Bottom Line: The coup in Egypt boils down to a change in power brokers from Qatar to Saudi Arabia, which is in line with the preferences of the US and Israel.
Analysis: It is difficult to understand the geopolitical dynamics surrounding Egypt right now partly because US policy remains confused since Washington lost its footing in the post-Iraq invasion and more acutely during the Arab Spring. Washington had supported the Muslim Brotherhood, via its Qatari allies, but there was one particular move on the part of the MB that gave Washington a change of heart. It was not the call to arms for Sunni jihadists in Egypt to head to Syria to fight the Assad regime—this only worked in Washington’s (short-sighted) favor. The final straw was now-deposed President Mohamed Morsi’s call to arms in the Sinai, his clear goal of making a Muslim Brotherhood path from the Sinai to Gaza. The Sinai is Israeli territory, as far as Washington and Tel Aviv are concerned, and this is a no-go area for the Muslim Brotherhood. For Israel, an Egyptian government is acceptable as long as it honors Camp David.
Recommendation: The Egyptian military’s slaughter of hundreds of Muslim Brotherhood supporters as it used total force to disperse a massive sit-in sets the brief bankruptcy reprieve back and bodes ill for repairing the economy on any real terms. What happens next, though, will depend less on the military’s missteps than on the geopolitical dynamics. The Egyptian coup has set in place a new power paradigm that favors a US-Saudi-Israeli axis, and it will be these three forces in the end that determine what happens next. For this reason, we expect the military to wade through the mire of its own misjudgment with help from outside forces. Qatar is definitively out of the game now after its brief but very visible flirtation with a legacy much bigger than itself.