Electoral dividends: A victory for Islamists and expectations for economic reform

One of the most frequent observations made of the Arab Spring throughout the Middle East, particularly in Egypt, has been the performance of religious movements. For many in the West, the triumphs of Al Nahda in Tunisia or that of the Egyptian Muslim Brotherhood and its Freedom and Justice Party (FJP) are symbolic of a broader narrative sweeping the region: the rise of political Islam.

However, in line with the discrepancies between the societies involved in the Arab Spring, the roles of their respective local Islamist groups are unique. In Egypt the rise of political Islam may very well have less to do with religion directly than with a profound and lasting process of social and economic change.

UNITED FIGHT: The protests that toppled Hosni Mubarak were not overtly religious, and liberals and secularists played a prominent and central role in the uprisings. However, as the popular uprising carried on, the Muslim Brotherhood assumed an increasingly more active position in the revolutionary wave, helping the group pave the way for a string of electoral victories for Islamist candidates. In elections for the People’s Assembly, the lower house of parliament, the FJP and the main Salafist party, Al Nour, secured an impressive 356 of 508 seats, compared to just 72 for the secular parties Al Wafd and the Egyptian Bloc. The Islamists repeated the feat in the upper house elections, winning 150 of the 180 contested seats. Finally, in June 2012, Egyptians elected Mohamed Morsy – an understated senior member of the Muslim Brotherhood – as president.

OLD & NEW: The Muslim Brotherhood – one of the largest and most influential Islamist organisations throughout the Muslim world – was founded in Egypt in 1928. In 1954 President Gamal Abdel Nasser, the secularist nationalist army general who had assumed power through a recent coup, banned the movement, forcing it underground. The group organised a network of mosques, religious schools and charitable organisations beyond the reach of the state. By operating medical clinics and social welfare programmes for the poor, the Brotherhood managed to build a wide base of followers that repaid their support in the recent elections.

The more fundamentalist Salafists, on the other hand, are a far newer phenomenon. Under recently ousted President Mubarak, the Salafists eschewed politics via a strict interpretation of Islamic law. They opted to focus more narrowly on religious rather than socioeconomic issues, where they were given a freer hand by the secular Mubarak regime in exchange for political quietude.

LEVERAGING THE FIELD: Analysts have attributed the Muslim Brotherhood’s victories to distinct advantages over its competition: superior organisation, greater grassroots reach and a treasure chest of cash, much of it from membership dues. Al Nour, which was formed just a few months prior to the elections, had nowhere near this amount of resources.

The Islamists’ prominence can be explained in part by Egypt’s socioeconomic legacy in the decades after independence in 1952. When Nasser and his fellow military officers overthrew the British-allied monarch, King Farouk, they intended to transform Egyptian society. Their policies unleashed a tremendous social redirection with implications that resonate to this day. At the core of Nasser’s socialist vision was a bold land reform programme that granted land titles to millions of peasants. However, this reduced farmers’ holdings to tiny tracts that could not support large peasant families. Combined with soaring birth rates, the reforms spurred a wave of migration that turned towns into mega-cities. Cairo’s population ballooned from 2m in 1952 to 18m today.

Egyptian peasants accustomed to living in tiny villages migrated to the cities by the thousands, settling into vast slums on the outskirts of cities across the country. These became today’s overcrowded shantytowns with unpaved roads, piles of burning trash and open sewers. For millions of Egyptians, modernisation and social engineering have meant a disruption of more traditional ways of life. The rapid pace of change prompted many to look for solace and support in the familiar framework of Islam.

FACING DISILLUSIONMENT: Far from the secular Egypt he imagined, Nasser’s policies sowed the seeds for a religious renaissance. This process accelerated under Nasser’s successors, who retained macroeconomic policies that were out of step with social realities, further alienating the state from its citizenry. When Nasser’s nationalist-socialist policies failed to generate enough capital to drive economic growth, Egyptians looked on as Anwar Sadat’s wide liberalisation scheme failed to trickle down the wealth it was meant to generate. Mubarak later initiated a mass privatisation programme that grew into a system of crony capitalism that benefitted a select elite. Throughout this latter period, the bulk of Egyptians saw their living standards steadily erode.

As frustration grew, large segments of society came to oppose the status quo. Acts of civil disobedience grew more frequent. Factory workers organised sit-ins and strikes, and protests movements, like Kifaya (“Enough”), the National Association for Change and We Are All Khalid Said (named after a 28-year old who was brutally beaten to death by police officers in 2010), called for a new political order. The group credited for coordinating the protests that brought down Mubarak, the April 6 Youth Movement, derived its name from strikes in the industrial city of Mahalla Al Kubra in the Nile Delta, where textile factory workers were beaten by police for demanding a minimum monthly wage of LE1200 ($200). Harnessing the power of the internet and social networking sites, participation in the April 6 movement soon ballooned to over 100,000.

By focusing on wages and working conditions, the message of the April 6 movement resonated with Egyptians across the country. Despite posting strong growth rates for several years, most Egyptian workers had seen little improvement in their daily lives. According to World Bank statistics, the Gini coefficient – a measure of distribution inequality – for income in Egypt rose between 1996 and 2008. Furthermore, these downward trends coincided with the government’s moves to cut food subsidies, thereby driving up the price of basic staples. Egypt’s revolution was sparked by a number of factors, but among the most important was a very real sense that despite strong macroeconomic growth, daily life for most Egyptians was growing tougher by the day.

FISCAL RESUSCITATION: One of the first orders of business for Egypt’s new government is the economy. Egypt is in dire need of international assistance to help bridge an estimated $10bn-12bn gap in the balance of payments for FY 2012/13, which began in July 2012. In June 2011 Egypt’s military rulers turned down a $3.2bn loan from the IMF. However, when aid from donor states failed to materialise, Egypt’s caretaker government returned to the IMF, but negotiations were subsequently halted in May 2012 amidst political discord within Egypt over a future constitution and the presidential elections.

Given that much of the Brotherhood’s support stems from economic frustrations, the FJP’s fortunes will depend on how quickly it can resuscitate an economy in critical condition. However, it remains unclear the extent to which economic policy will be redrawn. The FJP espouses a free market creed, and much of the Brotherhood’s leadership is comprised of experienced businessmen with a distrust of government activism in the economy.

The popular Justice and Development Party (or AKP in Turkish) in Turkey, which came to power on the heels of a crippling financial crisis in 2001, is often held up as a model. Since then, the economy has posted soaring growth figures. More importantly, the gains have been widely shared, and the country’s Gini coefficient has fallen. As the fortunes of most Turks have climbed, so too has the party’s share of the vote.

MOVING FORWARD: Mimicking Turkey’s economic success is a tall order for Egypt’s leaders. Foreign direct investment has dried up, the fiscal deficit is growing and foreign currency reserves have fallen sharply of late. The Muslim Brotherhood’s supporters have invested great hope in the FJP, but meeting popular demands for more jobs, better housing and improved health care will take time and patience on behalf of the electorate.

For the first time, the real burden of responsibility lies squarely with the Muslim Brotherhood. In capturing both parliament and the presidency, the Brotherhood is exposing itself to considerable risk, said Rania Al Malky, former editor-in-chief of Daily News Egypt. “The challenges facing any new government are enormous,” she argued.

As the world watches Egypt transition to a newly democratic order, the FJP’s religious agenda will garner much of the attention. But the fortunes of political Islam in Egypt will depend less on what happens in the mosques than what happens in the market.