When an important leader of the political opposition hints that a military coup might be preferable to the current chaos, and when a major financial organization proposes an economic program certain to spark a social explosion, something is afoot. Is Egypt being primed for a coup?
It is hard to draw any other conclusion given the demands the International Monetary Fund (IMF) is making on the government of President Mohamed Morsi: regressive taxes, massive cuts in fuel subsidies, and hard-edged austerity measures whose weight will overwhelmingly fall on Egypt's poor.
"Austerity measures at a time of political instability are simply unfeasible in Egypt," says Tarek Radwan of the Washington-based Atlantic Council. "He [Morsi] is already facing civil disobedience in the streets, protests on a weekly, if not daily basis, clashes between protestors and security -- he does not want to worsen the situation."
The "situation" consists of wide spread police strikes, particularly in the industrial city of Port Said, but also including parts of Cairo and the heavily populated Nile Delta. The police in Sharqiya have even refused to protect Morsi's house. At its height the strike spread to half of Egypt's 27 administrative governorates.
Microbus drivers, angered at rising diesel prices and fuel shortages, blocked roads leading into Cairo, setting off massive traffic jams. Farmers in the Delta joined them, refusing to ship crops and shutting down farm machinery.
Added to the tense political situation are rapidly shrinking foreign currency reserves, an economy that is dead in the water, and an unemployment rate that has risen to 13.5 percent, and close to 25 percent for Egyptians aged 15 to 29. The number of Egyptians living below the poverty line has increased from 20 percent in 2010 to 25 percent today. And tourism, which contributes 11 percent of the gross domestic product, has tanked.
Morsi's Islamist government appears increasingly isolated, although the Muslim Brotherhood is still the best organized political force in Egypt. Reaching out to the opposition, however, is not its strong point. Morsi was elected with only 52 percent of the vote, and most observers think that support has eroded in the face of economic crisis and political instability. The government managed to ram through an Islamist constitution, but only 33 percent of the voters went to the polls. The government had planned on elections sometime between April and June, but a court recently overturned that decision.
The Morsi government has increasingly resorted to the use of force against opponents, including police tactics similar to those used by the Mubarak government. The government Attorney General recently caused an uproar by asking for "civilians" to arrest "lawbreakers." The opposition charges that the call is cover for the Morsi government to set up militias dominated by the Muslim Brotherhood.
The plagues being visited upon Egypt may not be of Biblical proportions, but they are serious enough to destabilize the biggest Arab country in the Middle East. They certainly threaten the gains of the January 2011 revolution that overthrew the autocratic and corrupt government of Hosni Mubarak and sent the powerful Egyptian army back to the barracks.
They may not stay there long.
Opposition leader Essam Al-Islambouli of the National Salvation Front told Al-Ahram Weekly, "Today, we don't just have a convoluted political process, but we are also facing confused and disturbing economic challenges, and we are seeing the threat of citizens bearing arms against each other. We might be reaching a point at which it will become inevitable for the Armed Forces to step in."
Mohamed ElBaradei, head of Egypt's Constitutional Party and founding member of the opposition National Salvation Front, told Ahram Online that while he doesn't "hope the military takes over," it would be better to be ruled by the military than by Islamic militias.
The Muslim Brotherhood does have a paramilitary wing called the "Hawks" that surfaced in 2006 during demonstrations at Al-Azhar University, and one rumor is that the MB has as many as 5,000 soldiers. There is also a reputed pledge by Hamas to send fighters from Gaza to support the MB. But it is very unlikely that the Brotherhood has anywhere near 5,000 armed men, and Hamas official Mahmoud Al-Zahar denied that the Palestinian organization intends to interfere in Egypt, calling the rumor nothing more than an attempt to smear Hamas. Indeed, relations between Hamas and the Morsi government have recently cooled.
The puzzling thing about the IMF's demands is that they fly in the face of a recent study by the organization's chief economist Oliver Banchard, which found spending cuts and taxes hikes only make recessions worse. Stimulus spending are far more effective in restarting an economy.
The Morsi government was hoping the international lending organization would front it $4.8 billion to pull Egypt through the current crisis, but Cairo has delayed asking for the loan, in large part because it is afraid of what the reaction would be. Cutting fuel subsidies would fall heavily on the poor, who use kerosene for cooking. However, without the IMF loan, loans from the U.S. and the European Union will be put on hold as well.