New Year brings with it splendid new opportunitiesJanuary 4, 2016 10:46
Egypt’s “dream revolution” still looks distant
The new government doesn't seem to know where it's going, and the economy is sinking slowly.
November 21, 2012 2:39 by Reuters
By Una Galani
A rainbow-coloured mural on the wall of a café in Egypt’s busy capital teems with optimism. Yet the aptly-titled “dream revolution” fresco draws a mock smile from customers. The country doesn’t have a functioning police force, suffers from daily strikes, and religious tension is on the rise. Nearly two years after Hosni Mubarak was ousted, high expectations from the popular uprising are yet to be fulfilled. The new government doesn’t seem to know where it’s going, and the economy is sinking slowly.
“We’ve hit a bottleneck”, grumbles the chief executive of a large business as he sips coffee on a hotel terrace.Egypt elected a moderate Islamist president, Mohamed Mursi, and the government of his Muslim Brotherhood movement has been in power almost five months. But the country still doesn’t have constitution, nor a parliament. The divide between conservatives and liberals is growing. Government advisors privately talk about the difficulty of working with the existing bureaucracy and acknowledge that the new regime has been reluctant to make tough decisions.
“We knew it would take time”, says a senior professional woman holding her hands to her head in frustration, “and we were willing to give the Islamists a chance but we’re not even on the right track”. The complaint is symptomatic of how support for The Freedom and Justice Party, the political arm of the Brotherhood, is waning.
The Brotherhood’s success in wrestling power from the military after Mubarak’s ouster has been undermined by its failure to tackle basic problems such as energy shortages, garbage collection, and security. As pointed out by one fund manager, political mistakes – the failure to form a competent government, or the appointment of an Islamist-dominated constitutional assembly – will have economic consequences as well.
The country seems as paralysed as the traffic in central Cairo’s gridlocked streets, which is made worse as crowds of all sizes now routinely hold protests against a whole range of issues. But the basic complaint is the same in boardrooms as it is in the streets. Egypt needs a sense of movement and “direction”, as one investment banker summed up.
Hopes for a rapid rebound have vanished as the government dithers. The economy will grow 2 percent this year, according to the International Monetary Fund, one third of the average during the last five years of Mubarak’s rule – and Egypt needs at least that 6 percent growth to contain its double-digit unemployment.
A preliminary deal with the IMF worth $4.8 billion has been agreed and will be finalised in December. That will allow banks that have made handsome profits financing the government by buying its T-bills at sky-high rates to resume lending to the private sector. It might also help shore up the pound, which is trading at its weakest level in almost eight years.
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