When is a coup not a coup?

One of the more logic-defying aspects of the Egyptian crisis reaches new levels of absurdity.

Most sane people would agree that the deeply disturbing situation in Egypt amounts, in effect, to a military coup. On July 3 the nation’s first democratically-elected president, Mohamed Mursi of the Muslim Brotherhood, was ousted from office by the military, purportedly acting on behalf of millions of vociferous street protesters who had grown tired of his political and economic mismanagement. Predictably, this erosion of fundamental democratic values has led to violence and bloodshed, with secular Egyptians pitted against understandably alienated Islamist factions.

The military’s role in this chaos is suspicious to put it mildly. While army chiefs are adamant that they are acting under a popular mandate, and their intervention was celebrated wildly by many demonstrators – plenty of whom too young to remember several decades of repressive military rule in Egypt – there are lingering doubts as to the purity of their intentions. The interim authorities have hastily assembled a “roadmap” theoretically leading to fresh elections next year and a return to civilian rule, but recent developments have concerned many. Mursi continues to be held under house arrest; many other Muslim Brotherhood leaders are either under confinement or the subject of arrest warrants. Confusion and likely misinformation still shroud the events of July 8, when over 50 Mursi supporters were shot dead outside an army barracks in Cairo – both sides blame each other. Most recently, army chief Abdel Fattah al-Sisi took the unusual step of openly calling for popular demonstrations, apparently to give him a mandate to confront “violence and potential terrorism”. The military has also threatened bloodshed against pro-Morsi activists resorting to violence. Whether Egypt is being returned to the dark days of authoritarian rule is arguable; whether the recent chain of events equates to a coup is surely beyond question.

Not, it would seem, if you are the US government. On Thursday the Obama administration told Congress that it does not plan to make a determination on whether a military coup has occurred in Egypt, following several weeks of high-level dithering. The problem is that under legislation dating back to the 1980s US aid must stop to “any country whose duly elected head of government is deposed by military coup d’etat or decree” or toppled in “a coup d’etat or decree in which the military plays a decisive role”. Annual Washington aid to Egypt totals around $1.55 billion, the vast majority of which goes to the military. This is not mere altruism – Egypt, with its Israeli peace treaty and control over the strategically important Suez Canal, is a vital US ally in a volatile region. When Mursi was deposed Obama faced a conundrum – acknowledge the coup and lose valuable influence in the Middle East, or deny its existence and face questions over American commitment to the democratic process.

By burying its head in the sand Washington obviously believes that it can occupy a happy medium straddling these two undesirable outcomes. In reality, however, its refusal to face up to the bleeding obvious weakens US credibility abroad. Notwithstanding the military overthrow of an elected president, government officials considered Mursi incompetent, increasingly authoritarian and are not sad to see the back of him. Above all, the episode serves as a timely reminder that Western administrations will extol the virtues of democracy where it is in their national interests to do so, and no further.

Alex Rickets

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Mildly positive figures won’t arrest Apple’s downward spiral

Apple’s latest quarterly results, released on Tuesday night, lifted the American technology giant’s stock by 5 percent in after-hours trading as better-than-expected iPhone sales offset a sharp drop in underlying profits. The company said that profit fell by 22 percent in comparison with the same period last year; however sales of 31.2 million iPhones in the quarter ending in June – an increase of 20 per cent – beat market predictions and reassured investors that demand for Apple’s smartphones has not yet run dry.

In a nutshell, the figures weren’t as bad as many had feared. In recent times Apple has been dogged by suspicions that it no longer has the innovative potential of old, the Western smartphone market is saturated and it is losing ground in important emerging economies. Since September over 40% has been wiped off the value of its market capitalisation; last year it also ceded its crown as the world’s largest smartphone maker to Samsung. Against a backdrop of diminishing expectations solid iPhone sales figures were greeted largely favourably. US shipments grew by an impressive 51 percent.

It appears unlikely, however, that these mildly positive results will signal a reversal in Apple’s recent fortunes. Serious questions still remain about the company’s capability to produce exciting new models, having come up with nothing of the sort since the iPad in 2010. Strong performances by existing smartphone models in the US will not have much of an impact beyond the short-term given the general acceptance that growth potential in Western markets is slowing down. In China, where the smartphone market has yet to fill out to the same extent, Apple is losing out to Samsung and local competitors. Revenue from the Greater China area – which includes Hong Kong and Taiwan – slumped 43 percent from the previous quarter and is down 14 percent from last year. In the first quarter, Apple’s Chinese market share of 9.7 percent was well down on Samsung’s 17.7 percent. The general perception is that Samsung’s far greater variety of models and prices is better suited to the diverse Chinese market.

Beyond the iPhone, sales of Apple’s iPad underperformed market expectations. Year-on-year revenues fell 27 percent, hurt by a nine-month gap since the latest product launch. Although Apple still dominates the tablet computing market – CEO Tim Cook claimed that the iPad accounts for 84 percent of web traffic from tablets – increasing competition means that without engaging new models this side of the company’s business is also vulnerable to decline.

Cook has repeatedly insisted over the last few months that Apple has a raft of exciting new products in the pipeline. Recent trade mark applications suggest that these include a smartwatch, while there has also been speculation surrounding a foray into television and a cheaper iPhone, made of plastic rather than aluminium, to counter the company’s problems in emerging markets. It seems clear that the future technology battleground will be centred very much on China – here Apple has much ground to make up, having been outpaced by nimbler, more diverse competitors. Notwithstanding a better-than-expected quarterly report, expect the downward spiral of the former darling of the technology world to continue – unless its new launches catch the eye of consumers as the iPhone did.

Alex Rickets

Are the Conservatives recovering ground?

A recent opinion poll places the Tories level with Labour for the first time in over a year, markedly improving the chances of a Conservative majority in 2015.

The conventional wisdom over the last few months has been that Prime Minister David Cameron’s party don’t stand a chance of gaining a parliamentary majority at the next general election. A flatlining economy and lingering suspicions over the Conservatives’ perceived links to the wealthy have manifested themselves in a Labour lead of between five and ten points, depending on which poll you trust. This is despite data consistently indicating that Cameron as a leader is more popular than Ed Miliband, and that the Tories generally are more trusted on the economy.

Of late, however, the tide appears to have been turning, and this has now been backed up by the latest ICM survey for the Guardian newspaper. The poll demonstrates that, based on a sample of 1003 adults, Labour and the Tories are neck-and-neck in terms of voting intentions on 36 percentage points. This constitutes a seven-point month-on-month increase for the Conservatives; support for the Labour opposition, meanwhile, is unchanged. The big losers are UKIP, down five percentage points to 7% – a far cry from the party’s projected support only a couple of months ago. What should we make of all of this?

The first thing to note is that this apparent change in the political landscape is not attributable to a drop in support for Miliband’s party. The fact that Labour voting intentions have not altered in the last month suggests that the electorate does not care about the current trade union scandal, whereby Unite bosses stand accused of rigging Labour parliamentary candidate lists. The explanation does not lie to the left of UK politics.

Rather, it seems more likely that central to the resurgence in Conservative fortunes is the economy. Chancellor George Osborne indicated his willingness in 2010 to live or die by his economic policy – in light of the financial crisis it is the single pivotal issue on which the 2015 election will be fought. For three years, in light of weak confidence and stagnating GDP figures, this boldness seemed misguided. But green shoots are belatedly appearing – recent figures relating to consumer and business confidence, the dominant services sector and manufacturing have all been promising. While the Eurozone lurches from one near-disaster to the next, afflicted by high deficits, record unemployment levels and social unrest, UK growth forecasts have been revised upwards by national agencies and the IMF. The Conservatives have long been confident that an upturn in the UK’s fortunes will swing the opinion polls in their favour. This is with good reason – voters have been slow to forget Labour’s disastrous economic legacy, and have greater trust in the Tories’ ability to look after the nation’s finances.

The second major factor behind the Conservatives’ recovery is their repair of the right-wing vote. A few months ago, with Cameron appearing hesitant on the EU and local elections approaching (traditionally an arena for mass protest votes), UKIP were flying high in the polls, and many Tory figures worried that Nigel Farage would steal some of their politicians, much of their support and split the right. With the Lib Dems dead and buried and the left-wing vote heavily weighted in favour of Labour this could have led to a comfortable Labour majority. The story, however, is now very different. The Conservatives have been tough on welfare, restricting access to non-UK nationals in the recent spending review and rolling out their £26,000 household cap this week. They have also been tough on Europe, sponsoring a private member’s bill seeking to enshrine in law Cameron’s commitment to holding an in/out referendum in 2017. With the local elections now behind us, these factors have caused a dramatic slump in UKIP support. The Tories have regained the right of UK politics.

Although other polls continue to show a Labour lead Miliband has reasons to be worried. The fact that the ICM survey was for the Guardian newspaper – comfortably the most left-leaning UK broadsheet – means that its indication of a Conservative resurgence can be trusted. More importantly, the Tories increasingly appear to be the party most attuned to public opinion. A comfortable majority favours Cameron’s welfare cap, placing Miliband in an awkward position because traditionally his party would have firmly opposed such a concept. While Cameron has now set out his EU policy, pledging to hold a referendum after an attempted renegotiation of power balances, Miliband still appears vague and unclear on the topic. If the nation’s finances continues to improve, bringing into sharper focus the public’s economic distrust of Labour, a Conservative majority will no longer appear quite so far out of the question.

Alex Rickets