Happy new year, Cairo?

Residents speak of a tough year, and worry about a tougher one ahead.

By , Staff writer

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    An Egyptian woman holds a poster with Arabic that reads, "my Christian siblings.. happy new year.." in front of the presidential palace in Cairo, Egypt, Dec. 31.
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I'm back in Cairo after well over a year away, and my first thought was that little has changed.

Getting out of Cairo airport is still a chaotic mess of taxi and hotel touts, though easy to navigate if you know the drill. Traffic was worse than I'd have expected for midday on Saturday, but Cairo zahma hardly has a predictable rhythm anyway. Parts of the city are always one flat tire away from being turned into a parking lot.

As I pulled into my old haunts, one thing that struck me was the apparent absence of the over-the-top commercialization of Christmas I was used to when I lived here years ago. Friends agreed, saying shops and hotels had reined in their use of the holiday, on the reasoning of "why take a chance?" Referring to bearded President Mohamed Morsi from the Muslim Brotherhood as "Morsi Claus" was apparently de rigeur, however, in certain activist and secular circles.

But enough with first impressions. Egypt had a tumultuous 2012 that was disillusioning, to put it mildly, for many of the young revolutionaries who supported the January 2011 uprising against Hosni Mubarak. While you can't see the economic pain of the past year by walking the streets of Cairo, just a few early conversations with friends and acquaintances make it clear that it's very real. In the fashionable districts of Cairo, shopkeepers say business is down. In more working class neighborhoods, the guys selling vegetables or clothing say likewise. Men who paint houses or fix plumbing say work is less steady, with customers putting off non-essential work.

And while in my few brief conversations with Egyptian contacts the focus has been disappointment with the new Muslim Brotherhood-backed constitution, or anger at Morsi and the Brothers' apparent accommodations to a military hierarchy that has cast a shadow over Egyptian politics for a generation, it is economic conditions that will make or break the emerging new Egyptian political order in 2013.

The two, of course, are not mutually exclusive. While Morsi has spoken of a need to restore a battered Egyptian economy, neither he nor anyone else has been better able to provide stability or bread than the military was when it was running Egypt from February 2011 until June of this year.

On one level, they can be forgiven. The past year has seen certain post-Mubarak assumptions (or hopes) seriously ruptured. A popular Egyptian view of the military as protector of the nation was eroded. In February, more than 70 people died following a soccer match in Port Said at which security, the responsibility of the army, was conspicuous by its absence.

There was an elected parliament, one packed with Islamists, the results of which were later annulled. There was a presidential election that pitted President Morsi against former Mubarak Prime Minister Ahmed Shafiq that saw Morsi walk off with the spoils. Neither option was enticing to Egypt's young revolutionaries, and in Morsi's victory – which was made possible by the Brotherhood breaking a promise not to run a candidate for president – there was evidence that the Islamist movement could not be taken at its word.

And, of course, there were clashes between protesters at Tahrir and at the presidential palace in Cairo, in the industrial towns of the Nile Delta, and once again in Port Said, along the country's economically vital Suez Canal. The constitution, which Egyptians were promised would be written by a truly representative body, was rushed through by Morsi and his allies over serious opposition towards the end of the year. When it came time for Egyptians to vote on it, it passed – but with less than 40 percent of the Egyptian electorate participating, many voters having lost hope that the political process was going to deliver anything of any tangible value to them or their families.

Attempts not made

While fixing Egypt's economic problems would be the work of years under even the best of circumstances, serious attempts to address how the national budget is administered, rampant corruption that makes being either a simple wage-earner or an entrepreneur a minefield, or the heavy-hand of the military in business, were not made. The average Egyptian was financially worse off at the end of 2011, and worse off still at the end of 2012. This simple reality is how Egyptians are judging recent events, and why so many of them are so deeply worried. 

Now the country is less than two months away from electing a new parliament, extending a period of political uncertainty. A new political reality will be created by that election – the fifth national vote in two years – and will lead to more political uncertainty as factions in parliament are formed, and Egyptian politicians test the new rules of the game. Local and foreign investors will stay on the sidelines for awhile yet, hoping for some clarity as to the new rules –clean ones or dirty ones, new ways of doing business or the same old rent-seeking of the past – before they put any more skin in the game. 

Meanwhile, Egyptians are watching, and worried. The Egyptian pound plunged to an eight-year low against the dollar in the past month, and the Egyptian government's foreign reserves now stand at about $15 billion, less than half of what they were at the time of Mubarak's ouster. That exchange rate – and the soaring interest the Egyptian government pays on international borrowing – has a host of implications for the subsidized bread, cooking fuel, and gasoline that millions of Egyptians rely on.

A random walk through Cairo can't show how finely poised Egypt's situation is. But if you stop to talk for a few hours, you can feel it.

It's the economy, stupid, as a US political hack had it 20 years ago. And it's the economy that Egypt needs to focus on in 2013.

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