like a dawn run in the Boise Foothills we were rewarded for early rising. And there was not the jolt of noise pollution caused by incessant honking of horns by cars, scooters and buses seamlessly connected like a chain in lava flow motion. One wonders whether "honking proficiency" is a test question at the Cairo DMV. The horn section of the Cairo urban orchestra adds to the cacophony of 18 million neighbors living cheek by jowl.
I was eager to meet with Am-Cham CEO Hisham A. Fahmy this morning. We had met before on earlier visits but never at a time when the stakes were so high. I wondered how candid he could or would be. He didn't hold back in his briefing and he confirmed that the economy is on life support with few good options.
A dissident last night stated in an offhand and matter-of-fact way that the looming economic crisis would be characterized more as an energy crisis. This morning's meeting at the Am-Cham clarified that portrayal.
The greatest government subsidy in Egypt is for energy: gasoline and diesel. Other subsidies exist for foodstuffs, however,the largest drain on the treasury is the energy subsidy. As the government monetary reserves slip further into negative territory the energy subsidy will likely be cut. With summer just around the corner and energy costs expected to rise this could be the one-two knockout punch to the economy. With the dramatic disparity in income, those below the middle class will be socked the worst. Of course, that will have political and economic consequences. Trimming the energy subsidies poses a great problem for the Muslim Brotherhood leadership.
While this energy crisis began long before the revolution the MB now owns it.
The US economic assistance triggered by subsidy cutbacks would be chump change to the huge government debt incurred hourly by Egypt. Many countries will come to the table with direct financial assistance, loan forgiveness and debt re-structuring if IMF conditions are met. However, the total amount is still dwarfed by the overall debt. I felt again like I was watching a train wreck in slow motion.
The math of the economic crisis is simple. The Egyptian budget is basically divided into four equal parts: 25% subsidies, 25% interest on debt, 25% salaries, 25% education. While somewhat simplistic this budget pie chart illustrates why the approaching train whistles grow louder.
One wonders how the Egyptian economy chugs along at this point. The answer is the grey, underground and informal economy. Thirty to 50 percent of the economy is essentially off the books. This means no revenues are derived from a massive exchange of money and services on a cash basis. The large enterprises have been targets for taxes but the small enterprises operate below the radar screen.There is a huge merchant class in Egypt and life goes on for the masses.
The lack of clarity for Egypt's future was punctuated by the fact that the Am-Cham has not assembled its talking points and message for upcoming annual "door knock" with Congress in Washington, D.C. in April. In prior years these message points would have already been and ready for shipment. As of today there wasn't even a draft. The economy is so shaky U.S.-based companies and other industrial forces in Egypt can't predict the country's economic future one month down the road.
We spent five hours at the University of Cairo in multiple meetings with faculty and staff. We were hosted by the Professor Hala H. Elsaid, Dean of Faculty of Economics & Political Science. We connected because of our mutual backgrounds in banking policy and she was rightfully proud of her ascension to dean on the vote of her peers. The logistics were arranged by a recent legislative fellow, Dr. Ahmed Abd Rabou, who is a professor at the university. He spent one month in DC under the Legislative Fellows Program and smoothly moderated all sessions.
The discussion with his faculty colleagues was very animated as we discussed the future of the US-Egyptian relationship. We concluded that relationships among friends are often more difficult to sustain than between enemies. Like a good marriage it takes work. Hard work. One professor criticized President Obama for not living up to his rhetoric in his noted Cairo Speech that occurred in a nearby building. I remember that speech vividly and was proud of President Obama for talking about the "elephant in the room." He addressed historical and sensitive topics oftentimes avoided. This hyper-sensitivity and critical view of the US is rampant. Each time we encountered it we calmly re-stated our "people to people" mission and our non-diplomat status. We pushed back criticisms by pointing out that Obama's speech and subsequent actions have all been intended to highlight the long-standing friendship with Egypt. The US has focused on process knowing that reforms and democracy evolve by the citizens inside the country.
The faculty meeting was a warm-up to a gathering in a spacious lecture hall attracting more than 200 students. This was definitely not as tough as facing an open meeting in Grangeville to discuss more Wilderness. (I have had both character building opportunities.) The questions were direct, respectful and packed a punch. They were intended to send a message. We received and we delivered. I pointed out that Scott Klug was not happy with the outcome of the 2012 election and I was unhappy with the outcome of the 2000 election. We are all moving on and staying engaged. Paul Ryan (our traveling colleague -not the VP candidate) is a star player in this delegation and can forcefully point out that after more than 200 years we are constantly vigilant to perfect the US election laws. The historical context for the criticism we encountered is two years of their nascent democracy. For the foreseeable future the U.S. is a likely rhetorical target. The Iraq war was mentioned twice in the Q & A so there is a hangover from that invasion. We were asked how we would define "democracy" for Egypt. That's an easy question: Egypt must define its own democracy.
Paul encouraged the students to vote. I encouraged them to be candidates.
Last night we meet with a young woman, Dr. Nermeen Ibrahim Bedair, who was very happy to conduct her business as a dermatologist until the police cracked down and cracked heads in Tahrir Square. Nermeen now has 30,000 followers on Twitter. She tweets daily as an unintended activist. We also met with Alfred Raouf who is an young engineer and carries a bullet in his calf from Tahrir Square. He works tirelessly with his political party to develop an agenda and future course of action. He and his party must decide whether to boycott the next election or choose to place demands in front of the Muslim Brotherhood for changes to the constitution. They may do both.
We dined last evening with seven activists and I told them I saw seven candidates at the Cafe Riche table. Most demurred but three expressed interest in carrying their passion forward by putting their names on the ballot. I related the story of Rep. Carolyn McCarthy (D-N.Y.) who, as a nurse, was elected to the US House of Representatives after her husband was murdered in cold blood on a New York subway. She has an agenda and pursues it to this day in the political arena.
Cafe Riche had great lemonade with crushed mint but the cigarette smoke was thicker than the Camel smokers booth at the Frankfurt Airport. The place is a throwback to colonial days and would be a great set for a movie.
Tuesday Observations - Ah Ha Moment(s)
There is no political infrastructure in Egypt in the wake of the revolution to govern or serve effectively in the opposition. The opposition has a thin bench to offer as alternative choices. It's understandable that the business of politics in Egypt is still in its infancy. While we grow weary in the US with the consultancy class, constant campaigns, talking heads, biased/unbiased media, pollsters, commentators, pundits, fundraisers, bloggers, tweeters, organizers and political wizards, we need to remind ourselves that these competencies lubricate our functioning democracy. While the role of the opposition is to oppose, those opposed in Egypt are new to the game and largely unseasoned and untested. I sense hesitation and outright fear to directly engage in a political exchange through multiple media. Those governing are riding in their first rodeo. They're incapable of "going big" and haven't figured out how to play small ball and get their sea legs. Amidst this landscape of political infancy is a looming economic crisis.
Before Recep Tayyip Erdogan was Prime Minister of Turkey he was Mayor of Istanbul. He knew how to deliver services and pick up the garbage in the street. Garbage pick-up would be a good place to start for any political party in Cairo. That area needs a little attention.
There is no effective dialogue taking place among political parties or officials of the opposition. At the moment it amounts to talking past each other as both sides concoct their conspiracy theories. The MB has articulated theories of Obama putting them in power and the opposition spins tales how Obama put the Muslim Brotherhood in power. Maybe they can agree on that for openers....... even if it's a fantasy.
Tomorrow: We leave early for Alexandria by van. The trip will take approximately three hours. Alexandria was once the center of the whole Mediterranean and largely Coptic Christian. It's growing into a Muslim Brotherhood stronghold. And history marches on. More tomorrow from Alexandria.
Monday, March 11: Cairo
Today was spent in a series of meetings with political analysts, human rights activists, journalists, Speaker of the Shura Upper Council ( upper House ) and front line activists. As I write it's Monday in Boise and Tuesday in Cairo.
It was a non-stop day of back-to-back meetings and discussions. Our delegation probed hard for facts to sort through many fuzzy perceptions, theories and assumptions swirling throughout Egypt on the immediate and long term future of the country. We started connecting dots on some aspects of the country's fate and failed to receive clear indications on others.
The lack of clarity was troubling.
It's clear the Muslim Brotherhood (MB) is failing in its leadership at the moment. It's uncertain whether they will recover from stumbling out of the blocks after winning the elections, suspending the Parliament and blinking on leadership on the economy. Some describe the MB as good traders who have reached out to Turkey and China for imports but failed as business leaders to grow the economy. The business acumen was presented as a distinct plus to voters in the elections but the faltering economy leaves them open to widespread criticism. In today's Egypt "it's the economy stupid."
Anti Muslim Brotherhood sentiment is white hot among dissidents, opposing parties, secularists and human rights activists. These feelings are so strong that some believe the economy will collapse within 30 days leaving the Military to keep the peace and pick up the pieces. For some in the broadly defined opposition camp this is a desired outcome to oust the Muslim Brotherhood from their control of the country. As I listened to the searing statements from this side of the political spectrum it was akin to the theory "......we need to burn down the village to save it."
The opponents of Morsi and the MB don't want to tinker with the constitution and participate in the next round of elections that will most likely take place in 4-6 months. For them the constitution was hastily constructed with a failed process excluding secularists, Christians, human rights groups and moderates. It is startling to hear a scenario constructed where some believe a collapsed economy will lead to the end of the MB. This in turn will result in a takeover of the country by the Military and lead to a valid constitution with fair elections.
Our delegation was often reminded that the US system has a fair process in place compared to a flawed process in Egypt.
As a former politician and office holder it is difficult to understand how Morsi opponents could walk off the field and threaten a boycott of the next round of elections.
The meetings with activists, dissidents and opposition party members contrasted with a long discussion with the Speaker of the Shura, Ahmed Fahmy.
Knowing the line of reasoning by his opponents we quizzed the speaker on many subjects raised over the past two days. He adeptly answered many of the tough questions in a way that suggested the Muslim Brotherhood was finished stumbling. He spoke about developing their own "charm offensive" (ala President Obama) to reach out to the opposition to correct known deficiencies in the constitution thereby leading to elections with a more level playing field. He wants to bring departed industrialists back to Egypt with fair taxes and promote employment. When asked for a timetable on new elections he unhesitatingly stated they would take place in 4-6 months after specific fixes were made in the constitution allowing greater participation by the opposition. He specifically welcomed international observers to the next round of elections. We left our meeting in the heavily guarded Capitol believing there was every intention to meet the conditions set out by Secretary Kerry to trigger a safety net of IMF assistance.
I reminded the Speaker of election monitoring activities by the US Association of Former Members of Congress and he promised to keep us informed of the elections through an invitation to participate as monitors. That possibility will be followed-up and explored. While my opinion was not sought I offered him a suggestion that he not keep his Shura agenda secret. They were meeting this week and addressed the very questions we raised. Under the constitution the Shura is the governing body of the country at the moment in light of the dissolution of the Lower House of Parliament. It is disconcerting, however, to realize that in the Shura elections there was only a 7% turnout. Historically, the Shura has been filled with cronies of the President and the Egyptian voters treated it this way in spite of the revolution.
After leaving the meeting we tried to assess whether we had just met the same man described so negatively by the MB opponents. We also wondered whether the charm offensive included us. Time will tell.
Egyptian Economy: The country is running out of financial reserves by the hour. It's truly hemorrhaging money it doesn't have and it has no access to borrowing. Sixty percent of the economy is on auto pilot and won't get hurt with an economic meltdown and 40% will feel it in harsh ways. It's unclear whether an economic meltdown is imminent. I believe the situation is truly dire. This would be a true shutdown of the economy and promote widespread civil unrest at the same time. Until we met with Speaker Fahmy I would have bet the economic failure was just around the corner. Like the US Congress, Egypt may take the country up to the edge of the cliff. I have not swung from pessimistic to optimistic, however.
Safety/Security: I have heard many times that safety on the streets is becoming a real concern. The failed economy and high emotions is a volatile mix. We must keep in mind that the random violence newly experienced in Egypt doesn't come close to the violence on the streets of Chicago. Egypt has for many years experienced a crime rate of almost zero. Murder was unheard of and there was no talk of guns held by citizens for unlawful purposes. That situation has changed. We heard of weapons coming into Egypt from Libya and held secretly by Egyptian citizens who feel things might unravel on the streets. This is new. I didn't expect this.
Veiled Women: I have visited Egypt since 1996 and it resembled Turkey in many respects in terms of "covered" women. It was a mix one would expect in a secular country in the Middle East. That, too, has changed. I noticed this development two years ago when I visited the University of Cairo and saw the majority of women with veils. I am hard pressed now in traveling by car throughout the city to see women who are unveiled. Over the past few years I have discussed this phenomenon with women journalists and the story has been the same. It seems that many women are choosing to wear veils just to make their lives more comfortable because they have experienced harassment by men in neighborhoods as they walk down the street "uncovered." In discussions with women I have been remind that wearing the veil is a matter between a woman and Allah. If a government were to demand the veil I believe we would see more demonstrations.
Balance of Power: It's clear the Military lives in a parallel universe with the Muslim Brotherhood. The Military wields real power that could be a safety valve for any unrest. There is a distinction between the Military protection of borders and responsibilities for national security versus the Interior Ministry which is responsible for the police force. The Military would not be on the streets bashing protestors but it could step in as a political force if there is a breakdown. As a show of strength by the Military it got all it wanted in the constitution.
Perceptions of US: There's no way to sugar coat this: In today's environment in Egypt the US is damned if it engages and damned if it pulls back. The meetings with Morsi by Secretary Clinton and Secretary Kerry gave rise to the belief that the US full supports the Muslim Brotherhood and therefore is part of many current problems. In spite of calm attempts to explain that the US recognizes the process and legitimate elections we were waved off. Of course, we have heard directly ( today in the meeting with journalists ) that the US is not concerned about Egypt and the rest of the Middle East. As the theory goes, we just support the "Jewish State of Israel" and that is our only priority in the region. When we repeated the US policy of supporting a "transition to democracy" we were reminded that true democracy in Egypt had no chance under the current Muslim Brotherhood leadership with the failed constitution.
Scoop of the Day: We learned that statements were made Sunday night by MB officials reminding Egyptians that citizens have the power to make arrests of "saboteurs" and they should be mindful of that authority. For some dissidents and MB opponents this was a chilling announcement. It's true that this provision in law has existed for some time and the MB opponents questioned timing and rationale of the press statement.
Final Thoughts: We will continue to sort out whether the Muslim Brotherhood continues to stumble. If they truly are tone deaf it will become evident very quickly.
If the MB has misread the elections and perceived a non-existent mandate it won't be long before those mistaken perceptions trigger further reactions from many who gathered, protested, chanted and created a revolution. Those memories are fresh in the minds of hundreds of thousands who just might find their way to Tahrir Square once again.
Tomorrow we meet with the American-Egypt Chamber of Commerce and spend time with students and faculty at Cairo University. The perceptions from the business community should be quite interesting. I met with them before the revolution and look forward to comparing sentiment.
March 8 and March 9
We flew from Washington, D.C. through Munich to Cairo on Lufthansa. The last leg of the flight had very few non-Egyptians on the flight. This absence of foreign visitors is one of the starkest realities of the post-revolution era. Twelve percent of Egypt's GDP comes from tourism and 10% of the employment is tied to tourism. This sector of Egypt's economy has been devastated since the revolution due to the current political uncertainty.
I have never worried about travel in Egypt before and this trip was no exception. However, most people who knew of my trip simply stated "be safe." This common view of Egypt is keeping the tourists out and driving the economy down.
Egypt and most of the Middle East begins the weekend on Friday and resumes work on Sunday. Today we started early with meetings at AMIDEAST (www.amideeast.org), the US Embassy and lunch with the presidential campaign team for Ahmed Shafik. Shafik lost in the two candidate run-off for president against Mohammed Morsi, the Muslim Brotherhood candidate.
The smog gripped the city as Cairo came to life this morning. The traffic was unbearably bad in this city of some 18 million. One must allow at least 40 minutes to drive a few miles. We ended the day with a tour of Old Cairo adjacent to the El Hussein Mosque and for some interaction with Caiereans in the Khan El Khalil market.
Egypt is a complex country. It has a extremely rich culture and history but struggles with the future. As a key ally, we still quarrel and disagree. It is the economic and thought center of the Middle East but it is standing still at the moment.
I have always felt extremely welcome in Egypt, an over-the-top hospitable country. Chris and I have been fortunate to develop close personal friendships and business dealings in Egypt since our first trip in 1997. Those relationships have led me to read the wonderful trilogy by Naguib Mahfous, contemporary novels by Alla Al Aswany and "After the Prophet" by Lesley Hazelton about the Sunni-Shia split. Like many, I track Egypt through various media and felt the overwhelming elation of the Arab Spring and the Egyptian Revolution.
My last trip to Egupt was after the revolution but before the presidential elections. That trip filled me with joy and hope that Egypt was on a solid trajectory on its transition to democracy. I should have known better. After all, our own democratic experiment is still a work in progress and the complexities of Egypt did not guarantee a smooth glide path.
Therefore, I am now on the ground in Cairo with a firmer grasp on reality and with some trepidation that things might be heading backwards.
Egyptians expected a great deal from the revolution. Too much. They are now dealing with deep frustration and pessimism is creeping in about the future.
I believe at least 3 key sentiments are driving this frustration and negativism:
1. This new democratic freedom is being viewed by Egyptians in an "all or nothing" context. The nuances of taking the steps towards democracy or a true "transition" to democracy is being tossed aside for a black or white situation.
2. Nothing is at it appears. The country has made great strides with its multiple elections but those are now being viewed as negative and making people weary about the road to democracy.
3. The non-Muslim Brotherhood faction that lost the election to the MB lives in a bubble that equates to the non-recognition of the election victors. There is deep seated belief that the MB could not have won the elections. Just couldn't happen. Therefore, some believe a quick "do over" is in order.
Additonally, the Muslim Brotherhood was expected to make government run efficiently because the MB base was deep with business talent and economic success. To the contrary, the MB has made mistake after mistake since taking office in putting the economy on track. With rampant unemployment and over-spending the situation gets worse by the hour. Politics is about the future and the "street" who supported the MB sees no future in the chosen leadership at the moment. The MB been unable to articulate a grand plan or play small ball. In fact, it's subtle pronouncements on limiting freedoms have alienated many who feel they have seen this movie before. There were expectations that the billions of dollars siphoned off through corruption would be recovered and shared. That's unrealistic and impossible.
The opposition to the Muslim Brotherhood has now taken to boycotts and protests. This was the stuff of the revolution but is not necessarily the right formula for making the political process work. We must consider the fact that the military still has great control over the country and Mubarak forces have not totally left the scene.
There is a theory that the second election after a revolution is the one that counts. Anyone whose candidate has lost an election in the U.S. knows there will be another. Too many in Egypt are focusing on the last election instead of the next election.
The U.S. is caught squarely in the middle. By historical standards and policy the US recognizes the party and people in power if the election process was deemed legitimate. The U.S. is sharply criticized for meeting with Morsi and some credit the US with putting him in power by cuddling up too closely with him and the MB during the campaigns. Theories abound and are basically baseless, but that doesn't stop the rumors from spreading based on the deeply sour economy and the high level of frustration. Secular forces, moderates and Christians fault the U.S. for not running Morsi off his perch somehow expecting our country to become involved internally to that degree.
The withholding of an aid package pleases some for the wrong reasons. The U.S. is withholding approximately $400 million dollars in direct economic aid until Egypt agrees to certain measures demanded by the International Monetary Fund and other western nations. The stakes are high. Very high. Billions of dollars in aid will be delivered to Egypt if it takes steps to stop spending spree it is on. Secretary Kerry could not have been clearer about our policy in this regard during his visit one week ago.
Withholding the aid to Egypt will please deficit hawks in Congress and, interestingly, it will please some in Egypt angry at the US and also hoping Morsi fails.
I have never been in Egypt when so much was on the line for the future. There is a clear path forward and looking in a rear view mirror by all parties is a fools game. Egypt's stability is in our country's best interest. Most readers didn't wake up this morning thinking about Egypt but it might get higher on our radar screens in short order. Egyptian leaders need to wake up to the fact that the last election didn't mean a wholesale shift to create an strict Islamic nation. That train left the station a long time ago. In a country of 80 million people beset with economic problems some good old fashioned down-the-middle political actions are in order.
I can't wait to find out more this week. We only scratched the surface today but it was fascinating.