Download North Africa Outlook: Egypt`s new rulers offer liberal reforms backed

July 2013
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North Africa Outlook: Egypt’s new rulers
offer liberal reforms backed by an iron fist
Support from the Gulf has helped ease a chronic fuel
supply problem and the generals have appointed a
government that will push liberal economic recipes, but
as politicians and business recalibrate following Morsi’s fall,
delivering positive results will depend on Egypt achieving a
degree of consensus that cannot be bought at the barrel of a
gun, write Jon Marks and John Hamilton
T
Those anxious to see ‘stability’ restored to a region wracked by
turmoil since the 2011 Arab Spring will warm to the policy mix
likely to be introduced by Egypt’s new government. Interim
prime minister Hazem El Beblawi is likely to seek an early deal
with the International Monetary Fund and the full disbursement
of some $8bn committed by Saudi Arabia and the United Arab
Emirates.
As promised when General Abdelfattah El Sisi announced the
overthrow of elected President Mohammed Morsi in the name
of the people and the Supreme Council of the Armed Forces
(Scaf), a government comprising mainly ‘technocrats’ is being
put in place. The army says it wants no part in day-to-day
government, but soldiers are openly policing Cairo, other major
urban centres and troubled Sinai; and the police – a cornerstone
of the Mubarak regime ousted in January 2011 – are playing a
public role in curbing protest by the Muslim Brotherhood (AlIkhwan Al-Muslimeen) and other aggrieved groups.
With the death toll rising, two Egypts are confronting each
other: one shaped by the power-brokers who drove Morsi and
his Ikhwan-dominated government from office; the other
comprising the ex-president’s supporters, plus secularists
sceptical at the military’s motives and smaller Islamist groups,
who are wondering how the military is back at centre-stage
after the 2011 revolution and elections in 2012 that were
deemed fair.
Morsi was ousted following much-anticipated mass protests on
30 June, orchestrated by a youth-led group Tamarrod (Rebel), in
a reflection of the extent of Egypt’s economic and social
problems. Tamarrod members have since complained at being
sidelined in a decision-making process dominated by the Scaf.
The youthful core of Tahrir Square revolutionaries, leftist and
Islamist critics are likely to be disappointed as the new political
dispensation is rolled out.
Interim president Adly Mansour was the Supreme
Constitutional Court’s chief justice. While the Scaf has
announced appointments and initiatives in his name, Mansour
was silent in public during his first week in office. The
replacement regime is showing signs of being economically
liberal, while backed by the strong arm of the military. It is
unclear whether the Ikhwan – Egypt’s largest political grouping
– will be given any role.
Regional outlook
The overthrow of Egyptian president Mohamed Morsi following mass
protests against his administration demonstrates the fragility of the
political reform process which began in the ‘Arab Spring’ revolutions of
2011 and which still has a long way to run. In the long term, all the
countries of the region – including Morocco and Algeria which have so far
avoided revolutions – face unpredictable and potentially seismic social
change. In the short term, governments from Cairo through to Rabat must
do what they can to get through a potentially explosive summer coinciding
with the holy month of Ramadan that started on 10 July.
In Egypt, Ramadan brings the likelihood of serious black outs and
possibly further civil unrest. Gas supplies for power stations are still
unsecured and the massive uptake of air conditioning amongst the
population is pushing electricity consumption to new highs.
Libya hopes to maintain power production throughout the peak periods
in July and August as it is bringing in temporary generation units. But
while the implementation of the political isolation law is still uncertain,
unruly militias continue to disrupt government and strikes periodically shut
in up to one-third of oil production.
The Tunisian opposition movement has failed to harness the momentum
of the Egyptian counter-revolution to build a mass movement against the
An-Nahda dominated government, which is making progress towards
finalising a constitution.
Rumours of President Abdelaziz Bouteflika’s imminent return to Algeria
from Paris have so far proved misleading. He is in his third month of
treatment for a stroke. Decision-making is frozen and anti-corruption
investigations are continuing regardless.
By allowing the ‘moderate Islamist’ Parti de la Justice et du
Développement (PJD) to form a government in 2011, King Mohamed VI has
insulated Morocco from the dominant political trend in spite of a worrying
level of economic deprivation.
Beblawi’s government faces daunting challenges: Morsi’s
government had overseen rising government debt (to around
$40bn from $30bn at end-2010), inflation rising into double
digits and unemployment reaching a record 13.2% according
to official data. Austerity, with measures that protect poorer
Egyptians built in, is likely to dominate.
John Hamilton is a senior North Africa analyst and director at
Cross-border Information (CbI), a business intelligence and
consultancy company that tracks people, politics and
business across Africa and the Middle East
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