Facing Crisis, Egypt’s Leader Tries New Tack: Talking to Opponents

Facing a ruinous economic crisis, President Abdel Fattah el-Sisi recently decided it was time to hold talks with what was left of Egypt’s political opposition, giving them a seat at the table after nearly a decade of repression, prison and exile.

But to an authoritarian leader like Mr. el-Sisi, reconciliation only goes so far.

No sooner had the national dialogue started than the government began hemming the talks in, an indication that, after years of political repression and military domination of the economy, the autocratic leaders remain reluctant to turn the page — even if they might like their people, Western lenders and Gulf allies to think otherwise.

Islamists were barred from the dialogue, and much of the secular liberal opposition was not invited. Crucial topics, including anything to do with the ill-defined matter of national security, were off limits. And the day after the talks launched last month, Egypt awoke to the news that security agents had arrested a dozen relatives and supporters of the only person so far to announce that he would challenge Mr. el-Sisi in the next presidential election.

Mr. el-Sisi has spoken of charting a new political and economic course for Egypt amid surging inflation ‌and a currency that has shed half its value in the last year, thrusting the middle class toward poverty. ‌Yet the economic overhaul the government promised has added up to mostly talk and little action.

“The reality is that Egyptians are currently feeling a lot of worry and they are wondering about Egypt’s policies, where it is going,” Amr Moussa, a former foreign minister, said in unusually pointed public comments last month.

Economists and analysts had long warned that Egypt’s sluggish, state-dominated economy, coupled with Mr. el-Sisi’s lavish spending on weapons and a construction boom that juiced short-term growth but ran up a staggering debt bill, was unsound.

Those weaknesses became all too apparent after Russia invaded Ukraine last year, when the price of crucial wheat and fuel imports soared, Russian and Ukrainian tourist revenue dried up and foreign investors pulled dollars out of Egypt.

Despite official efforts to portray the crisis as the unavoidable fallout of the war, the discontent is audible — loud, by the standards of a country where openly criticizing the authorities can mean arrest.

The opposition talks are one sign Mr. el-Sisi is feeling the pressure, analysts said. Another came when a member of Parliament said last week that the presidential election, expected next year, would be brought forward to the end of this year.

Analysts and diplomats viewed the new schedule as a suggestion that the ruling establishment fears Mr. el-Sisi’s popularity might plunge even further before a vote.

Though there is little hope of truly free and fair elections, Mr. el-Sisi and the military-security apparatus he represents are attuned to appearances. A high turnout, analysts and diplomats say, would embolden the president to claim popular support before making painful economic reforms.

The stakes could not be much higher for Egypt to right itself.

The Arab world’s most populous country and a longtime strategic ally of the United States, Egypt has endured bouts of instability in the 12 years since its 2011 Arab Spring uprising, when a brief and tumultuous experiment with democracy ended in the military takeover that brought Mr. el-Sisi to power.

Now, more widespread poverty and suffering for many of the country’s 105 million people is almost guaranteed, analysts say. An economic meltdown risks fostering unrest that could spread to other parts of the Middle East and propel an exodus of migrants to Europe.

Within months, the country could be forced to choose between honoring its debt payments and feeding the many poor Egyptians who depend on government-subsidized bread.

Perhaps in an attempt to appease rising public anger, analysts and diplomats say, the president has also released at least 1,000 political prisoners over the last year.

At the same time, however, new arrests of political activists, researchers, opposition figures and even soccer fans are far outpacing those releases. And few expect the so-called national dialogue to lead to much but a stack of paper and some photo opportunities.

Diaa Rashwan, the government-appointed coordinator of the dialogue, said in a news conference last month that Egyptians should distinguished between “isolated” arrests and “broader phenomena,” including the openness represented by the dialogue. He claimed that the president could not interfere in the judicial process.

The Civil Democratic Movement, a coalition of opposition parties, reluctantly agreed to participate in the talks out of a conviction that there was no other avenue to be heard, even after some of its members were arrested in the run-up, said Khaled Dawoud, a member of the coalition.

“Can you imagine how terrifying it must be to work under these circumstances?” he said. “If you’re starting the national dialogue and the first move you make is the takedown of a possible candidate and the arrest of his family and supporters, that’s a very bad sign for the presidential elections.”

During the last presidential election in 2018, all of Mr. el-Sisi’s serious challengers were jailed by Election Day.

This time, Ahmed el-Tantawy, his only declared challenger, has had more than 20 supporters and relatives arrested already.

“Political reform doesn’t need a dialogue,” Mr. el-Tantawy said. “It needs political will.”

“The average citizen can see this state’s failure to keep its promises the last nine years in the daily economic sphere and in their lack of freedoms,” he added.

When Mr. el-Sisi came to power, he promised stability and prosperity after the turmoil of the 2011 revolution. Many hailed him as a savior.

And Egypt’s strategic importance, in the region and beyond, has long allowed the president to dodge a reckoning over the country’s prodigal spending, sluggish economy and political repression.

While some members of Congress have denounced Egypt’s human rights record, the United States and Europe still view its government as a valuable security partner and an indispensable linchpin of regional stability. Wealthy Gulf monarchies and Western-backed international lenders have repeatedly come to Egypt’s rescue, propping up its autocratic leadership.

Those backers are now demanding profound changes, including reducing the military’s stranglehold over many industries and allowing the currency to trade at its real value instead of artificially strengthening it.

Egypt agreed to several such conditions last year in exchange for a $3 billion bailout from the International Monetary Fund.

Yet results have been minimal, eroding the national credit rating and delaying a second chunk of the I.M.F. loan, originally scheduled for March.

About $2 billion was supposed to arrive by June 30 via sales of state-owned assets to Egypt’s resource-rich Gulf neighbors, which have grown far less willing to help Mr. el-Sisi unless for profit. But analysts say the country’s military leadership has slow-walked privatization out of a desire to retain control and the profits that come with it. The sales, and the dollars, have failed to materialize.

The near paralysis has raised the question of how much more the Gulf and the West might pay to stabilize Egypt if it will not save itself.

In the meantime, Egyptians are getting poorer.

The government is lifting fuel and food subsidies that make life barely manageable for millions, and new welfare spending has not kept up with inflation. Poor and middle-class citizens can no longer afford some basic groceries. Elite Cairenes are watching their savings vanish and their businesses falter.

Alaa, a civil engineer in Sharqiya, northeast of Cairo, said he once supported Mr. el-Sisi because his construction firm stood to profit from presidential megaprojects such as a lavish new capital city. Now, both Egypt and his company are drowning in debt.

When Alaa is not dodging debt collectors’ calls, he said, he is saving to illegally board a boat to Europe.

“Say there’s only a 90 percent chance that I make it,” said Alaa, 36, who asked to be identified only by his first name because of the risks of criticizing the president. “That’s still 90 percent more of a chance to have a life than I’d have staying in this country.”