Further Attempts to Destabilize Egypt

Incident: Religious violence between Christians and Muslims in Egypt erupts to a dangerous level. In the city of Luxor, in highly Christian-populated Qena province, Muslim protesters attacked Christian-run shops and Christian-owned vehicles after rumors that a Christian man had sexually assaulted a 6-year-old girl. Police dispersed protesters initially with tear gas, but the tensions have risen to an irreversible high.  In another incident that is still simmering, a Coptic man who was an outspoken atheist sentenced to three years in prison for blasphemy. This particular case has done much to increase the community's fears of what is to come under the new constitution.

Bottom Line: Salafi jihadists are purposefully fomenting tensions between Christians (who number 10 million in Egypt) and Muslims in an attempt to destabilize the country ahead of new elections. Egypt's revolution has only just begun and this will compound the security risk to Western energy interests and also creates a very uncertain legislative playing field.

Analysis: Egypt's 10 million Christians (around 10% of the population) are dangerously nervous-and they should be. A new constitution forced through by Egypt's Muslim Brotherhood president, Morsi, does not protect their rights. Incidents of religious violence have increased significantly since Morsi assumed power amid both political and economic certainty and a weakened security apparatus. Rumors are now the stuff of immediate violence, and the entire region of Qena is a tinderbox-home to some of Egypt's poorest villages and a volatile mix of Christians and Muslims. December and January have seen a definite spike in Christian-Muslim tensions and incidents of spreading violence. The complicated reality is that the Muslim Brotherhood's alliances with the extremist Salafists are fractured, and while the secular opposition is rallying to regain strength at the 11th hour before April parliamentary elections, the bigger threat to the Muslim Brotherhood's hold on power may end up being the most extreme of the Salafis. It is in this atmosphere that Egypt's Christians are growing increasingly anxious and volatile. (Next week we will present a full Executive Report analysis of the situation in Egypt, which we believe is of prime importance to energy investors).