Panel I: The Bush Administration and the Middle East : Redrawing the Political Map?

Fawzi Asmar: Thank you, Hisham. Our panel, as you know, it's about the Bush Administration and the Middle East, which is, I think, one of the most important issues for us. We have distinguished speakers. Hopefully they are going to take over and talk about these issues.

The first speaker will be Professor Fred Lawson. He is a professor of government at Mills College. He is going to talk about the Bush Administration and Syria, which is a very important issue, especially these days and especially after the vote yesterday or discussion yesterday at the House of Representatives about Syria. In fact, he published several books, and one of them which I think is important is about why Syria goes to war.

Fred Lawson: Fred H. Lawson is Professor of Government at Mills College. During 1992-93, he was Fulbright Lecturer in International Relations at the University of Aleppo; in the spring of 2001, he was Fulbright Lecturer in Political Science at Aden University. Among his published works are Bahrain: The Modernization of Autocracy (Westview Press, 1989) and Why Syria Goes to War (Cornell University Press, 1996). He is presently finishing a book-length study of the emergence of sovereign states in the modern Middle East.

Fred Lawson: The elimination of the Saddam Hussein regime in Iraq creates a major crisis for the regime of Bashar al-Assad in Syria. The crisis has at least four components to it. The first of the components of this crisis concerns Syria's relations with Iraq. Beginning in 1997, Damascus cultivated close economic relations with Iraq. This set of economic relations with Iraq was centered primarily on the transportation and refining of Iraqi oil. In late 1997/early 1998, the ancient pipeline that linked the northern Iraqi oil-producing areas around Mosul to the new Syrian port at Banyas was reopened and oil started flowing across Syria into the Mediterranean. There were even hints that the pipeline to the old refinery at Tripoli, in Lebanon, might be reopened as well and there might be a second set of pipelines across Syria from Iraq. This opening up of the pipelines across Syria enabled Syria to use Iraqi oil for domestic purposes inside Syria, and this freed up then the shrinking pool of Syrian oil for export overseas. The Syrian government was then able to sell its own petroleum on foreign markets to generate hard currency and to generate revenues for the Syrian government and for the Syrian economy in general.

Almost every schoolchild knows these days, thanks to the New York Times, about the oil flow across Syria. The oil flow is certainly something that we're aware of. We need also to remember that the economic relationship, however, between Syria and Iraq also involved the expansion of trade in food and in a wide range of manufactured goods as well. Some of these exchanges were undertaken under the auspices of the United Nations Oil-for-Food Program, and in this way the trade in Syrian manufactured goods was linked up with the oil trade and oil markets in general. But the rest of these goods were paid for directly by Iraqi consumers. So Syrian business people and Syrian brokers moved back and forth in increasing numbers, with increasing frequency, as the new century came to a beginning.

The burgeoning economic relations between Syria and Iraq produced three notable benefits for Syria, it seems to me. First of all, the growing economic connections with Iraq enabled the Syrian regime to postpone making reforms in Syria's banking sector. Syria's banks remained locked in the sort of structure and the sort of arrangement they had been since the early 1960s, thanks to the new revenues and new resources flowing into the country. Second, relations with Iraq propped up many of Syria's stumbling, outdated public sector enterprises. Public sector enterprises that probably could not have been competitive in global markets could find markets for their goods inside Iraq. Third, of course, the relations with Iraq opened up new opportunities for some private sector companies.

Notice, all of this was only possible as long as the Iraqi economy was constrained by the UN sanctions regime. None of this could have worked if Iraq had been well integrated into the international economy. All of this could only work if Iraq was severely limited in its trading partners. On the demand side, as I understand you all say here in Washington, Iraqi consumers were only willing to settle for Syrian goods as long as Iraqis had no access to anything else. The only reason Iraqis were willing to pay good money for Syrian clothing and Syrian electronic goods was if they could not buy Japanese and Taiwanese goods like everyone else. On the supply side, the trade network of this economic order buttressed a whole complex arrangement of licit and illicit enterprises and licit and illicit activities inside Syria. So the Syrian economy was kept going in a relatively inefficient way, in a relatively halfway legal way, as a result of these kinds of activities.

It's therefore not surprising that Syria did not evidence much enthusiasm for United States drive to overthrow the existing political-economic order in Iraq. The very seriousness with which Syria regarded keeping good relations with Baghdad and maybe even supporting Baghdad in the face of international condemnation was evident, led the Syrian government to welcome Hassan Al-Majid to Syria in late January of 2003. In May of 2003, Syria's minister of the economy, Hassan al-Rifaey, told reporters that Syria intended to maintain its existing commercial relationships, its existing commercial agreements, with the new Iraqi government. In August, a delegation of Iraqi commercial and industrial representatives held talks with the Syrian Ministry of the Economy. In November in fact, early November, the Syrian government announced that a new weekly passenger train would start operating between Aleppo and Mosul. The first run of this new railroad link is in fact scheduled for this evening, the evening of the 21st of November. So from now on we can ride the train once again from Aleppo to Mosul.

In all these ways, it seems to me that the Syrian government is wrestling with some way to salvage a position that it had built for itself in dealings with Iraq that has now disintegrated and will be extremely hard to put back together after the new order arises inside Iraq.

The second aspect of the current crisis facing Syria concerns Syria's relations with surrounding countries. As long as Saddam Hussein was in power in Baghdad, Damascus could carry out a foreign policy that was predicated on the assumption that Iraq would remain isolated in regional affairs and Iraq would be only a weak player in the Middle East and in the world as a whole. As long as Iraq continued to be shunned by the rest of the Arab world, Syria found itself able to build bridges with Iraq pretty much on its own terms. Syria could set the terms, Syria could set the agenda for relations with Iraq. Syria, for instance, could insist that Iraq keep its influence in Lebanon quite limited. Syria could stop Iraq from building constituencies inside Lebanon. Syria could juggle the rapprochement it was carrying out with Iraq with rapprochement to Kurdish organizations inside Iraq and inside Iran.

More important, it seems to me, as long as Iraq remained weak and isolated in regional affairs, Damascus was in a position to take the initiative to build a coalition to offset the Turkey-Israel axis in regional affairs. Syria could take this initiative by building a loose alliance with Iraq, with Lebanon and even with Jordan. This was always a tricky project. This was always something quite hard to carry out. First of all, it demanded, in order to work, that Iraq not carry out any initiatives that might upset its other partners. The alliance demanded that Iraq work inside the framework of collaboration with Syria, Lebanon and even Jordan. And this counter-alliance demanded that Israel not feel threatened so much by this counter-alliance that Israel might resort to any preventive operations to break up the alliance or any countermeasures that would jeopardize Syrian security. So Syria recognized that the new counter-alliance needed to be carried out very carefully. It seems to me we see then Syria rearranging its troops in Lebanon, withdrawing from strategically important parts of Lebanon in February 2003, as it sees this counter-alliance slipping away.

At the same time, Syria undertook to improve its relations with Turkey. Again, this was a balancing act in 2002-2003. The Syrians were engaged in a delicate kind of process of exercising leverage on Turkey, trying to improve its bargaining position regarding Turkey, by moving closer to Iraq, by threatening to play the Iraq card – while at the same time keeping relations with Iraq in check so as not to provoke Turkey into countermeasures as well.

But again, this complicated diplomatic game was only possible as long as the Saddam Hussein regime was quite weak, as long as Iraq was limited in its influence in regional affairs. With the collapse of the Saddam Hussein regime, Damascus then has lost the ability to play the Iraq card in regional affairs. Syria therefore, it seems to me, is desperately scrambling to try to work out relations with surrounding countries. In an unprecedented move, at the end of July, Syria's prime minister, Muhammad Mustafa Miro, traveled to the Turkish capital, Ankara, and negotiated a range of new projects between Syria and Turkey. There were new incentives that were arranged for trade between Syria and Turkey during these talks. There was even an agreement to resume talks over water-sharing between the two governments. I would urge us to see in the context of this new Syrian effort to build bridges to Damascus the Israeli strike against the former PFLP base inside Syria in early October. The Israelis are no doubt quite worried about the possibility that this new initiative will undermine the Turkey-Israel relationship.

The third component of the crisis facing Syria these days concerns Syria's frozen domestic political system. The removal of Saddam Hussein, it seems to me, sets the stage for a reemergence of the pro-democracy movement inside Syria. In surrounding countries, in most countries of the Middle East – in Egypt, for instance, in Jordan, in Saudi Arabia, although I will hold my tongue until I hear what As'ad has to say – but in many countries of the Middle East, tacit government support for United States action in Iraq generated friction between local government and local citizens in these countries. Consequently, in many countries of the Middle East, leaders stepped up their use of the security services, stepped up their efforts to suppress popular opinion and expressions of popular opinion, during the time of the war. Egypt, for instance, has renewed its state of emergency law for three more years. Jordan amended its press law to prohibit any criticism in the press that might tarnish the reputation of the nation. That's a nice broad definition of how to have a press law. So many governments in the Middle East found themselves at odds with their local populations during the course of the war and how to respond to U.S. policy in the region.

In Syria, on the other hand, the government's open opposition to United States action in Iraq revived popular support for President Dr. Bashar al-Assad, and revived popular support for the president that had been flagging over the past few months. As it became clear the war was going to erupt in Iraq, spontaneous popular demonstrations erupted in some of the larger cities in Syria. In July 2002, perhaps the largest of these demonstrations erupted, primarily to protest Israeli actions in the West Bank but I think also to protest the general trend in regional affairs and the general possibility of growing U.S. activism and presence in the region. As a result of these popular demonstrations and popular activism, the authorities ended up being forced to organize official rallies and official marches to protest not only Israeli actions but U.S. actions in the region as well. All these moves, I think, rekindled hope among prominent liberal critics of the regime, who have once again publicly expressed a hope that the range of expression and the range of debate inside Syria might be enlarged.

So as a result of the toppling of the Saddam Hussein regime, as a result of the end of an authoritarian regime next door, the Syrian political system faces a tough choice. The tough choice is between once again cracking down on critics of the regime, between once again suppressing dissent inside Syria on the one hand, and on the other tolerating greater public involvement, greater public activism, in political affairs. There's a good deal of commentary, of course, on what the end of the Saddam Hussein regime might mean for Syria, what kind of model this might create for the future of the Syrian political system. Knowledgeable observers have argued that President Bashar al-Assad's outspoken opposition to U.S. military action might show either his inexperience or his desire to cultivate support among the Syrian public. I'd suggest a little different way to think about the current situation. It's clear, I think, that the president faces firmly entrenched resistance inside Syria, and firm resistance not only to reform but also resistance to any effort on the president's part to consolidate power in his own hands. Therefore the president is taking a kind of risky move, the risky move of mobilizing popular activism, of lining up alongside popular mobilized public sentiment in the street, improving the chances that established structures inside Syria will weaken and therefore might set the stage for innovations in administration and maybe even innovations in the political system at large.

Fourth and last. Of course the crisis involves Syria's relations with Washington. On the 27th of March, as the first part of the war was winding down, President al-Assad gave an interview to As-Safir in which he stated, "The United States and Britain will not be able to control all of Iraq. There will be much tougher resistance if the American-British designs do succeed, and we hope they do not succeed and we doubt that they will. There will be Arab popular resistance." Before the initial fighting was even finished in late March, Secretary of Defense Rumsfeld charged – I don't really need to tell you all this story, do I? It suddenly occurred to me what audience I am sitting in front of.

But what I think is increasingly shaping the crisis in Syrian-United States relations is that Syria remains highly disappointed. Syria remains highly chagrined at the attempts the United States has made to restart the peace talks with Israel. Syria was convinced that both the Clinton Administration and even perhaps the Bush Administration would take firmer steps, would take more serious efforts to break the logjam in Syrian-Israeli negotiations. It became clear in March of 2000 that the Clinton Administration had no real interest in doing this, that the Clinton Administration was simply going to present Israeli positions to Syria. So I think the Syrian regime in the end found it impossible to trust that Washington would act in any way to promote the peace process.

At the same time, I think the Syrians are highly uncertain and cannot know what to expect from Washington at any particular time. On the one hand, there certainly seems to be some expressions of sympathy for the Arab side. There seems to be some expression of sympathy on the part of the Clinton Administration and the Bush Administration to promote negotiations. But on the other hand, no real concrete actions. The Syrian government really cannot tell how reliable the United States government is at the moment, what it can expect from Washington at this particular time.

In all of these ways, then, the Syrian government finds itself facing unprecedented uncertainties, unprecedented problems in juggling domestic and regional relations. It's a time of danger when we might well expect the Syrian government to be as firm as possible and as uncompromising as possible to face these challenges. Thanks very much.

Fawzi Asmar: Thank you, Professor Lawson. It's very enlightening and I think it's very important what we just heard. Phyllis, your turn. Phyllis Bennis is a name that the Middle East activists and activity has known for a long time. She is with IPS, the Institute for Policy Studies. She was the first, I think, the first person who led the group of aides, of congressmen, to Iraq to examine the condition of Iraqis because of the American sanctions and to find out about the humanitarian problem in Iraq. Since then, of course, she was very active in other aspects of the Middle East. She's still active in Iraq and in Palestine. She's currently co-chair of the U.S. campaign for ending Israeli occupation of the West Bank and Gaza. We hope she will succeed and we hope to see the fruit of that. She is going to talk about Iraq.

Fawzi Asmar: Thank you, Phyllis. Now Professor As'ad AbuKhalil, from the University of California. I was reading the bio that I have here and brought my attention something, beside where he got his B.A. and Ph.D. and where he is teaching, which is that he wrote about his favorite food. He said that his favorite food is fried eggplant. Then he said, with Arabic bread, and please don't call it otherwise, because the Israelis stole all our culture, they're trying to steal our food and so on. Let me tell you, I was reading the other day something happened – I was reading something and I found that there is an Israeli tabbouleh and an Israeli fettoush and of course they have Israeli falafel, Israeli hummus and all that. But you chose eggplant because I think they cannot adopt it, so if you start with two minutes telling us about that.

As'ad AbuKhalil: How much time do I have?

Fawzi Asmar: Fifteen minutes.

As'ad AbuKhalil: As'ad AbuKhalil is from Tyre, Lebanon. He grew up in Beirut, received his BA and MA from American University of Beirut in poli sci, came to the US in 1983 and received his PhD in comparative government from Georgetown University. He has taught at Tufts University, Georgetown University, George Washington University, Colorado College, and Randolph-Macon Woman's College and served as a Scholar-in-Residence at Middle East Institute in Washington DC. He also served as free-lance Middle East consultant for NBC News and ABC News, an experience that only served to increase his disdain for maintream US media. He is now professor of political science at California State University, Stanislaus and visiting professor at UC, Berkeley.

As'ad AbuKhalil: I certainly won't be talking about eggplant then. I will begin by saying that there is one thing that I agree with the government of Saudi Arabia with, and it will be only one thing, and that is there is a campaign against Saudi Arabia in the United States that is rather orchestrated. However, I think that many Arab groups, or Arabs like myself, have the dilemma. Because there is an orchestrated campaign that is very much part of the pro-Israeli voices and propaganda in the United States, should that make us reluctant from being critical of Saudi Arabia? My position on this is, absolutely not. They have their own agenda, and I think those of us who are critical of Saudi Arabia should do so regardless of what is going on around us. They have their own agenda and we should have our own agenda. It is particularly important to be critical of Saudi Arabia for the extremely obscurantist role they have played in the last fifty years in the history of the Middle East in fighting all vestiges of the Enlightenment, in pushing against any ideas of gender equality, secularism, leftism, Marxism and so on in the Middle East. And particularly because of the very suffocating role they play in controlling so much of Arab media, Arab publishing and also of Arab government and religious institutions.

I also should say that just because there is clearly an anti-Islam prejudice in the United States, in no way should that make us also reluctant from being critical of the doctrine of Wahhabiya, which is a doctrine, and to be critical of Wahhabiya is not the same thing as being critical of Islam. This is a very extreme offshoot that is certainly different in many ways from the mainstream Islamic ideas. For that reason, Wahhabiya, despite all the millions of money that has been spent by the royal family, has failed miserably to capture the imagination of Muslims. This is why I one time had an argument with Bruce Lawrence of Duke University, when he was quoted in the Washington Post that 17 percent of Muslims in America are Wahhabis. I was so outraged with that, and I asked him where he got that outrageous figures from. He said, well, I was thinking all these mosques and stuff. I said, these mosques may get the money, but yet they do not adhere to Wahhabiya because of the unpopularity of their doctrine.

Despite the fact that there is a campaign that is exhibited in the media and Congress against Saudi Arabia, we should not mistake that to say that there is a government-sanctioned campaign against Saudi Arabia. The signs from the U.S. government to the royal family are not worrisome in the least. When there was an intensification of the campaign early this year, the president of the United States called the Crown Prince of Saudi Arabia and told him, assured him – this was all in Arabic press and in some American press – that between our two countries there is "permanent friendship." I love that phrase, you can do so much with it, and I did in my new book coming out on Saudi Arabia, because what does that mean in international law? What is permanent friendship except a recipe for tolerating whatever massacres, human rights violations, occur in Saudi Arabia, as they are doing now – provided, of course, they do that all in the name of this declared wars – not war – on terrorism.

Second, yes, there have been some mute, very timid statements coming out of the U.S. government about democracy, but we should be very clear about what is intended by them. When Colin Powell announced with great fanfare a pittance of money, this Partnership for Peace in the Middle East about democracy, to which they allocated $37 million – and they spend a year on trying to brainwash Muslim minds more than $300 million only last year. The money is going to be expended because Congress said we're not spending money enough about that. So when he announced that to great fanfare, he did a very interesting interview with Al-Quds Al-Arabi, which is an Arab nationalist newspaper published in London, with sympathies to some unsavory causes on occasion, like Saddam and bin Laden. But they are independent of Saudi money and this is one of the few voices you can go there for that. He was pressed on the issue of Saudi Arabia and he cut off the interview because they pressed him. He said, no, no, no, we do not mean that this will mean we will force the Saudi government to reform or to adopt democratization. Ever since that, you will notice that he only would give interviews to those Arab media that are quite subservient to U.S. interests, like Al-Arabiyya satellite station, Al-Hayat, LBC, [Al-Khalosat?] newspapers, among the rest.

The third point, the speech that Phyllis mentioned by Bush last week, he keeps repeating it, and the more he repeats these words, I get more worried. I remember Josef Goebbels' words in his diaries during the Second World War about propaganda is repetition, constant repetition. The more they invoke freedom and the more they invoke democracy, I get more worried about where will bombs fall next. In fact, it reminds me of a very famous Arabic saying. Early in Islamic history, when Ali ibn Abi Talib was going against the Kharijites, they raised the slogan "la hukma illa li-llahi", "there is no rulership except that of God." Ali ibn Abi Talib was supposed to have said, "khata kalam [murhak yurad?] bihi batil" – "these are righteous words intended for false purposes." That's exactly what these words on democracy mean. They are merely used A) in order to engage in propaganda here for U.S. constituency, to say that yes, we drop bombs on all these countries but we also are pushing for democracy, and because the public pays little attention, they're not going to go and check the record.

[End of Side A; Side B begins]

-- what was offered. And then of course there are so-called reforms, which I think it is an insult to my audience to take them in any way seriously. These are the same cosmetic reforms that Saudi Arabia tries so desperately to announce without having any concrete results on the ground. If we see the pace of so-called reform in Saudi Arabia, we have to wait thirty years for any of that to get concretized. I said also the boosting of the so-called liberal voices – they are more, not like liberal as we use liberal in America, but more the neoconservative voices in the Kingdom and outside the Kingdom, in the Arab media and propaganda outlets.

There's also the announcement of the withdrawal of U.S. troops, except hundreds of military advisers remain in the Kingdom. I love that. Of course you remember that there were thousands of military advisers in Vietnam when America was supposed to have no troops in Vietnam because these are mere advisers. The Soviets had how many thousands of military advisers in Egypt. So I think that I will wait before I really declare that Saudi Arabia is free of U.S. troops, especially that they are close by.

The concluding section, because I have to finish here, the dilemmas – I have two more sections, but let me be brief. Dilemmas for Saudi Arabia, what can they do? They can go to the Qatari model, which is embarrassing them further. Qatar is the model where they go very far in pleasing Israel and the United States and to have host of any U.S. troops, invitation to launch any wars in the Middle East on their land. Here is a country that didn't have an air force, not even one fighter jet, that spent $2 billion on Al-Udeid Air Force Base, that is one of the most advanced, in order to have the Central Command relocated, and General Abuzaid already moved now to Qatar for that purpose. But in fairness to them, once they built the base and it became known that they have no air force, they did buy eighteen fighter jets from France to spare themselves the embarrassment.

The second point is that, how do they please the United States? The more you please the United States, the more you displease your constituency. The more you please your constituency, the more you displease the United States. So that's a dilemma they have to resolve. There's royal squabbles, the succession struggles, which is being unresolved in earnest. We can talk about that later. Also, do you touch Wahhabiya, as the United States would like you to do eventually? What do you replace it with, what kind of ideology do you have instead? How do you resolve that problem?

In conclusion, Saudi services to the United States have been numerous, not only in oil. It's very important we repeat that. It's not only about oil. It's not only about oil in Iraq and it's not only about oil in Saudi Arabia. There is the Cold War cooperation between the two sides. The funding, propagation and arming of a conservative Islam, from the ranks of which came out bin Laden. There's the quiet diplomacy that they use against all Arab efforts of leftism, Arab nationalism and so on. There is the covert operation they did in the Cold War, Turki Bandar and the rest. Military bases in the Kingdom, the purchasing powers of the Kingdom have been very good for the United States, not only of weapons but goods and services. There's also this utilization of Saudi finance propaganda for U.S. use. The media outlets I mentioned are an example.

This is really the conclusion. Options for the United States, I don't think they are clear. Saudi Arabia is not an aberration in U.S. foreign policy, I would like to emphasize, just as Israel is not an aberration in U.S. foreign policy. Often in Middle East circles we tend to think that if only they'd change their views on the Middle East, everything would be good – no. The tolerance of human rights violations in Israel or Saudi Arabia is consistent in the record of U.S. foreign policy worldwide. They violate human rights worldwide and they use them for political purposes.

Another option they have is to interfere in the succession struggle, to support the pro-American faction, the Sudairi Seven. They have a very important role to play and they are playing it particularly – we can talk about that later – a very interesting role as of late. In other words, the pro-American camp has been more silent in recent times. Perhaps they want to have the damage done due to the closeness between the government and the American government to affect and harm the Crown Prince. That's why they are insulating themselves from that.

I think also, given the mess in Iraq, that the United States still needs the oil and economic OPEC role of the Saudi government in any oil negotiation in the future. Thank you.

Fawzi Asmar: Thank you, As'ad. Now our last speaker, Professor Samer Shehata from the Middle East and Arab politics at the Center for Contemporary Arab Studies at Georgetown. I'm looking forward to seeing your coming book about Egypt. Now, Egypt, please.

Samer Shehata: Samer Shehata teaches Middle East and Arab politics at the Center for Contemporary Arab Studies in the School of Foreign Service at Georgetown University. Before coming to Georgetown he spent one year as a Fellow at the Society of Fellows at Columbia University and another as Director of Graduate Studies at New York University's Center for Near Eastern Studies. He finished a PhD in Politics from Princeton in 2000 and holds degrees from Cambridge University and the University of California at Berkeley. His articles have appeared in the International Journal of Middle East Studies, Middle East Policy, Salon, Slate and other publications. He is currently completing a book based on his dissertation about working class politics and culture in Egypt.

Samer Shehata: Thanks very much for inviting me. I think the title that was given to today's talk is "Egypt in the Crossfire." I don't know that I would stick with that title myself. Maybe something like "Egypt in Crisis and the United States."

Egypt today really does face multiple, simultaneous crises, which have been exacerbated by the war in Iraq and by U.S. policy since 9/11. These are indeed unusual times in Egypt. It is not business as usual by any means. It's an exciting period, an uncertain period – possibly a hopeful period, depending on what the outcomes may be.

The crises, in brief, are three, really. There's an economic crisis that of course existed well before the Iraq War but that has really deteriorated Egypt's economy since the devaluation of the pound in January 2003. There is a succession crisis. Of course, as you know President Mubarak is seventy-five years old. I'll talk about that, and that of course precedes also the Gulf War. Then finally, there is a crisis of popular discontent and protest and mobilization, which precedes the Gulf War, which really began most recently in March and April of 2002, in which the Egyptian Street really did see tens of thousands of protesters protesting the Israeli siege and occupation of Ramallah, Jenin and so on. But which continued, in terms of popular protest, most recently before and after and during this recent war.

Let me talk a little bit about the crises, and I'll talk about how the U.S. is implicated or at least involved in all of these crises, interestingly enough.

The economic crisis, I mentioned the dollar. But it also has to do with unemployment, the banking sector problem in Egypt, and of course the war hasn't helped anything. In terms of the banking crisis, Egypt has for some time had a serious banking sector crisis, having to do with nonperforming loans, lack of transparency in the banking sector, and a number of bad loans that were given – kind of absconding of money by people in power, including members of the parliament, as it were. So that's something that most definitely existed before this recent war and had nothing to do with it. Of course, Egypt has a continuing crisis of unemployment. The official statistics are, these days, about 9 percent, but I don't think anybody believes them. We know that the real figure is someplace between 15 and 20 percent. There's no question about that. The amount of new jobs needed each year in Egypt as a result of new entrants to the labor force is anywhere between 700-900,000 jobs, and the economy is definitely not meeting that. 40 percent of the population is younger than fifteen, which means that there will be even more jobs needed in the future. One recent World Bank "gray report" study, which isn't kind of available to the public, had a graph about the unemployment and the population entitled, "The Time Bomb: Unemployment is the Problem of the Youth."

So certainly, these are two parts of the economic crisis. As I said, there's a dollar crisis in Egypt, a crisis of the Egyptian pound which is definitely on people's minds. In January 2003, the government decided to devalue the pound, to float the pound, as it were, and I think it's quite clear that this decision was taken by certain elements in the government, particularly the president's son and the kind of new economic team, as it were, who are for the most part fully on board the ideas of the Washington Consensus. So on January 28, 2003, the last day the Egyptian pound was pegged to the dollar, the exchange rate was 4.5 pounds equals 1 dollar. The next day, the pound fell by 15 percent immediately. It fell to the level of 5.3 pounds equals 1 dollar. Today the pound is trading in Egypt at about 6.5 pounds to the dollar. It's gone up to above seven. Of course a black market has developed again, which we hadn't seen really for a number of years in Egypt