Egypt Burning

Violence is escalating in Egypt. What does it mean?

Hundreds are dead and thousands are injured in the latest round of fighting. Muhammad Morsi has been deposed by the military, and protests by his followers have been violently suppressed. Western countries are trying to balance realpolitik with human rights. Do they rebuke the military leaders and cut off aid, or do they engage with the regime and risk losing standing with the rest of the world?

A winner in this no-win situation is Ayman al-Zawahiri, formerly lieutenant to Osama bin Laden and now al-Quaeda’s leader. A year and a half ago he voiced his disgust at his former colleagues in the Muslim Brotherhood for what he called their treasonous acceptance of the rules of the West. When the military fired on Brotherhood protesters, he must have felt vindicated.

But Egypt is a pluralistic society, with secular, Christian, and Muslim citizens. Their economy exports oil and cotton, and attracts tourists from around the world. The military is the most powerful economic actor, controlling hotels, gas stations, and even noodle factories. Real democracy in such a society consists of checks and balances between functional state institutions. They’re a long way from that.

Revolutions are good at tearing down; they’re not so good at building up. The road to democracy is long and hard. Let’s hope their civil strife doesn’t turn into civil war.

Douglas R. Tengdin, CFA

Chief Investment Officer

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