2013-03-03 10:55:19 - New Defense market report from Business Monitor International: "Egypt Defence & Security Report Q2 2013"
* Egypt's strategic position is slightly tense currently. On the one hand, its newly elected leader, President Morsi, hints at the possibility of burgeoning democracy in the country. However, his recent appropriation of complete judicial, legislative and executive powers intimates otherwise.
* Equally, a democratically elected leader seeking to make Egypt a regional powerhouse and a player on the international stage could indicate stability and increased regional security, or the ruling potentate's links with the Muslim Brotherhood, together with recent revelations of his anti-Semitic tendencies, could spell trouble, particularly for the Egypt-Israel peace treaty and Egypt's close ties with the US.
* Moreover, there are rumblings of discontent amongst the Egyptian populace. Elected with only 51%, Morsi's victory was by
no means a landslide, and many are not happy with his rule, his re-writing of the Constitution, and his appropriation of more power than even former President Mubarak had. A series of recent high-profile accidents, including a train crash and a building's collapse, together with the uncertain state of the Egyptian economy, have fostered discontent particularly as many seem to feel Morsi is not addressing the country's key problems.
* Domestically, the Egyptian military is now focused on the threat of jihadi terrorists in the Sinai, following an attack there which left 16 soldiers dead and led to the sacking of military chief Field Marshal Hussein Tantawi and other senior commanders. Moreover, Egypt's involvement in a number of UN peacekeeping missions, including in Sudan, potentially put them at the risk of retaliatory terrorist attacks.
* The court's decision to accept the appeal to retry Mubarak could have far-reaching consequences, however in the near term there were celebrations in the streets as many applauded the decision to impose more stringent punishments on the former president and his cohorts.
* Regionally, Morsi is repositioning Egypt in a leadership role that could see it play a prominent part in Syria and Iran especially. However, in the future this could bring Egypt into contention with Saudi Arabia as both struggle to become the region's leader. Moreover, tensions have risen since the recent trial and sentencing of an Egyptian human rights lawyer in Saudi Arabia
* Over the last quarter BMI has revised the following forecasts/views./li> * The various security dilemmas that Morsi faces are discussed in detail. As well as balancing Muslim Brotherhood links with Hamas against Egypt's treaty obligations to Israel, the president has had to address Muslim anger inspired by an online video that denigrated Islam, while also condemning anti- Western violence as seen in the murder of the US ambassador to Libya.
* The launching of Operation Eagle in the Sinai peninsula, whose objective is to tackle the Salafist militants responsible for killing 16 Egyptian soldiers in August, is also discussed along with its implications for Cairo's relations with Tel Aviv, which could have been further damaged after the release of Morsi's 2010 anti-Semitic interview.
* Egypt has moved closer to procuring two Type 209 submarines from Germany. Again, this caused Israeli concerns, but Germany appears to support the new Egyptian government, pressing ahead with the sale.
* The agreement of an IMF loan facility, which had been delayed until 2013, combined with financial support from sources such as Qatar, which donated over US$2bn to avert a currency collapse, should ensure both that Egypt avoids economic meltdown and that it is able to continue investing in its armed forces.
Full Report Details at
- www.fastmr.com/prod/541189_egypt_defence_security_report_q2_2013 ..
We forecast this year's defence expenditure to be in the region of EGP41mn, (2.3% of GDP).
BMI has given Egypt a Security risk rating of 56.1, and a terrorism risk rating of 61.0, putting it in overall 10th place in our regional Security Risk ratings.
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