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Managing Change in Egypt
Advancing a New U.S. Policy that Balances Regional Security with Support for Egyptian Political and Economic Reforms By Brian Katulis June 2012

w w w.americanprogress.org

THE ASSOCIATED PRESS/PETE MullER

Managing Change in Egypt
Advancing a New U.S. Policy that Balances Regional Security with Support for Egyptian Political and Economic Reforms By Brian Katulis June 2012

Contents

1 Introduction and summary 5 U.S. national security interests in Egypt 9 Egypt’s political, economic, and security transitions 18 A new U.S. policy: Managing change in Egypt 28 Conclusion 30 About the authors and acknowledgements 31 Endnotes

Introduction and summary
Egypt is in the midst of a series of major political, security, and economic transitions that will unfold for years to come. The 2012 presidential elections set to conclude later this month in a final run-off election mark the end of one period in this transition. But Egypt faces a long road ahead, including drafting a new constitution, setting checks and balances in the new political system, and concluding trials for former leaders in previous governments. The world’s most populous Arab nation could transition into something that resembles Turkey, with a greater voice for Islamist parties and curbs on the previously unchecked power of the security establishment. Or Egypt could transition toward a scenario similar to Pakistan, in which the military and internal security forces continue to hold significant political power and dominate key sectors of the economy. Most likely Egypt will carve out its own path with its transition shaped by multiple centers of power—some that have emerged since the popular uprising in 2011 and others that have existed for decades. The path Egypt takes will have major implications for the rest of the region. The changes in the formal structures and internal balance of power in Egypt’s government, alongside the social and economic transformations Egyptians continue to experience, will be some of the most important strategic dynamics reshaping the Middle East. What happens in Egypt will be as important as the threats and challenges posed by Iran, the re-emergence of Turkey as a regional power, and the continued problems emanating from the unresolved Arab-Israeli conflict. The changes underway in Egypt could spark its greatest repositioning since the 1970s, when it turned away from the Soviet sphere of influence and toward the United States and signed a peace treaty with Israel. The stakes for U.S. national security are great. How Egypt evolves in the coming years will affect U.S. national security policy in the Middle East on multiple fronts, including:

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Center for American Progress | Managing Change in Egypt

Managing regional security and the Arab-Israeli conflict • Fighting terrorist networks • Responding to new trends such as political reform and the rise of Islamist parties across the region • Forging new economic relations with the broader region Engaging with the new Egyptian government in all these arenas will require the United States to balance and integrate efforts to advance two core objectives— maintaining a close partnership with Egypt in advancing regional security and supporting Egypt’s political and economic transitions toward more effective governance and expanded economic opportunities for its citizens. The days when the United States could prioritize regional security over support for Egypt’s political and economic transitions are over. Egypt’s political transition remains a volatile work in progress after multiple rounds of parliamentary and presidential elections, with the constitutional reform process representing the next key phase. This political uncertainty has weakened Egypt’s economy, leaving endemic problems of high unemployment, growing public debt, corruption, and increasing pressures on Egypt’s foreign cash reserves—without a coherent economic policy response from...
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