Thursday, March 31, 2011

Two reasons to worry about Egypt

Mubarak's fall was one of the most exciting moments in the Middle East in a long while. But I'm not sure that anything we are seeing now is cause for optimism. In a nutshell, here's the problem:

1. Egypt faces impossible choices: I will spare you a diatribe on Egypt's budget and debt dynamics. Suffice it to highlight that on the eve of Egypt's revoltution, the country had a budget deficit of 8% of GDP, depended on Tourism for 20% of its foreign exchange earnings and had expenditures that look like this:

Government Expenditures as % of GDP

 Source: IMF

You are reading this right: the government spends 6.1% of GDP subsidizing fuel (5.1%) and food (1%). In his last action in office, Mubarak raised wages, so the 7.1% spent on wages is now higher than it used to be. But oil prices have also risen globally since then, as have food prices. My point? The government is facing a much bigger bill than is implied by the chart above, and must cut subsidies - but this is likely to get people rioting again!

2. No one knows what Egyptians want: Everyone agrees that Egyptians want democracy, but what else do they want? What are their economic priorities? We don't know, because the country has never been a democracy. To appreciate the depth of this mystery, you need to look no further than the Twitter feed of Wael Ghonim, one of the admirable curators of the Egyptian revolution. A couple of days ago, he was asking people via twitter to suggest topics for him for an editorial he was invited to write.

It is heartwarming that a leading activist is listening to the crowds, but it is also worrisome that the demands of Egyptians are not immediately obvious even to himself! Predictably, the reponses were conflicting:

Yes, it is good to see some people want freer trade, but some people want more government spending from a government that can't even afford to maintain its current spending!

I don't envy the economic policy makers in Egypt. They are damned whatever they do.

Wednesday, March 30, 2011

Top 5 reasons why Hafez Assad was better than Bashar

5. Hafez did not pretend to reform. He just didn't reform.
4. Hafez took responsibility for his actions. He did not shy away from assuming responsibility for killing.
3. Hafez was consistent. He did not send mixed messages.
2. Hafez listened to his advisors. He did not say they want to reform, but "I'm holding them back."
1. Hafez did not giggle like a 5 year old girl at his own jokes.

To all "pragmatists" (Hillary Clinton), crypto-intellectuals (David Ignatius), or downright insane (Joshua Landis), eat your own words about Bashar the reformer now.

Sunday, March 27, 2011

Syria Ambassador Imad Moustapha is not defecting

I noted that some people saw the blog by Syria-clown-in-DC, Imad Moustapha,  as a sign of wavering. He referred to the dead in Dara'a as "Martyrs". It is not. SANA, the official Syrian news agency also referred to them as "martyrs":

Bashar al-Assad offered "condolences to the families of the two martyrs who died during the unfortunate events which took place in Daraa on Friday"

The truth is that every other person that dies in the Middle East is a "martyr". Even car accident victims are "martyrs." The word doesn't mean much more than "dead of unnatural causes."

But the blog entry is more interesting because of its Freudian slips:  read Shostakovich for spineless, and "Xenon" (Zeno of Tarsus) for the Syrian regime's unabashed regional expansionary policies.

Click on the image for my comments.

Saturday, March 26, 2011

Assad nominates Hariri for PM!

Hussain Abdul-Hussain's blog highlights the author's own article in Kuwait's Al-Rai paper. The Washington-based author says that Bashar Assad has approached US officials to suggest that he is ready to recommend (to his allies in Beirut) the nomination of Saad Al-Hariri as Prime Minister of Lebanon again. Read the whole article here (Arabic).

If true, this confirms that Assad is desperate to re-ingratiate himself with Arabs, by appearing to move away from his alliance with Iran. Tony Badran has an excellent piece on why Assad will not move away from Iran.  For an in-depth look at the complex relationship between Hizbollah and Syria, I recommend this piece by Emile Hokayem.

It is easy to look at Assad's gesture as a kiss of death. But it does not need to be. March 14 have been re-invigorated by the recent protests, and are back "on message" by focussing squarely on Hizbollah's weapons.  Assad cannot deliver Hizbollah's weapons to the negotiating table, and it is difficult to imagine another Hariri premiership now that can duck the question of those weapons. This nomination will only expose Assad's own impotence.  

Has Assad lost control of Syria?

Ignace Leverrier, a former French diplomat who lived in Damascus, asks this question in Le Monde. His question is prompted by a recent incident where the Syrian Ministry of Information stopped the distribution of a newspaper, Al-Watan, only to allow distribution again. More importantly, he points to the puzzling press conference by Buthaina Shaaban in which she said that the President ordered the police not to shoot at protesters.  We all know what happened the next day.

Are security forces acting independently of Assad, or is the president so devious that he is deliberately making statements that encourage people to demonstrate only to have them shot?

The International Crisis Group published a note yesterday that highlighted the tension between the reformers on one hand and the "old guard" on the other. They argue that:

President Assad must show visible leadership and do so now.  His political capital today depends less on his past foreign policy successes than on his ability to live up to popular expectations at a time of dangerous domestic crisis. 

To my mind, however, it is very clear that Assad simply does not have what it takes to show leadership. The result of all his talk of reform is best summarized by the Human Rights Watch report published on the 10th anniversary of his rise to power: Syria - A Wasted Decade.

As dozens of Syrians get killed, Assad has yet to speak to his people.  He simply sends out Ms. Shaaban to peddle the same promises the world has heard for a decade. Read this article from June 11, 2005 - it sounds like it could have been published it yesterday!

I don't think Assad has "lost" control of Syria, because I don't think he has ever had real control. He accomplished little, which only shows that he is too indecisive or simply unable to lead.  What this means, of course, is that anyone hoping for "change" in Syria should not hold their breath for what Assad will say next. Whatever he says will carry no credibility. The fate of the regime will be decided on the streets, and the turning point will only come when Syria's security forces begin to lose cohesion.

Friday, March 25, 2011

Cancel Al-Dardari talk in London

On March 23, while Syrian security forces were busy killing peaceful protestors, the Arab Bankers Association in London announced this event on its website:

"The Arab Bankers Association would like to invite you to a presentation by HE Mr. Abdullah Al-Dardari, Deputy Prime Minister for Economic Affairs in Syria on" Recent Development in the Banking Sector in Syria" on Wednesday 30th of March 2011.
Please find enclosed details for the evening.
For reservation please contact the ABA on:
Zina-                                      020 7659 4889
Houda-                                  020 7659 4892"

Why is the Arab Bankers Association hosting a senior member of Assad's regime at this time? I'm sure this event was planned well before recent events unfolded. But it is not too late for the ABA to avoid displaying the same lack of judgement as Vogue. The ABA can cancel this event.

Please help encourage the ABA to cancel this event by sending an email to either of the two email addresses above. If you are too busy to write an email, you can simply copy and paste the text below:

I am dismayed that the Arab Bankers Association is hosting Deputy Prime Minister Al-Dardari of Syria on 30 March 2011.

Syria is no doubt an interesting destination for business and banking. But Syria is at an important juncture, as its people struggle for freedom. With dozens reported killed by the regime over the past few days, maintaining this event with a senior member of the regime betrays a lack of sensitivity to those who died.

I hope that the ABA will take the courageous step of cancelling this event, which can only bring embarrassment to your association. I also hope that the ABA will host a meaningful event about opportunities in Syria once the regime is changed. Only such an event will bring added value to both Syria’s economy and the Arab banking community in London.

Saturday, March 19, 2011

Nasrallah hedges his bets

It was easy to miss Nasrallah's speech today, given everything else happening in the Middle East. But it was noteworthy.

His thrust was characteristically rambling, but his tone wasn't especially angry. He even made an attempt at puerile humour (Hariri will not defend Lebanon with his jacket), which seemed well tailored to his happy audience. 

Overall, there was nothing new in what he said, but what he did not say was noteworthy. His rhetoric about the "before and after" of the STL indictment is gone! He's now saying that the indictment does not matter, because it is known known, rather than a known unknown.

It was also noteworthy, though hardly surprising, that he talked about Arab uprisings everywhere but did not mention Syria. 

Nasrallah is nervous. He's going to lose his biggest ally, and he knows it. 

Is another Jumblatt turnaround imminent?

The dust barely settled on Jumblatt's inelegant flip-flop of January.  Casting his lot with "Syria and Hizbollah" was never going to be an easy task.  The recent batch of Wikileaks cables only confirm that Hizbollah will never trust him. So, it is not surprising that as recently last Sunday, Jumblatt was still trying to have it both ways: there were protestors carrying the PSP flag and his pictures at the March 14 rally.

Now Syria is creating a new challenge. Dara'a is not the only city in Syria that is witnessing anti-regime demonstrations, but it is the city where the largest demonstrations have taken place. It also happens to be a mostly Druze city.

Jumblatt has often tried to project a role of a "regional" Druze leader, by hosting meetings for representatives of his community from both Syria and Israel. He cannot stay on "Syria's side", or even stay mute if Druze are being arrested or killed in Syria.

What will he do now? My hunch is that he will reach out to a bottle of vodka for the next couple of days. His next flip-flop will be very painful.

I just can't conceal my schadenfreude.

[Update: As events unfolded in Syria, I became aware that Dara'a is not a "mostly Druze city", as I was lead to believe. My source, a Druze himself, seems to have somewhat exaggerated this one. It does not change the fact, though, that the area includes a significant Druze population which is active in the anti-Assad demonstrations.]

Wednesday, March 2, 2011

Charbel Nahhas shines again

Readers of this blog know that I have a very low opinion of Charbel Nahhas.

It comes as no surprise to read in today's Daily Star that he seems to be at the vanguard of obstructing the Special Tribunal for Lebanon.

"Nahhas told Berri that the [telecommunication] data in Bellemare’s possession was unofficial and did not carry the signature of any telecom company. He said that Bellemare, in his new request to the Telecommunications Ministry, wanted this data to be official and signed according to the rules so that it can be adopted as a legal document at the STL and used as evidence in the draft indictment handed over by Bellemare to pretrial judge Daniel Fransen in January, the sources added.

Following Nahhas’ refusal to cooperate with the UN Investigation Commission, Lebanese security and judicial authorities directly approached the telecom companies which supplied Bellemare with unsigned data, telecommunication sources said. Nahhas rejected Bellemare’s request for signed data, the sources said."

Up until now, and for all his Change and Reform bluster, Nahhas would have be remembered for one achievement: it is his lack of  competence that helped Lebanon attain the world's slowest internet speeds. Now we can add Obstruction of Justice to his list of achievements.

Bravo, Charbel.

Tuesday, March 1, 2011

Vogue's excuses are worse than its deed

Atlantic's Max Fischer managed to track down Vogue senior editor Chris Knutsen to ask about the decision published Joan Buck's article about Asma Al-Assad. Fischer's full article is a must-read.

Two things are apparent from Knutsen's reply:

1. The decision to publish the article was not made because they did not think it through. They thought long and hard for "more than a year"!

2. Vogue decided to operate within the media restrictions of Syria: "we strived within those limitations to provide a balanced view of the first lady and her self-defined role as Syria's cultural ambassador."

The most telling part of the Atlantic article, though, is its exposure of the confusion in Chris Knutsen's mind:

"I asked Knutsen if he thinks Bashar al-Assad is a despot. He sighed, "Yeah. I would call him an autocrat." When I pressed him on the point, he said, "there's no freedom there," adding, "it's not as secular as we might like."

It's not apparent why Knutsen conflates secularism with freedom. What is apparent is that Knutsen, living up to the worst stereotypes of his industry, seems to have the intellectual depth of BrĂ¼no. Quelle surprise.