CAIRO, (Reuters) – President Hosni Mubarak provoked rage on Egypt’s streets today when he said he would hand over powers to his deputy but refused to step down after more than two weeks of protests demanding that he quit.
The armed forces high command had earlier issued “Communique No.1”, declaring it was taking control of the nation in what some called a military coup seeking to end the turmoil under the 82-year-old former general, who has ruled for 30 years.
“Leave! Leave!” chanted hundreds of thousands who had gathered in Cairo’s Tahrir Square in anticipation that a televised address would be the moment their demands were met.
Instead, the former air force commander portrayed himself as a patriot and war hero overseeing an orderly transition until an election in September — in which he said last week he would not stand. Mubarak praised young people who have stunned the Arab world with unprecedented rallies. He offered constitutional change and a bigger role for Vice President Omar Suleiman.
Waving shoes in the air in a dramatic Arab show of contempt, the crowds in central Cairo chanted: “Down, down Hosni Mubarak.”
Asked if Mubarak would step down, an Egyptian official had told Reuters before the speech: “Most probably”. But his information minister had said that would not be the case.
Joy turned to despair and then to anger.
Mohamed ElBaradei, a Nobel peace prize winner and retired U.N. diplomat who runs a liberal political movement, wrote on Twitter: “Egypt will explode. Army must save the country now.”
DELEGATING POWERS
In a 20-minute address in which he said he would not bow to foreign pressure — Washington has called on its old ally to make way quickly — Mubarak said he would “delegate to the vice president of the republic the prerogatives of the president of the republic in a manner that is fixed by the constitution”.
“It is not immediately clear what powers are being handed over,” British Foreign Secretary William Hague told the BBC.
Suleiman, a 74-year-old former intelligence chief who was promoted just last month, is not widely popular with protesters who are seeking a complete break with the military-dominated system that has governed Egypt for the past six decades.
Suleiman appeared on state television to say there was a “road map” for transition and said he would oversee a “peaceful transition of power” in the Arab world’s most populous nation.
Egypt’s sprawling armed forces — the world’s 10th biggest and more than 468,000-strong — have been at the heart of power since army officers overthrew the British-backed king in 1952.
The army, from politically plugged-in generals to poor conscripts and junior officers, is key to what happens next. “This poses a real dilemma for the army,” said Rosemary Hollis at London’s City University. “Are they going to allow the demonstrators to escalate their demonstrations so that they push the point that Mubarak has got to go, and that means the army definitely does split with Mubarak? he demonstrators are very disappointed and there will be violence.”
Robert Springborg of the U.S. Naval Postgraduate School called Mubarak and Suleiman’s speeches “enormously provocative”, made by “desperate men, willing to gamble the fate of the nation for their own personal interest”.
“The speeches … are not intended to bring an end to the crisis in a peaceful way but to inflame the situation so there is justification for the imposition of direct military rule. They are risking not only the coherence of the military but even indeed, and I use this term with advisement here, civil war.”
The army quelled bread riots in Egypt in 1977 and halted a rampage by policemen over pay in 1986, but the momentous scale and consequences of the uprising that began on Jan. 25 across the country dwarfs those events.
I FELT YOUR PAIN
“I have felt all the pain you felt,” said Mubarak, who last week had already pledged not to run again in September. “I will not go back on my response to your voice and your call.”
“Your demands are legitimate and just … There is no shame in hearing your voices and opinions, but I refuse any and all dictations from abroad,” he said.
“I have announced my commitment to peacefully hand over power after upcoming elections … I will deliver Egypt and its people to safety,” he said, once more, as he did last week, trying to paint himself as the father of the nation.
After the speech last week many Egyptians beyond the urban elites in the vanguard of recent protests had said they were satisfied by a promise of change in due course and have said they were more interested now in an end to economic disruption.
Tourists, a key source of income to the country of pyramids and Red Sea beaches, have deserted the hotels since last month.
But the anger on the streets of Cairo and Alexandria, hours ahead of a planned “Day of Martyrs” protest today to commemorate the 300 or more killed by security forces since Jan. 25 appeared ominous in an environment where the army has been on the streets for two weeks and yesterday said it was in charge.
“We want a civilian state, civilian state, civilian state!” Doaa Abdelaal said on Twitter, an Internet service that many see as a vital catalyst for the protests in Tunisia and Egypt that have electrified oppressed populations across the Arab world.
“The army is worried that tomorrow on Friday the people will overpower state buildings and the army will not be able to fire back,” Anees said. “The army now is pressuring Mubarak to resolve the situation.”
It remained to be seen if his speech would satisfy the army.
“He doesn’t seem to understand the magnitude of what is happening in Egypt. At this point I don’t think it will suffice,” said Alanoud al-Sharek at the International Institute for Strategic Studies. “He has performed quite a sleight of hand. He has transferred authority to Omar Suleiman while somehow retaining his position as ruler.”
WASHINGTON WARY OF TUMULT
News that Mubarak may hand over power, or be unseated, in this key American ally in the Middle East had provoked loud and emotional cheers in Cairo’s Tahrir Square, the focal point for pro-democracy demonstrations. But some in the crowd were quick to protest they did not want military rule.
Washington’s approach to the turmoil has been based from the start on Egypt’s strategic importance — as a rare Arab state no longer hostile to Israel, as the guardian of the Suez canal linking Europe and Asia and as a major force against militant Islam in the Middle East.
President Barack Obama, hailing history unfolding, said the United States would support an “orderly and genuine transition to democracy” — Washington would be publicly uncomfortable if the army held on to power, and also does not want Islamist rule.
It had no immediate reaction to Mubarak’s speech.
Washington pressured Mubarak to speed up the pace of reform but stopped short of demanding the resignation of the president of the country, which has a 1979 peace treaty with Israel and an army which receives about $1.3 billion in U.S. aid a year.
The protests that have shaken the Egyptian political system and the political landscape of the Middle East was partly inspired by the example of Tunisia, where street protesters toppled the president on Jan. 14.
Below is reaction from analysts and economists.
EGYPT OPPOSITION LEADER MOHAMED ELBARADEI, ON TWITTER
Egypt will explode. Army must save the country now.
STRATFOR GLOBAL INTELLIGENCE FORECASTING COMPANY
Mubarak may still be attempting to hang onto power, but that does not mean the military does not have a plan. The military likely has anticipated the opposition’s complete rejection of Mubarak’s minor concessions.
Thus, the coming hours will tell whether this is the reaction that the army is waiting for to legitimize their intervention, for if the military does not act, the next likely scenario is for the demonstrations to spiral out of control.
ELLIOTT ABRAMS, SENIOR FELLOW FOR MIDDLE EASTERN STUDIES AT COUNCIL ON FOREIGN RELATIONS
My great fear is that if the demonstrations don’t end that the military begins to split over this. You may have younger commanders who don’t want to go down with the ship.
NABIL ABDEL-FATTAH, AL-AHRAM CENTRE FOR POLITICAL AND STRATEGIC STUDIES
Unfortunately I think this speech is going to be a critical point in the development of the crisis. In fact, it has pushed the crisis into a dark area. There appears to be a return to an oppressive political patriarchy that looks at what has happened with condescension.
HASSAN NAFAA, INDEPENDENT POLITICAL ANALYST AND GOVERNMENT CRITIC
The speech reflects a sick-minded leader unable to let go of power, afraid of repercussions after his corruption was exposed.
Mubarak is unaware of the turmoil on the Egyptian street and will drive the people to chaos. Egyptians feel insulted. Tomorrow at least half of Egypt will be on the street. The army will have to act quickly.
FRENCH PRESIDENT NICOLAS SARKOZY
I hope with all my heart for Egypt’s nascent democracy that they take time to create the structures and principles that will help them find the path to democracy and not another form of dictatorship, religious dictatorship, like what happened in Iran.
BRITISH FOREIGN SECRETARY WILLIAM HAGUE, ON BBC TELEVISION
We are studying very closely what the president and vice president of Egypt have said. It is not immediately clear what powers are being handed over and what the full implications are.
We think the solution to this has to be owned by the Egyptian people themselves. All we want in the United Kingdom is for them to be able to settle their own differences in a peaceful and democratic way.
BRIAN KATULIS, MIDDLE EAST EXPERT AT CENTER FOR AMERICAN PROGRESS IN WASHINGTON AND INFORMAL ADVISER TO WHITE HOUSE
The essential question right now is what happens on the streets and how the military will handle that.
It seems to me the army is sending different signals. Earlier today it was reported that they had senior officials say to demonstrators all of your demands will be fully met. That clearly was not the case if you listen to Mubarak’s and Suleiman’s speeches. That indicates to me some possibilities for internal divisions.
ROBERT SPRINGBORG, PROFESSOR OF NATIONAL SECURITY AFFAIRS AT THE U.S. NAVAL POSTGRADUATE SCHOOL
It’s an enormously provocative step. There are desperate men, willing to gamble the fate of the nation for their own personal interest. It’s a very sad historic moment for Egypt.
The speeches tonight are not intended to bring an end to the crisis in a peaceful way but to inflame the situation so there is justification for the imposition of direct military rule. They are risking not only the coherence of the military but even indeed, and I use this term with advisement here, civil war.
I think it needs to be made perfectly clear (by outside powers) that Mubarak and his regime are forfeiting Egypt’s future. Egypt is in an economic crisis. It is going to have to be bailed out and the short answer to what they are doing now is that it will not be bailed out with anything like a military regime in place that is associated with Mubarak, Omar Suleiman and these people who are part of this regime.
ANTHONY CORDESMAN, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES
The truth is that even the senior military now at the top of the power structure under Mubarak almost certainly have no clear idea of what happens next, and it will be days before anyone knows how well the transition will function, who goes and who stays, and how stable the result really is.
ANGUS BLAIR, HEAD OF RESEARCH, BELTONE FINANCIAL, CAIRO
Now he’s not leaving, and it’s not enough. The market’s not going to rise, the market is going to fall, and people are angry. Expect a weekend of disturbance, of bigger protests.
(On the possibility the stock exchange will reopen on Sunday:) I don’t know if it will open now. You’ll have an indication from the GDR prices tomorrow. They were down sharply in the morning (on Thursday), then they recovered during the day. Not all of them, all the whole ground, but quite a lot.
The currency will weaken a little more at the moment, given this news, until he leaves his office. But it won’t be significant. I don’t expect significant depreciation.
STEPHEN GRAND, MIDDLE EAST EXPERT, BROOKINGS INSTITUTION IN WASHINGTON
It was quite surreal. He’s a stubborn old man who refused to see the writing on the wall. I happen to believe the demonstrations will continue, people will continue to push for his ouster and eventually will succeed.
ROSEMARY HOLLIS, PROFESSOR OF MIDDLE EAST POLICY STUDIES, CITY UNVERSITY LONDON
This is simply not enough. A critical turning point was reached in the last two days and I don’t see Mubarak can hang on without there being serious trouble now. The demonstrators are very disappointed and there will be violence.
JOHN SFAKIANAKIS, ECONOMIST, BANQUE SAUDI FRANSI
Markets are going to see this and run away.
It just makes it more confusing and unpredictable than ever before. Unpredictability is the thing foreign investors hate, along with political instability, and this is really the epitome of both of theses elements.
I think international investors will brace for the worst, because they will now begin to expect a severe deterioration of the political situation, which means the currency is going get pounded, the stock market will get pounded, and they will leave Egypt en masse.
There seems to be a gap between what society wants and what the president is delivering, and the two together are a destructive mix, and investors would not want to see nor participate in a country that has this.
ALANOUD AL SHAREK, SENIOR FELLOW, REGIONAL POLITICS, INTERNATIONAL INSTITUTE FOR STRATEGIC STUDIES-MIDDLE EAST
He doesn’t seem to understand the magnitude of what is happening in Egypt.
At this point I don’t think it will suffice. He still seems to think he is the top patriarch and custodian of the Egyptian people. He doesn’t realise that there is a genuine act of resistance taking place.
MATT SMITH, ANALYST, SUMMIT ENERGY, LOUISVILLE, KY:
We’re putting a premium back on oil prices because of continued uncertainty in Egypt. Many people expected Mubarak to resign and he didn’t.
RICHARD ILCZYSZYN, SENIOR MARKET STRATEGIST AT LIND-WALDOCK IN CHICAGO:
It was a bit of a surprise for us and the market. Oil markets are going to respond to the upside. It is now a lingering debate. Any instability in the Middle East means higher prices in oil.
BILL O’GRADY, CHIEF INVESTMENT STRATEGIST, CONFLUENCE INVESTMENT MANAGEMENT, ST. LOUIS, MISSOURI:
Oil and equities market are choppy after the non-announcement by President Mubarak. We don’t know what to do with this announcement. I think we may be on the cusp of a coup d’etat since the military and the civilians are not on the same page as the government.
The younger military really want to see this guy go and they are allied with the protesters. The older military don’t want to give up power just yet and want to play a role in the orderly transition of power. This is playing out a lot like the situation with Anwar Sadat.
PETER BEUTEL, PRESIDENT, CAMERON HANOVER, NEW CANAAN, CONNECTICUT:
His speech did not do anything to assuage those who are in opposition to him. Analysts expect the protests to continue.
The great fear of the oil market is that violence and protests which seem likely to intensify after the speech may be transferred to other parts of the oil rich Middle East.”
MOHAMED EL-ERIAN, CO-CHIEF INVESTMENT OFFICER AT PACIFIC INVESTMENT MANAGEMENT CO
By falling far short of what millions of Egyptians are looking for, the president’s speech will fuel enormous popular anger.
Given the intense disappointment with the speech in Egypt, the country has entered this evening an ominous period of extreme tension and danger that can only be resolved by credible regime change that the majority of Egyptians can buy into.”
ALANOUD AL SHAREK, SENIOR FELLOW, REGIONAL POLITICS, INTERNATIONAL INSTITUTE FOR STRATEGIC STUDIES-MIDDLE EAST
“He doesn’t seem to understand the magnitude of what is happening in Egypt.
At this point I don’t think it will suffice. He still seems to think he is the top patriarch and custodian of the Egyptian people. He doesn’s realise that there is a genuine act of resistance taking place. He has performed quite a sleight of hand. He has transferred authority to Omar Suleiman while somehow retaining his position as ruler.
It’s a very strange manoeuvre. And he sheds responsibility for any of the negative things that have happened.”
STEPHEN SCHORK, EDITOR, THE SCHORK REPORT, VILLANOVA, PENNSYLVANIA
“The market did not react to news from Egypt. We were up a bit in post settlement trading but I think that is more on technicals. The market is confused now. Given how much weakness we saw last week, I expect prices to move higher.”
MATT SMITH, ANALYST, SUMMIT ENERGY, LOUISVILLE, KY:
“We’re putting a premium back on oil prices because of continued uncertainty in Egypt. Many people expected Mubarak to resign and he didn’t.”
RICHARD ILCZYSZYN, SENIOR MARKET STRATEGIST AT LIND-WALDOCK IN CHICAGO:
“It was a bit of a surprise for us and the market. Oil markets are going to respond to the upside. It is now a lingering debate. Any instability in the Middle East means higher prices in oil.”
BILL O’GRADY, CHIEF INVESTMENT STRATEGIST, CONFLUENCE INVESTMENT MANAGEMENT, ST. LOUIS, MISSOURI:
“Oil and equities market are choppy after the non-announcement by President Mubarak. We don’t know what to do with this announcement. I think we may be on the cusp of a coup d’etat since the military and the civilians are not on the same page as the government.
“The younger military really want to see this guy go and they are allied with the protesters. The older military don’t want to give up power just yet and want to play a role in the orderly transition of power. This is playing out a lot like the situation with Anwar Sadat.
“This has got to have the Saudis all hacked off, since the U.S. Administration is not likely to do anything except dump a guy when sentiment goes against him. The Saudis are likely seeing a replay of Jimmy Carter and they don’t like it.”
PETER BEUTEL, PRESIDENT, CAMERON HANOVER, NEW CANAAN, CONNECTICUT:
“His speech did not do anything to assuage those who are in opposition to him. Analysts expect the protests to continue.
“The great fear of the oil market is that violence and protests which seem likely to intensify after the speech may be transferred to other parts of the oil rich Middle East.”
STEVEN COOK, MIDDLE EAST ANALYST, COUNCIL ON FOREIGN RELATIONS IN NEW YORK:
“We have seen today some movement but nevertheless Hosni Mubarak appears defiant to the end.”