COLUMN-Mursi's folly

Nov 25 (Reuters) - After helping end the fighting in Gaza,

impressing President Barack Obama and negotiating a $4.8 billion

loan from the International Monetary Fund, Egyptian President

Mohamed Mursi has fallen victim to what Bill Clinton calls

"brass."

Mursi's hubristic post-Gaza power grab on Thursday was

politically tone deaf, strategic folly and classic over-reach.

It will deepen Egypt's political polarization, scare off

desperately needed foreign investment and squander Egypt's

rising credibility in the region and the world.

Television images of renewed clashes in Cairo, Alexandria,

Port Said and Suez will play into stereotypes that the Middle

East is not ready for democracy. They will bolster suspicions

inside and outside Egypt that the Muslim Brotherhood cannot be

trusted.

I disagree with the skeptics and believe democracy can still

be established in Egypt. But Mursi's moves won't help Egypt make

the difficult transition.

"There was a disease but this is not the remedy," Hassan

Nafaa, a liberal political science professor and activist at

Cairo University, told Reuters Friday. "We are going towards

more polarization between the Islamist front on one hand and all

the others on the other. This is a dangerous situation."

An alarming dynamic is taking hold in Egypt. Power-grabs,

brinksmanship and walk-outs are becoming the norm, as a bitter

struggle plays out among newly empowered Islamists, vestiges of

the Mubarak regime and the country's deeply divided liberals.

Political paralysis is the result - with rule by presidential

decree, overreach by the judiciary and a deadlocked

constitutional assembly. As polarization deepens, desperately

needed economic, political and judicial reforms stall.

Friday's street protests were relatively small compared to

the massive Arab spring demonstrations.. But the trend is in the

wrong direction.

"President Morsi has used the nearly absolute authority he

assumed last August," Nathan Brown warned in an excellent

analysis for The Arabist, "to try to put that absolute authority

beyond reach, at least on a temporary basis. He may very well

succeed."

In a surprising triumph in August, Mursi abruptly ended the

Egyptian military's post-Mubarak rule of the country. After

apparently gaining the support of younger military officers,

Mursi forced older, pro-Mubarak officers, led by Field Marshall

Muhamad Hussein Tantawi, into retirement. Mursi then seized

sweeping powers.

In one positive sign, Mursi used his new authority

sparingly. Critics who feared an Islamist crackdown were proven

wrong. His boldest move was a failed October attempt to remove

the country's unpopular prosecutor general, a Mubarak holdover

widely criticized for mounting lenient prosecutions of Mubarak

and other former officials. When the prosecutor, Abdel Meguid

Mahmoud, refused to obey Mursi's order to resign, the new

president quickly backed down.

That restraint vanished on Thursday. Mursi removed the

unpopular prosecutor, opened the doors for a re-trial of Mubarak

and other officials and granted himself and the country's

constitutional assembly immunity from rulings by the country'

pro-Mubarak judiciary. Critics feared pro-Mubarak judges would

dissolve the constitutional assembly, just as they had dissolved

the country's first democratically elected parliament before

Mursi was elected president in June.

In a speech outside the presidential palace on Friday, Mursi

argued that he had seized sweeping powers to preserve the

transition to democracy. He promised that once full

constitutional democracy was established, he would relinquish

these powers.

"I am for all Egyptians," Mursi said, adding that he was

working for social and economic stability and the rotation of

power. "I will not be biased against any son of Egypt."

Unfortunately, we've seen this script before. It almost

always turns out badly. A destructive dynamic is taking hold in

Egypt. The poisonous distrust and conspiracy theories that have

handicapped the country's transition to democracy are deepening.

On Friday, a senior Brotherhood official scoffed at liberal

opposition leader Muhammed ElBaradei's calls for protests.

"We're not scared of ElBaradei," the official told

journalist Lauren E. Bohn, "he has no real support on street,

he's Western."

ElBaradei and members of country's liberal opposition have

their flaws. They are deeply divided, failed to build strong

political organizations and too quickly engaged in boycotts and

walk-outs.

Only Egyptians can change Egypt's political culture. The

international community, though, can and should clearly signal

its support for constitutional democracy and the rule-of law in

Egypt. The State Department issued a statement Friday calling on

all sides to peacefully resolve their differences. But the

quicker way to create pressure is through the IMF.

On Tuesday, officials from Egypt and the IMF announced a

tentative agreement to issue a $4.8 billion IMF loan to the

country's cash-strapped government. Egyptian officials agreed to

enact spending and tax reforms designed to reduce the country's

deficit, attract foreign investment and restore the economic

growth that vanished after Mubarak's fall.

IMF officials said the loan was part of a whopping $14.5

billion funding package planned for Egypt. They did not name the

donors but they are believed to include the Unites States, the

European Union, Saudi Arabia and Qatar. Final approval of the

$4.8 billion IMF agreement lies with the group's board, due to

meet on Dec. 19.

Washington, Brussels and the IMF should set benchmarks for

the disbursement of the aid, pegged to democratic reform being

implemented in Egypt. Fears of instability in Egypt or Gaza

should not prompt the international community to turn a blind

eye to Mursi's power-grab. All Egypt's key stakeholders -

whether Islamists or secular liberals - should be shown that

they will pay a price for anti-democratic excess.

We've funneled billions to Egyptian dictators before. The

results were grim: poverty, economic stagnation and deep

resentment of the United States. If Mursi - or any Egyptian

leader - flouts democracy, they should not receive billions in

American and international aid.

If Egyptians squander their chance for democracy, it's their

choice. Shame one us, though, if we lose our nerve and make the

strongman mistake twice.

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