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Egypt: Sadt's Domestic Position

PretNIO IIM 76.025June 1976

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June 1, 1976

EGYPT: SADAT'S. DOMESTIC POSITION*

MAJOR JUDGMENTS

Though Egyptian President Sadat remains in con-

trol, there are grounds for concern about the strength

of his domestic position. Reports from a variety of

sources over the past several months have conveyed a

mixed picture of the stability of his regime and the

degree of support for his leadership.

On one hand, Sadat appears to enjoy widespread

popular backing and senior Egyptian officials respon-

sible for security have expressed confidence that the

regime can handle any subversive elements, civilian

or military.

The military establishment appears to be loyal

and continues to provide the main underpinning for

Sadat's regime. As long as it backs him, he can

probably remain in power. Yet the officer corps is

not immune from the influence of the activities of

leftist elements, the resurgence of rightists of the

* This memorandum was prepared under the auspices ofthe National Intelligence Officer for the Middle East.It was drafted by State/INR andwas coordinated at the working level among CIA, DIA,NSA, State/INR, Treasury, and intelligence organiza-tions of the Armed Services. Review of the draft andprovision of helpful comments by the US mission inCairo are also gratefully acknowledged.

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Moslem Brotherhood, the continued appeal of Nasserism,

the alienation of its Soviet arms supplier, and the

impact of economic stagnation and inflationary pressure

on the urban poor and working classes. Should Sadat's

principal Arab rivals collaborate with the Soviets in

a common front against him, his position could be

severely shaken. This coalition, however, could not

topple him from power as long as the Egyptian armed

forces remained behind him.

At the same time,

he is genuinely popular and has no visi-

ble rival who could hope to command the broad spectrum

of support that he currently .enjoys. He still controls

the nation's sole political party and the parliament;

his internal security services have a,reputation for

efficiency in ferreting out coup plotters.

On balance, short of an assassin's bullet, or

another heart attack, we see no immediate threat to

Sadat. There are, however, some disturbing trends

which eventually may raise serious problems for the

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DISCUSSION

Introduction

1. The central role that Egypt plays in the processof achieving a just and lasting peace in the Middle Eastputs a premium on the continuing stability of PresidentSadat's regime. On the surface, his government enjoyswidespread domestic support, and his popularity remainshigh. Yet the regime is faced with inadequate economicgrowth, inflationary pressures on lower and middle incomegroups, and the prospects of more serious economic dis-location as economic liberalization gets underway. Theregime also faced the deterioration of Egypt's militarycapability resulting from Sadat's alienation of the So-viets, the revival of whatEgyptians term the communistmovement, and, perhaps more ominous over the longer term,the resurgence of the right-wing Moslem Brotherhood.

2. In looking at Egypt's domestic scene, it is wellto bear in mind that, despite its relatively large popu-lation (roughly 35 million), only a small percentageof Egyptians have any influence over the course of events.These include the professionals, intellectuals, bureau-crats, politicians,'labor and religious leaders, and mostimportantly the military. Egypt's Coptic Christians,numbering between four and five million, its ruralpeasantry in the Nile Delta and upper Egypt, numberingaround 17 million, and much of its urban poor, probablynumbering 10 million or so, count for little in termsof political power.

3. Of Egypt's institutions, the most important isthe military establishment which provides the underpinningof Sadat's regime and was the vehicle for late PresidentNasser's rise to power. Other politically importantinstitutions include the.Arab Socialist Union (ASU),which is Egypt's sole legitimate political party, theswollen bureaucracy, the Moslem religious leadership,the universities, and the communications media. Thelabor unions and the parliament have not yet developedsignificant, independent political clout, but there aresigns that both may be beginning to do so.

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Official Confidence

4. The leaders of the Egyptian security forcesseem confident of their ability to control dissidence:

-- ,In early May, statedthat the morale of the armed torces was good,that they are considered totally reliable,and that the impact of shortages of spareparts had been blunted by efforts to acquireparts and new equipment from other sources.Although there were some troubling problemswith inflation and the cost of living, hepointed out that the officers still did con-siderably better than their civilian counter-parts.

assure Ambassador Eits a the governmenthad identified domesti agitators and coulddeal with them. J conceded, however, thatthe new five-year austerity program thatSadat called for in his speech onAMarch 14might prompt some disturbances ore-saw the trade union elections this summer asthe next danger point.

Reported Dissidence

5. Despite these assertions that all is well, in-telligence reports in recent months suggest that problemsremain. in lateMarch, for example, that Egypt s arme forces were en-countering significant morale and logistical problems.

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-- Officers were growing resentful because ofreductions in weapons supplies, in theirpolitical power, and in the perquisitesthat they had enjoyed under Nasser.

-- Because the withdrawal of Soviet techni-cians has left the army with major main-tenance problems which Chinese and Yugo-slav assistance cannot solve, officersfeared that the armed forces would be un-able to play more than a defensive rolein the future.

6. Similar concerns had been reflected in otherreports of dissidence within Egypt's armed forces.

-- On March30

there had been unrestamong Egyptian air force and army person-nel at several bases about two weeksearlier in opposition to Sadat's policiesand his "betrayal" of the Arab cause.Elements of Egypt's Second and ThirdArmies reportedly had been moved backfrom the Canal Zone, where some of thealleged troubles had occurred, in orderto preclude the spreading of anti-regimesentiment.

there had "re-cently" been rio ing in the air force andarmy and that 50 officers from both ser-vices had been arrested in two incidents.The reasons given for the rioting were"low morale" caused by Sadat's "no-war-no-peace" posture, his alienation of Moscowand the concomitant deterioration of Egypt'smilitary capabilities, the failure of mili-tary salaries to keep pace with the risingcost of living, and the displacement of themilitary from first to last place in thegovernment as a result of the "sell-out" tothe civilians.

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7. Although these reports of unrest in the armedforces cannot be confirmed, it is likely that the mili-tary establishment does face morale problems.. ThatSadat is aware of these dangers is suggested by thefanfare surrounding recent attempts to secure armsfrom non-Soviet sources and by recent efforts, atForeign Minister Fahmi's urging, to prevent the furtherdeterioration of Cairo's relations with Moscow. While.Sadat probably hopes to acquire Soviet arms throughthird countries, his personal phobia against the So-viets continue unabated.

8. Following his abrogation of the Soviet-Egyptianfriendship treaty in mid-March, Sadat had extended to10 days a scheduled four-day visit to the 'troops in theCanal area. His addresses to various units there weredesigned to raise morale by praising the military fortheir heroism in the 1973 fighting and by promisingthat he would make a maximum effort to replace theirSoviet equipment.

Other Potential Trouble Spots

9. Although the military is the ultimate guardianof Sadat's regime, other elements of Egyptian societycould undermine his position, including his standingamong the military.

The Right

10. Egyptian society is basically conservative.Rightist elements historically have been powerful; forexample, it was only with great difficulty that Nassersucceeded in suppressing the main political arm ofconservative Moslems, the Moslem Brotherhood (Ikhwan).The abortive putsch at the Cairo military cadet academyin 1974, it should be remembered, was led by a putativeIslamic zealot who mobilized middle class youth. TheMoslem Brotherhood seems recently to have grown ininfluence, especially in the military and in governmentagencies. Supported by money (and arms as well) fromLibya, its long-term aim is to exploit the shortcomingsof Sadat's regime.

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11. The Brotherhood has traditionally derived mostof its strength from families of merchants and shop-keepers and from the peasantry, but it also includesmany-intellectuals. Xenophobic in outlook, its aimhas long been to combine a fundamentalist Islamicpolitical system with modern social reforms.

12. Last March, senior Egyptian security officers

had doubts about the dependability of the army forac ion against the Brotherhood, particularly if thearmy were called on to suppress rioting in populationcenters. The officers commented that, for the firsttime since Nasser executed the Brotherhood's leaders in1954, the movement now has as its head a viable publicfigure, Kamal al-Din Husayn, who has a power base.

13. Kamal al-Din Husayn is a former Vice Presidentand Free Officer (the Nasser-led group that overthrewKing Farouq in 1952).he is the present leader of the secretive military wingof the Brotherhood. Another prominent member of thatwing is Husayn al-Shafi'i, one of the few, along withSadat and Kamal al-Din Husayn, surviving members ofNasser's Revolutionary Command Council (Sadat dismissedShafi'i ingloriously from his.position as Vice Presidenta year ago). Of the two Brotherhood leaders, the 54-year old Kamal al-Din Husayn probably represents thegreater potential threat to Sadat's leadership.

14. Sadat's regime has sought to capitalize onthe reservoir of Islamic sentiment in Egypt by en-couraging Muslim leaders to carry out propaganda attackson Egyptian leftists and to seek to counter leftist in-fluence among students. The government-orchestratedcall for a return to Islamic values is a two-edgedsword, however, since a "back-to-the mosque" movementrisks arousing public denunciation of the secular as-pects of Sadat's social, political, and economic "opendoor" policies.

-- On May 12, the US Embassy in Cairo notedthat a new conservative ground swell inEgypt was generating support for the Is-lamization of the nation's juridical struc-ture. The Embassy opined that the recentincrease in self-confidence among religious

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elements was the price the government wouldhave to pay for seeking to use them in com-bating leftist political views.

-- On April 6, People's Assembly Speaker Mar:'i,a Sadat in-law, told the People's Assemblythat six communist students from a secularuniversity had gone to Cairo's al-AzharUniversity (the Islamic world's premieruniversity) to encourage students to marchon the Assembly to demand abrogation of theconstitution and the substitution for it ofthe Islamic legal system (the Shari'a). Mar'iwarned that the leftists were endeavoring toachieve their ends by exploiting "religiousquestions."

13. Despite Sadat's overtures to conservative ele-ments, his chosen vehicle for the expression of conserva-tive views is off to a slow start. In March, Sadatannounced that three political forums (minbar) wouldbe set up within the framework of the Arab SocialistUnion. One of these forums, the Liberal Socialists'Organization, headed by MnsaaMrd is the designa-ted conservative faction.

is forum ishaving d icu y a tracting ASU members. Even Murad'sparliamentary supporters have been reluctant to joinhis group. They apparently believe that their interestswill be better served by joining the centrist forum,the Arab Socialist Organization (ASO), headed by PrimeMinister Salem, which includes most of the governmentestablishment.

The Left

14. Extreme leftists -- old-line communists andassorted Marxists -- are few and could not by themselvesmount a coup. Communists in Egypt are pariahs to all butthe relatively small intellectual class and some laborand student elements. Their atheism is an ineradicableblemish on their ability to create a mass movement, unlessthey disguise their true colors. The security apparatus

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closely monitors the illegal but recently revivedEgyptian Communist Party and what local securityofficials call the Egyptian communist movement.*Sadat jailed his main pro-Soviet rivals in 1971and has kept most other prominent leftists on ashort leash. Nevertheless, Marxists and other left-ists are influential in the communications mediaand among university students.

15. The third and last forum which Sadatauthorized in March is the Progressive NationalUnionist Organization (PNUO). Sadat asked an eminent,

id Muhi al-Din to head the PNUO.the major

reason for creating the forum was to lure he leftistopposition into the open.

16. Assembly Speaker Mari told visiting Ameri-can dignitaries in mid-April that many leftists under-stand Sadat's strategy and, as a result, have joinedthe centrist ASO forum to avoid showing their hand.Mar'i accused the Soviets of trying to turn the PNUOinto an effective campaign organization for Moscow'spropaganda purposes by providing money and equipment.

17. Senior Egvotian security officials,do not consider the

PNUO as a serious threat to the government in the nearfuture. Even though there are a number of so-calledcommunists in the PNUO secretariat, these officialsbelieve that infighting among the political oppor-tunists who comprise the bulk of the PNUO's membershipwill keep the organization from ever becoming effective.

18. The main danger from the leftists is that theycan agitate among pro-Soviet elements in the militaryand among students, workers, the urban poor and thedisgruntled middle class. A major objective of theleftists, as the government is well aware, is to iden-tify or create issues on which they can join forceswith the rightists, who are more numerous, in opposi-tion to Sadat.

* It should be noted that Egyptian security authoritiesare often imprecise in distinguishing among leftistfactions, frequently interchanging the terms "Marxists,""leftists," and "communists."

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Nasserists

19. Most Egyptian politicians, including Sadat,proclaim that they are Nasserists, i.e., followers ofGamal Abdul Nasser and his revolution. Many "orthodox"Nasserists, however, charge that Sadat has betrayedNasser's ideals of Arab unity and Arab socialism.

-- They regard the Sinai II accord with Israelas evidence of Sadat's disloyalty to Pan-Arabism.

-- They view his opening of Egypt to foreignprivate investment as a deviation from theproper socialist path.

20. These orthodox Nasserists, largely but not en-tirely leftist, are particularly strong among workersand journalists and in the universities and the bureau-cracy, and are also represented in the military. KamalAhmad, a member of the ASU Central Committee and a here-tofore little known representative in the ASU of Alexan-dria's yeast workers, has received considerable mediaattention since the end of March as the leading spokes-man for Nasserists.

21. Ahmad has maneuvered, thus far unsuccessfully,to gain control of the PNUO from Khalid Muhi al-Din inorder to give orthodox Nasserists a forum of their own;Sadat has refused to countenance the formation of afourth, explicitly Nasserist forum on grounds that allEgyptians are Nasserists.

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24.

Partly because o Nasseristobjections, or examp e, adat decided against substitu-ting a multi,-party system for the ASU. Instead, hesought the middle ground through the establishment ofthe three "forums." Moreover, when prominent right-wing Egyptian journalists attacked Nasser's memorylast winter, Sadat felt constrained to rebuke them pu-blicly.

25. Despite the fertile field that Nasserist senti-ment offers to Libyan and Soviet provocateurs, Sadatprobably can continue to manipulate and mollify mostNasserists who lack cohesive unity and leadership.

26. Nasserists and the Elections. Egypt will holdparliamentary elections in October. Campaigning wouldnormally begin in early July after the end of the currentsession of the People's Assembly. However, thanks tothe energy of the leftists, especially Kamal Ahmad'sNasserists, the campaign is already well under way.Establishment politicians who had planned to be on va-cation in August are now getting nervous. They believethat Nasserism remains the natural tool of Sadat'st op-ponents.

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27. Sadat, who is elected by the Assembly subjectto ratification by a national plebiscite, has not yetaccepted the parliament's nomination for a second six-year term beginning in October. There seems littledoubt that he will run again and win.

28. There is general agreement that the economywill be the major election issue. Newspaper editorsof both the right and left claim that the Nasseristdemand for junking the "open door" and returning toNasser's "socialist path" will compound Egypt'seconomic problems. On the other hand, they believethat much of the Nasserists' appeal will be bluntedbecause there is widespread revulsion against themost flagrant abuses of governmental authority underNasser. There is also a feeling of relief that Sadathas permitted freedom of expression to flourish.

Labor

29. Egypt's trade unions were tamed under Nasserand have remained docile. Nasserism,. however, is astrong force in the labor movement, and there are indi-cations that the urban poor and industrial workers areimpatient with hardships caused by the inflation sincethe 1973 war and fearful lest Sadat's rejuvenation ofEgypt's private sector jeopardize the benefits of Arabsocialism. Labor union elections tentatively scheduledfor June and July should reveal more about the attitudesof this sector.

Youth

30. Egypt's universities have traditionally beenfocal points of unrest. Even in Nasser's days, someof the worst disturbances originated on, or quicklyspread to the campuses. Leftists and rightists areboth vying for influence among the students. Sadatrecognizes the importance of the universities and canbe expected to continue to head off or suppress dissi-dence from this source.

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The Bureaucracy

31. Egypt has a huge, unwieldy bureaucracy, largelya legacy of Nasser, who guaranteed that every universityand technical school graduate -- and there are tens ofthousands of them each year -- could have a governmentjob if no other were available. The swollen bureaucracyhas thwarted Sadat's efforts to promote Western invest-ment, not only through inertia and red tape, but alsothrough deliberate obstructionism by those bureaucratswho fear that Sadat's policies will cost them their jobsor who are ideologically opposed to Sadat's policies.

Rivalries within Sadat's Entourage

32. The rivalries and personality clashes thatexist within the inner circle surrounding Sadat serveto inhibit anyone close to him from challenging hisleadership: On the other hand, the feuding andjealousies have also contributed to Sadat's isolationfrom a continuing flow of information about what isgoing on in all vital sectors of Egypt's economicand political life. The lack of timely and reliableinformation could -- especially in a crisis -- jeo-pardize Sadat's ability to control and manipulate thereins of power.

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Egypt's Economic Situation

34. Egypt's economic plight is serious. It has alarge and expanding population that it cannot feed with-out foreign aid. The economy is sluggish with an annualgrowth rate of less than five percent. Egypt is miredin debt and-lacks sufficient foreign exchange to serviceits external obligations and to finance necessary im-ports for consumption and for development projects.

35. Since the 1973 war, the overall cost of livinghas risen sharply:

-- Increases of 35 percent for lower and mid-dle-income groups included a 69 percentjump in food costs alone, an especiallyheavy burden for the poor.

-- Incomes of most Egyptians have remainedrelatively stable since 1973, thus lower-ing their standard of living. Domesticinflation, coupled with conspicuous con-sumption by wealthy and well-connectedEgyptians (including members of Sadat'sentourage who are widely suspected ofcorruption) and by foreign Arab touristsand investors, has prompted considerablegrumbling among many less fortunatecitizens, civilian and military alike.

36. The government continues to subsidize certainbasic commodities, such as bread, tea, rice, and cottoncloth, but frequent shortages of some staples haveundercut the subsidy program and added to the discon-tent. The government now finds itself under heavypressure from foreign and international lenders torationalize its expenditures by terminating mostsubsidies and taking other unpopular steps. Sadat iswell: aware of the political impact of eliminating thesubsidies on basic items and will seek to limit theeffect of his austerity program on the masses whocan ill afford further belt-tightening.

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37. Sadat's efforts to secure private foreign in-vestment, part of his "open door" policy, have bornelittle fruit. Although the prospect of joining Arabmoney, Western technology, and Egyptian skills hasattracted considerable interest, actual investment hasbeen deterred by bureaucratic lethargy and the quagmireof conflicting regulations that partial liberalizationhas created in Egypt. Bureaucratic problems have alsoslowed drawdown of project aid and of lines of creditavailable to joint investment and construction firmsformed by Egypt with OPEC partners.

38. These problems leave Cairo heavily reliant onan uncertain flow of cash aid from OPEC sources. Be-cause of their desire to keep Sadat in power, conserva-tive OPEC countries, especially Saudi Arabia, havebeen generous.. Thus far, however, their aid has beenmainly disbursed on an ad hoc basis to avert financialcrisis -- a practice that has increased uncertainty andimpeded economic planning in Egypt.

39. A number of misgivings have prevented otherArabs from underwriting the Egyptian economy on a long-term basis. The Saudis in particular are apprehensiveabout Egyptian financial shenanigans and have warnedrepeatedly that a long-term commitment is dependent onthe institution of financial controls, preferably underthe supervision of a consortium or a multilateral agency.At the same time Arab donors are somewhat reluctantto finance the buildup of Egypt's industrial and mili-tary strength to a point where Egypt, under a more radi-cal successor government, could dominate the area mili-tarily. The most serious deterrent to increased sub-sidies may be the suspicion since signature of Sinai IIthat Cairo can.no longer be relied upon to pursue the"battle" against Israel alongside other confrontationstates.

The External Dimension of Sadat's Domestic Position

40. Sadat's domestic position depends to a considera-ble extent on his international and intra-Arab stature.Signing the second Sinai agreement diminished perceptiblySadat's position in the Arab world. Though some Arab

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leaders have acquiesced in this action, no Arab leaderexcept Sudan's Numayri has openly supported it.

Sadat is also aware that his recenttour o the ra ian Peninsula was only moderately suc-cessful in economic and political terms because mostPeninsula leaders had misgivings about Egypt's abilityto use effectively the funds they have provided andabout his Middle East negotiating strategy. He did,however, get considerable military aid funds.

41. The relative isolation of Egypt, which haslong been accustomed to a leadership role in Arabcircles, tends to undercut Sadat's position at home.Libyan strongman Qadhafi, avowed enemy of Sadat, hassought to take up Nasser's pan-Arabic mantle. Qadhafi'sagents, rather than Cairo, now control many LebaneseNasserists, for example, and are doubtless encouragingsubversion among both religious conservatives and dis-gruntled Egyptian Nasserists who are disheartened bythe decline of Egypt's prestige in the Arab world.

42. Following the abrogation of the friendshiptreaty, Soviet propaganda was quick to try to stir upanti-Sadat sentiments among Egyptians, accusing Sadat ofbreaking ranks with his -Arab brethren and the Nasseristtradition at Washington's behest. Although Moscow isapparently making efforts among the military to promotesubversion against Sadat, its potential for success islimited. Should Sadat's principal Arab rivals collaboratewith the Soviets in a common front against him, hisposition could be severely shaken. This coalition,however, could not topple him from power as long asthe Egyptian armed forces remained loyal.

Sadat's.Assets

43. Sadat has substantial assets in coping withthese formidable-challenges.

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-- His genuine popularity, although economicproblems have tarnished the lustre heacquired from the 1973 war: His "Egypt-first" reputation has struck a responsivechord among many of his fellow countrymen,who have long felt that Egypt has carriedtoo much of the burden of the Arab-Israeliconflict and Nasser's adventurism. Hisexpulsion of Soviet military advisers in1972 and the termination of the friendshiptreaty in March 1976 have also been popularwith the people at large.

-- His ability to garner US and other externalsupport which vindicates, to a degree, hisforeign policy in Egyptian eyes. On theother hand, his Western connections heightenthe expectations of many Egyptians far beyondSadat's ability to fulfill them.

-- The support of bourgeois elements of Egyptiansociety: These elements are still numerousdespite suppression under Nasser, and havelauded Sadat's policies of opening Egypt'sdoors to foreign investments and goods and ofproviding wider scope for cultural interchangewith the West. Egypt's bourgeoisie has longhad a cultural affinity with the West andresented Nasser's socialism and closed 'society.

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-- The lessened threat of war: Many youngEgyptians are delighted that Sadat'spolicies since 1973 have reduced some-what the danger of renewed fighting andthus the likelihood of their indnctininto.

-- The absence of an identifiable alternativeto Sadat among his political opponents:They all lack the broad appeal he enjoys.Loyal followers control the ASU and thePeople's Assembly, and we believe that thetop echelon of the military establishmentstill supports him, despite some misgivingsabout the effects of Sadat's policies onthe capabilities of the armed forces. Hedoes not permit ambitious insiders to acquirean independent power base.

-- Sadat's sense of mission: He has a vision ofwhat he wants Egypt to become and a strategyfor achieving his goals, both in the Arab-Israeli context and in th A w at

-- Since about January, the rapprochement betweenEgypt and the Palestine Liberation Organiza-tion has been gaining momentum. Although this

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development is largely a factor of their re-ciprocal rivalry with Syria, any warming ofrelations between Sadat and the Palestinianresistance movement benefits Sadat. He canill afford the opposition of Palestinianstudents in Egypt, or Palestinian activistsabroad.

Summing Up

44. Despite numerous warning signals, Sadat's r -

ime does not seem to be in immediate dancor

45. Of course, the possibility of assassinationor physical collapse is always present. If anything

- should happen suddenly to Sadat, the stage coudbset for radical and rapid change.|

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