FT / Sisi secures position in Egypt and abroad despite rights record

SHAFAQNA – When Abdel Fattah al-Sisi, Egypt’s president, held talks with Barack Obama, US president, on the sidelines of the UN General Assembly last week, the meeting was welcomed by many Egyptians as an overdue international recognition of their leader and their country’s regional weight.

Mr Obama described relations with Egypt as an “important cornerstone of our security policy”.

The comment marks a remarkable change in tone after a year of strained relations between Cairo and Washington following the popularly backed coup in which Mr Sisi, then army chief, ousted his elected Islamist predecessor Mohamed Morsi and launched a fierce crackdown against the former president’s Muslim Brotherhood supporters.

Human rights and political freedoms in Egypt remain under intense pressure, and an armed insurgency by Sinai-based militants against the army and police has caused hundreds of deaths on both sides since the coup.

But as Mr Sisi enters his fifth month in office, a combination of geopolitical chance and domestic economic measures have helped consolidate his rule and raise Egyptians’ hopes of a return to stability and the chance of prosperity.

The meeting with the Mr Obama represents a setback for Mr Sisi’s critics, who would prefer to see him shunned as a ruthless coup leader responsible for hundreds of civilian killings.

But Washington’s new war against the Islamic State in Iraq and the Levant, known as Isis, has forced a reappraisal of its regional alliances that is working to the advantage of Mr Sisi and his anti-Islamist regime, political analysts say.

“The new Egyptian regime has the advantage of being on the political scene when Isis has become far more prominent in American eyes than anything that analysts might find problematic anywhere else in the region,” said H.A Hellyer, associate fellow of the Royal United Services Institute in London.

“Criticisms of the Egyptian government continue, but they are far more muted than they would be otherwise.”

At home, despite the insurgency in the Sinai there is a perception that stability is returning as the backlash from the Muslim Brotherhood runs out of steam – a reflection both of tough policing and a sharp drop in the popularity of the group, say observers.

Meanwhile, Saudi Arabia and the United Arab Emirates – which welcomed the toppling of the Brotherhood president – have poured billions of dollars into Egypt to stabilise the economy. This, and the fact that, unlike Mr Morsi, Mr Sisi commands the support of state institutions, including the bureaucracy, army and police, means his tenure is seen as increasingly secure.

Domestic confidence in his leadership was starkly demonstrated when the government raised the $8.5bn needed to fund the expansion of the Suez Canal in just eight days, via investment certificates open only to Egyptian buyers. The mega project is at the heart of Mr Sisi’s plans for an infrastructure stimulus to kick-start the economy.

The perception that political risk is diminishing is reawakening the interest of overseas and domestic investors in Egypt’s large market of 90m people.

“The foreigners now see that there is stability. Whether they perceive it as stability based on repression or acceptance, they see stability,” said Wael Ziada, head of research at EFG-Hermes, the regional investment bank. “Investors also see the economy picking up steam, a big fiscal stimulus and more than $2bn of aid from the Gulf.”

Energy shortages and a deficit of about 11 per cent of gross domestic product remain big concerns. However, Mr Sisi sent investors a positive signal in the summer when he announced plans to press ahead with slashing costly fuel subsidies – a move previous administrations have balked at for fear of provoking unrest.

“President al-Sisi has made more progress in his first few months in office than many had expected,” said Capital Economics, the London-based consultancy, last month. “Fiscal consolidation is under way and the authorities have started to tackle the problems in the beleaguered energy sector.”

GDP data “confirmed that the country’s economic recovery has gathered steam”, it said. The economy expanded by 3.7 per cent in the second quarter, up from 2.5 per cent year on year in the first quarter and ahead of forecasts. Investment was almost 20 per cent higher than a year ago, and the government expects foreign investment to reach about $6bn this year.

But if Egypt’s new president feels more secure, he shows no sign of relaxing the iron grip of the security services.

An axe hangs over local human rights and civil society groups, who have been given an ultimatum to comply with laws placing them fully under the control of the government. Scores of political prisoners protesting at their detention remain on hunger strike.

“Some wonder if, as the government and the state realise they are secure, they might ease up on various restrictions on dissent,” said Mr Hellyer. “Unfortunately, the track record thus far does not indicate much in that direction.”

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