The Rule of Law and the Egyptian Economy: Missing Connections

After years of political upheaval, the media reports news in Egypt in isolated streams. Two of the biggest stories of the past two months have been President Abd al-Fattah al-Sisi’s economic conference at Sharm El Sheikh and the recent sentencing of former President Muhammad Mursi to death (excellent recap at the Atlantic Council here). These events received extensive coverage in Arabic and in English, but it is as if they occurred in different countries. That is not to say that journalists, academics and diplomats have not roundly criticized both events as a sign of the Egyptian government’s suffering legitimacy and burgeoning authoritarianism, while the average Egyptian lives on a dollar a day, etc., etc. But journalists are having difficulty making analytical connections between events, one of which I hope to gesture at here.

The world’s news outlets are suffering from outrage fatigue on the issue of the Egyptian judiciary. Since the March 2014 mass sentencing of roughly 700 defendants to death, many in absentia, dozens of reports and think pieces have tried to explain the meaning of these show trials and extreme sentences in Egypt. Is the judiciary authoritarian but still independent, or is it controlled by the “deep state”? The significant sentencing of Mursi, along with academic Emad Shahin and preacher Yusuf al-Qaradawi and many others, and has triggered smaller batch of stories; by now, Egypt is a necessary ally against ISIS, so the State Department has even moved on. Facing a long appeals process, the actual execution of all these sentences remains in question. In recent days the public eye has turned to the social and professional aspects of the judiciary itself, after Minister of Justice Mahfouz Saber said in an interview that a son of a garbage collector should never be a judge and resigned in the ensuing uproar. The outrage was far weaker last year when the Supreme Council of the Judiciary issued regulations blocking candidates for judge whose parents had not attended college.

Just as Egypt’s judges are complicit in carrying out these show trials—more to preserve a state that rewards their profession than to comply with specific political demands—Egypt’s state business cronies are busy putting on a show economy with events like the Sharm El Shaykh conference. Most of the criticism of this event focused justifiably on the phantasmagoric second Cairo planned on desert land between the present-day capital and Suez. Beyond $12 billion in trumpeted aid from Gulf states, and $20 billion in new oil and gas mining agreements at a time Egypt still has unresolved debts to mining companies, the conference showcased $90 billion in “memoranda of understanding” for investments in the productive parts of the economy.

There are many good reasons why these pledged investments are unrealistic, but one relates to the state of Egypt’s court system. One of the best studies of the Egyptian state in the Mubarak era is Tamir Moustafa’s The Struggle for Constitutional Power. Moustafa explains Sadat’s creation of the Supreme Constitutional Court during the Infitah, or economic “opening,” of the 1970s. Sadat recognized that to ensure long term investment in Egypt, there had to be a judicial system that reassured investors about their property rights, and that could also hold the different parts of Egypt’s own administrative apparatus accountable to each other. Over time, the judges on this court gained the power and credibility to challenge the Mubarak regime on a number of issues such as election monitoring, free speech and human rights. This was a small price for the regime to pay for the great support the court gave to the privatization of the economy and the increase in Egypt’s political and business credibility. The intense politics surrounding the judiciary in the years since the 2011 revolution is destroying that credibility. The impact on domestic and international investment will take longer to determine.

The Egyptian judiciary is the center of current political anxieties because the national legislature is still non-existent and the executive remains a black box (albeit a leaky one). The administrative and legislative pressure on Sisi and his cronies is leading to arbitrary policy blunders that threaten his long-term power. To cite two just this week: Sisi imposed a 10% capital gains tax last July, and then arbitrarily rescinded it this week to give an impetus to the stock market, which is getting dragged down by the slowly unwinding Egyptian Pound. Meanwhile, hastily made adjustments to investment law in the lead up to the Sharm conference have large incongruities with the existing codes that apparently create the opportunity for wide abuses in the sale of state land and enforcement of licensing and labor disputes at the General Authority for Investment. The ongoing judicial persecution of Egypt’s political opposition is indeed worth covering. But it is time for the media to return its attention to all of the other roles the judiciary plays in Egypt’s administration and economy, and better investigate the real conditions and sentiments behind Sisi’s claims of economic recovery.

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About ericschewe

PhD, History. This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Unported License.
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