Sta­bil­ity at last for Egypt?

Financial Mirror (Cyprus) - - FRONT PAGE -

On Sun­day, af­ter his swear­ing-in cer­e­mony, the new Egyp­tian pres­i­dent, for­mer army head Ab­del-Fat­tah el-Sisi, told dig­ni­taries in Cairo that “the pres­i­dency of Egypt is a great honour and a huge re­spon­si­bil­ity.”

In­deed, the re­spon­si­bil­ity on his shoul­ders should not be un­der­es­ti­mated. Sisi has promised to work to­wards na­tional and re­gional sta­bil­ity in a na­tion of di­vided po­lit­i­cal fac­tions that is cur­rently ex­pe­ri­enc­ing its slow­est eco­nomic growth rate in two decades.

The west­ern world watched as Mubarak was over­thrown in the 2011 Arab Spring and hoped for a demo­cratic out­come. How­ever, Mursi, the coun­try’s first freely elected ruler, was crit­i­cised for im­pos­ing the ex­trem­ist views of the Mus­lim Brother­hood, a de­nounced terrorist or­gan­i­sa­tion, as well as mis­han­dling the econ­omy.

Sisi de­posed him and took con­trol. Con­tro­ver­sially, un­der his lead­er­ship, hun­dreds were killed in street protests and thousands were im­pris­oned, in­clud­ing those who sup­ported Mursi’s de­feat along with Brother­hood mem­bers, thanks to a new law re­strict­ing protests. How­ever, he ar­gued that free speech for Is­lamic mil­i­tants should not take pri­or­ity over na­tional se­cu­rity. Many sup­ported his case, and in the for­mal elec­tions last month, Sisi, al­beit with weak com­pe­ti­tion, soared to vic­tory with 97% of the vote.

Since Mubarak was top­pled, in the re­sult­ing three years of in­sta­bil­ity and un­cer­tainty, the Egyp­tian econ­omy has been in a dire state. Un­em­ploy­ment and in­fla­tion are on­go­ing prob­lems, cor­rup­tion is wide­spread, and for­eign re­serves are now about half of their De­cem­ber 2010 lev­els. Sisi’s an­swer is greater govern­ment in­volve­ment. He has talked about set­ting cer­tain food prices and about state­spon­sored projects to cre­ate jobs, but si­mul­ta­ne­ously prom­ises to make the coun­try busi­ness and in­vestor friendly.

His eco­nomic poli­cies will cer­tainly ben­e­fit from greater in­ter­na­tional sup­port now that the Mus­lim Brother­hood no longer holds sway. The UAE, Saudi Ara­bia, and Kuwait have sent al­most $12 bln in cash and petroleum prod­ucts. The coun­try may also be el­i­gi­ble for a loan from the In­ter­na­tional Mon­e­tary Fund, which would raise con­fi­dence and in­vest­ments. It is sus­pected that Sisi will con­sider im­ple­ment­ing aus­ter­ity mea­sures should it help prove to the IMF that Egypt is now mov­ing in a more sen­si­ble di­rec­tion.

In a TV in­ter­view be­fore the elec­tion, Sisi claimed that the Egyp­tian peo­ple will no­tice the eco­nomic im­prove­ments within two years. The econ­omy is es­ti­mated to grow at a rate of 3.2% in the next fis­cal year. The public cer­tainly hope that his poli­cies will work, and their vote ex­presses their de­sire for change af­ter years of un­rest. How­ever, these are not a peo­ple known for their pa­tience. Words are not ac­tions. Sisi will have to prove him­self in the com­ing months if in­deed he wishes to stay in power and put the days of po­lit­i­cal rev­o­lu­tion to rest.

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