edited by EGYPT at tJ~e CROSSROADS Domestic Stabilit~ a.b Regional Role EGYPT at the Crossroads," Domestic Stability and Regional Role edited by PHEBE MARR National Defense University Press Washington, DC 1999 T~e IHstitute [or National Strategic Studies The Institute for National Strategic Studies (INSS) is a major component of the National Defense University (NDU), which operates under the supervision of the President of NDU. It conducts strategic studies for the Secretary of Defense, Chairman of the Joint Chiefs of Staff, and unified commanders in chief; supports national strategic components of NDU academic programs; and provides outreach to other governmental agencies and the broader national security community. The Publication Directorate of INSS publishes books, monographs, reports, and occasional papers on national security strategy, defense policy, and national military strategy through NDU Press that reflect the output of NDU research and academic programs. 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Library of Congress Cataloging-in-Publication Data Egypt at the crossroads : domestic stability and regional role / edited by Phebe Marr. p. cm. Includes bibiliographical references (p. ). ISBN 1-5706-022-6 1. Egypt--Politics and government--1981- 2. Egypt--Economic conditions--1981- 3. Egypt--Foreign relations--1981- 4. Regionalism-- Egypt. I. Marr, Phebe. DT107.87.E34 1999 962.05'5--dc21 98-54860 CIP First Printing, June 1999 vi Co teHts Preface ix Acknowledgments xi Prologue xiii I. EGYPT'S DOMESTIC STABILITY The Egyptian State in Transition 3 Tahseen Basheer Whence Will Come Egypt's Future Leadership? 17 John Waterbury The Changing Face of Egypt's Islamic Activism 29 Saad Eddin Ibrahim The Islamic Factor 47 John L. Esposito Dilatory Reform vs. Making a Break for the Market 65 Alan Richards Economic Reform and Internal Stability 93 Hanaa Kheir el-Din The Military in Egyptian Society 105 Stephen H. Gotowicki vii II. EGYPT'S REGIONAL ROLE Capitalizing on Diplomacy 129 Rosemary Hollis From Geopolitics to Geoeconomics 153 Abdul Monem Sa'id Ali The Future of the Middle East and Egypt 171 George Joffe Managing Ambivalence: Egypt's Changing Regional Environment 193 Aft Hillal Dessouki U.S.-Egyptian Defense Relations 203 Chas. W. Freeman, Jr. Egypt's Security Concerns 211 Ahmed M. Abdul Halim lU. U.S.-EGYPTIAN RELATIONS The Future of the U,S.-Egyptian Relationship 223 Ahmed /smai/ Fakhr Egypt at the Crossroads 231 Phebe Marr About the Editor 253 °oo Vlll rref.ce This book is an outgrowth of a collaborative effort of two strategic studies centers, the Institute for National Strategic Studies at the National Defense University in Washington, and the National Center for Middle East Studies in Cairo, Egypt. Over a period of several years, a group of colleagues connected with these institutes has been engaged in conferences and discussions focusing on the future of Egypt and the U.S.-Egyptian relationship in the changing security environment of the post-Cold War Middle East. This volume, the fruit of those labors, brings together the work of a distinguished group of Egyptians and Americans, combining the research efforts and long practical experience of authors of diverse backgrounds, including academics, military professionals, economists, and policy makers. Authors originally prepared their papers for two conferences, one on Egypt's domestic stability held in Washington, the other on Egypt's regional role, held in Cairo; their work has been updated to reflect changing events. Egypt has a seminal role as a Middle East actor and is central in U.S. strategic planning on the Middle East. Because of Egypt's influence in the Arab and Islamic worlds, it is of paramount importance that Egypt remain a force for moderation. Any dramatic change in Egypt's position could alter the regional balance of power and the existing favorable security environment. Egypt's regional role as a moderating element depends on its domestic tranquility and its economic health. As authors in this volume emphasize, the domestic and regional aspects of Egypt's policy are inextricably linked. Without a reasonably sound economy and political stability, Egypt will be unable to undertake an active regional role. The reverse is also true-an active peace process and a growing regional economy are essential for Egypt's stability at home. The combined essays tie together three essential components of the U.S.-Egyptian equation. The first part addresses domestic issues in Egypt and the prospects for Egypt's continued political stability. The second section concentrates on Egypt's regional role in the new post-Cold War environment. The third part looks at the future of the U.S.-Egyptian partnership. Authors have probed the underlying factors likely to persist well into the 21 st century, rather than dwelling on episodic changes that may dominate tomorrow's headlines. It is hoped that exploration of these fundamental aspects of Egypt and the U.S.-Egyptian relationship will provide a sense of the forces at work in the region and of the issues with which U.S. strategists will have to grapple over the next decade. X Acnowie )Oments I would like to thank the authors of this volume for their efforts and their patience in persisting through a number of revisions over the past year. In addition, a considerable debt of gratitude goes to the staff at the National Center for Middle East Studies, and in particular, to its director, Major General Ahmed Fakhr (Ret.). Without his intellectual acumen, efforts, and cooperation in this long joint venture, this book would not have been possible. Much appreciation is also due to two directors of the Institute of National Strategic Studies at the National Defense University, Drs. Hans Binnendijk (current director) and Alvin H. Bernstein (former director), whose sponsorship and encouragement of the project made it possible. I am also grateful to the generosity of Joseph Berger, former general manager of the National U.S.-Arab Chamber of Commerce, for providing financial support for a portion of this work. The book is also informed by contributions from a number of discussants and participants, both American and Egyptian, whose work is not directly acknowledged in specific chapters but whose insights are included in the introduction and conclusion. Last, but not least~ I would like to thank members of the Publication Directorate at INSS for seeing this volume through to completion. xi ,_c~ete(lR.i..1 -' cyprus ~'>'U..~ . .'~:~ Egypt I'~tematicnal ~o~1rd Rp~ Ex3re~sway Nalicnal c.aP,iI~l . - - Road ----~ R a!lro,3d ....... .... .... !" J~'~;~-.-., j ' - "li?~19 4 ' ./ • As SallGm .i |,\ ~" / I. / Ma"~n J .. , j/ ~=~ /" ~'Siweh • : ""x. =.___~AIBi'c AiTtr • ~ ' AI Miny&~"l Gl'~nb'\k \i~.,. ' " ! '" ~ i "%',.... • ~, ( . t ; : < • ~,y,, ~ SAUDI %, '~ ~ ~,.,~.,o~ ?~" \ ! ARABIA /- t ,, / .... :L.. ,~ .....-- ~ -,. 7, ,,L,~F,~ ':. : 7, MI~I ° x , '-"t°i'A~m " 1 ,\ \ ,/.. I i' i t / /'. / Ab3 Su~li~J~*~ .i n • ~G~ s~p i@ !~,~ ~c,~ ~i¢,. ~i,~i~ .. • .. , ~,~ mt~i~i~,~IT,~'~i~,~. (~n~ ~i~=~:": ' . <, " : SUDAN: 71 .... ..... i, " D',Inqunlb~." Mi PROLOGUE Pt-IEBE MARR Focus E 2pt? For muc~ of its recor~eb ~is~r~t Egypt has been a linchpin of regional trends and developments in the Middle East. As scholars have long recognized, there are some unique reasons why Egypt has been able to play such a central role. Today, in the post-Cold War era of flux and uncertainty, these reasons remain as valid as ever, although their context is changing. Chief among them has been demography. From ancient times to the present, the Nile Valley has been able to sustain a larger, settled population than its desert neighbors. Today, with over 64 million inhabitants, Egypt is the most populous country in the Arab world; in the Middle East it is outstripped only slightly by the non-Arab countries of Iran (67 million) and Turkey (65 million). Its demographic size and the relative homogeneity of its population give it considerable political weight in the regional balance of power. Egypt also occupies a favorable geostrategic position, much to its advantage throughout its history. Situated at the intersection of three continents--Europe, Africa, and Asia--Egypt has been nourished by flows of population and ideas from all three and has, in turn, functioned as a vital connecting link among them. Even today, in an era of satellite downlinks and supersonic jets, Egypt remains an important focal point for communications and transport. The Suez Canal provides a vital shipping channel between the Mediterranean and the Indian Ocean through which D°o X111 passed 15,000 ships in 1996.1 Overland routes via the Sinai tie Egypt to the Levant and the rest of southwest Asia. Egypt's lifeline, the Nile, inextricably links it to African nations further south. Egypt's regional importance, however, hinges even more on its cultural influence than its geography. In ancient times, Egypt was a cultural crossroads, contributing to civilizations as diverse as those of the Phoenicians, the Nubians, the Greeks, and the Romans.