The Five Stages of Egypt's Revolution

It matters little who wins the presidency this weekend -- a much bloodier uprising is inevitable.

CAIRO – I was put on the spot by a wise old friend of mine in Washington several years ago. He wanted my pitch on Egypt in 30 seconds or less. "This is a town beset with attention deficit disorder," he said, "so what have you got?" I gulped and offered up the "three Ms of Egypt": the military, the mosque, and the masses.

Despite the popular revolt against Hosni Mubarak's regime last year, it remains true that the only political contest that counts in Egypt has pitted its military generals against the mosque's imams and leaders. Both want control over the masses -- 85 million Egyptians. The recent elections highlighted these three Ms: However depressing for many reformers and activists, the culmination of nearly 18 months of mass protest now pits the Muslim Brotherhood's Mohammad Morsi against Ahmed Shafiq, a retired military officer and former Mubarak prime minister.

Whether the military or the mosque wins the runoff this weekend, reformers and their supporters around the world need to consider some equally important potential futures scenarios. Their first step should be to dust off a copy of Crane Brinton's An Anatomy of Revolution, a 1938 study that considers major revolutions in history, identifies the factors influencing them, and attempts to extrapolate certain "rules" for how such seismic political transitions play out. In the startling air of uncertainty pervading Egypt's current impasse, it provides at least a framework -- and often strangely accurate reference point -- from which to contemplate events. And it serves as a guide, and a warning, to Egypt's future. This week's court ruling blessing Shafiq's candidacy and dissolving parliament -- reasserting the military's grip on power and infuriating millions of Egyptians in the process -- should only be taken as another sign that the center, hemorrhaging ever more legitimacy, ultimately cannot hold.

Brinton would tell you that in the long run, it actually doesn't really matter who the next president of Egypt is. Morsi and Shafiq are doppelgangers: Both are ghosts of the past, circling each other, embedded in the old system that has defined and sustained them for decades. Of course, the man from the military and the man from the mosque each claim to be the true champion of the revolution. In truth, it's likely that neither is -- and that both will pass from the scene as the revolution's pendulum swings inexorably to the extremes.

You may be asking: How can it not matter? While the mosque (in the form of the Muslim Brotherhood) and the military (in the form of the ruling Supreme Council of the Armed Forces) stand triumphant, each risks losing its grip on political power. Both will inevitably be the victims of true political transformation and swept away, as Brinton would say, through the course of events.

There are signs now that this could happen and, not surprisingly, both Morsi and Shafiq know it. The Brotherhood's initial reluctance to support last year's revolution has been replaced by its enthusiastic participation in the democratic process, from elections to constitutional reform. The mosque is now seen as fully committed to regime change, and is quietly flirting with the more extreme revolutionaries, both secular and religious, on the margins of Egypt's political environment -- ranging from the revolutionary youth to the ultraconservative wings of his Salafist counterparts. But despite this tentative flirtation, Morsi and his co-leaders would far rather Shafiq and his military allies take the vote than turn the country over to Egypt's true revolutionaries. For example, a deal struck between the SCAF and the Brotherhood's leadership on the eve of last November's parliamentary elections apparently benefited both camps more than the many thousands of protesters who had threatened to derail the election schedule. As the vote went ahead as planned, the Brotherhood won nearly half the seats, while allowing the SCAF to retain ultimate power -- a deal that served the short-term interests of both sides.

 In the near future, however, the three Ms are far less significant than the big E: Egypt's economy. Whoever the next president is, the economic challenges that confront him -- ranging from chronic unemployment to ailing foreign credit -- are urgent. In the last 18 months the country's foreign currency reserves have plummeted by more than half, and foreign direct investment last year totaled only one-third of the 2010 figure. Tourism has cratered. Aside from the military establishment, the state's resources and capacity are worn out and poorly functioning -- when they function at all.

Finally, the relationships between the legislative assembly, the presidency, and the executive have yet to be defined. They limp along today in a dystopian setting, as Egypt's political forces bicker over the makeup of the assembly to draft a new constitution. The parliament has historically been little more than a rubber stamp for regime policies and, even as Egyptians go to the polls to select a new president, it is a mystery what powers that figure will possess. A relatively emasculated presidency with little real capacity to enforce policy changes remains a distinct possibility.

It seems all too possible now that, to effect real political change, Egypt's revolution will need to somehow devour both mosque and military. Genuine redistribution of political power will require a dramatic upheaval of these entrenched systems. As political theorist Gene Sharp warns in his 1993 treatise From Dictatorship to Democracy: "Nowhere ... do I assume that defying dictators will be an easy or cost-free endeavor. All forms of struggle have complications and costs. ... The fall of one regime does not bring in a utopia."

In Egypt, these casualties would not only include the hundreds of young men dead on the streets, but also the destruction of arrangements that favored certain sections of Egyptian society and provided the foundation for its political order. Once again, Brinton offers guidance for how to think of this process by conceiving of revolutions in terms of stages: In his model, Egypt has traversed the first stage -- the collapse of the regime -- and begun stage two, epitomized by an ineffective, moderate interim government that fails to deliver sufficient political change. Depending on how you apply this framework to the Egyptian setting, this second stage may equate to either the interim SCAF or some kind of "inclusive" -- i.e. badly fudged -- government that will be unpopular, and destined to fail. Again, whether this administration is led by Morsi or Shafiq makes little difference in the long run.

The failure of the moderates will bring about stage three: the wholesale disintegration of a measured transition process, leading to widespread political confusion, major clashes, and the beginnings of violence verging on anarchy. Stage four ushers in the radical, purging, period -- terrifying for its uncompromising zeal and tyranny. This "fever," in Brinton's terminology, breaks in the final stage, as the radical leadership burns itself out and is replaced by a more stable and long-term representative government.

It's unclear who the "stage four" zealots will be in the Egyptian context, though some kind of militarized religious force seems probable. Indeed, the Salafists and other more extreme religious groups are conspicuously absent from the current clash of the mainstream factions -- particularly considering their astonishing election performance that gave them 25 percent of parliament.. Their silence, like that of France's Jacobins or Russia's Bolsheviks, is telling. They are, quite obviously, patiently awaiting the weakening of the military and the mosque, which are just now in the process of weakening each other -- as the contending moderate parties in revolutionary France and Russia weakened each other -- paving the way for the extremists.

Of course, this kind of framework is often dismissed as the mindless wanderings of historical structuralists. Egypt is neither Russia nor France. Yet, in the context of Egypt's current political dilemma, Brinton's scenarios need to be taken seriously. What they suggest is what we already know to be true: The outcome of Egypt's revolution will not be decided by a committee, it will not be managed, and it will not be moderated. It will be decided in the streets, as all revolutions are. Egypt's revolution is not nearing an end, it's only just beginning.


Democracy Lab

Egypt's Subsidy Blues

When Egypt's next rulers finally tackle urgently needed economic reform, they should look to an unlikely model: Iran.

If people are hungry, provide food at prices they can afford. If they need fuel to cook it, or perhaps to bring their crops to market, give them a break at the pump. What could be fairer or more straightforward?

What, indeed. Governments all over the developing world have been seduced by the populist logic of subsidizing consumer necessities. The approach was especially alluring in centrally planned economies (including hybrids such as China and India), where prices didn't reflect costs to begin with. And, of course, subsidies for petroleum proved to be as Arab as hummus for the oil exporters of the Middle East, where citizens have come to think of fuel at circa 1979 prices as a birthright.

If subsidies are good for the poor, why not let everybody else in on the deal? That's a formula for multiplying the waste -- subsidies reduce prices below cost, after all, artificially increasing demand and, where the subsidies are borne by the producers, undermining supply incentives. Nonetheless, extending eligibility to include both middle-class and business users has, more often than not, proved irresistible.

The catch, of course, is that few developing countries can really afford the drag on efficiency or budgetary cost. Case in point: Egypt, which devotes an astounding 10 percent of GDP to subsidies for food and fuel -- both of which it must import. Whoever wins the presidential election runoff this weekend will thus face the unenviable task of prying both the middle-class and powerful business interests from their accustomed perquisites.

It needn't (and probably shouldn't) be done overnight; among other problems, that would spike inflation, which Egypt can't afford, either. The big question is whether the new government will have the will and the way to manage it at all. Much, alas, is at stake here: Egypt's failure to confront the subsidy issue would put at risk the gains of two decades of growth in which GDP per capita, measured in terms of purchasing power, almost tripled.

As you might have already guessed, subsidy withdrawal can be harmful to health. Back in 1977, when Egypt was effectively bankrupt, Anwar Sadat decided to let food prices rise and Egyptians took to the streets. Days of rioting and some 160 deaths later, Sadat changed his mind.

Apparently, the passage of time hasn't made the process any safer. Yemen's initiative to reduce fuel subsidies in 2005 led to riots that left dozens dead; the decision was quickly reversed. Today, Yemen's transition government must finance fuel subsidies equal to nine percent of GDP -- the highest fuel subsidy burden in the world.

It was much the same story in Nigeria, where the cash-starved government lifted fuel subsidies this past January and then quickly compromised after the announcement was countered with a general strike. The issue is far from settled, though: There are press reports that the government is so hard up for cash that it hasn't paid gasoline marketers for subsidized deliveries since the beginning of 2012.

None of this bodes well for Egypt's next president, who will be caught between conflicting economic priorities from the get-go. One the one hand, he must make headway in meeting the expectations of middle- and lower-income Egyptians who resent the fact that a disproportionate share of the (very substantial) fruits of growth under Mubarak ended up in the hands of cronies. Raising the price of bread and gasoline is hardly a way to win them over. On the other hand, the failure to cut the budget deficit over the next few years might well leave the economy broke and stagnant.

Egypt made it through the global recession in good shape, but stumbled badly in the wake of the revolution as tourism collapsed and investors (domestic and foreign) put their plans on hold. To bring back growth, the new government will need to woo the people who can vote with their checkbooks. And a critical step in that direction would be to spell out a credible plan for containing spending -- a virtually impossible task without reducing subsidies, which have ballooned over the years to absorb more than a quarter of the government budget.

Actually, the most realistic path to investor confidence runs through Washington: There's no way Cairo will be able to lure back private investors unless it can win a vote of confidence (and a multibillion dollar line of credit) from the IMF and other multilateral lenders. While the IMF won't hold all the cards in the coming negotiations -- the rich countries it represents have a strong interest in stabilizing Egypt -- the Fund will surely insist on a believable plan to slow the hemorrhage of foreign currency from the Egyptian Central Bank before it throws good money after bad. And I can't imagine any plan passing the laugh test that doesn't include cuts in subsidies.

How, then, might the government thread the needle, making nice to Washington without alienating the home crowd?  The model for subsidy reform, ironically, comes from a country (Iran!) not known for either political subtlety or effective economic management. But I get ahead of myself.

Any realistic plan to reform subsidies must start with natural gas and petroleum products. Yes, food subsidies are also wasteful: Heavily subsidized bread is available in any quantity to everybody, and close to 70 percent of all Egyptians have ration cards that allow them to buy other staples at a fraction of cost. But lower-income Egyptians are far more sensitive to the price of food than to the price of gasoline. Equally important, food subsidies cost less than half as much as fuel subsidies.

By the same token, it also makes sense to delay the day of reckoning on subsidies for liquid petroleum gas (butane/propane), which most middle- and lower-income Egyptians use for cooking. Price hikes would hit the wrong people hard, yet only modest sums would be saved since only 14 percent of the fuel subsidy goes for LPG.

The big money -- but relatively little of the benefit trickling down to the poor -- is in the subsidies for gasoline, diesel fuel, heavy boiler fuel and natural gas. Much of it goes to industry, whose owners will no doubt raise a formidable fuss if it is taken away. But one has to hope that the folks who gained the most from economic growth under Mubarak (and have the most to lose if growth does not resume or the revolution turns anti-capitalist) will be in a mood to compromise, perhaps settling for tax incentives to install more fuel-efficient equipment. The large numbers of middle-class Egyptians who've become very attached to private cars are another story.

That's where the Iran model fits in. Like Nigeria, Iran ran out of money to pacify ordinary citizens with subsidized fuel. And, as in Nigeria, the inefficiencies created by the subsidies were a formidable drag on growth. But unlike Nigeria, Iran played reform smart, offering cash compensation to roughly 80 percent of consumers before it sharply raised the prices of liquid fuels in March 2010. That outlay reduces the net budget savings by half. But, combined with a heavy PR effort (and a show of force against protestors), the money made it possible to set the economy on a path toward efficient energy use without creating a political blowback.

Egypt can't afford to recycle such a high percentage of the savings from reform. But it could give all households ration coupons for very limited amounts of fuel at pre-reform prices, and allow those who don't need them to sell the coupons to others who do. This would, presumably, go a long way toward making the reform palatable without undermining incentives to conserve fuel. And with time (and the restoration of economic growth), the coupons could be phased out.

No Egyptian government since Sadat's has taken subsidy reform seriously. But, then, no Egyptian government before this one had the political legitimacy to take on so onerous a task. Moreover, no government has been confronted with so stark a choice between change and stagnation.

There are, in fact, signs that some Egyptian politicians are ready to bite the bullet. Last week the interim government quietly presented parliament (now dissolved) with a proposed budget that would cut fuel subsidies by 27 percent and end all subsidies to industry in 2013. The new government isn't bound, of course, by the wishes of the old. But it's an opening -- cross your fingers.