Everyone is now waiting for Egypt's Supreme Council of the Armed Forces (SCAF) in Cairo to speak. Will these officers, who apparently knew about the pending Egyptian move to officially halt natural gas deliveries to Israel, act like statesmen, or will their weakness let the dictatorship of the street lead this crisis too? SCAF members, headed by Minister of Defense Field Marshal Mohamed Hussein Tantawi, should not be envied, as they are daily forced to make tough decisions with the knowledge that their boss was ousted and is standing trial, and it is doubtful if anyone can protect them from a similar fate.
On Thursday, Egyptian General Petroleum Corporation (EGPC) and the Egyptian Natural Gas Holding Company (EGAS) announced that they were terminating the gas supply and contract agreement with East Mediterranean Gas Company (EMG), which exports gas to Israel. The announcement said that the reason for the decision was arrears in payments by Israel as set out in the contract. The story broke in Israel last night, and immediately shot to the top of the news in both countries.
A tactical move in a legal imbroglio
The public debate that emerged in Egypt over the last 24 hours has been limited to the key aspect of the affair. Since the sabotage of the gas pipelines in Sinai began in February 2011, gas deliveries to Israel have been reduced to nothing. This fact drove the foreign partners in EMG to file a $8 billion claim for damages against the Egyptian government.
The Egyptian announcement about the official termination of the gas deliveries is therefore a tactical move in the complex legal discussions. But the gas agreement is not just a commercial contract; it is a contract with long-term diplomatic and security significance. The generals in Cairo know this perfectly well, so it is doubtful that they did not know in advance of the move by the heads of Egypt's energy industry.
The officers fully understand the necessity of the agreement to stabilize Egypt's tottering economy. The leaders of the Muslim Brotherhood also appreciate the agreement's importance to Egypt's dwindling cash. Egypt needs the agreement as much as Israel needs Egyptian gas.
Egypt's economy is teetering on the brink of insolvency. Following the revolution, personal safety in Egypt deteriorated, and crime rose. Tourism is down by a third, and investors are staying away. Gas exports were supposed to be a fixed and sure source of revenues, as well as a primary strategic means for increasing Israel's dependence on Egypt, in addition to Israel's dependence on Egyptian cooperation in Sinai.
We are now seeing both these channels being undermined. In a recent interview to the Egyptian press, Omar Suleiman, the former chief of military intelligence, which oversaw the gas agreement, said that the signing of the agreement gave Egypt control of 40% of Israel's electricity. His comment did not get the attention it deserved in Israel, but even more importantly, it was overlooked by the opinion-setters in Cairo, who insist on the right to sabotage the agreement.
Since the revolution more than a year ago, there has been a stormy public campaign in Cairo to terminate the gas agreement with Israel led by various politicians and commentators. Each of them has his own motive. Some want to settle accounts with Hosni Mubarak, accusing him and his sons of pocketing bribes. Others are truly and innocently convinced that gas was sold to Israel at scandalous prices, and that Egypt's treasury lost revenues to which it was legally entitled. They protest that Israelis enjoy discounted natural gas ahead of residents of villages in the Nile Delta who are bereft of a regular supply of electricity. A third group benefits from loud headlines promising that the issue will be dealt with.
The will of the Egyptian people
All means are legitimate to achieve the ends. Yesterday, "Al Jazeera" interviewed Cairo oil trade expert Ibrahim Zahran. In scholarly language, he explained that the agreement was born in a friendly conversation between Omar Suleiman and Ariel Sharon, which means that its validity is therefore in doubt. The Egyptian expert was not fazed by the pictures "Al Jazeera" aired during the interview, which showed then-Israel's Minister of National Infrastructures Benjamin Ben-Eliezer signing the agreement with Egyptian Minister of Petroleum Sameh Fahmy.
A leading candidate in Egypt's presidential elections, Abd el-Moneim Abu el-Fatwa welcomed yesterday's announcement. "It's the will of the Egyptian people," he said.
In contemporary Cairo, the populist dialogue is also a tool for navigating the decision-making process of SCAF. Its officers are sometimes compelled to make decisions under pressure, and struggle to express their positions in the reality of a biased public opinion, which is heating up during the election season.
Within a few months, the generals promise to hand over power to a president elected by the people. It is impossible to know the man who will be elected, or what his relations with Parliament, controlled by religious parties, will be.
Egypt's near future will decided by internal dynamics and the consolidation of forces that are still being formed, which few can predict. It won't be calm, and in one scenario, Egypt could end up in a Jacobean whirlwind. No one can then promise that reason and logic will overcome the roar of the masses.
The writer is the Arab affairs correspondent for “IDF Radio" (Galei Zahal)
Published by Globes [online], Israel business news - www.globes-online.com - on April 23, 2012
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