The Muslim Brotherhood Wants Chaos in Egypt
From the Muslim Brotherhood's actions of the past week--especially its decision to scuttle a desperately-needed $3 billion loan from the International Monetary Fund--it seems clear that Egypt's dominant political organization is acting like a Leninist or Nazi vanguard revolutionary party, in what it evidently sees as a pre-revolutionary situation. The Brotherhood knows and says that Egypt's economy is headed over a cliff, but wants to blame the crisis on the military the better to seize power.
American policy, which focuses on protecting a $75 billion investment in Egypt's military over four decades, is hopelessly obsolete. The reverberations reach up to the Persian Gulf, where security officials now warn that the Muslim Brotherhood is a danger to Gulf security as big as Iran.
Egypt's Muslim Brotherhood signaled its intent on Sunday to push the country into economic chaos. With liquid foreign exchange reserves barely equal to two months' imports and panic spreading through the Egyptian economy, the Brotherhood's presidential candidate Khairat al-Shater warned that it would block a US$3 billion emergency loan from the International Monetary Fund (IMF) unless the military government ceded power.
"We told them [the government], you have two choices. Either postpone this issue of borrowing and come up with any other way of dealing with it without our approval, or speed up the formation of a government," Khairat al-Shater said in a Reuters interview. 
The news service added that al-Shater "said he realized the country's finances were precarious and a severe crunch could come by early to mid-May as the end of the fiscal year approached, but that this was the government's problem to resolve".
Last week, Egypt's central bank reported that total reserves had fallen to $15 billion, but - more importantly - liquid foreign exchange reserves had fallen to only $9 billion, equivalent to just two months' imports. Foreign exchange futures markets expect the Egyptian pound to lose half its value during the next year, and Egyptians have responded by hoarding diesel fuel, propane gas and other necessities.
With half of Egypt's population living on $2 a day or less, the expected devaluation would push a significant part of the population below minimum nutrition levels, and balloon the government's deficit as the cost of subsidizing imported necessities rose. Egypt imports half its caloric consumption.
The IMF loan was a stop gap to delay devaluation, but the Muslim Brotherhood's al-Shater made clear that Egypt's dominant political party would spike it. "It is not logical that I approve a loan that the transitional government would take for two or three months, then demand that I, as a permanent government, repay," Shater told Reuters." I have to agree to a loan, somebody else gets to spend it, then I have to pay it back? That is unjust."
As Egypt headed towards chaotic breakdown, Western observers asked how its economy might be stabilized. This appears to have been the wrong question to begin with, for the Muslim Brotherhood will not allow the West to stabilize Egypt's financial position. The right question is: who will benefit from the chaos?
The whole essay can be found here. But there's more.
A Brotherhood coup in Cairo would have implications through the whole Arab world. As Issandr el-Armani wrote April 2 at The Arabist:
The US is still putting all of its eggs in the military's basket, as the recent waiver for aid to Egypt and the backroom deal over the NGO affair showed. Gulf states like the UAE [United Arab Emirates] are in full-blown anti-Muslim Brotherhood hysteria, reflecting a wider unease in Saudi Arabia, Kuwait and even Qatar about a Muslim Brotherhood-led Egypt.That is an important wrinkle, virtually ignored by the US foreign policy establishment. To the extent American analysts have examined the links between the Muslim Brotherhood and the Saudi royal family, they have concluded that "the Saudis gained newfound influence with the Muslim Brotherhood and its even more hard-line Salafis", as John R Bradley argued last October in Foreign Affairs. 
The Gulf monarchies have a reason to fear the Muslim Brotherhood: as opposed to the tribal monarchies of the Gulf, the Brotherhood rebottles Islamic radicalism in the form of a modern totalitarian revolutionary party. If Egypt starves, the cry will go up from Cairo: "Our brothers lack bread and the corrupt House of Saud spends in wealth on whisky and whores."
Gulf State officials have made no secret of their alarm. Egypt Independent columnist Sultan al-Qassemi  reported on February 2, "In a widely circulated video recording of a recent speech in Bahrain, Dubai's police chief, who enjoys close relations with the country's prime minister, warned against the Muslim Brotherhood, stating that their 'threat to the region was just as serious as that of Iran's."
A potential conflict between the Gulf States and Egypt will further add to centrifugal tendencies in the region. They are allies against Iran, but prospective competitors, and deadly ones. The Muslim Brotherhood's efforts to wrest control of Syria from the Iranian-allied Assad family may push the the conflict into an entirely new dimension.
How do you confront an enemy that deliberately sows chaos? No-one should underestimate the intelligence and dedication of the Muslim Brotherhood. Over a year ago, the Brotherhood's English-language website reposted my essay "Tunisia's Lost Generation," which summarized my "Spenglerian" thesis about Muslim demographics. The Muslim Brothers, that is, have been more attentive to their own weaknesses than, say, the American conservative mainstream, which until recently suppurated in bathos about the wonderful prospects for democracy in the Arab Spring. The Islamist leadership in Egypt is in general tougher-minded and more realistic than most of the American conservative leadership. They are much more like Communists and Nazis than the cartoonish Jihadists we sometimes imagine our enemies to be. (I do not mean to suggest they are any less Islamist; as Andrew Bostom points out, one can argue credibly Hitler was inspired by the jihadists, rather than the other way around. But these are jihadists with the organizational ruthlessness of the Nazis in 1933).
And they are about to make mincemeat out of American policy. Again, from Asia Times:
American policy seems entirely unprepared to deal with this scenario. America has paid out $75 billion in aid to the Egyptian military since the peace treaty with Israel in 1979, and continues to see the Supreme Council of the Armed Forces as the fulcrum of stability in Egyptian politics.
This is a bi-partisan stance. Senators John McCain (Republican-Arizona) and Lindsey Graham (Republican San Francisco) met with Egypt's Muslim Brotherhood leaders in Cairo in March, evidently in the hope of persuading the Brotherhood not to challenge the armed forces' control of the government.
McCain made clear that he wanted to maintain reduce "tensions" between the Islamists and the armed forces regime, as he said in a March 30 radio interview in Cairo:
The current tension between the military council and the Muslim Brotherhood may aggravate the situation in the country in the upcoming period during which the constitution will be drafted ... I'm deeply concerned about the possibility of an escalation of tensions and the occurrence of more confrontations and demonstrations [in Egypt]. However, the more important question is whether the Muslim Brotherhood will adopt a moderate approach, or if some of its extremist members will be directing the constitution-drafting process and the [presidential] elections. That is the default American position, but it appears to have become obsolete in the week since McCain and Graham went to Cairo. The Muslim Brotherhood, contrary to earlier promises, was not content to take over parliament, but also fielded its own presidential candidate, Khairat al-Shater, and al-Shater showed his hand on April 8.
The Republican position to date really isn't that much different from that of the Obama administration. It amounts to clinging to the wreckage of military rule. Here's my recommendation:
As traditional American policy tools fail, the alternative to promoting stability is to manage instability. That is a task for which Americans lack the required cultural skills and iron stomach. But they will have to learn fast.
If the Muslim Brotherhood proposes to gain from an economic crisis that transfers power from the old civil institutions to revolutionary organizations on the street, the obvious riposte is to intensify the crisis, so that the revolutionary organizations cannot manage it: to fight fire with fire, and discredit the Muslim Brotherhood.
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