April 1, 2013

THE OBAMA administration and other Western governments are increasingly concerned that Egypt’s shaky Islamic government will exhaust the country’s foreign reserves rather than adopt the painful austerity measures necessary to win fresh funding from the International Monetary Fund (IMF). While the danger of an economic collapse is real, it is not the only threat the West should be focused on. Cairo is also on the verge of adopting laws that would cripple the country’s fragile new democratic order and drastically reduce the West’s ability to influence Egypt’s course.

Foremost among these is legislation that would regulate nongovernmental organizations (NGOs) — the building blocks of democracy. As in many other countries, Egypt’s independent human rights groups, legal aid societies, women’s groups and other organizations helped lay the groundwork for the 2011 revolution; now they are essential to ensuring that a free society takes root. Many of Egypt’s NGOs and nascent political parties have received funding or training from U.S. and European foundations, such as the National Democratic Institute, the International Republican Institute and Freedom House.

The former, autocratic government of Hosni Mubarak sporadically sought to repress NGOs, and the military regime that ruled the country in 2011 brought a criminal case against dozens of NGO employees, including a number of U.S. citizens. The flare-up in U.S.-Egyptian relations was defused when the Americans were allowed to leave the country, but the criminal case has continued, with a verdict now set for June. While saying that it is “determined to ensure that civil society is empowered,” President Mohamed Morsi’s government has done nothing to stop the criminal case; and now the legislative Shura Council, which is dominated by the ruling party, is considering restrictions on NGOs that go much further than those of the Mubarak government.

Under the proposed law, which won preliminary approval from the council late last month, the funds of NGOs would be subject to detailed government supervision. Groups would have to obtain official approval for their initiatives and could not receive foreign funding without the government’s permission. Moreover, all foreign organizations that receive funding from governments would be banned from working in Egypt — a stricture that would shut down organizations from America, Germany and elsewhere that have worked to nurture an independent civil society and train democratic politicians.

In effect, the new rules would destroy most of the country’s independent groups and place those that remained under government control. Together with another proposed law drastically restricting public demonstrations, the effect would be to neuter opposition to Mr. Morsi’s government and eviscerate the democratic regime it has promised to uphold.

Following an outcry by Western organizations, Mr. Morsi’s office issued a statement saying that “in light of the perceived lack of national consensus” on the law, “the presidency has reached out . . . to ensure that the law is not rushed through.” Thus far, however, the government has given no indication that it will retreat from the most harmful provisions, including the ban on congressionally funded U.S. NGOs. The Obama administration and the IMF have been urging Mr. Morsi to reach out to his opponents and build a coalition that can win public acceptance for measures to stabilize the economy. A similar compromise with civil society will be needed to preserve Egypt’s nascent democracy.