Egypt Defence and Security Report Q1 2009

Anti-government sentiment appears to be growing, fuelled by the September 2008 Duweiqa rock slide, which killed up to 100 people, and the collapse of a building in Alexandria. Leaders of opposition parties and NGOs have announced intentions to bring a lawsuit against top government figures for criminal negligence in Duweiqa. There is a general perception of inadequate safety standards and corruption, with much of the blame directed at the government. According to a Pew Global Attitudes survey, 13% of Egyptians were satisfied with their government, against 45% in Jordan and 79% in Kuwait.

However, if the parliamentary election is anything to go by, the opposition parties filing the lawsuit against the government do not have enough popular backing to make any real impact. One event that could make an impact is an Islamist uprising. Al-Qaeda's number two, Ayman al-Zawahiri, who is Egyptian, recently said the Duweiqa incident highlighted the corruption of Muslim governments. Also, the Muslim Brotherhood (MB) seems to be moving closer to the secular leftist opposition, with Chairman Mahdi Akef meeting with the al-Wafd party in late September 2008 to tell him that serious change is necessary in Egypt and that they should work together against corruption.

Any political deterioration could trigger a fall in the relatively strong forecast growth rate of 5.4%, as would a more-severe-than-expected world recession. Based on the government's apparent commitment to sustaining growth, it may opt to cut taxes. However, this would affect an already strained fiscal situation.

Egypt continues to be a major recipient of US foreign military aid, which it uses to acquire largely USmade military equipment as part of a bid to modernise its armed forces. The latest acquisition of M1-A1 Abrams tanks is an example of the ongoing importance of this. Egypt boasts what is, for the region, an extensive military equipment manufacturing industry, although it has no armaments design industry to speak of. Its defence industry remains largely dependent on co-production deals, again, primarily with the US. Egypt’s military expenditure is likely to be constant, providing Cairo remains in the US’ favour, and as long as the US does not reprioritise substantially its regional defence subsidy priorities.

This appears unlikely, however: Cairo and Washington share many of the same beliefs regarding Egypt’s security concerns. US pressure for political reform in Egypt is likely to remain limited because the US does not want another Islamist government in the region. This rationale has seen the US continue to bolster the Mubarak government through explicit support and extensive financial and military aid. This valuable political and financial relationship maintains the need for the regime to continue to subdue groups such as the Muslim Brotherhood, despite its apparent legitimisation at the hands of the electorate.

As has been noted previously, European companies are increasingly breaking into the Egyptian defence market over the last few years, and stronger ties with China could see the end of dependency on the US.