A New Day Dawning
A week of rioting across Egypt have placed the future of President Hosni Mubarak in question. Egypt, the leader of the Arab World, now faces a crisis that may very well signal the closing of an old and the opening of a new chapter in Egyptian history.
Relative Tickers: NYSE: EGPT, NYSE: VOD, OTC: EGYMF.PK, OTC: TEGPY.PK, Nasdaq: TRAMX, Nasdaq: TRIAX, NYSE: CEL, AMEX: ISL, NYSE: NOC, NYSE: RTN, NYSE: ATK, NYSE: LMT, NYSE: BA, NYSE: HON, NYSE: GD, NYSE: COL, NYSE: GR, NYSE: LLL, NYSE: SAI, Nasdaq: FLIR, NYSE: ERJ, NYSE: SPR, Nasdaq: BEAV, NYSE: TDG, NYSE: CAE, NYSE: HXL, NYSE: ESL, NYSE: TDY, NYSE: CW, NYSE: HEI, NYSE: TGI, NYSE: ORB, NYSE: AIR, Nasdaq: KAMN, Nasdaq: AVAV, NYSE: XOM, NYSE: HAL, NYSE: SLB, NYSE: CVX, NYSE: COP, NYSE: NBL, NYSE: BHI, NYSE: SII, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ
Egyptian protesters are calling for President Mubarak to step down and to open up the political system. Protestors also want solutions to end severe unemployment and widespread corruption. Unlike protests in the past, this week's protests are centered squarely on economic and political issues. What has taken the ruling establishment by surprise are the continuing and growing calls for Mr. Mubarak to resign and leave office (and the country).
Riots are occurring in Al-Qahira (Cairo), Al-Iskandriya (Alexandria), and Asyut, Port Said, Al-Arish, Suez, Nasr City, Dumyat, Mansoura and others.
Mr. Mubarak became President on October 6, 1981, succeeding Anwar el-Sadat after the latter's assassination. Mr. Mubarak's tenure has included a stagnant economy, loss of stature both in the Arab and Islamic world and a governing bureaucracy that is very corrupt. Egyptians have been frustrated by their lack of jobs, access to jobs and economic opportunities.
Over 50% of Egypt's 80 million people are under age 30; many have never known neither any other ruler other than Hosni Mubarak, nor the dominance of the ruling National Democratic Party (NDP). Mubarak has won four elections since assuming office, with several of those elections being questioned as to their integrity. (The term of office for the Egyptian president is six years). Dissent of the regime is not tolerated. A state of emergency has been in place since President Sadat's assassination in 1981.
The state of emergency was originally instituted to combat "radical" Islamists associated with Sadat's murder. Since, however, it has been widely applied against all challengers to the regime. Those who challenge the rule of the NDP, or are seen to threaten the principals of the 1952 Officers' Revolution (brought about by Gamal abd El-Nasir), face prosecution and / or persecution by the government.
Nasir's revolution sought to modernize Egypt. The goals of the Officers' Revolution were to make Egypt a self-sufficient, secular leader in the Arab world. The leaders of the 1952 Officers' Revolution were from the Egyptian military, probably the most progressive and modern institution in Egypt. Gamal abd El-Nasir, Anwar el-Sadat and Hosni Mubarak were officers prior to becoming President. Like the U.S., the President of Egypt is also the Commander-in-Chief of the Egyptian military.
As calls for Mr. Mubarak's resignation continue and riots take hold in most Egyptian cities, the future of Egypt becomes cloudy. Can Mubarak continue to hold power? He has dissolved his cabinet and promised reforms. This has not placated the protestors.
Recent reports from Egypt include looting and attacks on the Interior Ministry. Protestors so far, have not been attacked by the military. In many instances, protestors are riding on military vehicles without incident. Also of note is that the protests have not taken on any anti-American or anti-Western tones. This is, as of now, a solely domestic matter.
Two things are notable about Egypt's protests. First, is that the military is holding back. Other than protecting government facilities and key economic assets the military has had little involvement in the protests or (at least not seen in public) in the political offices. Whether or not the military acts (on its own) or is provoked into acting is yet to be seen.
Second, is that like Tunisia (and Iran in 2009); this is a "mobile and electronic revolution". Protestors are using cell and satellite telephones and the internet to communicate, and to set and plan protests. Despite a shutdown of the nation's mobile communications networks, Egyptians are able to communicate and stage protests (many have circumvented the government's blockages). Vodafone (Nasdaq: VOD) and Mobinil remain active in numerous locations across Egypt.
Whether or not a regime change occurs, we are witnessing the beginning of a new era in the Middle East. The "street" is awakening. This is the third set of protests to break out in the Middle East where the people themselves have taken to the streets to seek and establish change: Iran in 2009, Tunisia in mid-January 2011 and now Egypt. Similar riots have occurred in Yemen, Lebanon, and Jordan this past week.
Tunisians overthrew President Zine el-Abidine Ben-Ali after nearly thirty years of one party rule. President Mubarak may very well be next.
The people in these protests are and have been motivated by economic frustration and political repression, coupled at times with political and institutional corruption. A new tool in facilitating the protests (and revolution) in Tunisia's case is the cell phone and the internet. One cannot but help but wonder at the power of the pocket sized phone or laptop. Earlier revolutions were fought with guns and bullets, will the new revolutions be fought with flip tops and send buttons?
Whatever change lies ahead for Egypt is yet to manifest itself. Egypt is critical to the U.S. and the Middle East, due to the Suez Canal, Egypt's commitment to the "war on terror" and the peace existing between Israel and Egypt.
Should Mubarak prevail, the inevitable will only be delayed. At some point in the future, a new leader will succeed him. Whether be through the military, an electoral process or some form of revolution, a new day in the Middle East is soon rising.
This article should interest investors in: Market Vectors Egypt Index ETF (NYSE: EGPT), Egyptian Mobile (OTC: EGYMF.PK), Telecom Egypt (OTC: TEGPY.PK), T. Rowe Price Africa & Middle East (Nasdaq: TRAMX), T. Rowe Price Institutional Africa & Middle East (Nasdaq: TRIAX), Cellcom Israel (NYSE: CEL), Aberdeen Israel Fund (AMEX: ISL), Northrop Grumman (NYSE: NOC), Raytheon (NYSE: RTN), Alliant Techsystems (NYSE: ATK), Lockheed Martin (NYSE: LMT), Boeing (NYSE: BA), NYSE: IWM, NYSE: TWM, NYSE: IWD, Honeywell (NYSE: HON), General Dynamics (NYSE: GD), Rockwell Collins (NYSE: COL), Goodrich (NYSE: GR), L-3 Communications (NYSE: LLL), SAIC (NYSE: SAI), FLIR Systems (Nasdaq: FLIR), EMBRAER (NYSE: ERJ), Spirit Aerosystems (NYSE: SPR), BE Aerospace (Nasdaq: BEAV), TransDigm Group (NYSE: TDG), CAE (NYSE: CAE), Hexcel (NYSE: HXL), Esterline Technologies (NYSE: ESL), Teledyne Technologies (NYSE: TDY), Curtiss-Wright (NYSE: CW), HEICO (NYSE: HEI), Triumph Group (NYSE: TGI), Orbital Sciences (NYSE: ORB), AAR Corp. (NYSE: AIR), Kaman Corp. (Nasdaq: KAMN), AeroVironment (Nasdaq: AVAV), Smith & Wesson (Nasdaq: SWHC), DigitalGlobe (NYSE: DGI), GenCorp (NYSE: GY), Hawk (AMEX: HWK), LMI Aerospace (Nasdaq: LMIA), Exxon Mobil (NYSE: XOM), Halliburton (NYSE: HAL), Schlumberger (NYSE: SLB), ConocoPhillips (NYSE: COP), Chevron (NYSE: CVX), Noble Energy (NYSE: NBL), Baker Hughes (NYSE: BHI).
Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.