So Egypt joined the ranks of utterly undemocratic Saudi Arabia in turning down the invitation, while Jordan, Yemen, Algeria and Bahrain were more than happy to dine on the low-country delicacies of Sea Island, Georgia. “The spread of freedom throughout the broader Middle East is the imperative of our age,” President George W. Bush said afterward. A new Partnership for Progress endorsed by the G8 “will seek to advance the universal values of human dignity, freedom, democracy, the rule of law, economic and social justice” in the region, he declared.

Meanwhile, back on the banks of the Nile, minor legislative elections were fast approaching, Mubarak style: more than 50 key leaders of the outlawed Muslim Brotherhood–the usual suspects–had been arrested. The Cairo press reported allegations that several were tortured, and one died under murky circumstances. “They [the government] always manage to get ahold of Islamist leaders and put them in jail, then release them when the elections are over,” says Mona Makram-Ebeid, a prominent Egyptian politician and human-rights activist. “It doesn’t smell good.”

In fact, it’s that sort of record that has made “Egyptian democracy” an oxymoron in the Occident. It’s given Mubarak, 76, a reputation as a military strongman who uses the threat of Islamic unrest–sometimes real, sometimes exaggerated–to keep his people down and himself on top, a strategy he’s followed since his predecessor was murdered by extremists in 1981. It’s also fueled exasperation in U.S. policymaking circles. “The stagnation of Egypt is a tragedy for a great country,” says Judith Kipper, director of the Middle East Forum at the Council on Foreign Relations.

But Egypt may just be the best bet the Arab world has for the kind of contagious political reform the region needs. “The grand hopes of some [in the Bush administration] that Iraq would be a beacon for change are clearly not going to be realized in the near term,” says one experienced State Department official. The luncheon crowd at Sea Island represented countries that are either too small, or too much on the fringe, to have much impact. But Egypt, at the center of the Arab world, has 75 million people and a historical role as the hub of modern Arab culture. “It has a megaphone quality to it,” says the same official. Without Egypt, no movement toward greater democracy is likely to gather much momentum. With it, the chance for real change grows exponentially.

The raw material is there, say opposition figures and Western diplomats, which is one reason they’re so frustrated. Many Arab countries have to start from scratch building representative government; they have no history of democracy and no semblance of democratic institutions. Egypt has both. Parliament was established in 1866, and from the 1920s until the coup that brought Gamal Abdel Nasser to power in 1952, democracy flourished, even if it was under much-resented British tutelage. Unlike many other Arab countries whose borders were drawn in sand by colonial powers, Egypt has a strong sense of its own identity and legitimacy. To get Egyptian democracy on track, then, you shouldn’t have to invent the wheel. You just need to let it roll. “This is an absolutely critical moment, a tipping point in Egypt’s history,” says a Western envoy in Cairo.

But everything in Egypt politics, education and especially economic growth–seems to be stuck. “It’s like a small car with an engine that’s growing, but the chassis stays the same,” says Wael Nawara, a young Egyptian entrepreneur. “And the whole thing is getting more and more rusty.” In 1987, for instance, about $10 billion of a $40 billion GDP was produced by the private sector. By 1999 it was cranking out about $70 billion of a $100 billion economy. But the statist system wasn’t ready for a free-market free-for-all. “Businessmen were sent to jail or left the country because banking regulations didn’t match the reforms that were promised,” says Nawara. “And if the underground activity [the black economy] stopped, the country would come to a complete standstill.” If taxi drivers were paid what was on the meter, for instance, they couldn’t even buy gas. “Everything is forbidden, but everything is possible if you know how to pay the price,” says Nawara. “We can’t move ahead like that.”

Some would-be reformers put their hope in new parties that are now fighting for official recognition in the Egyptian courts. Makram-Ebeid, a Christian, is secretary-general of one called the Tomorrow Party, which advocates liberalizing the economy and developing information technology while evoking the spirit of the democratic movement of the 1930s. (Her grandfather, Makram Ebeid Pasha, was one of the heroes of what’s called the liberal era.) Other new parties hark back to Nasserist ideals of Arab nationalism, in one case, or a kinder, gentler, more open-minded version of Muslim Brotherhood teachings in another. “These new parties are reflecting new ideas, but with a legacy,” says Makram-Ebeid. “They’re not starting from scratch.”

Other reformers are hoping that the president’s son, Gamal Mubarak, can help open the country to greater democracy. A handsome and articulate former investment banker who lived in London for four years, he has cultivated an image as a business-friendly technocrat even as he’s risen to the top ranks of the ruling National Democratic Party. His job is to modernize the NDP and make it more appealing to Egypt’s youth. Gamal has brought young academics into the party’s policy wing, and vowed to boost education and health standards in the country. But some NDP elders resent his growing role, and perhaps his ideas, and rampant speculation that Gamal, 41, was being groomed to succeed his father has forced him to issue repeated denials and lower his profile. That has not dampened the speculation, not least because the country lacks another obvious successor. So in a way he, too, personifies Egypt’s dilemma: capacity for change, but a lingering inability to do so.

Even among Egyptian dissidents, you don’t hear much talk about getting rid of President Mubarak altogether. Egyptians generally appreciate the stability he brought in the past. After the assassination of President Anwar Sadat in 1981, Mubarak kept Egypt from sliding into chaos. In the early 1990s he had to fend off new challenges from rebels, terrorists and assassins, some of whom forged close ties to Osama bin Laden. His policies of coercion and co-optation worked. He crushed the terrorist organizations so effectively that there hasn’t been a serious incident in Egypt since 1997.

The problem is that his government acts as if it’s still under siege. “They want to wave the Islamic bugaboo at the West,” says one Western envoy. And the relatively tame Muslim Brotherhood suits that purpose so perfectly, its relationship with the Mubarak government seems almost symbiotic. The brotherhood is officially banned, but it has offices all over the country and ran candidates as nominal independents in the 2000 parliamentary elections. “Everybody knows we are the brotherhood,” says the group’s 75-year-old leader, Mohamed Akef. “The regime certainly knows we are the brotherhood.”

Here, too, the operative philosophy seems to be that everything is forbidden, but a lot of things are possible. The brotherhood’s candidates won 17 seats in the 444-member Parliament four years ago, which has made this outlawed party by far the largest of the tiny opposition groups tolerated by the government. The recent arrests and alleged torture of Muslim Brothers may have served to intimidate the party but were never intended to eliminate it. Meanwhile the government rules under emergency laws in effect for as long as Mubarak has been in power.

The people are very angry at all sides. Someday there will be an explosion because they don’t believe any side," says Magdy Ahmed Hussein, an Islamist often at odds with the brotherhood. “Not only is there no progress, but we are going from bad to worse. In 1987 we were 100 opposition members of Parliament, nearly a quarter of the total. Then the government stopped everything and returned to a 99 percent majority.” (Its current majority is actually closer to 85 percent.)

Focused on Iraq, Washington is not pushing very hard for change in Cairo. “We ask nothing of Egypt,” says the Council on Foreign Relations’ Kipper. “We ask them to cooperate on intelligence and security issues. But we don’t ask anything else of them, for all the billions we spend there.” The pressure of public diplomacy won’t do much good in any case. It’s not only the Mubarak government that resents American-sponsored plans. Average citizens also resist being told how to change their society. And terrorists take advantage. Last week a purported tape from Ayman al-Zawahiri, Osama bin Laden’s Egyptian No. 2, dismissed talk about reform in the Arab world as just another American conspiracy. A State Department official, speaking privately, summed up the kind of dialogue that might work with the Egyptian government. “We should have to accept that [reform] is not going to be immediate, but they have to accept that it’s inevitable.” The driving force is–and has to be–on the banks of the Nile, not the Potomac.

New elections are coming up next year, for the president and the National Assembly. If Mubarak remains in good health, he’s expected to run for yet another term, possibly unopposed. But what many opposition politicians say they want, in any case, is not a shot at the presidency. They want to crack open the doors of Parliament. They’re not even asking for, or expecting, to win a majority. “Something like 40 percent [opposition] to 60 percent [government] would be a good start,” says Makram-Ebeid.

That may not sound like full-fledged democracy, and it isn’t. But by the standards of any country in the Arab world, it’s not bad. If Egypt can begin a new era in which a little less is forbidden, and a little more is possible, that would be a good first step toward meeting the imperative of our age.