Brother Knows Best

How Egypt's new president is outsmarting the generals.

Shortly after the Aug. 5 killing of 16 paramilitary policemen near Egypt's border with the Gaza Strip, Egyptian, Israeli, and U.S. officials determined that the perpetrators were part of an "extremist group" -- one they have yet to identify. According to official accounts, assailants firing AK-47s attacked the conscripts and officers as they prepared for iftar, the traditional breaking of the Ramadan fast. Eight of the terrorists were killed in the ensuing firefight, but not before the perpetrators hijacked an armored personnel carrier and tried unsuccessfully to cross the Egypt-Israel frontier.

To a variety of observers, however, the official story seems a little too neat. The Egyptian government rarely comes to a quick conclusion about anything except when its leaders have something to hide, typically resulting in a half-baked story that few are inclined to believe. The tale about a shadowy group of militants fits the bill, leaving journalists, commentators, and other skeptical Egyptians with two theories: Either the Supreme Council of the Armed Forces (SCAF) and Egypt's intelligence services planned the operation to embarrass Egypt's new president, Mohamed Morsy, or Israel's Mossad did it -- a silly allegation that Morsy's own Muslim Brotherhood advanced. Lost in all this speculation, however, were the attack's unexpected but important political effects.

What makes the Rafah incident more interesting than previous attacks in Sinai -- of which there have been many -- is its potential to break Egypt's political logjam. At first it looked as if Morsy would bear much of the blame for the attack despite his tough rhetoric in its aftermath. Indeed, he stayed away from the funerals for the martyred policemen, claiming implausibly that his security detail would disrupt proper mourning rituals. Protesters chased Hisham Qandil, Morsy's handpicked prime minister, from the proceedings with a barrage of shoes. On Tuesday, it seemed that predictions of Morsy's early political demise would prove accurate. But just 24 hours later the tables had turned.

It was perhaps inevitable that Egypt's various political parties, groups, and factions would try to leverage the violence in Rafah to their political advantage. Even the April 6 Movement, Kefaya, and other less well-known groups seized the opportunity to burnish their now fading political images with what turned out to be a sparsely attended protest. They rallied near the Israeli ambassador's residence over Mossad's alleged responsibility for the killings, apparently indifferent to the irony of expressing solidarity with the widely demonized  security forces. At the end of the day, however, these antics were but a sideshow to the next act in Egypt's central political drama, pitting the SCAF against the Muslim Brothers.

For months now, it has seemed that this play had no end. The Brothers have long maintained a vision of society that resonates with many Egyptians but very little in the way of means to transform these ideas into reality. The military is an exact mirror image of the Brothers. The officers have no coherent and appealing worldview, but they have had the ability to prevent those who do from accumulating power and altering the political system. The result has been a stalemate, marked by a series of tactical political deals that only last until circumstances force the Brothers and the officers to seek accommodation.

But the Rafah killings may well have tipped the scales. As weak as Morsy's position seemed to be, two distinct advantages have enabled him to spin the attack to his political advantage: the utter the incompetence of Maj. Gen. Murad Muwafi, the head of the General Intelligence Service, and the very fact that Morsy is a popularly elected president.

On the first count, Muwafi admitted that his organization intercepted details of the attack before it happened, but that he and his team never "imagined that a Muslim would kill a Muslim brother at iftar in Ramadan." He then passed the buck, lamely offering that he had given the information to the proper authorities, presumably the Ministry of Interior. Muwafi may have been using the reference to Muslims' killing of fellow Muslims while breaking fast to cast suspicion on the Israelis -- no matter that this theory is demonstrably untrue -- or because it reflected the complacency of the Mubarak era of which he is a product. Either way, it played to Morsy's advantage.

Under Mubarak, Muwafi would likely have gotten away with his ineptitude. No doubt, there were intelligence failures during the Mubarak era, but the former president and his minions could always count on force and state propaganda to cover their tracks. (It is important to remember that however unseemly it was for the Muslim Brotherhood to blame Israel for the Rafah attacks, it is a tactic that Hosni Mubarak perfected during his three decades in power. A little more than a month after the Sept. 11, 2001 attacks, for example, Mubarak told an Israeli TV audience, "You are responsible [for terrorism]." ) But old tricks don't always work in the new Egypt. Muwafi's admission that the GIS knew an attack was on the way provided Morsy with an opportunity to clean house -- a stunning move made possible only by the fact that he can claim a popular mandate. Out went Muwafi, North Sinai governor Abdel Wahab Mabrouk, and Hamdi Badeen, the powerful commander of the Military Police.

The SCAF, the GIS, and Ministry of Interior may yet respond, but they are in a difficult political position. How do they justify opposing the president for removing the people ostensibly responsible for failing to prevent the deaths of Egyptian troops? In the new, more open Egypt, people are demanding accountability and Morsy is giving it to them,  which may be why Field Marshal Mohamed Hussein Tantawi, head of the SCAF, has so far yielded to Morsy. Yet Tantawi's position is made all the more precarious because if he does not respond in some way, he is signaling that there is no price to be paid for defying Egypt's defense and national security establishment, opening the way to further efforts to undermine the deep state.

Given the SCAF's June 17 constitutional decree stripping the Egyptian presidency of virtually all of its national security and defense-related prerogatives, it is unclear whether Morsy has the authority to back up his sweeping personnel changes. Muwafi is a military officer, but General Intelligence is -- at least on the government of Egypt's organizational chart -- separate from the Ministry of Defense, which would suggest that the president was within his legal right went he sacked the intelligence chief.  The same argument can be used regarding Abdel Wahab Mabrouk, who is also a military officer but, by dint of his position as governor, is subordinate to the interior minister. Yet like so much in Egypt, what is written is different from actual practice, so there may be ways that both men retain their positions. The fate of Badeen is clearer since he is an active military officer and the June 17 decree prohibits the president from making personnel moves without SCAF's approval. At the very least, President Morsy will have to leave the choice of Badeen's replacement to Field Marshal Tantawi.

As the New York Times, the Washington Post, and other major newspapers all dutifully reported, the violence in Sinai was  an "urgent" and "crucial" test of Morsy in his "tense relationship with the military." It was, indeed,  an early test, and Egypt's new president seemed to pass with flying colors. Against all expectations, Morsy made the most politically out of the Rafah killings. To be sure, this episode was not exactly Anwar Sadat's takedown of Ali Sabri, Gen. Mohamed Fawzi, and Gen. Sharawi Guma in 1971 for allegedly plotting a coup d'état that ended with all three behind bars and went a long way toward consolidating Sadat's power. Yet if Morsy can make the dismissals stick, he will not only have made a convincing case that he is much more than the weak transitional figure the SCAF has sought to make him, but he also will have begun a process that could alter the relationship between Egypt's security elite and its civilian (and now elected) leadership.

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Countdown to Zero Dollars

The U.S. opened the door to nuclear trade with India -- and got nothing.

NEW DELHI — It was supposed to signal a new era of strategic and economic cooperation between India and the United States, but four years after a ground-breaking nuclear deal between the two countries, frustrated American companies are wondering what happened to all the lucrative deals that were supposed to come their way. And Pakistan, which tends to view India's every move on the global chess board as a zero-sum game, has registered its unhappiness by ramping up its capacity to produce weapons-grade plutonium with two new Chinese-supplied reactors.

The deal, known as the U.S.-India Civil Nuclear Agreement, ended a 34-year embargo on the transfer of nuclear technology to India, paving the way for U.S. manufacturers and suppliers to sell reactors and fuel to India, even though it is one of the four nuclear weapons states that are not party to the Nuclear Non-Proliferation Treaty, or NPT. (Pakistan, Israel, and North Korea are the other three.)

Giving India this exemption did not sit well with the non-proliferation community -- it still doesn't -- but heavy lobbying by the U.S. nuclear industry helped the Bush administration push the deal through Congress.

Thus far, however, the results have disappointed the Americans.

"It's no secret...that the U.S.-India Civil Nuclear Agreement hasn't met U.S. commercial expectations due to the nuclear liability law passed by the Indian Parliament, which essentially shuts out U.S. companies," said Rep. Steve Chabot (R-OH), chairman of the House Foreign Affairs Subcommittee on South Asia at a hearing in May. That's putting it mildly. Of the $150 billion jackpot that was supposed to be in play, U.S. firms have not yet earned a dime.

Hillary Clinton traveled to New Delhi the same month as the hearing, to nudge the process along. A few weeks later in Washington, standing beside her Indian counterpart, she announced the first modest piece of good news: Westinghouse, whose headquarters are in Pennsylvania but which is owned by the Japanese conglomerate Toshiba, had concluded what is called an "early works agreement" to begin preliminary negotiations on site development and licensing issues for a proposed 1,000-megawatt reactor in the western state of Gujarat. But this is far from a done deal and it could be years before an actual contract is signed. "An agreement has to be reached on the liability law before we do anything," said Scott Shaw, a spokesman for Westinghouse.

Meanwhile France's Areva and Russia's Rosatom have been doing a very profitable business in India -- thanks to the doors opened by the U.S. government's 2008 deal. Areva has already signed a $9.3 billion preliminary agreement to build two  reactors, the first of six that are planned. The deal could eventually be worth about $20 billion to the French company.

Although frustration within the U.S. nuclear industry is palpable, the official line is that it's still early. "It would be beyond expectations to have business on the ground at this time," said Daniel Lipman, director of strategic supplier programs for the Nuclear Energy Institute in Washington.

The biggest problem for American companies trying to do business in India, as Rep. Chabot noted, is a severe liability law adopted by India's parliament shortly after the nuclear deal was signed. Mindful of the Bhopal catastrophe -- the 1984 industrial chemical accident that killed 3,000 almost instantly and up to another 20,000 over time -- Indian lawmakers insisted that not only plant operators but also suppliers and manufacturers be held liable in the event of a similar catastrophe. This is seen as much less of a burden for state-owned companies like Areva and Rosotom than it is for private sector U.S. companies and their insurers.

Raja Mohan, an analyst at the Observer Research Foundation in New Delhi, describes the liability laws as "ridiculously hard" and blames the Indian government for mismanaging the legislative process, but he also notes that the government is rethinking the entire question of nuclear energy in the wake of Japan's Fukushima reactor disaster, and that India as a whole, with its booming economy and growing middle class, has a changed outlook. "Having a nuclear reactor in your backyard is not popular here either," he said.

Indian officials are inclined to shrug at corporate America's frustration. "When we began to negotiate, it was never about business. Both sides were looking at it in a much larger strategic sense," said Shyam Saran, who was India's Foreign Secretary at the time. "The agreement reflects a certain strategic convergence between the U.S. and India. A deal would not have been possible without this convergence. Even if we are not allies, we have similar concerns and attitudes regarding the emergence of China-not as a threat, but as a challenge. Like it or not, we both have to deal with it."

The nonproliferation lobby in the United States and elsewhere has never been comfortable with the deal, which gives India access to sensitive technology and allows it to buy nuclear fuel on the international market without binding it to the rigorous safeguards and restrictions of the NPT. Under the terms of the deal, India has agreed to open all of its civil nuclear facilities to inspection by the International Atomic Energy Agency -- which proponents say is an important step forward -- but India's military nuclear facilities remain closed to IAEA inspection.

Pakistan, which views India and its nuclear arsenal as a constant existential threat, is deeply disturbed by the preferential treatment given to India. "It creates a new category of nuclear weapons state -- one with all the benefits of the NPT, but with no safeguards on weapons," said Maria Sultan, director of the South Asian Strategic Stability Institute, an Islamabad think tank.

Before the agreement, India had to choose: it could use its limited domestic supplies of uranium for energy or for bombs. Now, with access to the international marketplace, it can have both.

Pakistan responded to the U.S.-India agreement by signing a deal with China for the construction of two more plutonium reactors. One is currently undergoing trials and the other is scheduled to come on line by 2016. Pakistan already has two plutonium reactors built by China, the only country willing to supply it with nuclear technology.

Boosting strategic ties with India by offering it nuclear technology may have looked like a win-win idea at the time, but thus far the payoff to the U.S. nuclear industry has not materialized and the headache of dealing with Pakistan's burgeoning nuclear arsenal is getting worse.

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