BETWEEN PRAGMATISM, FEAR AND FAITH IN THE RELATIONS BETWEEN EGYPT AND THE WEST
Egyptian woman in front of the US exchange store
@ Hoqook News, 3 April 2011
The revolution in Egypt has brought about some important changes in the relation between the new decision-makers and the international institutions. One of the best illustrations is the ever-changing attitude of the Egyptian government toward the EU and the International Monetary Fund’s (IMF) money. On December 20th 2012, Egypt has finally committed itself to accept the $4.5 billion loans from the IMF in order to straighten its financial situation. Van Rompuy also announced last Sunday 13 January that the EU offers Egypt 5 billion euros ($6.7 billion) in grants and loans stressing that a deal with the IMF was a condition to trigger additional financial support.
Capitalism meets Islamic finance
The agreement between Mohamed Morsi and Christine Lagarde could be the end to a year-long debate inside the “newly liberated” Egyptian society. The question of its relation with the Western financial instruments has brought Egypt to question itself and its identity when confronted with the outside world. Several analysts (among others the Moroccan-American blogger Issandr El-Amrani have pointed out that the main focus of the Egyptian society and its leader has been less on the economic potential of this loan but rather on the compatibility with (new) Egyptian values. These values have yet to be defined as the main party in power, the Muslim Brotherhood (MB), is struggling to combine the reality of today’s progressist and capitalist environment with the conservative Islamist views.
Short timeline of positive and negative development for IMF-Egypt loan deal
@ Author’s compilation
In the end of 2011, the main issue was about the relation with money in Islam, crystallized in the debate around the practice of usury (borrowing with high interest). MPs from and Imams close to the MB and Al-Nour (Salafi party), stated that taking and giving interest is one of the worst sins according to Islam and that an economy based on such interest is bound to collapse. However, other, more pragmatic, leaders argued that if a loan is necessary it should be from an Islamic nation and in accordance with Islamic laws. The issue of Islamic finance is rising and many countries are facing the same internal struggle (see the Malaysian monetary crisis in 2000 and its refusal of IMF help). Ibrahim Warde has analyzed in detail the paradox of a thriving system rooted in medieval practice and gives great explanation in this IslamOpedia online video.
Nobel Prize for conspiracy theories
This allowed, in the beginning of 2012, the Qatar to enter into the discussion and propose to double its aid commitment from $2bn to $4bn, thereby matching the IMF’s proposal. The will to turn toward the Gulf countries rather than the West raises another debate on whom to trust for the new Egypt. While Mubarak was a strong ally of the US and the European countries, some parts of the society had a strong resentment and fear of the potential interference of foreign forces. Some Egyptian leaders were quick to denounce external interference to reject the loan. For instance, the MB argued that the IMF was putting a hold on its money in order to favor the liberal candidate Mohammed ElBaradei as Prime Minister. This has led the former EU Ambassador in Egypt, Marc Franco, to say that Egypt could win a Nobel Prize for their numerous conspiracy theories . From Egypt, it seems that the EU is seen both as a great source of aid and funding but is at the same time dismissed as an “intruder” when interests are diverging.
Egypt’s President Morsi meets with IMF Managing Director Lagarde
@ Al-Ahram August 2012, Photo: Reuters
After the election of Morsi in June 2012, the tendency changed and the idea that Egypt needed this money to revive its economy was becoming widely accepted. Sheikh Sayed Askar, MP for the Freedom and Justice Party, and a former detractor of the loan, told Al Arabiya that “before, there were intentional attempts to destroy the country but now that a proper government [meaning the MB] took over, there are needs that have to be fulfilled and the loan is the only means of doing so”. Regarding the adequacy with Sharia, Askar also argued that sometimes necessity allows for exceptions and that is why it is not prohibited. Many progressive and socialist parties, mostly in the opposition, were quick to denounce this as inconsistency and as a manipulation of faith in the attitude of the MB. However, since the first step of democratization, many economists from within Egypt and outside, have called for quick financial and economical actions in order to stabilize the society, to reinsure the markets, the foreign and local investors and the tourist incomes.
Capitulation or new global model ?
Today, in the beginning of 2013, although the deal may finally reach a consensus, the Egyptian position toward its former Western allies and their money is yet to be defined. As we have seen, the main issues were not economical ideology but, first, the relation of Islam to interest, then the love-hate attitude toward the West and the rising influence of the Gulf-Wahabite powers and finally the pragmatism and concessions of the new parties in power. Egypt, and other Islamic countries, must therefore choose between accepting the rules of the existing global political and economic system or propose a new model of the economy based on different principles and values. New ideas might help to form a new economic framework and help a declining Western economic system… But this is another debate!
Romain Gustot is currently a student in EU International Relations & Diplomacy at the College of Europe (Bruges). He graduated from the school of Journalism and the Institute for European Studies of the ULB in Brussels, where he was Editor-in-chief for Eyes on Europe, a trilingual journal written by students, experts and politicians.
Find out more:
Alternative News Websites on Egypt and the Arab World :
- The Arabist (Eng/FR) : http://www.Arabist.net: Blog of Issandr El Amrani is a Moroccan-American political analyst, journalist and commentator, writing about Egypt and the Middle East
- Al-Masry Al-Youm (Eng/Arab): www.Egyptindependent.Com : Publications of independent and balanced daily-news on the Egyptian Politics and society.
- Hoqook News: (Arab) www.hoqook.com, (Eng) https://www.facebook.com/hoqookinternational : Network of journalists and activists reporting on human rights issues and development policies in Egypt and using innovative online tools to provide objective information.
- Muftah (Eng) : http://muftah.org: Free and open debate from Morocco to Pakistan. Provides incisive analysis on the MENA region and highlight issues and concerns that mattered to the region’s people.