Egypt matters for one reason — the Suez Canal. The Suez Canal carries 10% of world trade and 4.5% of world oil production. Shut down the Canal and the world economy takes a tumble. Right now, the world economy can’t handle such an exogenous shock. The global economy would sink back into recession and the fiscal crisis would re-ignite. Governments would default in Europe. States would declare insolvency in the United States. Food prices and energy would sky rocket in the emerging markets. Stock markets will collapse. A wave of political upheaval would sweep the Mideast and then the world.
Hosni Mubarak should not step down and flee Egypt like Ben Ali did in Tunisia. If he does, the Egypt unrest will immediately radicalize. Witness today’s jail break of Muslim militants by armed men.
To prevent bloodshed and protect his legacy, Mubarak needs to declare a transition to democracy and free elections under United Nations supervision. Otherwise the Muslim Brotherhood will control of Egypt and the Suez Canal within a few months. The Muslim Brotherhood is the only well-organized opposition group in Egypt and they will have no qualms about using unbounded violence to seize and hold power.
With the Muslim Brotherhood in power, they will have access to the huge arsenal of weapons that the United States has provided Egypt over the past thirty years. Sources on the Internet estimate that the US has provided $50 billion of military aid since 1978. For example, The Egyptian Air Force has 438 aircraft and 155 armed helicopters, according to Wikipedia; 220 of these aircraft are F-16’s.
The United States has also sold the Egyptian 700 M-60A1 main battle tanks and 500 Hellfire anti-tank missiles as part of the First Gulf War.
With such an arsenal and a huge population, seizing and securing the Suez Canal to protect world trade will involve a major war. Such a conflict will involve destruction and bloodshed of historic dimensions as Islamic fundamentalists and Al-Queda gain access to real firepower and battle the international community and try the wreck the global economy. The weakness in the stock market on Friday as the unrest in Egypt began will look tame.
Consequently and immediately, with the support of the international community and the full military backing of the United States, Mubarak needs to declare a transition to democracy. This transition needs to be supervised by the United Nations and will take years to accomplish given the radical elements in Egyptian society. Hillary Clinton should invoke the lessons of Germany and Japan after World War II while explaining what needs to be done to a global audience and the world media. She should declare that democratic transitions take at least 10 years to take hold so a long-term occupation of Egypt by UN Peacekeepers is mandatory. She should declare that step one of this democratization process is for Mubarak to renounce his candidacy and the candidacy of his son or family in any future free election. Step two would be a constitutional convention sanctioned by the United Nations – that will take at least one year to organize. Step two would be free local elections – that will take another three years. Step three is free national elections – that will take at least four years.
During the transition, the resistance of the military, bureaucracy and judiciary cannot be under estimated. These institutions will resist change because it will undermine their privileges. To counterbalance these institutions, United Nations will need to stay involved for a long time.
The alternative is a Second Suez Crisis, bloodshed, political turmoil and economic recession. If the United Nations won’t step in then the United States will have to form a ‘Coalition of those with a Vested Interest’ and secure the Canal.
By the way, Dr. Zahi Hawass’, Egypt’s Secretary General of the Supreme Council of Antiquities, idea of returning the Thutmosis III obelisk in Central Park to Egypt does sound so great this week. Mayor Bloomberg bring that obelisk inside and protect it from the weather. It would be a major addition to the Metropolitan Museum’s Egyptian collection. And it is just one block away.