Egypt enters a new phase that might favour extremists


H A Hellyer
  • English
  • Arabic

The bombing of an Egyptian police compound in Mansoura on Tuesday, and the designation of the Muslim Brotherhood as a terrorist organisation by the interim government, mark a turning point for the political crisis in the country. And yet, the authorities do not appear to have the type of forward thinking necessary to prevent Egypt from slipping into a new cycle of terrorism and violence.

The escalation of violence has been ongoing since August 14. There were acts of violence after the removal of Mohammed Morsi from office, but those acts were containable. When the government made the decision to disperse the pro-Morsi sit-ins, which led to the deaths of more than a thousand people, it was predictable that, at some point, there would be acts of terrorism in retaliation. The interior minister himself identified the Mansoura attack as a response to the state’s dispersal of those sit-ins. This does not necessarily mean that the Muslim Brotherhood itself is behind the attack, as the government now seems to claim.

These types of attacks are not the modus operandi of the Brotherhood, and little evidence has been presented to indicate the group is orchestrating such attacks. On the other hand, the accusation that such attacks are simply “false flag operations” carried out by the state to smear the Brotherhood is equally bereft of evidence. Supporters of the Brotherhood-led Anti-Coup Alliance may promote this notion, but to deny that there are pro-Morsi Islamists who may have turned to violence is unhelpful.

There is a third possibility: that non-Brotherhood Islamists have turned to violence. Since Mr Morsi was deposed, there was a distinction being made between such Islamists and the Brotherhood, even from within the Egyptian government. It was not until late November that the ministry of interior claimed to have evidence that the Brotherhood were financing certain terrorist operations.

Yet, on the day of the attack in Mansoura, there appeared to be conflicting messages from the cabinet, with a spokesperson implying that the Brotherhood were to blame while the prime minister downplayed those comments. The government then issued a statement that the radical group Ansar Bayt Al Maqdis claimed responsibility – the army has been battling the group in Sinai for months. The following day, the cabinet issued a statement officially designating the Brotherhood as a terrorist group.

This inconsistency harms the government’s credibility, and the designation is not without costs for Egypt. It is one thing for the government to claim that non-Brotherhood Islamists such as Ansar Bayt Al Maqdis were guilty of violence – that group, by all accounts, is a small fringe element of the pro-Morsi camp. And it is quite another to declare that a group that was voted into office only a year ago is a terrorist organisation. While most Egyptians are likely to support the military, even a minority of 15-20 per cent of the population that back Mr Morsi and the Brotherhood is a hugely significant number to describe as “terrorist”.

The country is due to go to the polls to vote on a draft constitution in less than three weeks. The government will have to deal with the real threat of violent attacks on polling stations, which could damage the turnout for such a key vote. The fear of violence is already producing a troubling atmosphere. Naguib Sawiris, a noted businessman and financial backer of one of Egypt’s main non-Islamist parties, has already openly declared support for vigilante violence if Islamists seek to violently disrupt the poll. In response, an official statement from the Anti-Coup Alliance implicated Mr Sawiris in the Mansoura attack, without providing any evidence.

The decision to outlaw the Brotherhood essentially suspends any possibility of a political settlement. The hardening of attitudes, and the demonisation emanating from both sides make it difficult to imagine an Egypt without further political violence in the short and medium term. Any peaceful opposition to the state and the post-Morsi road map is the right of any Egyptian. But given the history of incitement to violence that exists among many of the Brotherhood’s senior leadership, and the national media’s narrative against the group, it will be difficult for it to distinguish itself from those more violent factions that are responsible for terrorist acts – even if it does not share their approach.

While the government increasingly excludes and demonises not only violent Islamist but non-violent and non-Islamist dissent, that only provides radical opponents with the ability to recruit. This will undermine stability and the peace. During the funerals of those who died in Mansoura’s attack, there were attacks against members of the April 6th movement (non-Islamists who are critical of the government), as well as on businesses and property assumingly owned by Brotherhood members. This polarisation is dangerous, and can get a lot worse.

Egypt has now entered into that phase where the political elite seems to apply counterterrorism techniques on peaceful protesters. This makes a focus on law and order even more important. Dissent, when it is not combined with violence, ought to be treated delicately, as opposed to responding with the usual heavy-handed approach. The only beneficiary of this approach, in the end, are violent groups that will exploit such policies for recruitment purposes. Unfortunately, the authorities do not seem to recognise the risks of the path they are taking.

Dr HA Hellyer is an associate fellow at the Royal United Services Institute in London, and the Brookings Institution in Washington DC

On Twitter: @hahellyer

CHATGPT%20ENTERPRISE%20FEATURES
%3Cp%3E%E2%80%A2%20Enterprise-grade%20security%20and%20privacy%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Unlimited%20higher-speed%20GPT-4%20access%20with%20no%20caps%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Longer%20context%20windows%20for%20processing%20longer%20inputs%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Advanced%20data%20analysis%20capabilities%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Customisation%20options%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Shareable%20chat%20templates%20that%20companies%20can%20use%20to%20collaborate%20and%20build%20common%20workflows%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Analytics%20dashboard%20for%20usage%20insights%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Free%20credits%20to%20use%20OpenAI%20APIs%20to%20extend%20OpenAI%20into%20a%20fully-custom%20solution%20for%20enterprises%3C%2Fp%3E%0A
Seven%20Winters%20in%20Tehran
%3Cp%3E%3Cstrong%3EDirector%20%3A%3C%2Fstrong%3E%20Steffi%20Niederzoll%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%3C%2Fstrong%3E%20Reyhaneh%20Jabbari%2C%20Shole%20Pakravan%2C%20Zar%20Amir%20Ebrahimi%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”