247. Telegram From the Embassy in Egypt to the Department of State1

8600. Subject: An Overview of Destabilizing Forces in Egypt. Ref: State 38873.2

1. (S-entire text).

2. Summary. The threat of Sadat’s assassination has been heightened by the Egyptian-Israeli Peace Treaty. This could be very destabilizing, particularly since there is no established successor of Sadat’s stature. Assassination could polarize the country between those who unify behind a temporary successor (probably Mubarak) and those who would seek safety in return to the Arab fold. Over the longer term, it is difficult to imagine Sadat’s successor being able to persist for long in a policy opposed by the rest of Arab world. Sadat’s security, however, is good and the Egyptians are aware of the threat. The following assessment of destabilizing forces in Egypt, prepared in response to reftel, assumes Sadat’s remaining in office at least until 1982.

Egypt learned important lessons from the January 1977 subsidy riots3 and is unlikely to repeat past mistakes. The economy has improved (the Ministry of Economy claims a per annum GNP growth in [Page 827]real terms of over 9 percent), but important sectoral snags remain. It is questionable how much improvement has trickled down to the lower income levels. Housing and public services are woefully inadequate; the urban fabric has been strained almost to the breaking point. Institutional weaknesses and a lack of resources limit the government’s ability to address these problems.

Sadat remains physically and psychologically isolated; officials have difficulty in making and following through on decisions; and most of those close to the President will not give him bad news. Nevertheless, Sadat is widely popular, while his opposition is fragmented and without effective leadership. The Peace Treaty is backed by an overwhelming majority, including the military. Mass media and labor present no current challenge to the regime. Fundamentalist Muslim organizations oppose many governmental actions, including the Peace Treaty, but they are bereft of real leadership and do not constitute a present threat. The Soviets, opposing Sadat’s leadership and the peace process, have few assets with which to work.

Continued stability depends greatly on the political and economic momentum generated in the critical months ahead. If forward movement is not maintained, destabilizing forces could present a threat to Sadat’s regime. End summary.

2. In the charged atmosphere following the conclusion of the Egyptian-Israeli Peace Treaty, the threat of Sadat’s sudden removal from office by assassination has been heightened. Syria, Iraq, Libya, and the PLO, even Jordan, have as a primary objective the overthrow of Sadat. While Sadat’s security is good, and the Egyptians are aware of the threat, we cannot rule out the possibility of a successful assassination attempt. Such an event could well be destabilizing, the more so since there is no established and automatic successor of Sadat’s stature. Assassination could polarize the country—those who would react in rage and unify behind a temporary successor (probably Mubarak) and those who would seek safety in return to the Arab fold. Much would depend upon the wishes of the military leadership. Over the longer term, it is hard to imagine any successor to Sadat having the fortitude, vision, tactical flexibility and political base to persist for long in a policy opposed by the rest of the Arab world.

3. The following assessment is based on the assumption that Sadat will continue in office, at least until his current term expires in 1982. Should he then decide to transfer power to Mubarak, we assume the process would go smoothly. Nevertheless, even with Sadat in office, the Egyptian system is subject to a number of strains which have the potential to destabilize the situation. These are outlined below.

4. Egyptian vulnerability to destabilizing forces was best demonstrated by the January 1977 subsidy riots which severely shook this [Page 828]government. For a few days there was some doubt as to the outcome. In the end the government did survive and in doing so appeared to learn some lessons that make it less vulnerable today. The proximate cause of the January rioting was the government’s announcement of precipitous rise in prices of basic commodities. It has not repeated this mistake, but, rather, has achieved much the same goal by resorting to incremental price increases. There have been some grumblings, but there appears to be no mass discontent.

5. This is partly due to the fact that Egypt’s overall economy has been steadily improving. Since January 1977, the Egyptian GNP has gone up by approximately 8 percent per annum in real terms (the Ministry of Economy says the figure is more than 9 percent). The balance of payments picture has dramatically improved and, for the first time in its history, Egypt is current on its external debt. Income from Canal tolls, oil exports, tourism, and remittances are all rising. Some sectoral snags remain, however, particularly in the construction industry.

6. There is some question, however, on how much of this improvement in the large has trickled down to the lower income levels. Certain sectors of society obviously have benefitted from Sadat’s open door. Others, particularly lower paid government employees, have not. The frustrations of living in Cairo and other Egyptian cities increase daily. This is a function of population explosion, of urban migration, and of an infrastructure which was sorely neglected for 25 years. Cairo could comfortably house 2½–3 million; it is called upon to shelter some 9 to 10 million. The housing shortage is acute; perhaps as many as a half million Cairenes are camped out in a semi-permanent status in the City of the Dead, with virtually no government services. Cairo’s water, sewage, transportation, and telecommunications are all woefully inadequate.

7. In addition to a lack of real resources, the government’s ability to address problems is limited by institutional weaknesses, including considerable corruption. The Egyptian bureaucracy has grown so large that in many cases it barely functions. Everyone dealing with it, Egyptian or American, is fast frustrated. Egypt’s bureaucracy has been notably inefficient and venal on at least a petty scale throughout history; with the increased money available in the economy this phenomenon is on the increase. This corruption is widely assumed to extend to the highest level of Egyptian society. Sadat’s wife and his closest advisor are popularly believed to be involved, although hard evidence to support this charge is difficult to come by.

8. The government’s ability to deal with major social and economic issues is further limited by Sadat’s physical and psychological isolation. His peripatetic style of government makes it difficult for key officials to get decisions. Access to the President is strictly limited, and [Page 829]most who surround him are very reluctant to give Sadat bad news. He has few close associates. This would be less damaging if subordinate officials were willing to make independent decisions. Unfortunately, the nature of Egyptian society pushes almost all issues to the top for resolution. Until Sadat reaches a decision, all too often nothing happens. (Frequently, little happens even after Sadat issues directives; there is little follow-up, and bureaucratic inertia is massive—see 78 Cairo 19822.)4

9. Sadat’s popularity nevertheless continues to be wide and apparently genuine. The opposition which does exist is fragmented and lacks dynamic leadership. Thus far, to the best of our knowledge Egyptian security forces (military and civilian) are loyal to Sadat, cohesive and professional, and seem to genuinely welcome the peace treaty with Israel. The Egyptian military—specifically its lower officers and rank and file—reflects its society and is not an elite organization. On the one hand, the military is not cut off from the people. On the other, it is affected by the same economic and social problems which afflict society in general. Additionally, the armed forces are acutely aware of the fact that their military capability has declined in recent years, particularly when compared to Israel.

10. The mass media is government-controlled and uncritical. While there is no prior censorship, editors are government-appointed and are expected to know what should not appear in print. By and large they observe closely these unwritten rules. Labor groups, too, are amenable to government direction. There have been no significant strikes since January 1977, and recent wage increases have permitted workers to keep up with inflation, if only just barely. Labor leaders report no mass discontent, but say there is a pervasive sense of drift.

11. Student and fundamentalist Muslim religious organizations could cause the administration difficulty, as Sadat undoubtedly is now aware. The conservative campus-based Islamic societies (with links to the Muslim Brotherhood) are the best organized force in the country outside the military and the communists, and are deeply committed to their cause. They control student governments on many campuses, and [Page 830]are in a strong position in the national student leadership. The Islamic societies, and their adult associates, oppose much of Sadat’s peace policy, especially the failure to resolve the Jerusalem issue, and have strong reservations over the course of domestic developments. They fear modernization, and oppose Sadat’s economic open door. The religious right, however, bereft as it is of real leaders does not at present constitute anything more than a latent threat. It has attracted no more than 10–15 percent of the student population, and the campus groups are fragmented geographically and ideologically. The lack of a hierarchical structure in Sunni Islam argues against the rise of large scale organized opposition from the religious right. It could develop, but it would take time. There is no charismatic leader, but the situation is ripe for one to emerge. Sadat has shown that he recognizes the potential threat and has initiated a two-track policy. He has warned that he will crack down on the Ikhwan and the Islamic societies while, at the same time, offering financial inducements to main line religious figures. More funds have been appropriated for mosque construction, wages have been raised in the religious sector, and a large number of mosques are about to be brought under government control.

12. The only significant minority group in Egypt, the Copts, has little ability to destabilize the country. At most, there are 4 million Copts in a total population of some 40 million. They are scattered around the country, with the largest concentration in rural upper Egypt. Despite their protestations to the contrary, the GOE does not seek to deliberately discriminate against Copts. Fundamentalist Islamic organizations do seek, however, to repress the Christian community. This is a problem for the government as well as for the Copts. Outbreaks of religious strife will continue but should be easily contained by the security forces, as they have in the past. Sadat has repeatedly stressed his commitment to communal peace. In doing so, he has done much to calm the Coptic leadership.

13. The Soviets continue to work against Sadat, but few assets remain with which they can work. Their consulates and cultural centers have been closed, and their activities are carefully monitored. They have considerable influence with domestic leftists, but these same leftists have little power or influence of their own. Many were discredited by their involvement in the excesses of the Nasser era. The domestic left continues to have a disproportionate amount of influence with Cairo’s intellectual elite, but has made little inroad with the Egyptian masses. While the left retains the ability to exploit incidents (as it did in January 1977), it has so far showed itself incapable of instigating instability on its own.

14. Overall, our assessment at this time is that destabilizing forces are evident on the political-economic scene and that those forces in [Page 831]some respects could pose potential problems for the continuation of moderate rule in Egypt over the coming critical months in which negotiations for a comprehensive peace will have to be pursued. The peace is overwhelmingly popular among Egyptians, but it has been bought at the price of near-total political isolation in the Arab world, with all that connotes for the continuation of economic support from the oil-rich, formerly “moderate” Arabs, and for the ingrained Egyptian claim to leadership in the Arab world.

13. Egypt’s economy is improved; growth rates are up. But peace brings its own additional demands in the form of rising popular expectations on the standard of living, and built-in distortions in the economy limit the government’s maneuverability in policy terms. (It would be a reckless policy maker, indeed, who would advocate attacking head-on the enormously costly subsidy burden.)

14. Continued stability in this potentially unstable setting depends greatly on the political and economic momentum Sadat is able to generate in the conduct of Egypt’s affairs, and thus is subject to virtually continual reassessment by the Embassy. Sadat has just pulled off an historic political coup, and his Economic Ministers are able to point to significant, identifiable economic advances in some areas of their responsibility. The question now is: what follows? A brief pause of some few months in which negotiations remain inconclusive may be acceptable. After that, if forward movement is not maintained in Egypt’s external and domestic economic problem areas, now quiescent destabilizing forces indoubtedly will surface and pose to Sadat’s government basic questions of survival.

15. The above arguments are predicated on Sadat’s remaining around and in power for the immediate future. As indicated earlier, should he leave office suddenly, the stability problem could become acute. There is no clear precedent for succession. According to the constitution, if Sadat dies in office the Speaker of the People’s Assembly would become acting President, until Parliament nominates, and the electorate endorses, his successor.

16. At the moment, Vice President Mubarak appears to be the clear favorite, and Sadat’s choice, for this office. His role in vetting the national Democratic Party’s candidates for the coming election should give him considerable control over this body. Many, however, would oppose Mubarak’s assumption of the presidency, undoubtedly emboldened by recognition of the fact that the Vice President lacks an independent power base. Up to now Mubarak is Sadat’s creation. Without his mentor in the presidency, he would be a much weakened man. Some suggest, however that Mubarak is ambitious, and with his man Kamal Hassan Ali as Min Defense, might at some time decide to make a power play of his own. It is possible in this society, but there is [Page 832]no tangible evidence that Mubarak is at present planning any such thing.

17. Despite these caveats, our current assessment is that Mubarak is the most likely person to succeed in a constitutional succession. The question remains how would he perform? Many consider Mubarak to be a lightweight, intellectually unsuited to manage Egypt’s affairs. Yet the same, and more, was said of Sadat following Nasser’s death. Sadat learned quickly and confounded his critics, although not without some difficulty.

18. While no Sadat in either wisdom or experience, Mubarak has had a longer apprenticeship under Sadat than the latter enjoyed under Nasser. Sadat has delegated far more authority to Mubarak than he, Sadat, ever received from Nasser. Mubarak now has had considerable experience in local government, party, and diplomatic affairs. He has tremendous energy and appears to have grown in the job. His greatest liabilities are his tendency to adopt simplistic approaches to complex issues, and his frequent attempts to personalize abstract problems. We believe he would be better qualified to rule after some more seasoning, but suspect he could handle the job if it were thrust upon him. His external and internal policies, at least initially, would not deviate from those of Anwar Sadat so long as the twin objectives of (a) further progress on Middle East peace front and, (b) economic development makes headway with our and other friendly states’ help. In connection with the first, Mubarak is not rabid on the Palestine issue. He has several times told the Ambassador that if meaningful autonomy for the Gazans can be obtained, the West Bankers can be left to stew in their own juice, if they refuse to participate in the peace process.

Eilts
  1. Source: Department of State, INR/IL Historical Files, Box 11, Cairo. Secret; Roger.
  2. Not found.
  3. Also known as the Egyptian Bread Riots, the demonstrations broke out January 18–19, 1977, when hundreds of thousands of lower class Egyptians protested the World Bank and International Monetary Fund-mandated termination of state subsidies of basic foodstuffs. Sadat ended the subsidies in an attempt to receive loans from the World Bank.
  4. In telegram 19822 from Cairo, August 25, 1978, the Embassy provided a discussion of Egyptian economic policy-making responsibilities as background for Carter’s preparations for the Camp David Summit. The analysis concluded: “In sum, decision-making at higher levels in the government-dominated Egyptian economy tends to be diffused, poorly coordinated, lacking in clear guidance from superior authority and unresponsive to out-of-the-ordinary requirements. Buck passing is a well-developed bureaucratic art; individual responsibility for decisions normally is accepted only if impossible to avoid. The extensive use of government committees is a device designed at least as much to arrive at collective responsibility for decisions as it is to reach a consensus on feasible, preferred courses of action.” (National Archives, RG 59, Central Foreign Policy File, D780348–0998)