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Newly appointed Egyptian Minister of Defence, Lieutenant.-General Abdel-Fattah el-Sissi, left, meets with Egyptian President Mohamed Morsi in Cairo on Aug. 13, 2012, the day after Mr. Morsi shook up the military by retiring some generals.Egyptian Presidency/The Associated Press

There seems to be an endless stream of dramatic political developments in Egypt since the overthrow of Hosni Mubarak a year and a half ago. The latest is the move by President Mohamed Morsi to retire the most senior armed forces officers and regain some presidential constitutional prerogatives that those officers had taken for themselves in June. The immediate tug-of-war for supreme national authority between the armed forces and the President (who is seen as a proxy for the Muslim Brotherhood) hides several historic and longer-term developments of profound importance to Egypt and the entire Arab world that Egypt usually influences.

These include the birth and nurturing of a stable constitutional and republican system of government, and the retooling of the role of the Egyptian Armed Forces in national life. Both of these are necessarily slow, complex processes that are under way in a serious manner, which is to be applauded. The irony of the tug-of-war for power between the Islamist presidency and the armed forces is that both of them represent legitimate power in the eyes of the Egyptian people, who nevertheless do not want either of them to monopolize power and return to the authoritarian rule of the Mubarak era.

They will soon have to learn to share power with the three other basic elements of Egyptian national politics that are still being born: the parliament, the judiciary, and the citizenry that has yet to express itself fully through stable political parties and civil society. These players will slowly assert themselves in the months and years ahead, starting with a new constitution that must be ratified by a national referendum, followed by parliamentary elections.

In this wider context, the most important element of this week's moves by Mr. Morsi must be the assertion of civilian authority over aspects of the military – in this case only its leadership. This has more significance in the long run than the other dramatic move by Mr. Morsi, which was to cancel the June 17 constitutional declaration that aimed to give the Supreme Council of the Armed Forces (SCAF) legislative and executive authority, cement its long-term decision-making authority, and weaken the powers of the incoming president. There is no serious debate about the fact that Mr. Morsi enjoys greater popular legitimacy than the SCAF, because he was elected and the SCAF was given only temporary responsibility for overseeing the transition to a new democratic system in Egypt. So his abrogation of SCAF's slightly hysterical grab for long-term constitutional power is widely seen as legitimate and acceptable.

When parliament and the judiciary participate more routinely in national policy-making, the armed forces' public policy role will shrink even further. Getting the civilian-military balance in political life right is the single most important challenge in Egypt and any other Arab country experiencing historic transformation from autocratic to democratic rule. Mr. Morsi has quickly asserted the presidential prerogative in naming the senior commanders of the armed forces, but a stable civilian-military balance will take many years to achieve, given the deep penetration of the armed forces' many branches in national, provincial and local governance structures, as well as in the economy.

To appreciate the magnitude of the task ahead, interested readers should turn to a timely and high-quality analysis of exactly how the armed forces dominate Egyptian life, Above the State: The Officers' Republic in Egypt, published this month by the Carnegie Endowment for International Peace's Middle East Center and written by Yezid Sayigh. His main point is that the Egyptian Armed Forces senior officers corps since 1991 expanded their thorough penetration of almost every sphere of Hosni Mubarak's crony patronage system, through "the promise of appointment upon retirement to leading posts in government ministries, agencies, and state-owned companies, offering them supplementary salaries and lucrative opportunities for extra income generation and asset accumulation in return for loyalty to the president. This officers' republic served as a primary instrument of presidential power, and even after Mubarak's ouster retains its pervasive political reach, permeating both the state apparatus and the economy – not just at the commanding heights but at all levels."

Elected civilian officials now must confront these "self-perpetuating military networks" of thousands of retired officers in senior positions throughout all levels of the state governance system, the economy, and many privatized holding companies and commercial firms. The "officers' republic" will fight back if it feels its privileges are threatened by civilian control, Mr. Sayigh says, and could turn into an embedded " 'deep state' with the potential to obstruct government policies and reforms and impede public service delivery, undermining the performance and legitimacy of democratically elected civilian authorities. Only after the officers' republic is completely extricated from the Egyptian state and dismantled can Egypt's second republic be born."

I suspect that this is where we are witnessing the real birth pangs of a new Middle East.

Rami G. Khouri is editor-at-large of The Daily Star and director of the Issam Fares Institute for Public Policy and International Affairs at the American University of Beirut.

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