Egypt’s national tragedy took a turn towards farce April 27, when Saudi Arabia closed its embassy and several consulates after demonstrations that “threaten the security and safety of Saudi and Egyptian employees, raising hostile slogans and violating the inviolability and sovereignty,” according to a Saudi statement. Saudi Arabia and other Gulf States were supposed to anchor an international aid package that will forestall a disorderly financial crisis.
With a critical fuel shortage cutting into food supplies and essential services, Egyptians already have a foretaste of chaos. The two-for-a-penny pita, the subsidized flat bread that provides much of the caloric intake for the half of Egypt’s population living on less than $2 a day, is at risk.
A battle over the Muslim Brotherhood’s international ambitions may push Egypt over the edge into a Somali level of horror. I warned in this space on April 11  that the Muslim Brotherhood thinks that it can thrive on chaos. The anti-Saudi demonstrations support this interpretation of the Brotherhood’s actions.
The anti-Saudi demonstrations began after a Saudi court sentenced an Egyptian lawyer, Ahmed el-Gezawi, to a year in prison and 20 lashes for offending the Saudi monarch King Abdullah. It’s not clear who started them, but Egypt’s Muslim Brotherhood apparently encouraged them.
The Saudis claim that Gezawi was smuggling Xanax into the kingdom. Just who started the demonstrations against Saudi embassies and consulates is unclear, but the Muslim Brotherhood is holding a net to catch the fallout. As Reuters reported April 28,
The Muslim Brotherhood’s political party said the protests at the Saudi embassy showed “the desire of Egyptians to preserve the dignity of their citizens in Arab states.” Analysts point to the rise of the Brotherhood as a cause of Saudi concern about the direction of the post-Mubarak Egypt.
As I reported April 11,  the Brotherhood prefers an early economic crisis to a later one, so that it can blame the disaster on the present military government. The Muslim Brotherhood’s then presidential candidate Khairat al-Shater”said he realized the country’s finances were precarious and a severe crunch could come by early to mid-May as the end of the fiscal year approached, but that this was the government’s problem to resolve.” Since then, the military-controlled elections commission has excluded al-Shater as a candidate, and the Brotherhood replaced him with Mohammed Morsi.
Meanwhile, Egypt’s Salafist party, the extreme Islamists, withdrew support from Mohammed Morsi and backed instead the more liberal Islamist candidate, Abdel Moneim Aboul Fotouh, often described as a “defector” from the Brotherhood.
Although the Salafists propose an even more extreme version of the Muslim Brotherhood’s program, oil is thicker than blood in the region; the Salafists get a reported $50 million annual subsidy from the Saudis, and presumably are acting under Saudi orders.
As the situation on the ground deteriorates, Egypt’s military government is becoming a bystander to events. Egypt is in a classic pre-revolutionary situation, like Russia in October 1917 or German in March 1933, with a vanguard party ready to dislodge a disintegrating civil society, and replace it with totalitarian party rule at street level. The Muslim Brotherhood, Egypt’s largest political party, is poised to ride to power on the back of this crisis.
The International Monetary Fund (IMF) is negotiating a US$3 billion loan with the Egyptian government, with the understanding that all the major parties will support severe belt-tightening, and that the Saudis and other Gulf states will fund the loan as well as additional aid. Saudi Arabia had promised to lend Egypt $3.75 billion, but paid in only $500 million of its pledge. Last week the Saudis said that they would pay in another $1 billion. But that was before the demonstrations against their embassy.
As the main opposition body to military misrule during the past six decades, the Brotherhood harbors parliamentarians as well as firebrands. But the revolutionary dynamic in Egypt favors the firebrands. As critical shortages spread through Egypt’s fragile economy, Islamist street justice already is replacing the corrupt and crumbling institutions of the military regime. There is a second analogy to revolutionary Leninism, in the form of the Brotherhood’s international ambitions.
In effect, the Muslim Brotherhood has chosen to push the country towards chaos. “North Africa’s biggest economy has imploded since a democratic uprising last year and the country will run out of money to meet basic subsidies including wheat and oil by the summer,” the Daily Telegraph reported April 16. The proposed $3 billion loan from the International Monetary Fund, the newspaper added, was part of a $12 billion emergency financing package from the IMF and European Union to save the Egyptian economy from collapse. “Brussels is most worried about the popular backlash that would result from deep cuts in public spending,” the Telegraph reported.
The backlash, though, has been in progress for more than a year. Islamist organizations began to take control of food and fuel distribution as shortages appeared after the overthrow of president Hosni Mubarak in 2011. The first Islamist equivalent of workers’ soviets, or “revolutionary committees,” were formed to discipline bakeries and propane sellers who “charge more than the price prescribed by law,” the Federation of Egyptian Radio and Television reported on May 3, 2011.
These committees formed under the aegis of the Ministry of Solidarity and Social Justice. What has already emerged in Egypt, to use Leninist terminology, is a situation of dual power. The military government remains in command, but critical economic functions already are in the hands of Islamist parties.
The Ministry of Solidarity and Social Justice began forming “revolutionary committees” to mete out street justice to bakeries, propane dealers and street vendors who “charge more than the price prescribed by law,” the Federation of Egyptian Radio and Television reported on May 3, 2011. The Solidarity ministry declared that “Gangsters are in control of bread and butane prices” and “people’s committees” would be formed to combat them.
Fuel shortages have become critical in many parts of Egypt. UN observers report that the supply of diesel is down by 35%, and is so scarce that food supplies are threatened. According to the UN news service IRIN in an April 2 report from Cairo, “It has been three months since a fuel shortage hit Egypt, and people’s patience is wearing thin amid fears the crisis could disrupt the production of subsidized bread. The government blames hoarding for the crisis. Thousands of cars queue outside petrol stations from early morning, while long queues form outside gas cylinder centers.”
More than a hundred Egyptian bakeries shut down in mid-April to protest the fuel shortage, the Egyptian news site Youm7.com reported April 12 . In Beni Suef, dozens of bakery owners gathered in front of a government flour warehouse to complain that they could obtain fuel only at black market prices, which required them to sell bread at black market prices.
Hoarding explains part of the problem. Egypt is running out of cash – its liquid foreign exchange reserves have fallen from $25 billion when Mubarak fell to only US$9 billion in March – and a devaluation of the Egyptian pound is widely expected, followed by a sharp rise in the price of imported commodities. But outright theft of exportable commodities also contributes to the shortages. Daily demand for gasoline jumped to 23 million liters from 14 million liters last September, the Egyptian General Petroleum Corporation reported, and Egyptian press reports alleged that the additional demand reflected illegal sales of gasoline to overseas buyers.
It is not clear whether the government is trying to make its dwindling reserves last longer by cutting fuel imports, whether hoarding of fuel is in anticipation of a devaluation, or whether fuel supplies simply are being loaded onto tankers and sold to foreign buyers. Judging from Arab-language press reports and blogs, though, the public’s perception is that corruption and incompetence have brought about an economic disaster. shThe military government has created a vacuum, and the Muslim Brotherhood must fill this vacuum or lose its chance to accede to power. Judging from al-Shater’s opposition to an IMF loan, the Brotherhood has decided that worse is better.
The military government appears to have responded to the threat from the Muslim Brotherhood indirectly, through the Electoral Commission’s April 14 announcement that it had disqualified al-Shater along with nine other presidential candidates. The pretext for banning al-Shater has to do with a jail term he served under the Mubarak regime.
Another Islamist candidate, Hazem Salah Aboul Ismail, was disqualified on the grounds that his mother was naturalized an American citizen. Ismail has threatened to retaliate to reveal secrets about corruption in the military government. A day before the Electoral Commission’s announcement, the Muslim Brotherhood in alliance with the Salafist Front had filled Tahrir Square with demonstrators. Now the Salafists and the Brotherhood are fighting.
The Saudi Crown Prince, Interior Minister Prince Nayif bin Abd al-Aziz, is a bitter enemy of the Brotherhood. “In the past Nayif has castigated the Muslim Brotherhood for their influence in Saudi Arabia, so he can be expected to look on with suspicion as the Brotherhood moves towards power in Egypt and perhaps in Syria and Tunisia,” Joshua Teitelbaum wrote in a paper for the Begin-Sadat Center for Strategic Studies .
And on April 16, Jordan’s parliament passed a draft political law that would disqualify the country’s branch of the Muslim Brotherhood from participation elections, effectively banning the largest opposition party to the Hashemite monarchy.
The Arab monarchies fear that the ascent of the Muslim Brotherhood to power in Egypt by revolutionary means portends a further revolutionary assault on their own regimes. And the result of American failure to take decisive action to interdict the Brotherhood’s march to power is likely to be greater instability and a decline of American influence in the region.
Interdicting the Brotherhood, in turn, requires an uncharacteristic harshness on the part of American policy. War correspondent Peter Arnett might have concocted the notorious statement, “It became necessary to destroy the town to save it,” supposedly said by an American officer of the Vietnamese provincial capital Ben Tre in 1968. Something like that might be the outcome for Egypt.