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Shock Doctrine in Egypt: Sharif Abdel Kouddous on Post-Mubarak Economic Crisis, Presidential Race

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As Hosni Mubarak’s former spy chief Omar Suleiman announces he will run for president and Egypt teeters on the edge of an economic crisis, we discuss the state of post-revolution Egypt with Democracy Now! correspondent Sharif Abdel Kouddous, based in Cairo. Suleiman headed Egypt’s intelligence services for more than 18 years, becoming a close U.S. ally and playing a key role in the Bush administration’s extraordinary rendition program. Now he joins a crowded field of candidates in the presidential election set to begin May 23. Kouddous notes Egypt’s economy has reached a critical juncture, as the country faces a large budget deficit and is running out of its foreign currency reserves even as it relies on imports for key food staples, such as wheat. “We don’t know where we stand in terms of the Constitution, where the elections stand. Egypt’s revolution still is up in the air,” Kouddous says. He is in New York to to accept this year’s Izzy Award for Special Achievement in Independent Media for his reporting on the Egyptian revolution. [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We turn to Egypt, where the former intelligence chief of ousted dictator Hosni Mubarak has joined the presidential race. Omar Suleiman announced his bid on Friday, well over a month before Egyptians head to the polls. Suleiman headed Egypt’s intelligence services for more than 18 years, becoming a close U.S. ally and playing a key role in the Bush administration’s extraordinary rendition program. During the Egyptian uprising last year, Mubarak appointed Suleiman his first-ever vice president before he was forced out of power. The presidential candidate for Egypt’s Muslim Brotherhood, Khairat El-Shater, criticized Suleiman’s entry into the race.

KHAIRAT EL-SHATER: [translated] We strongly reject any attempt to restore the previous political regime in the same form and represented in the person of General Omar Suleiman. And we think that this is an insult to the revolution and shows a lack of awareness of the type of change that has taken place in the lives of Egyptian people and its impact. But in terms of how to deal with this issue and having just one Islamist candidate, the issue is not about whether the candidates are Islamist or not. The issue is about the attempt to steal the revolution. And if any attempt is made to steal the revolution or to carry out fraud, then, naturally, ourselves and others will go out on the streets.

AMY GOODMAN: Egypt’s presidential elections begin May 23rd. With Suleiman’s entry into the race, one of the most public faces of the Mubarak regime joins an already crowded presidential field in a critical vote for post-revolution Egypt.

For more, we’re joined by Sharif Abdel Kouddous. He is based in Cairo, a Democracy Now! correspondent, fellow at the Nation Institute. He’s here tonight to receive the Izzy Award for Special Achievement in Independent Media, named after the legendary maverick journalist I.F. Stone, who launched I.F. Stone’s Weekly in 1953 and exposed government deception, McCarthyism, racial bigotry. Sharif is being honored for his reporting on the Egyptian revolution. In a statement, the Park Center for Independent Media said, “With breathtaking bravery, Sharif’s unflinching on-the-street reporting simultaneously brought us the voices and faces of Egyptians, the drama of the moment and big-picture analysis — sometimes while tear gas or live rounds exploded in the background.” That is Sharif Abdel Kouddous, and he’s here in studio.

Welcome back to Democracy Now! here in New York, Sharif.


AMY GOODMAN: It’s great to have you with us.

SHARIF ABDEL KOUDDOUS: It’s good to be here.

AMY GOODMAN: Talk about the elections.

SHARIF ABDEL KOUDDOUS: Well, as you mentioned in the lede, Omar Suleiman is the last candidate to join the presidential race. He submitted his candidacy papers 20 minutes before the window closed on Sunday. He, in fact, had said he wasn’t going to run, just days earlier, and then reversed that decision, and apparently in one day obtained more than 70,000 signatures for his candidacy, which is, you know, more than double the 30,000 that’s needed to be an official candidate.

It’s ironic that he’s running. I mean, this is the man that Mubarak appointed as vice president once the revolution began in a bid to quell the uprising. During the 18-day uprising, he actually went on ABC in an interview and said Egyptians are not ready for democracy. Now he’s running for president. Many consider him the candidate now of the Supreme Council of the Armed Forces, which has ruled Egypt since Mubarak’s ouster on February 11th of last year. He’s a career army officer that served with many of the two dozen generals that serve on the military council. And as you mentioned, since 1993, he’s been the head of the General Intelligence Services—in Arabic, that’s known as the Mukhabarat—a very powerful intelligence position. He played a key role in suppressing the Muslim Brotherhood and other Islamists during Mubarak’s era. He played a key role in Egypt’s relationship with Israel, helping to enforce the siege on Gaza, helping to crush Hamas through destroying the tunnels that provide a lifeline to Gaza.

But, of course, also he was the CIA’s point man in Egypt for the extraordinary rendition program and was involved, by some accounts, actually in torture itself. One prisoner, who is an Egyptian-born Australian citizen by the name of Mamdouh Habib, who was rendered to Egypt, where he was—he says he was electrocuted, hung from metal hooks, suspended in water up to his nostrils. He was later sent to Guantánamo, where he was held for a number of years before being shipped back home to Australia without charge. He penned a memoir, and he said at one point that while he was being interrogated, the interrogator slapped him so hard that the blindfold dislodged off his eye, and sitting in front of him was Omar Suleiman. Omar Suleiman was also the liaison for the CIA in the rendition of Ibn al-Sheikh al-Libi, who of course played a key role in the Bush administration’s justification for the war in Iraq. So, that’s his background. And he has now entered the race.

It has caused widespread outrage in Egypt. Calls for protests have already begun for a big protest on Friday against his candidacy. A committee in parliament has approved a law—this is not approved by the parliament yet, just a committee putting it forward—to ban any former regime members who served in top-level positions in the last five years leading up to Mubarak’s ouster from running in the presidential election. It’s not understood whether this will actually pass, especially after the nomination window closed, but that’s where it stands right now. And I don’t know what kind of backing he would have popularly. I mean, let’s remember that on February 10th, Mubarak actually—the day before Mubarak stepped down, he tried to pass over all his constitutional powers to the vice president, to Omar Suleiman, and this was met with widespread disapproval. So, we’ll have to see what happens.

But another key person that is running in the presidential race, as you mentioned, and we heard a clip of him in the lede, was Khairat El-Shater. Khairat El-Shater is probably the most powerful member of the Muslim Brotherhood. He is a multi-millionaire business tycoon who was jailed for 12 years, a total of 12 years during Mubarak’s era. He ran the Muslim Brotherhood largely from his prison cell. He was released by the Supreme Council of Armed Forces in March of last year. His nomination actually caused outrage, as well, because it reversed a pledge by the Muslim Brotherhood not to field a presidential candidate. This was their pledge early on in the process. As we know, they dominate—they have about 50 percent of the seats in the legislature. They’ve dominated the constituent assembly, which we’ll talk about in a moment. And they have now said they’re going to field a candidate. They actually kicked out a key member, Abdel Moneim Aboul Fotouh, who is a liberal Islamist thinker, favored by many youth and revolutionary figures, especially after the withdrawal of Mohamed ElBaradei. They kicked him out of the Muslim Brotherhood because he decided to run, against their pledge, and now they’re fielding this candidate.

In fact, also, it’s unclear—I mean, this is all part of Egypt’s very confusing and erratic transition plan that’s been headed by the Supreme Council. We don’t know if Khairat El-Shater will be allowed to run. He has this military court ruling against him. He was pardoned by Tantawi, but another candidate, Ayman Nour, who ran against Mubarak in 2005, a court just ruled that even though he received a pardon, he can’t run. So the Brotherhood have now fielded a backup candidate, a man named Mohamed Morsi, who’s the head of their party, just in case. So, this is where—

AMY GOODMAN: And the candidate whose mother is an American citizen?

SHARIF ABDEL KOUDDOUS: Well, this was another—I mean, it’s hard to keep up with everything that’s happening in Egypt, but this is Hazem Abu Ismail, who’s a Salafi preacher. Salafis are—practice an ultra-conservative form of Islam. They won about 25 percent of parliament in the elections late last year. So he had widespread support. He also—while he is a Salafi preacher, he also is very critical of the Supreme Council of Armed Forces, so he tapped into this section of Egyptian society that is very religiously conservative but also against the military council.

He obviously is quite anti-American in his rhetoric. And it’s very ironic, because the law right now in Egypt is that you can’t run as a presidential candidate if you’re—you have to be born to Egyptian parents, and neither of them can have ever had any foreign citizenship. It turns out that Hazem Abu Ismail’s mother did get American citizenship. His sister was married to an American, and she would come visit her here. And it turns out the Presidential Elections Commission has received confirmation that he was an American citizen. The New York Times reported that she was actually registered to vote in California. And so, he’s not allowed to run anymore, and he’s calling for mass protests of his own.

AMY GOODMAN: You recently wrote a piece for The Nation, “Egypt’s Looming Economic Shock Doctrine.”

SHARIF ABDEL KOUDDOUS: Right. What’s happening right now is that Egypt is on the edge of an economic crisis. And this has been really the result of a badly mismanaged political transition. The issue is that we’ve been backed into a corner with the issue of foreign currency reserves. Egypt relies very heavily on imports for many of its staple items, including wheat. Egypt is the biggest importer of wheat in the world, relying on about 60 percent of—for domestic consumption on imports. So—but we’re running out of foreign currency, which we use to buy these imports, because there’s been a big decline in foreign direct investment and in tourism, which are our main inputs for foreign currency. And so, what has happened right now is we have about $15 billion left in foreign currency reserves. That’s about left for three months of imports. We’ve spent all this money to try and keep the Egyptian pound where it is, to prop up the currency. But if we do have to devalue the Egyptian pound, then all these imports would become very expensive and would severely deepen Egypt’s recession.

So, what’s happening right now is that the Egyptian government formally requested the IMF for a loan in January, a $3.2 billion loan from the IMF. Now, what the IMF does now is not impose direct conditionality as they used to with these structural adjustment programs. But what they have asked for is that the government put forward an economic reform package, which they then must agree to to release the funds. So this is kind of an indirect conditionality. The government reform package was drawn up by the SCAF-appointed, military-appointed government. It was not open to public debate whatsoever. A copy was leaked to the media—a very poorly written economic report. And instead of—let’s remember, this revolution was sparked in large part because of economic grievances. The revolutionary calls of “bread, freedom, social justice,” two of those are essentially economic calls. And the policies put forward in this economic reform package go much further towards promoting Mubarak-era policies that people, in part, revolted against than to promoting social justice. So there is talk of including expanding the sales tax, which puts really the burden on the majority poor, because they pay more for basic staple items. There’s talk of subsidy reform, but no talk of which subsidies are going to be targeted. Egypt has about 30 percent of its budget spent on subsidies. So it’s—but we’re put in a position where we really need to take some kind of foreign currency loan, and so it’s—I mean, the reason it’s called the “looming economic shock doctrine” is because we’re in a position where we’ve been backed into a corner, and it’s unclear exactly what budgetary and fiscal policies are going to be accepted to take this loan.

AMY GOODMAN: Sharif, on a recent visit to Cairo, U.S. Congress Member David Dreier and other U.S. lawmakers met with Egyptian parliamentarians, also with the Muslim Brotherhood presidential candidate, Khairat El-Shater. Congressman Dreier told reporters during a news conference future U.S. aid to Egypt remains uncertain, given the ruling military council’s crackdown on pro-democracy groups, including some U.S. groups.

REP. DAVID DREIER: Now, we know that the decision that Secretary Clinton made is going to see a continuation of assistance, the $1.3 billion in military assistance and the $250 million in civilian assistance, that that assistance is going to be continuing now. But, with challenges that lie ahead, questions that exist, there is no certainty about that. That will be a decision that we in the United States Congress will make. And again, I can’t predetermine the outcome.

AMY GOODMAN: Egypt was the biggest recipient of U.S. aid after Israel.

SHARIF ABDEL KOUDDOUS: Well, Congress passed a law that Egypt has—that they have to prove that Egypt is going on a democratic path to release the funds. But the Obama administration actually waived that on national security grounds and has continued the same policies of many U.S. administrations in providing military aid to Egypt. So, we’ll have to see where that goes.

One thing I want to mention before we run out of time is that there was news that just broke just before we went to air, again throwing Egypt’s political process up in the air, that a court has ruled that the panel that the parliament has drafted, a 100-member panel to write up the country’s next constitution, has been—has been suspended completely. So that—that ruling can be appealed, but it’s been suspended because the parliament, that’s dominated by the Muslim Brotherhood, decided that they would have 50 of its own members on this 100- member panel, 50 parliament members on the panel. About 60 percent of the people on this 100-member panel were in some way affiliated with the Muslim Brotherhood or the Salafi movement. And so this caused outrage. About two dozen or a quarter of the panel’s members have walked out, from secular and liberal forces, including the Coptic Christian Church, including Al-Azhar, the Sunni learning institution. So, right now, we don’t know where we stand in terms of the constitution, where the elections stand. Egypt’s revolution still is up in the air.

AMY GOODMAN: Well, Sharif, I’m looking forward to hearing you give a talk tonight, and I hope folks come out at Ithaca College. He will be receiving the Izzy Award for his reporting in Egypt. The event is open to the public, 7:30, Emerson Suites, Phillips Hall, Ithaca College. Congratulations, Sharif.

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