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Egypt Crisis

The wave of popular protests called ‘Arab Spring’ started in Tunisia in December 2010 when the people protested against their ruler Ben Ali who then fled to Saudi Arabia. This raised hopes among millions of other citizens in the neighbouring Arab countries. Thus, within a short span of time the protests spread to other countries like Algeria, Libya, Jordan, Egypt, Syria, Iraq, Bahrain, Yemen and some other Gulf countries. The demands of the protesters varied from country to country but in general it included demands for political freedom, social freedom, press freedom, improved human rights conditions, economic betterment etc.
In the Egypt People had suffered a lot during the period of presidency of Mubarak. The demonstrators have concentrated on legal and political issues including police brutality, emergency law, lack of free and fair elections and corruption, as well as economic issues including high inflation rate and low minimum wages. Demands from protest organizers also include a new government that represents the interests of the Egyptian people.
But the biggest reason was the State of Emergency Laws. Emergency Law results in: enormously extending of police force; suspension of police force; anybody can be imprisoned for any period of time, that too without reasons and of course, needless to say without trials. Further military ruler or his deputy has the power to monitor newspapers, journals, and other publications.
Pro-democracy activists organized mass protests calling for the resignation of the long-ruling president Hosni Mubarak. Later the protest was joined by opposition political parties, Islamist groups and labor unions, protesters in Cairo overpower the police and occupy the main Tahrir Square (Liberation Square), which becomes the iconic headquarters of the revolution. Mubarak was forced to resign after 18 days of mass protest, as the military refuses to use force against the protesters. Egyptian military headed by Field Marshal Mohammed Hussein Tantawi assumes interim power in Egypt as the Supreme Council of the Armed Forces (SCAF).
Later the protesters’ anger turns against the interim military regime, which rules by decree through a hand-picked cabinet staffed by former Mubarak loyalists.
Finally former President Mohamed Morsi took office on June 30, 2012, after winning Egypt’s first competitive presidential election, his ascension to the presidency marked the end of a rocky 16-month transition period.

The Morsi Administration continually clashed with opposition political parties and the judiciary. He carried out a surprise reshuffle of the army command, replacing Field Marshal Mohammed Hussein Tantawi with Abdel-Fatah el-Sissi. These clashes led to the poisoned political atmosphere that may have ultimately convinced military leaders that Morsi had to be removed.

By July 2013, economic growth had stalled, prices on food and fuel had increased, and fuel shortages had caused frustration for many citizens. Moreover, crime had dramatically increased due to police shortages.
Tensions escalate further when the Islamist majority in the Constituent Assembly – a panel appointed by the dissolved parliament to draft the new constitution – issues a controversial draft constitution, despite the walkout of secular delegates who complain their input was ignored.
Voters pass the constitution amid a low turnout. The new constitution proposed for the formation of Shura Council, or upper house of Parliament. 

Salient features of new constitution: 

a) The constitution ends Egypt’s all-powerful presidency, institutes a stronger parliament, and contains provisions against torture or detention without trial. 

b) It would give Egypt’s generals much of the power and privilege they had during the Hosni Mubarak era.

c) Article 2, defining the relationship between Islam and Egyptian law, remains essentially unchanged from Egypt’s old constitution. The new charter says that the legal code stems from “the principles of Islamic law”, wording that is broad enough to allow for individual rights and freedoms.

d) Article 50 preserves the right to assembly but requires “notification” of such gatherings.

e) According to new provisions no person may be “arrested, searched, incarcerated, deprived of freedom in any way and/or confined“unless it is ordered by a “competent judge”. Anyone jailed must be told why in writing within 12 hours, and the case must go to investigators within 24 hours. Detainees cannot be interrogated without their attorney or one appointed to them being present. Phone conversations, electronic correspondence and other communication cannot be listened to without a warrant.

f) The new constitution limits the President to two four-year terms.

g) Article 45 protects freedom of expression.

h) Believers in any of the three Abrahamic religions- Islam, Christianity and Judaism - are guaranteed the freedom of worship.

i) According to the draft the military would retain the ability to try civilians in military courts if they are accused of damaging the armed forces.

j) Citizens are equal before the law and are equal in general rights and duties without discrimination between them based on gender, origin, language, religion, belief, opinion, social status or disability.

By 30 June, on the first anniversary of the election of Morsi, tens of thousands of Morsi opponents massed in Tahrir Square and outside the main presidential palace in the Heliopolis suburb demanding Morsi's resignation
Following days of mass protests against President Morsi, Gen al-Sisi warned that the military was prepared to step in "to stop Egypt from plunging into a dark tunnel of conflict and infighting".  The army issued an ultimatum to Mr Morsi, instructing him to respond to people's demands or step down within 48 hours. When he failed to do so, it removed him from power and placed him under house arrest.
On 3 July, Gen al-Sisi suspended Egypt's constitution and called for new elections. He was backed by liberal opposition forces and the main religious leaders.
On July 8, 2013, interim President Adli Mansour issued a new constitutional declaration outlining the latest Egyptian transitional process. This declaration will serve as the country’s legal framework until a more permanent constitution emerges. According to Mansour’s declaration, Egypt’s currently suspended constitution will be amended and then submitted to a public referendum for approval. It seems that President Mansour’s authority to issue such a declaration rests entirely on his backing by the military.

On August 14, 2013 Egypt’s military and national police launched a violent crackdown against the Muslim Brotherhood, whose supporters have been continually demonstrating since the military’s July 3 ouster of former president Mohamed Morsi. There also have been reports of armed vigilante groups attacking Brotherhood supporters. Since the crackdown started, the military has denounced Morsi supporters as “terrorists,” and the interim government has re-imposed martial law (known as the Emergency Law), giving authorities broad legal authority to detain citizens and try them before military courts. The military also has imposed a national curfew. The Muslim Brotherhood, with many of its leaders now imprisoned, has vowed to continue its campaign of civil disobedience, though some of its supporters have reportedly armed themselves, rioted, and even used violence against Egyptian authorities, killing several. Additionally, some Brotherhood members have reportedly burned government buildings and Coptic Churches. Several prominent Brotherhood leaders may be put on trial for murder, and several others have lost children in clashes with police. Since August 14, the official death toll reportedly stands at over 1,000 killed (including some police).

Economic impact of revolt

According to preliminary estimates, the growth rate in 2010 was at 5.7%. The events that took place in 2011 affected most economic sectors, especially tourism, exports and remittances from abroad. Moreover, the local currency and on the government's reserves came under unforeseen pressure because of [monetary] transfers to foreign countries and the flight of certain foreign and Arab investments. This all negatively affected Egypt’s balance of payments. The sectors mentioned above are the main sources of local income in foreign currency, and they are used to pay for external obligations, be they foreign debts or import payments.
One of the direct implications of the post-revolutionary period was that Egypt’s GDP growth rate fall to 3.5%. Indirect implications mainly emanate from the flight of some Arab and foreign investments.
Deteriorating security led to suspending production in many sectors and contributed to increasing unemployment rate and declining national income.
Increasing challenges that faced the Armed Forces because of illegal flow of arms across the borders and infiltration of subversive elements, who were trying to impose their radical agendas, had an adverse impact on tourist flow and investments rates.
These factors resulted in the concerned international institution's downgrading of the credit rating of Egypt followed by increasing the interest rates of domestic and foreign loans. Furthermore, investment opportunities retreated, tourist attractions lost their customers and cash reserves dropped.

Implications for India

India has had close historical and civilizational contacts with Egypt. During the Nehru-Nasser era both countries had exceptionally close relations. India has enjoyed close cooperation with the Mubarak regime since he came to power. There will be serious implications if the Egyptian unrest spreads to the Arab world where India has higher stakes. An important concern for India is the 3600 people of Indian origin living in Egypt. Some 2200 members of Indian community are in Cairo. Further, Egypt’s strategic location along the Mediterranean, the Red Sea and the Suez Canal provides it a significant advantage vis-à-vis bilateral trade and tourism. In the economic arena Egypt remains an important partner of India. India has been among the top five importers of Egyptian products since 2005. The trade balance has been in favour of Egypt since 2001-02 except in 2004-05. Exports from India to Egypt have been increasing over the years. It increased to $ 1.3 billion during 2009-2010 from 1.29 billion in 2008-09. Total trade declined from $3.42 in 2007-08 to 2.46 in 2008-09 and then increased to $2.7 billion during July-May 2010. In terms of investments, India has a total investment of about $2billion in about 40 projects and Egyptian investment in India is about US$ 30 million.

Egypt has 3.5 per cent of Africa’s proven oil reserves which makes it an important country for India. Oil discoveries in the offshore waters of Egypt have immense potential. GAIL, Reliance Industries, and Gujarat State Petroleum Corporation are key players in the natural gas and petroleum sectors of Egypt. In the manufacturing sector Tata Motors, Ashok Leyland, Bajaj Auto and Aditya Birla Group in real estate and construction sectors are some of the important Indian companies having stakes in the country. Any instability in Egypt will have an adverse impact upon Indian companies involved there. A peaceful transition will provide continuity. Any increase in oil prices due to the instability in the country will also have implications for India.


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