Reva Bhalla: Hello, my name is Reva Bhalla, and I'm here today with Middle East Analyst Jacob Shapiro to talk about recent events in Egypt and the regional ramifications. So, Jacob, just at the start of this month, Egypt entered another phase of its post-Mubarak political paralysis, this time with the military actually granting the opposition's wish of ousting Muslim Brotherhood leader Mohammed Morsi and installing a new government. But we were in a very different place just a year ago. Jacob Shapiro: Yes, and it's a huge setback for the Muslim Brotherhood government. I mean, this is sort of what the Muslim Brotherhood has been working toward for decades really, since it was founded in 1928. And they finally got to sort of the pinnacle — they had Mohammed Morsi elected last year, just 12 months ago, in elections. But since Morsi was elected, he basically found ways to just upset every single segment of Egypt's political spectrum. So from the get-go, the military wasn't really happy with him, and there's was sort of an antagonistic relationship between the Brotherhood and the military but they decided that because the Brotherhood was the most powerful social and political organization that there was, they had to cooperate with them. But sort of in succession, Morsi and the Muslim Brotherhood went about upsetting the police and security forces, the judiciary by their grabs to sort of take power away from them, even by the end we saw Islamist groups professing sort of a lack of acceptance and satisfaction with what the Muslim Brotherhood had done, with the Salafist al-Nour Party signing onto the military coup. So they really sort of messed up, for lack of a better term. Reva: Sure, but you know that that rush toward consolidating power that Morsi led is understandable to a large extent. When you think of the Muslim Brotherhood for decades, long repressed — I remember when I was in Cairo, you know, at the height of Mubarak's regime, and every time you went to go and meet Brotherhood leaders they would be shifting around from safe-house to safe-house. Guys you would be talking to would be saying, "Sorry, I missed my appointment because I was in jail yesterday." It was a very paranoid state for them, and they were just very patiently waiting for their political opening. I was always impressed by their intense patience. And so they finally had that, right? And that political opening was there just long enough for them to rush in and try to consolidate power over all these institutions using their popular support. But it was hollow, right? What were they lacking? Jacob: Well, and I think some of that was a miscalculation on their point, right? Because they thought that because they had won that election, they thought that democracy was going to carry the day and they were going to be able to rule based on that legitimacy. What they failed to take into account was the fact that Egypt fundamentally, though there was a democratic election, the secular democratic values — freedom of the press and freedom of speech and all these things that we associate with liberal democracies — weren't there. And these weren't things that were going to sprout up overnight. And furthermore, like you said, the Brotherhood is used to being in the opposition. They're used to being paranoid and watching their backs and making sure that they can consolidate power when they get it. So rather than coming to the system and trying to engage other factions and sort of being able to work as a whole with other parts of the society, they got in and realized they had to consolidate as much control as they possibly could. That caused a big backlash against the organization, and Egypt's political culture obviously reacted really negatively to everything. Reva: And most importantly, they lacked the strong military support to enforce any of their very unpopular decisions. They lacked the judiciary support to really do anything. So that political paralysis was very understandable. Now, the military's position in all this has been really interesting. Jacob: Yeah, I mean, the thing is that it's sort of a combination of two things, right? They didn't really have the military support, and they didn’t have the support of these other parts of the political spectrum that they would have liked. But they also didn't reach out. You know, they didn't do a good job of trying to build those connections with the military, or trying to work with the judiciary. And the extent that was the judiciary not wanting to work with them, or the Muslim Brotherhood not being willing to reach out, we'll never really know sort of what it was. But it was obviously sort of both sides weren't able to come together and work together in any sort of democratic framework. And that's ultimately what resulted in the coup. Reva: But the military, as we've said from the beginning of our coverage, has always been the core institution to watch here. But it's been on this very slippery slope when it comes to its credibility, right? Like when Mubarak was being ousted, the military played a very careful line between the protesters, really shifting the blame to the police for all the abuses that people were upset about. And they were seen as the saviors. But I still remember shortly after Mubarak's ouster, you would walk down the streets of Cairo and all of a sudden you would see pictures of generals, like Tantawi, graffitied on the wall right next to Mubarak's face. And so all of a sudden, the military became very unpopular, then with the Brotherhood empowered there were so many conspiracy theories about the Brotherhood and the military in cahoots. And now, the military's back in that sort of savior image. But I don't think it's going to last very long. Jacob: It's part of the quality of mob politics and how mob politics work. I mean, one minute you're on top, the next minute you're not. I mean, there have been reported, and we read reports about reporters who went to the Muslim Brotherhood sort of pro-Morsi protests around the time of the coup, and they thought the military was completely on their side. And even after the coup happened, some of them were saying, "No, the military will come." Like, "They'll save us." Like you said, the military has this deep, entrenched sort of picture or image in Egyptian society as sort of being the saviors and being the ones that can make things right. And like you said, the military itself has to balance between intervening directly and sort of becoming the target for all of this popular dissatisfaction in the country, but also upholding that role and using that legitimacy they've built up over time since they came to power in 1952 to help rule the country. Reva: And that's a very tricky balance, right? So the military's going to be very quick to transfer control to a new civilian government, while keeping itself entrenched in the process. But, describe this new government. I mean, is it — what should we expect? Everyone's calling it a technocratic government. Is it really? Jacob: No, I don't think it's a technocratic government at all. I think in many ways it's just there to ensure that the military's interests are kept in place. I mean, remember the military worked with the Muslim Brotherhood to make sure that the constitution that the Muslim Brotherhood was trying to pass through the system was going to make — was not going to challenge any of the military's fundamental interests in the country, right? That constitution had to be suspended when they took the Muslim Brotherhood out of office, but now that they've installed their own interim president, who hasn't shown any willingness to sort of tackle any of Egypt's serious economic or political or social structural problems, he seems willing to just take aid from gulf countries like Saudi Arabia and Kuwait as sort of and sort of manage in the interim phase until they have a new civilian government. But the military wants this sort of power consolidated, and these figures that they've hand-picked to sort of run this constitutional process such that once the constitution is actually passed and once elections are actually held, the fundamental principles that will sort of underpin any government that comes up in Egypt will be based on those principles that the Egyptian military approved. So I think part of their calculus here is, Let's be sure that we're in on the ground when this constitution is written. Let's make sure that the people who write this constitution are in line with us and know what we want and it reflects our interest. And then once the constitution's written, and once we feel good about the fact that our interests are going to be protected no matter what happens, then let people go a little bit, and let them have elections, and let them feel like this is going to be democracy. But like you said, in the end, the military's going to be there to make sure its interests are met, and if they ever feel like it's not, they'll do exactly what they did to Morsi. Reva: And in the Muslim Brotherhood's very short-lived political career for now, that not only has ramifications domestically but of course regionally. I mean, Hamas was counting on this for their own political legitimacy. Now they're being squeezed, especially right now when we see this military build-up in the Sinai squeezing them and closing down their border crossings. We have the Brotherhood in Syria and the Sunni rebels now on the defensive. Even Turkey had this vision that it would be able to mold an Islamist presidency in Cairo that would allow it to exert its influence. And now Turkey's on the losing end of this bargain. But the gulf states also have been really interesting to watch. Jacob: Yes, and I think that part of what's so interesting is that when Iran — when the Syrian civil war sort of happened, and Iran lost its connection to Hezbollah and sort of lost that arc of Shiite influence that it had used as sort of, to really place itself in a good position in the region, there was sort of a free-for-all for influence. Suddenly Iran wasn't going to be as powerful as it was before. And you saw different nations and different groups trying to figure out just how much influence or just how much they could do to effect change. And I think that's finally starting to crystallize a little bit. When Egypt went to the Muslim Brotherhood, you sort of saw this arc of Muslim Brotherhood, moderate Islamist, pragmatic forces coming up in Turkey, in Qatar — there was talk of the Muslim Brotherhood in Syria, like you said, and also in Jordan, sort of rising to the occasion. But then you also had these more conservative states, particularly the gulf monarchies like Saudi Arabia, like Kuwait, like the United Arab Emirates, that wanted to make sure that whatever forces arose out of the Arab Spring sort of mob protests, and whatever came because of — as a result of all these clashes didn't fundamentally challenge their regimes, and their monarchies and the way that they made their lives. So, with Egypt sort of falling back to the military, you sort of see Egypt, which is the most populace Arab country in the region, which has the largest Arab military in the region, suddenly they've gone from being part of that sort of pragmatic Islamist part of the discussion over to more conservative, Saudi-Kuwait interests, where you want to sort of maintain stability rather than be open to these new political movements that want to experiment with new ways of governing. Reva: And speaking of which, the UAE just followed through in transferring another $3 billion to the Egyptian central bank, the Saudis are going to be transferring more money as well. And so that model that you described is holding, but we're still in this weird limbo, and this old order, where you had autocratic regimes and monarchies supplanting the colonial powers, relying very heavily on their militaries to maintain control over naturally fractious societies, colliding with the rise — the slow and uneven rise — of long-repressed Islamist forces. And in that limbo, countries like the United States, countries in Europe, are going to have a very difficult time trying to influence the situation. Jacob: Yes, and absolutely. And I mean, political competition comes in many different forms in the Middle East. I mean, you can have it like the Syrian civil war, where there are actually factions on the ground fighting each other. But then, like you said, the Saudi Arabians and the Emiratis gave a lot of money just recently after Morsi fell. Qatar has $8 billion already in Egypt, so you've already got their money there, and their influence isn't just going to evaporate overnight. They're still going to try to maintain their connections and their influence. So there's a myriad ways that all these different parties that are interested in the Middle East can try and move public opinion, or move the security situation and all this other stuff, and we're just going to have to watch as each one sort of puts their bet on a different horse and sees which one does well. Reva: And the problem is there are too many horses in this race. Jacob: Yes. Reva: Thank you, Jacob, for your insights. I think we're out of time. And thank you for joining us. And please follow our coverage on Egypt and these regional ramifications on Stratfor.com. We'll see you next time.