Five months in, Egypt's post-Mubarak politics have yet to take shape. With parliamentary elections scheduled to take place in only two months, and with Egyptians still wondering if they will vote for district representatives, national party lists, or some hybrid system, July's uncertainty has replaced February's euphoria.
It is not surprising that a system that was largely bereft of politics for decades would take a long time to generate genuine politics. What is more surprising is that the emerging issues of Egyptian politics, the economy and nationalism, would run so much at cross-purposes. Egyptians' ability to reconcile the two will be a vital test of their ability to thrive in the coming era.
The centrality of the economy to Egypt's political upheaval is well understood. Legions of unemployed young people searched for years to find their first job. Millions of government workers struggled every month to make ends meet. Meanwhile, a small elite seemed to live in a wholly different country, shopping in glitzy malls, driving fast cars, and having an ever-growing array of food and drink delivered to their homes in gated communities.
The Mubarak family was linked to the second group, and many saw them as profiting at the expense of the nation rather than building it. Further, those outside of the elite saw little prospect of themselves joining that elite without having gone to the right schools and joined the right clubs. They saw Gamal Mubarak's potential accession to his father's position as a symbol of corruption run rampant, and isolated protests on January 25 swiftly became a national movement.
While the economics of the Mubarak regime generated opposition, they did not generate a strong alternative. Mubarak's gradual turn toward a more capitalist economy bred some resistance on the Left as the poor and middle classes saw their social safety net eroding, but few on the Right urged more dramatic change. The government's goal was not to mobilize the public to support economic change, but rather to anesthetize it.
In the post-Mubarak era, the champions of a more open economy are few. The business community is tainted by its association with the Mubarak government and remains unable to articulate an alternative economic model to the one that produced immiseration and inequality, and ultimately contributed to Mubarak's demise. The military is loath to depart from the system of preferences and privileges that protected-and enriched-its most senior officers. The public call is for short-term spending that provides relief: increased government employment, subsidies, and government-financed housing.
And yet, solving Egypt's economic problems-rather than merely ameliorating them-requires substantial private-sector investment, both from Egypt and abroad. Hostility to local capital has led many Egyptian investors to send what money they can abroad, and foreign investors are waiting to see what happens in Egypt before committing additional resources there.
The outcome, then, is likely to be a lurch leftward in the Egyptian economy, as government spending increases to compensate for weak investment. Without significant foreign support, it is unlikely that such spending can be sustained.
It is the prospect of reliance on foreign financing that invokes the second emerging pillar of Egyptian politics, that of nationalism. For decades, Egyptians have watched their country slide from a position of regional preeminence. To many Egyptians, it was Hosni Mubarak's close ties to the United States-and by extension, Israel-that made Egypt a predictable and ultimately peripheral factor in regional affairs. Three decades of U.S. financial assistance to Egypt did not usher in a period of affluence; instead, it created Egyptian resentment that the United States took the country for granted. No one on the Egyptian political scene is arguing for closer ties to the United States. To the contrary, the instinct is to carry out acts large and small that demonstrate distance from the United States, from successful efforts to broker a fragile Hamas-Fatah truce to exploring the restoration of diplomatic relations with Iran.
Egypt's recent rejection of a $3-billion IMF loan that had few conditions attached is a sign of the populist impulse in Egypt to turn away from close collaboration with the West. The announcement soon after that the United Arab Emirates would loan Egypt $3 billion-following Saudi Arabia's commitment of $4 billion-was a sign that Egypt was exploring deepening its regional ties.
Yet, it is folly to think that the Gulf money comes with no strings related both to Egypt's economic performance and its political orientation. Likewise, Palestinians can tell the Egyptians horror stories about Gulf money that was pledged but not delivered through the years. Finally, Egyptians themselves have an ambivalent relationship to Gulf capital. The annual summer influx of Gulf visitors to Egypt often leaves behind hard feelings, and there is widespread anger toward absentee owners from the Gulf who bid up local real estate prices while not occupying their choice properties. There are few Egyptians who do not consider their Arab identity a core part of their being, and few who do not use the word "Arab" derisively to refer to the Gulf Arabs they see distorting their economy and society.
Egypt cannot be successful without a vibrant economy, and it cannot have a vibrant economy without investment from within and without. Yet, Egyptians seem to distrust most investors, either because they are tied to the ancient regime or because they see them as foreigners intent on capturing the country's resources. Egypt's emerging politics are populist pure and simple, but the populism does little to solve the country's problems.
When Egypt's politics do emerge, they are likely to array themselves along these two axes: their attitude toward the private sector, and their attitude toward foreign ties. The early signs are for a populist hostility to the private sector and a distrust of Western governments and Western capital. It is hard to imagine how such attitudes could yield a successful outcome. Defining an alternative will be vital for Egypt's future.