It is not easy to undo the results of forty years of socialism. Many Egyptian businessmen are undoubtedly enterprising, energetic, and hard-working. Egypt is a country where one is likely to see two men, brothers-in-law, hard at work in the middle of the night fixing their pickup truck, while a five-year-old boy holds up a flashlight for them. The problem is the inert bureaucracy that stifles initiative. Both the United States, which gives Egypt $2.3 billion in aid annually, and the World Bank have been urging Egypt for years to privatize public-sector companies that remain afloat only because they are receiving large government subsidies. A growing number of technocrats within the government have been saying the same thing.
But in Egypt the decision is Mubarak’s. Mubarak insists on moving slowly. “Too slowly,” says a Western diplomat, “especially in view of the likely reduction of Egypt’s annual aid package from the United States. But concepts of economic risk are incomprehensible to Mubarak.” His government is no longer “ideologically” committed to socialism, but Mubarak is reluctant to push privatization for fear of its political consequences. The government sees itself as pragmatic. In Egypt only the Islamic opposition parties and the left-wing Togama Party still follow an “ideology.” One of Mubarak’s supporters, a philosopher, told me he was correct in rejecting the demands of the World Bank for more privatization: “The World Bank has caused more violent unrest in the third world than did the late Soviet Union.” Privatization inevitably means widespread unemployment, and this, at a time of growing support for Islamic radicals, could prove disastrous for the regime. There is no government “safety net” of unemployment or other welfare benefits.
The present regime seems symbiotically linked with the bloated bureaucracy and with the office-holders who are running it; according to one informed estimate, there are eight million government bureaucrats. The directors of government-owned enterprises are also prominent in the governing National Democratic Party, and government ministers, when they leave office, are often appointed to the boards of nationalized industries. Not surprisingly, of 280 publicly held companies earmarked by the government three years ago for privatization, only three have so far been privatized: Coca-Cola, Pepsi-Cola, and the Nasser Boiler Company. And yearnings for a “reformed Nasserism” are still strong. An exchange in Naguib Mahfouz’s 1967 novella Miramar suggests the reason why. One of Mahfouz’s characters is furious at Nasser. A friend criticizes him for this.
“What other system could we have in its place? If you think clearly, you’ll realize that it has to be either the Communists or the Muslim Brotherhood. Which of those would you prefer to the Revolution?”
“Neither,” he replies hastily.
I smile in triumph. “Exactly. Let that be your comfort.”
Discussing the continuing dilemma between privatization and political stability, a writer in Al-Ahram recently reported that a search was on for a “middle way”â€”a metaphysical state no one has yet defined.
In foreign affairs, too, Egypt in recent months has been in search of something new. Ever since Sadat’s dramatic flight to Jerusalem in 1977, Egypt has been an advocate of peace. In the early Eighties, it paid a price for its courage when it found itself ostracized by the PLO and the Arab countries. During those years of isolation Egypt did not give up on its efforts to promote Middle East peace. So successful has Egypt been in this task as interlocuteur valable that during the past three years it has practically worked itself out of its chosen role. When Israel was induced to recognize the PLO and sign a formal agreement, Egypt had a discreet but important part in encouraging this breakthrough. Morocco, ‘Tunisia, and some of the Gulf sheikdoms followed suit. But the time Jordan signed a peace treaty with Israel, Amman did not even consult Cairo. Rabin telephoned Mubarak a few days before to inform him of what was about to happen; Hussein, Mubarak later complained to an Israeli visitor, never bothered to do so.
Some Egyptian economists and entrepreneurs have begun to worry that Israeli entrepreneurs and Arab financiers with surplus capital might team up to conquer vast markets in Egypt and the rest of the Arab world. Egyptian writers have filled the columns of Al-Ahram and other Cairo papers with dire warnings that if Israel is not checked, it might eliminate Egypt’s position as a “leading country” in the region and become the dominant political, economic, and cultural power. The recurrent word in this campaign, which in some way must have been encouraged by the government, was “hegemony.” Israel was trying to translate its military supremacy into political and economic power. The quest for “hegemony” was behind Israel’s talk of a “new Middle East.” Egypt was called upon to reassert its role as a “rival” leader to defend itself against the “political and economic threat” emanating from Tel Aviv.
Privately, other Egyptians were saying that Israel was effectively undermining Egypt’s position in the region. It was threatening to harm Egypt’s economy by encouraging Qatar, Oman and other Gulf states to sell their oil to Europe via pipelines running through Israel, instead of shipping it through the Suez Canal. Israel was driving wedges between the Arab brothers. Egyptian bureaucrats and academics were speculating on the need for an “improved balance of power”; the “co-existence” between Egypt and Israel should, they said, be a coexistence “in struggle,” similar to that of France and Germany before 1945. This “rivalry” would determine the future of the region. According to the brilliant left-wing columnist Mohammed Sid-Ahmed in Al-Ahram, Israel arrogantly assumed it was the “only victor”; it interpreted “the land-for-peace formula as an exchange of land for a Middle East market.”
The Israelis had, of course, provoked some of this by loose talk and ill-judged actions of their own. Almost seven hundred over-eager Israeli businessmen and politicians descended on Casablanca during the recent conference there on Middle East regional development, and dictated its agenda, or so it seemed to the far fewer delegates from the Arab world. Then Rabin chose this particular moment early in December to announce, cryptically, that Israel must once again prepare for a general Arab-Israeli war in the “middle range of time.” A memo prepared by the Israeli foreign ministry’s planning department, leaked to the Tel Aviv daily Ha’aretz in December, proposed “punishing Egypt” for its insistence that Israel sign the nuclear non-proliferation treaty. Egypt, the memo proposed, was to be deprived of its role as Arab-Israeli peace broker; and American congressmen should be induced to cut US aid to Egypt. Shimon Peres quickly announced that the memo was simply that, a memo, and did not reflect Israeli policy. Egyptian officials were sure it had been deliberately leaked by Israelis to put pressure on Egypt. Foreign Minister Amr Moussa described its authors as “feeble-minded.”
In the angry exchanges that followed, Peres was misquoted in the Egyptian press as saying that Egypt was the “donkey” that would push the stalled car of progress up the Middle East road. In fact he told the Arabs that their economies had given them so far only misery and that prosperity could be achieved only by cooperation with Israel. Several Israeli economists were quick to question this excessively optimistic statement. Peres’s repeated calls for a Common Market in the Middle East, on the model of the European Union, they said, had been questionable from the beginning; the very comparison with Europe was dubious because of the incompatibility between the near post-industrial economy of Israel and the third world economy of its neighbors with per capita incomes only a tenth or less than that of Israel. The national economies that formed the European Community were roughly comparable. Israel’s and Egypt’s were not. Peres seemed to be suggesting a lopsided economic union, as if between Holland and India. He also proposed that Israel be accepted as a member of the Arab League. This too was interpreted in Egypt as a “hegemonic” attempt to dominate the League just as it was celebrating its fiftieth anniversary. (Israelis would not have reacted more generously if Arafat had asked to be received as a member of the Executive of the World Zionist Organization.)
The air was thick with suspicions on both sides. If Egypt had in fact asked Jordan, Morocco, Tunis, and the Gulf states not to fall over one another in a rush to normalize relations with Israel, as officials in Jerusalem were insinuating, the Egyptians may simply have been trying to persuade these countries to coordinate their diplomacy. Or it may have been an attempt to show that Egypt was still able to call the shots. Rabin, as if to disprove the latter claim, promptly flew to Oman on a state visit. The predictable reaction was a quickly organized summit meeting in Cairo of Syria, Saudi Arabia, and Egypt, which took place in January. This, in turn, was seen by Israel as an attempt to slow the peace negotiations. But an Egyptian request to Jordan or Morocco to go slow may have been no more than an ironic comment on the viciousness of these countries toward Egypt in 1978 when it made a separate peace with Israel without consulting them.
On both sides, the “peace process” was opening new wounds even as it was curing old ones. Israeli and Egyptian insecurities mirrored one another. The idea of peace has always been interpreted differently by each side. Egyptians have never shared Israeli ideas of reconciliation, which sometimes seemed as though taken out of a Russian novel: former enemies fall into each other’s arms with tears of joy.
It has long been obvious that neither side would fulfill the other’s expectations. Israelis underestimate the frustration of Egyptians at being humiliated, time and again, by the Jewish state. Egyptians underestimated Israeli fears. They have been oblivious to popular emotions in a democratic mass society exposed to indiscriminate terror and led by coalition governments. It is always difficult for the raw nationalism of one people to empathize with the raw nationalism of another. Israelis have always had difficulty in realizing how deep a wound they had inflicted on the Arab psyche over the years; the few who did sense it were tortured by guilt and, perhaps unconsciously, wanted the Palestinians to say that the Israelis are forgiven. This, too, was unlikely. According to a poll published in Al-Ahram this winter, 75 percent of Egyptians say they are against Israeli investments in Egypt, 71 percent refuse to buy Israeli goods, 53 percent are opposed to Israeli tourists visiting Egypt and would themselves never go to Israel.
Ali Salim, a well-known Egyptian playwright, visited Israel last year and wrote a witty, sympathetic book about his impressions that became an instant best seller in Egypt. For this he was savagely attacked in both the progovernment and opposition press. He received so many threats that the police assigned him bodyguards around the clock.