Feature

Tracking the Revolutionary Mood

Egyptians' views of the political process and how things stand today offer some surprising insights. 

ABU DHABI — A year after the world's attention fixated on Tahrir Square in central Cairo, disillusionment seems to have replaced awe among Western observers of Egypt. Islamists, not the young liberals who sparked the uprising, won the majority of seats in parliament and will oversee drafting a new constitution. The ruling military council responded violently to ongoing protests, subjecting activists to military trials and cracking down on civil society, while the country's economy continued to suffer.

Evaluating Egypt in this way alone, however, misses the real revolution. According to nationwide surveys Gallup conducted in Egypt throughout 2011, including during the first phases of parliamentary elections in December, Egyptians are more optimistic than they have been in years, far less divided along secular-religious lines than the pundits would have us think and poised for the demands of democracy.

Most Egyptians want their ruling generals to step aside and allow the country's elected leaders to wield real authority. The new parliament's greatest challenge, however, is that the newly empowered public expects results -- not rhetoric. Just as the Egyptian people themselves, not superpowers or freedom agendas, ousted a three-decade dictator, they will have to build a new country on the messy rubble Hosni Mubarak left behind. Western countries must recognize this shift and stand back as Egyptians write their own history.

Optimism Endures

One of the enduring fruits of Egypt's uprising is a newfound belief that a better future is possible, despite the short-lived euphoria last spring. It wasn't always this way. Just months before Jan. 25, 2011, Egyptians' average evaluation of their present lives dropped to a new low. Far more concerning, however, was that people expected their future lives to be no better, rating them nearly as poorly as their present ones.

This changed after the revolution. Although an ailing economy and delayed reform made life harder after Mubarak's ouster, Egyptians' expectations for their future lives significantly rose, even as their satisfaction with the present declined. The newfound faith in the future has endured a tumultuous year of transition, presenting Egypt's leaders with the challenge of meeting great expectations.

Please imagine a ladder with steps numbered from 0 at the bottom to 10 at the top. Suppose we say that the top of the ladder represents the best possible life for you, and the bottom of the ladder represents the worst possible life for you (0-10). On which step of the ladder would you say you personally feel you stand at this time, assuming that the higher the step the better you feel about your life, and the lower the step the worse you feel about it? Which step comes closest to the way you feel? Just your best guess, on which step do you think you will stand in the future, say about five years from now? [Average shown.]

Copyright © 2012 Gallup, Inc. All rights reserved.

Egyptians' views of their political process reflect this optimism. Although many Americans -- and some Egyptian activists -- argue that little has changed in Egypt, most Egyptians see things differently, particularly after the recent parliamentary polls. Majorities believe in the honesty of their elections and that their lives are better because of Mubarak's resignation. The public even seems to think that the country's economic tailspin has slowed.

In your opinion, will conditions for each of the following improve, decline, or stay the same as a result of President Mubarak's resignation? [Percentage "improve" shown.]

Copyright © 2012 Gallup, Inc. All rights reserved.

Egyptians Expect More from the State -- and Themselves

Some will interpret these results as simply an indication of Egyptians' unrealistic expectations of a paternal state -- naive victims of a long autocracy waiting for their government to solve all their problems. This conclusion, however, would ignore a crucial shift taking place far from the cameras in Tahrir Square. The real change is in the rising expectations Egyptians place first on themselves.

Whereas 81 percent of Egyptians said they could "get ahead by working hard" in late 2010, this number jumped to 93 percent after the revolution and stayed at that level. In the country once known for its people's quiet resignation, today 90 percent say that if there is a problem in their community, it is up to them to fix it. And after an election seen as fair by most, the percentage who think they have not only the responsibility, but also the power to make change surged from 55 percent in September to 74 percent in December 2011.

Egyptians' new confidence in their ability to choose their future and in the fairness of the elections they lined up to do so means the public will expect its ruling generals to allow elected leaders to govern.

It also suggests the country is ready for an end to military rule. While the vast majority of Egyptians still have confidence in the Supreme Council of the Armed Forces (SCAF), most also expect them to relinquish power to a civilian government as soon as Egyptians elect a president. This is true regardless of political affiliation.

Do you think each of the following is a good thing or a bad thing for the country?
--The military remaining involved in politics after the presidential election.

Copyright © 2012 Gallup, Inc. All rights reserved.

Voters Want More Jobs -- Not Moral Policing

Whoever governs Egypt will need to deliver to a public that is no longer accustomed to passive fatalism. The new majority-Islamist parliament must understand this well and not misinterpret its victory as a popular ideological mandate. The Islamists' newly discovered public support is not the product of decades of unwavering philosophical followership, but the outcome of weeks of disciplined, effective campaigning in a country of undecideds.

Please indicate whether you support or do not support each of the following political parties or groups.
--Percentage support shown: the April 6 Youth Movement, the Muslim Brotherhood, the Free Egyptians Party, the al-Nour Party.

Copyright © 2012 Gallup, Inc. All rights reserved.

As such, the ballots cast in Egypt's parliamentary election likely reflect a vote of confidence for the parties perceived as best able to deliver on the public's priorities for the next government -- priorities that are not necessarily ideological. This means that the new government must focus on their constituents' main concerns, which, whether they support liberals or Islamists, focus on economic development, employment, and stability, not saving Egyptians from moral decay.

What are the two most important issues or challenges that the next government should address when it takes office? [First response shown.]

Copyright © 2012 Gallup, Inc. All rights reserved.

Little Difference Between Liberal and Islamist Party Supporters on Key Issues

While the hand-wringing in many Western capitals over the defeat of the liberals in favor of Islamists assumes these groups are starkly different on key issues of Western interest, this is likely not the case, according to Gallup's research. Supporters of secular and religious parties are remarkably similar on many of the key questions facing Egypt, from domestic priorities to foreign policy.

Of greatest importance to Egypt's political future is the country's new constitution -- a document that will be drafted under the supervision of a majority-Islamist parliament. Many in the West and in Egypt assume that the result will be a constitution that restricts individual freedoms. While one cannot predict the political calculations of the newly minted politicians, if these political parties responded to their constituents, there would be little to debate. The Muslim Brotherhood-affiliated Freedom and Justice Party supporters are at least as likely as those of the Free Egyptians Party, a self-proclaimed liberal group, to favor including fundamental protections for freedom of speech, religion, and assembly in a new constitution. 

Suppose that someday you were asked to help draft a new constitution for a new country. As I read you a list of possible provisions that might be included in a new constitution, would you tell me whether you would probably agree or not agree with the inclusion of each of these provisions? [Percentage agree shown.]
--Freedom of speech: allowing all citizens to express their opinion on the political, social, and economic issues of the day
.
--Freedom of religion: allowing all citizens to observe any religion of their choice and to practice its teachings and beliefs.
--Freedom of assembly: allowing all citizens to assemble or congregate for any reason or in support of any cause.

Copyright © 2012 Gallup, Inc. All rights reserved.

The other major concern for many observers is what a parliament heavily influenced by Islamists, perceived to be intolerant of other faiths and misogynistic, means for religious minorities and women.

Again, supporters of the Freedom and Justice Party are virtually identical to those of the Free Egyptians Party on questions of women's rights, even those explicitly regulated by religious guidelines like divorce.

Do you agree or disagree with the following statements? [Percentage agree shown.]
A. Women and men should have equal legal rights.
B. Women should be allowed to hold any job for which they are qualified outside the home.
C. Women should have the right to initiate a divorce.

Copyright © 2012 Gallup, Inc. All rights reserved.

Supporters of the conservative al-Nour Party, as well as those of the Freedom and Justice Party, are little different from those of the Free Egyptians Party, a group founded by Naguib Sawiris, a Christian, on reported interreligious acceptance.

Using a 5-point scale, where 5 means strongly agree and 1 means strongly disagree, how much do you agree or disagree with each of the following statements? You may use any number between 1 and 5 to make your rating.
--I always treat people of other religious faiths with respect.
--Most religious faiths make a positive contribution to society.
--I would not object to a person of a different religious faith moving next door.

Copyright © 2012 Gallup, Inc. All rights reserved.

Egypt's foreign policy, however -- principally maintaining its peace treaty with Israel -- is the key concern for many international observers. While the public is split on whether the Camp David Accords are good or bad for the country, this same divide cuts across political persuasions. This suggests that Israel and its supporters will need to engage the Egyptian public on the future of relations between the two countries, rather than seek to empower a particular political party believed to be friendlier to Egypt's Jewish neighbor.

What at least 90 percent of Egyptians do agree on, however, regardless of political party, is that lifting the blockade on Gaza is a "good thing" for Egypt.

Do you think each of the following is a good thing or a bad thing for the country?
--The current peace treaty with Israel
--Lifting the blockade on Gaza

Copyright © 2012 Gallup, Inc. All rights reserved.

Some have asked whether one year after its revolution, erroneously popularized as a Twitter and Facebook phenomena, Egypt has morphed into the new Iran -- with a parliament ideologically hostile toward the West. While 18 percent of Egyptians approve of America's leadership, far more see value in closer relations with the United States -- and this applies to supporters of the Islamist political parties as well.

This finding suggests that the revolution may be just beginning, replacing hardened postures with new possibilities in which many see the merit of warmer ties with countries even when they disagree with those countries' leadership. Western leaders would do well to draw inspiration from Egyptians in this regard, just as many from Athens to Atlanta drew inspiration from the protests we commemorate today.

Do you think each of the following is a good thing or a bad thing for the country?

--Closer relations between Egypt and the United States. [Percentage "good thing" shown.]

Copyright © 2012 Gallup, Inc. All rights reserved.

Feature

House of 19,000 Corporations

The uproar over Mitt Romney's finances shines a light on the world's most unlikely financial capital.

Grand Cayman is known for its beach resorts, world-class scuba diving, and as the unlikely facilitator of billions of dollars in global financial transactions.

The island has been garnering a lot of publicity this week -- not the good kind -- thanks to the scrutiny of presidential candidate Mitt Romney's tax returns, which include millions of dollars in foreign investments. According to ABC News, Romney has as much as $8 million invested in 12 Cayman Islands funds. (The governor has money parked in Bermuda, Ireland, and Luxembourg as well.)

Romney's Cayman riches aren't actually a new story. The L.A. Times reported in 2007 that the former Massachusetts governor was listed as a general partner and investor in BCIP Associates III Cayman, a fund set up by his old employer Bain Capital. Bain has as many as 138 funds registered in the Caymans, according to ABC. The BCIP fund is registered at P.O. Box 908GT in George Town, the Caymanian capital. This is the address of Walker House, the local office of international law firm Walkers. It's also, on paper at least, home to dozens of other companies including Del Monte Fresh Produce Inc., the global food giant physically headquartered in Coral Gables, Florida.

Walker House is just one of a number of addresses in downtown George Town used by corporations, including Coca-Cola, Oracle, and Intel, to minimize taxes or cut out the red tape in international transactions. The vast majority of these companies are legally prohibited from doing business in the Caymans themselves. The most famous of these addresses, located just down the road at 335 South Church St., is Ugland House, a five-story office building that is home -- physically -- to law firm Maples and Calder, and -- on paper -- nearly 19,000 companies.

President Barack Obama called out Ugland House specifically in a 2009 speech, saying "either this is the largest building in the world or the largest tax scam in the world." Legally speaking, it's neither. A 2008 GAO report found no evidence of illegal activity by Maples and Calder or any of the entities registered at Ugland House, about half of which have billing addresses in the United States. But, particularly in the case of hedge funds and private equity funds like Bain's -- about 38 percent of Ugland's "tenants" -- the building makes a mockery of the U.S. tax system.

As Romney's campaign has repeatedly stated, investors in these funds do pay U.S. taxes on their income. But there are significant financial incentives in having a Cayman address. First of all, the British territory has no direct taxes, and makes it exceptionally easy to set up a new company -- it only costs about $600. A fund with a Cayman address also allows foreign investors to invest in U.S.-run funds -- such as the bricks-and-mortar incarnation of BCIP Associates on Huntington Avenue in Boston -- while avoiding double-taxation in both the United States and their home countries.

A managing partner of Maples and Calder told Bloomberg in 2009 that “having a registered office address in the Cayman Islands is driven by commercial considerations, not by tax avoidance," but there are tax advantages for U.S. investors. Under U.S. tax law, a person is taxed on all foreign income. But a foreign corporation is not taxed on foreign income until it is distributed to shareholders, meaning greater returns for investors like Romney. The Caymans also allow U.S. non-profit entities like pension funds and university endowments to invest in hedge funds without paying the "unrelated business income tax," which could be as high as 35 percent if those funds were based in the United States.

There are also concerns that the complexity and lack of transparency in Cayman Islands transactions can make tax evasion and money laundering easier, though there's no evidence that Bain or Romney were involved in these activities and the vast majority of Cayman Islands transactions are entirely legal.

This is not to say they're popular. The organization Citizens for Tax Justice estimates that the U.S. federal government loses as much as $100 billion per year in revenue due to tax havens. Sen. Carl Levin has proposed legislation that would treat foreign-registered, U.S.-based corporations as American companies for the purposes of tax law. Legislation to shut down the Caymans as a tax haven has been proposed in the British parliament. Given the nearly $5 trillion held by U.S. corporations and individuals in tax-haven countries, though, these motions are likely to face some stiff, and well-funded resistance.

As for Romney, he argues, "I don't think you want someone as the candidate for president who pays more taxes than he owes." Fair enough, but it will be up to voters to decide what the definition of the word "owes" is.

Alan Markoff/REUTERS