Amidst an economic reform program, Egypt continues to be troubled by a wave of deadly terror attacks. On 12 October President Abdel-Fattah el-Sisi declared yet another state of emergency – aimed at fighting terrorism. In the context of recent attacks, the policy’s effectiveness is in question.
A series of major attacks
Egypt continues to be plagued by a stream of major terrorist attacks carried out by the Islamic State. Last week, Egyptian security forces conducting a police operation in the western desert fell victim to an attack that killed at least 16 people. A week earlier, a radical Islamist killed a Coptic Christian cleric in the city of Al-Salam, just outside Cairo. Coptic Christians in particular have been frequently targeted by Islamist militants in Egypt. Since December 2016, suicide bombings have claimed more than a hundred victims of Egypt’s Christian minority. Two of this year’s deadliest attacks occurred in Tanta and Alexandria on 9 April, Palm Sunday, killing 45 people.
Following the Palm Sunday attacks, President Abdel-Fattah el-Sisi declared a state of emergency – the first since 2013. After an extension in July, the state of emergency expired at the beginning of October. However, in an effort to confront the dangers of terrorism and its financing and in order to maintain security in all parts of the country, as well as ensuring the protection of public and private property and the livelihoods of citizens, President Sisi announced a new state of emergency on 12 October – effective for three months initially.
State of emergency: the new (old) normal
Since its founding in 1952, Egypt has been under a state of emergency for a total of 53 years. The most prominent instances have included the Suez Crisis, the Six-Day War, and former President Anwar Sadat’s assassination. Following the Egyptian revolution of 2011, the state of emergency was lifted in 2012. Since then it had only been briefly reinstated twice in 2013. But after the attacks in April of this year, President el-Sisi stated that “a State of Emergency [will be implemented] for three months after legal and constitutional steps are taken.”
These legal and constitutional steps are anchored in Article 154 of the country’s 2014 constitution. They stipulate that duration of each state of emergency is limited to three months and needs to be approved by the House of Representatives. In principle it can then only be renewed once. However, a new state of emergency can be requested under certain circumstances, and this is the tactic el-Sisi used in mid-October.
The latest state of emergency is linked to a significant increase of government intervention: in addition to expanded police powers, surveillance operations can also be increased. Worryingly, there is no appeals process for State Security Emergency Court verdicts.
Although the government had already targeted the press and NGOs prior to April 2017, the state of emergency now also allows it to monitor all forms of communication and to impose censorship prior to publication.
Reportedly, some 60,000 people have been imprisoned between 2013 and 2017, while the number of extrajudicial killings increased from 326 in 2015 to 754 in the first half of 2016 alone. The government created a Supreme Court for the Administration of Media, has not yet annulled the anti-protest law and furthermore passed a restrictive NGO bill in 2016.
Yet despite all of these measures, the number of terrorist attacks is not decreasing.
Undermining economic recovery
While the Egyptian government seems unable to substantially thwart the terrorist threat, it directs its increased powers towards political activists and journalists – all against the backdrop of its comprehensive reform program for economic recovery.
This week the International Monetary Fund (IMF) mission will visit Egypt for the second review of the government’s economic reform program, which includes liberalisation of the exchange rate regime, fiscal consolidation, as well as business environment reforms. Although GDP growth saw a decline in FY16 and again the first quarter of 2017, preliminary reports published by the IMF are cautiously positive.
Tourism, as an important income stream, has suffered under the country’s deteriorating security situation. While its share of GDP was 12.8% in 2014, it fell to 7.2% in 2016. It is expected to increase by 1.3% in 2017, but this is only a modest rise relative to where it could be.
Despite positive developments, such as the announcement that Egypt’s St Catharine’s Monastery has been included as an official Roman Catholic Church pilgrimage destination for 2018, an attack on police forces near the monastery earlier in October is likely to deter tourists from visiting.
Egypt’s new state of emergency is meant to provide the government with the necessary tool to fight terrorism and to ensure security in the country. Yet while terrorism wages on, key democratic institutions are being eroded.
Although the country is recovering economically – detailed results will be presented after the upcoming visit of the IMF to Egypt – unstable domestic security will almost certainly have a negative impact on market confidence. Egypt’s economic recovery requires both tourism and FDI.
Recent figures from the IMF and announcements by Egyptian Minister of International Cooperation Sahar Nasr have suggested that FDI may exceed its $10 billion target this year. This will be a key indicator of whether the state of emergency and associated restriction of freedoms have spooked investors.
Friederike Andres is an analyst for Global Risk Insights. As originally appears at: http://globalriskinsights.com/2017/11/egypt-economic-recovery-terrorism/