Two years after the popular revolt that toppled Hosni Mubarak, Egypt appears headed toward a "failed state" scenario. While Cairo has not yet defaulted on its debts -- an economic hallmark of nearly all erstwhile states -- it already meets many of the other political conditions associated with comprehensive failure. In Washington, the discussion is narrowly focused on the implications of the rapidly deteriorating economic situation, with little appreciation that the financial morass is inextricably linked to the government's increasingly authoritarian politics. If the ruling Islamist party does not change its approach, the economy will not improve, and the state will move closer to collapse.
THE POLITICAL CRISIS
Since the Muslim Brotherhood (MB) came to power, governance in Egypt has exhibited several classic characteristics of failed states:
Inconsistent and selective application of law. On March 27, an Egyptian court overturned President Muhammad Morsi's November 2012 decision to replace the sitting prosecutor-general with Talaat Abdullah, a crony who has since focused investigations solely on the MB's political opponents. The ruling renders all of Abdullah's investigations illegal. By ignoring the verdict and going after activists even more aggressively, the state -- personified in the president, his government, and the prosecutor-general -- has shown its willingness to undermine rule of law.
Deterioration of services. Basic public services such as electricity and gas are falling apart, with most Egyptians experiencing daily power cuts.
Unaccountable security apparatus. The interior minister, a Brotherhood loyalist, deploys the police to clash with opposition protesters while protecting the MB thugs who beat and torture demonstrators.
Delegitimization of the state. Due to a legally faulty election law issued by the Morsi-appointed upper house of parliament, the legislative elections originally slated for this month have been delayed until November. Meanwhile, the opposition is now refusing to participate in elections because Egyptian institutions cannot guarantee the fairness of the process. When Secretary of State John Kerry tried to mediate last month, the MB undercut his efforts by publicly calling for elections without any of the promised changes to the electoral law, which were the basis of his mediation. The situation is pushing Egypt toward failure, and the MB government shows no sign of seeking a solution.
POLITICS LINKED TO ECONOMIC PROBLEMS
The political crisis has contributed to the country's rapid economic deterioration. Unemployment has risen sharply, and tourism -- which traditionally comprised around 20 percent of gross domestic product -- is virtually nonexistent, with hotels experiencing occupancy rates of 10 percent on average. The dearth of dollars from tourism and foreign investment has left foreign reserves at a record low. Foreign currency is scarce, forcing many to turn to the black market at exorbitant exchange rates. Devaluation of the Egyptian pound has exacerbated the rising price of goods, and inflation is expected to worsen once the government implements the austerity measures mandated by the International Monetary Fund.
