There has been nearly unanimous criticism of U.S. President Barack Obama’s handling of the revolution in Egypt.\u00a0 However, I think a real reckoning of the situation reveals that the situation is enormously complex and any action requires careful consideration.<\/p>\n
<\/p>\n
Therefore, I would like to point out the various complexities, not to defend Barack Obama, but to highlight what the real issues at stake are in Egypt as a concerned observer and as an investor.<\/p>\n
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First, before engaging in the full discussion, let’s talk about why we should be interested in the first place.\u00a0 It is Egypt’s geography that makes it an important country.\u00a0 Egypt sits at the northeast corner of Africa and it sits at the southeastern corner of the Mediterranean.\u00a0 The country adjoins Israel via the Sinai peninsula, the Sudan and Libya.\u00a0 Egypt’s Suez canal connects the Mediterranean to the Persian Gulf.<\/p>\n
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It is a frequent misunderstanding that Egypt is an oil and natural gas producer of some size.\u00a0 But this is definitively not the case.\u00a0 Egypt is a net importer of food.\u00a0 And so forth.\u00a0 So the reason that we care about this country geopolitically is because of its geographic location and because its government is secular and allied to the United States.\u00a0 Which brings me to the rest of the discussion.<\/p>\n
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As the revolution unfolded Egypt stood as one of the United States’ oldest allies in the region.\u00a0 Dating back to the regime of Anwar el Sadat over 30 years ago Egypt could be relied upon to support the United States in the region.\u00a0 A problem with Iran?\u00a0 Egypt was there to help.\u00a0 A problem with Libya?\u00a0 Egypt was helpful.\u00a0 A problem with the Palestinians in the Gaza Strip?\u00a0 Ditto that.\u00a0 This loyalty was the choice of Egypt’s President Hosni Mubarak.<\/p>\n
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Was Hosni Mubarak a tyrant toward his people?\u00a0 No.\u00a0 Was he a tyrant to some of his people?\u00a0 Yes.\u00a0 Which ones?\u00a0 Primarily the radicalized, more Islamist elements of his population.\u00a0 Did Mubarak do everything he could to help his people domestically?\u00a0 Definitely not.\u00a0 But the United States’ interest in Egypt is not in its domestic politics, it is in Egypt’s ability to anchor North Africa as a bolster against nations less sympathetic the United States.<\/p>\n
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Unquestionably the United States’ perfect scenario with Egypt, as it is with all nations in the world, is that they have functioning, effective democracy and see the United States as a nation to build accord with and to be allied with.\u00a0 But we don’t live in a perfect world.\u00a0 So the United States has taken what Egypt and its Presidency has been willing to give it.\u00a0 The collaboration with Egypt has mostly brought peace to the Middle East vis-a-vis Israel.<\/p>\n
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So as the revolution began to unfold and it was uncertain as to whether or not Mubarak would survive the protests the United States and Barack Obama had all of this to consider.<\/p>\n
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With this background established I am going to discuss various scenarios, some of which we know now are not going to occur.\u00a0 Nonetheless they need to be discussed so that Barack Obama’s, and the United States’ position is more obvious.<\/p>\n
<\/p>\n
1.\u00a0 Mubarak survives the protests.\u00a0 The opposition loses.<\/p>\n
a)\u00a0 The United States supported Mubarak.<\/p>\n
1.\u00a0 Mubarak is pleased that the ally he has long supported lent support to his regime in his time of need.\u00a0 Therefore Mubarak is more loyal to the United States.<\/p>\n
2.\u00a0 The opposition forces inside of Egypt, who are ideologically very different than the United States, are deeply upset by the United States supporting a de facto dictator.\u00a0 They do not forget the slight and the rage of the opposition toward the United States increases.<\/p>\n
3.\u00a0 Muslim nations in the region are extraordinarily upset with the hypocrisy of the United States.\u00a0 On one hand they support democracy, but only if those that win the elections are allied to the United States.\u00a0 Nations in the Middle East use the supposed hypocrisy of the United States against it amongst their own populations.\u00a0 That is, the nations of the Middle East have a vested interest in the United States being the Great Satan because then the populations of these nations don’t focus on their own domestic oppressors, but instead on the U.S.<\/p>\n
Net result: Neutral.\u00a0 The U.S. maintains its ally, but the ally, Hosni Mubarak has a more fractured nation to govern.<\/p>\n
b)\u00a0 The United States supported the opposition.<\/p>\n
1.\u00a0 Mubarak no longer trusts the United States and it has either lost one of its strongest allies in the region – the most strategic on the planet – or it takes many years to rebuild the trust of the Mubarak regime (including the original most-likely-to-succeed-the-king, Mubarak’s son).<\/p>\n
2.\u00a0 The opposition inside of Egypt appreciates the United States’ efforts.\u00a0 But the appreciation does not mean that the ideologies of the opposition and the United States pull closer together.\u00a0 Not only that, but there could be a criticism from the opposition that the United States didn’t do enough to support the opposition.<\/p>\n
3.\u00a0 Nations in the Middle East have the same concerns about the U.S. that the opposition above does.\u00a0 And they continue to use the United States as the bogeyman to distract their populations.<\/p>\n
Net result: Bad.\u00a0 The U.S. has lost its most valuable Arabic ally; the opposition may like the U.S. better, but ideological differences remain; and the other nations of the Middle East still use the U.S. as the bogeyman.<\/p>\n
<\/p>\n
2.\u00a0 Mubarak doesn’t survive the protests.\u00a0 The opposition wins.<\/p>\n
a)\u00a0 The United States supported Mubarak.<\/p>\n
1.\u00a0 Mubarak is grateful, but who cares?\u00a0 He takes his estimated family fortune of $70 billion and lives out his last few years very comfortably.\u00a0 Perhaps supporters of Mubarak’s try and reinsert themselves into Egypt at some point in the future and they are grateful to the United States.\u00a0 Either way, the United States has lost its ally.<\/p>\n
2.\u00a0 The opposition is outraged.\u00a0 The rest of the world is outraged at U.S. hypocrisy.\u00a0 The U.S. has only Israel as an ally in the Middle East – the most strategic region in the world.\u00a0 Further, its possible that the opposition, which is ideologically very different from the U.S., actively thwarts and undermines the United States for many generations.<\/p>\n
3.\u00a0 Nations in the Middle East are outraged that the U.S. took an anti-Muslim position against the opposition forces of Egypt.\u00a0 Meanwhile, these governments use the situation as an excuse to clamp down on their ‘extremist’ elements all the while blaming the United States for the region’s problems.<\/p>\n
Net result: bad for the United States.<\/p>\n
b)\u00a0 The United States supported the opposition.<\/p>\n
1.\u00a0 Mubarak is extremely upset.\u00a0 Who cares?\u00a0 He can live out his days in exile.\u00a0 However, it could be that the supporters of Mubarak within and without Egypt are embittered.\u00a0 These folks may actively try and undermine the new Egyptian regime for generations to come.<\/p>\n
2.\u00a0 The opposition is delighted.\u00a0 Now they can hold democratic elections if they want.\u00a0 But what if they don’t want to hold democratic elections.\u00a0 What if the only organized opposition force in Egypt, the Muslim Brotherhood, outlawed for over 60 years, instead seizes power for themselves exclusively?\u00a0 The Muslim Brotherhood has seeded much of the Islamist militancy throughout the Middle East.\u00a0 Furthermore, the U.S. and the rest of the Western world supported the “democratic” protesters in Iran in 1979 against their long-term ally, the Shah of Iran, only to have the extremely conservative religious leaders, who were united and organized, take over Iran.\u00a0 To this day Iran is one of the most powerful nations in the Middle East and diametrically opposed to U.S. interests.\u00a0 This could happen in Egypt, too.<\/p>\n
3.\u00a0 The nations of the Middle East are outraged at U.S. meddling.\u00a0 In fact, if you take a look at Middle Eastern news sources from al Jazeera<\/a> to al Bawaba<\/a> on any random day throughout the crisis, various pundits have been accusing the U.S. of a coup, a revolution, of manipulation of the outcome, of a furtherance of the American empire.\u00a0 Those nations generally neutral to the United States (like Jordan and Saudi Arabia) see how the U.S. dealt with an embattled ally, Mubarak.\u00a0 In the future, their interactions with the U.S. are more tense.<\/p>\n Net: Neutral.\u00a0 The U.S. may have a grateful Muslim Brotherhood in Egypt, but their ideology is not a close fit with U.S. views.\u00a0 Furthermore, other nations suspect the U.S. may abandon them at any time.<\/p>\n Under every single one of these scenarios the U.S. at best finishes with a neutral outcome.\u00a0 Yet, many people are outraged at Barack Obama’s “indecisiveness.”\u00a0 The U.S. President is between a rock and a hard place: damned if he does, and damned if he doesn’t.\u00a0 By my reasoning, the U.S. President is responding in the only way that makes sense, especially given how in flux the revolution in Egypt really is at this moment.<\/p>\n <\/p>\n Those of you who might be opposed to Obama’s position, let me ask you this.\u00a0 Before the crisis unfolded would you have supported a covert war on the part of the U.S. to undermine the nearly unanimous dictatorships throughout the Middle East even if that meant thousands of collateral civilian deaths?\u00a0 Probably not.\u00a0 But then who should the U.S. deal with in the Middle East who is palatable to your political predilections?\u00a0 There are no democracies in the Middle East other than Israel’s democracy.<\/p>\n <\/p>\n My problem with the various points of view critical of Obama (on both the left and right) throughout this crisis is that they are invoking archetypes to make their arguments.\u00a0 On the left we have sympathy for the “democratic protesters.”\u00a0 But just because they are opposed to a dictator doesn’t make them democratic.\u00a0 It just means that they want power that they don’t have already.\u00a0 On the right we have sympathy for our “long-term ally” and “friend.”\u00a0 But Hosni Mubarak is not a gentle, understanding, “friend.”<\/p>\n <\/p>\n So as rational and also intuitive investors, we are in the same position as the U.S. President, Barack Obama.\u00a0 We are awaiting an outcome, all the while hoping that it will be favorable for our position.\u00a0 Any other point of view seems na\u00efve to me.<\/p>\n <\/p>\n Jason<\/p>\n","protected":false},"excerpt":{"rendered":" There has been nearly unanimous criticism of U.S. President Barack Obama’s handling of the revolution in Egypt.\u00a0 However, I think a real reckoning of the situation reveals that the situation is enormously complex and any action requires careful consideration. Therefore, I would like to point out the various complexities, not to defend Barack Obama, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-3447","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/3447","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=3447"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/3447\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=3447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=3447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=3447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}