The Dispensable Nation: American Foreign Policy in Retreat (29 page)

Democracy (and also political and religious moderation) depends on economic growth, and economic growth depends on reform. It is that simple. Reforming Egypt’s economy will not be easy. The country lacks leaders resolved to push painful change, however badly needed, and there is no unified vision of the future. Egyptians want prosperity but are not ready to sign up for real economic reform and the belt tightening
and economic hardships that go with it. Many think Mubarak already tried and failed at those kinds of reforms. President Muhammad Morsi, a sixty-one-year-old engineering professor with a PhD from the University of Southern California, talks about development and the economy all the time. He says that he favors the private sector and a business-friendly environment, and wants to work with international financial institutions to reform Egypt’s economy. His presidential campaign banners touted him as “Egypt’s Erdogan.” But he represents a Muslim Brotherhood that has a strong populist wing and has promised an economic safety net for the poor.
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The single biggest obstacle to economic reform and democracy alike is the Egyptian military. Something of a state within the state, it controls vast holdings in every economic sector from manufacturing to construction, agriculture, and tourism.
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It runs four-fifths of all industrial concerns and accounts for upward of 30 percent of the economy.

The generals have a different view of Egypt’s future and are jealously guarding their economic assets, which means resisting reform. They think that Egypt’s strategic importance would bring in enough aid for it to function—they have a hard time seeing why things could not go back to the way they had been under Mubarak. A senior American diplomat told me, “The military and its new government are not keen on reform, they think we should pay up for the country’s upkeep, and are resentful that we are not [doing so].”

The military does not want to give up its control of the economy, and that is a large reason it does not want to give up political power. It used its influence over the interim government in 2011 to say no to the IMF. And when it looked likely that an independent Muslim Brotherhood government would take over, the military tried to wrest control of the parliament and the constitution-writing process and tightened its grip over the judiciary, in part to have veto power over economic reform.

Egypt eventually entered talks with the IMF for a $4.8 billion assistance package (which would demand some reforms). The Muslim Brotherhood delegation that visited the White House in April 2012 was surprised to learn that the IMF had offered a package twice as large, but the Egyptian government (at the military’s prodding) had said no.

Many Egyptians, the Muslim Brothers foremost among them, say
that they want democracy and prosperity. But unless the military’s grip on the economy is loosened, democracy will not stand a chance, and poverty will remain Egypt’s lot. Breaking the hold of the military over the economy will not happen absent fundamental reform with strong international backing. So far, Washington has neither endorsed economic reform forcefully nor used its considerable leverage (in the form of massive military aid) to nudge the military to consent to change.

Many hope that Egypt will embrace the “Turkish model,” mixing democracy and capitalism with a somewhat toned-down brand of Islamism to produce an open and prospering society. But the Turkish model was built on the back of a series of IMF-prescribed reforms and the EU’s deep economic and political engagement with Turkey. Absent similar fundamental economic reforms, Egypt looks to be going the way of Pakistan, its economy reliant on U.S. aid, constantly on the brink of disaster, and avoiding it only thanks to timely infusions of Arab aid and rescue packages put together by international financial institutions. Meanwhile, the country gets poorer, its problems grow, and its escape from the cycle of crisis and poverty becomes more daunting and less likely. Anti-American extremist forces would then reap the fruits of political frustration and social misery. On the political front, the military’s “deep state” controls key sectors of the economy and wields considerable influence over the bureaucracy, the judiciary, and the still-potent security services. Prospects for civilian rule, let alone true democracy, are dim. The Obama administration may have bet on democracy turning Egypt into Turkey, but Turkey got where it is thanks to sustained European engagement. There we have fallen short.

It is true that the global financial downturn and the Greek crisis had left little for Cairo, but that is no excuse. Egypt is a hinge upon which the fate of the whole Middle East may turn. America spent trillions addressing security problems in the region after 9/11, problems that Washington believed were caused by the failings of dictatorship. Did America not go to war in Iraq to bring democracy to the broader Middle East and end the grip of Islamic extremism on Muslim hearts and minds? Now that democracy was on the horizon, we did not want to invest in it. “In short,” writes David Sanger of the
New York Times
, “America would talk about democracy promotion. But it would no longer be democracy’s venture
capitalist.”
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Venture capitalism or something like it, however, is just what the Middle East needs. The region boasts plenty of entrepreneurial energy, but it can find no outlet as long as the twitching hand of the sclerotic state chokes off economic liberty.
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The United States does not need to get it right everywhere, but it cannot afford to get it wrong in Egypt. It definitely cannot afford to stand back and simply watch events unfold without trying to influence them. A year and a half after Mubarak’s exit, the Obama administration still had no clear strategy for Egypt. Economic reform’s potential as a key driver of other changes has been largely overlooked. Change the economy in a freedom-friendly direction, and the generals and Islamists will have to adjust. In the words of the international relations scholar Michael Mandelbaum, “The knowledge and skills needed to practice democracy … come from the experience of operating a particular kind of economic system.… The school for democracy [is] the free-market economy.”
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Egypt’s best chance for real change came early, right after Mubarak left. That is when America and its allies should have put a big financial package on the table in exchange for big changes. We should have stressed the need for economic reform emphatically, bending all efforts to convince Egyptians that their problems will never be solved until they scale back their overgrown central state, improve its efficiency, and allow more scope for free enterprise. We should have put economic reform at the top of our talking points with Egyptians across the political spectrum, the generals included. The administration is gradually warming up to the idea, but it still does not see the economy as the fulcrum for change in Egypt and is not making the necessary big push for it to happen.

That we have settled for doing so much less than we did after 1989 in Asia, Eastern Europe, and Latin America speaks volumes about our disengagement from the region. If the potential for democracy held by the Arab Spring was not enough to compel our engagement, it is not clear what would be.

The Arab Spring was a classic “black swan,” an unlooked-for but massive strategic shift that made the first big cracks in the hard crust of brutal dictatorship that had long encased the Middle East’s basket-case economies and scary social trends. It did what the Iraq war had been meant to do but had fallen short of. It was America’s opening to try in this region some of what it had tried two decades ago as the Iron Curtain fell and dictatorships crumbled one after the other. Back then, America jumped at the chance to leverage the West’s victory in the Cold War in ways that would change the world for the better. We led an international alliance to build market economies and consolidate democracy across many parts of the world. The chance to do the same in the broader Middle East, to build prosperous economies and nurture democracy—to try to move the region into a new historical phase and onto a safer trajectory for all concerned—has not evoked a comparable response. Reformist hopes are never a sure thing, but surely this is an opportunity tragically lost.

Obama never offered a vision or a grand strategy to guide America’s response to the cascade of events unfolding in the Middle East. He responded to the Arab Spring without a consistent strategy or much enthusiasm or engagement, as if the protests and the political changes they produced were merely an unwelcome distraction instead of a historic opening. France and Britain (and Hillary Clinton) goaded Obama into intervention in Libya,
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but there, as in Egypt, American interest evaporated once the dictator was removed. America proved even more reluctant to get involved when it got to Syria. Rebels there have received moral and material support (largely nonmilitary and humanitarian aid) from America but no promise of intervention. In Bahrain, the administration protested the crackdown on protesters but did nothing more; and in Yemen, Washington backed a plan to stabilize the ruling regime with a formula that amounted to “No more President Ali Abdallah Saleh, but no democracy either.” Evidence of repression in Saudi Arabia was simply ignored.

To be sure, Obama’s initial instinct was to support protesters demanding an end to dictatorship. He saw the Arab Spring as a turning point in history, and he wanted America to help Arabs realize democracy. His strident rhetoric in support of protesters and his personal stance in pushing
Mubarak off his throne were as revolutionary as what was happening on the Arab street. But his administration backed away from that bold stance. It started talking about balancing interests against values, and in practice increasingly put interests before values. The administration would not support democracy for all Arabs (Bahrainis, Saudis, Yemenis were out of luck), but only for those Arabs whose cause fit American interests. By the summer of 2012, that was a club of one: Syria. To the rulers and people of the Middle East alike, “Obama’s wavering policies could be interpreted not as encouragement of epochal change so much as an effort to continue as long as possible the policies of the past.”
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Obama has been understandably reluctant to sign up for more wars in the Middle East. But his handling of the Arab Spring and Middle East policy has been defined by decisions that had nothing to do with armed intervention but were all about whether to support the possibility of building democracy in the wake of revolution.

In their book
Bending History
, Martin Indyk, Kenneth G. Lieberthal, and Michael E. O’Hanlon explain Obama’s failure to rise to the challenge of the Arab Spring by arguing that the candidate who ran on the power of ideas became, once in office, a reluctant realist. His focus shifted away from the grand visions and hopes that marked his campaign and settled on the immediate tasks required for keeping America safe in a highly dangerous world. Realist or not, Obama’s legacy in the broader Middle East will not be a Reaganesque one of having overseen one of the great historical transformations of our time. Instead, it will be far narrower and closer to the legacy of George W. Bush, whose war on terror provided the basis upon which Obama shaped his own approach to America’s role in the world.

If there is a discernible American strategy for the Middle East, it is counterterrorism—continuing the war on al-Qaeda and its franchises and offshoots using Special Forces and drones. This is to be expected—after all, there is still the threat of terrorism coming from the region. But counterterrorism will not transform the Middle East. To fully appreciate the impact of American foreign policy on the region one has to consider the responses to democracy and terrorism side by side, as the Janus faces of American engagement. It is not just that we did not have a proper response at the right time to the Arab Spring, we have doubled
down on counterterrorism. And when the two have come into conflict, as in Yemen, the latter has trumped the former. For, as surprising as it may seem to those who expected Obama to be a kind of “anti-Bush,” it is Bush’s preoccupation with homeland security as the be-all and end-all of grand strategy that serves as the best guide to how Obama sees American engagement in the Middle East.

America’s fascination with drones is easy to understand. They are efficient and cheap and a far easier way to wage the war on terror than a counterinsurgency campaign involving tens of thousands of troops and nation-building to go with it. So it was not a surprise that drones quickly became the central pillar of America’s successful counterterrorism strategy in Afghanistan and Pakistan, and then Yemen.
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Other counterterrorism advances also came online right around the time Obama became president, most notably an enhanced cyberwar capability.
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The combination of drones, Special Forces, and cyberwarfare presented the new president with a viable high-tech clandestine alternative to traditional military means to combat terrorism—Counterterrorism Plus. All told, as in the counterterrorism expert Peter Bergen’s estimation, Obama is actually one of America’s militarily most aggressive presidents—comfortable with making tough decisions such as killing bin Laden or expanding drone programs.
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