Egypt's long-awaited new premier likely to be a Liberal economist, not a Brother

Ahmed Feteha, Salma Hussein, Tuesday 17 Jul 2012

The name of Egypt's new PM is expected to be announced Tuesday. According to FJP officials, he will likely be a liberal economist - unaffiliated with the Muslim Brotherhood – with experience running state institutions

Egyptian president Mohamed Morsi with the soon-to-be-replaced PM, Kamal El-Ganzouri (Photo: Reuters)

More than two weeks have passed since Egyptian President Mohamed Morsi was inaugurated on 30 June, yet the country still awaits the appointment of a cabinet. The presidency has announced that a prime minister would be named on Tuesday.

Morsi explained the long wait on Monday by saying that he preferred to take his time and make “prudent” appointments, rather make any hasty decisions.  

Names of several potential candidates to head up the incoming government have been floating around for a while now. Almost all of them are economy people, making it very likely that Egypt's next premier will be a money-man.

Abdullah Shehata, economist and member of the Brotherhood's Freedom and Justice Party (FJP), appeared to confirm this. For him, it is “only logical” that Egypt’s prime minister in the post-Mubarak era comes from a solid economic background.

"Every time has its man. When the [former regime] wanted to make Mubarak’s son president, they chose Ahmed Nazif. Today, Egypt’s problems are primarily economic," Shehata explained.

Appointing economists to head up governments is, however, a longstanding Mubarak-era tradition. Apart from Nazif, the last prime minister before last year’s Tarhir Square uprising, all PMs were appointed directly by Mubarak since he took office in 1981. All of them had strong economic backgrounds.

The tradition appears likely to survive the ousted president. Among the names being touted for the post are three prominent bankers: current Central Bank of Egypt (CBE) Governor Farouk El-Oqda, former CBE governor Mahmoud Abul-Oyoun, and former deputy CBE governor Hesham Ramez.

Two former finance ministers have also reportedly been floated for the job: Samir Radwan and Hazem Beblawi. The latter, however, at the age of 76, says Shehata, does not appear to meet Morsi’s criteria, given his advanced age.

"This generation should not take over senior positions anymore," Shehata said, without mentioning names.

"This mode of thinking, the idea of giving technocrats ministerial portfolios, is typical of Egyptian politics," Samer Soliman, political economy professor at the American University in Cairo, told Ahram Online.

Appointing a cabinet of technocrats, as opposed to politicians, explains Soliman, is part of the traditional division of responsibilities in Egypt, whereby day-to-day economic issues remain the responsibility of the cabinet, while the presidency handles more strategic matters.

By doing so, Mubarak had been able to convince Egyptians – at least for a time – that the cabinet was to blame for deteriorating public services and general government inefficiency.

It was not a surprise, therefore, that Mubarak's first reaction to the mass protests that broke out against his rule in early 2011 was to sack his government in hopes of allaying public anger.

Soliman, for his part, described such tactics as “absurd.”

"The president is as responsible for the wellbeing of the Egyptian public as the prime minister is," he asserted.

Morsi, however, will be unlikely to follow the Mubarak-era practice of putting all responsibilities – at least in the public eye – on the prime minister, since he has repeatedly made promises to the Egyptian public for which he will be personally held accountable.

The new prime minister should also have significant political experience. It is preferable that he "has some work experience in state institutions," Shehata said.

Shehata went on to say that the FJP had given Morsi a list of nominees, all of whom belong to the party, which did not include Abul-Oyoun. The latter was a professor at Zagazig University and a colleague of Morsi's.

"This is not the only list he is looking at,” said Shehata. “This will be a political choice, his choice – not the party's. People will hold him accountable for this choice."

In the first 100 days of his presidency, Morsi has promised Egyptians major changes in terms of security, public sanitation, traffic, fuel and bread. When the time comes to answer to Egyptians, he will not be able to “pull a Mubarak.”

Indeed, the current status of Egypt's economy is delicate. Foreign currency reserves, used primarily to keep the local currency stable, are at dangerously low levels, barely enough to cover three months of imports. Growth remains sluggish, and the government continues to borrow locally – at yields as high as 16 per cent – to cover the budget deficit.

Such challenges are just the tip of the iceberg. Morsi, or at least his electoral campaign, has promised to impose liberal economic policies, slash unemployment by a third, and reach balance-of-payment equilibrium by the end of his first term. He has also vowed to reduce public debt by 15 per cent annually.

"The new cabinet will be mandated with implementing Morsi's programme," said Shehata. One of the criteria for the new PM is not just to be an economist, he added, but to be a liberal economist.

"Not a dogmatic, liberal kind of economist,” said Shehata. “But one who can strike a balance between efficiency [provided by free market laws] and justice [provided by the state]."

In brief, the incoming cabinet will have a tough time setting its priorities. On one hand, real economic reform takes time; but on the other, Egyptians expect the quick and significant reform of the country’s dilapidated public services.

"The 100-day programme will, God willing, effect material change in the lives of Egyptians within a short time," Abdel Hafez El-Sawy, a member of the FJP’s economic committee, explained.

According to El-Sawy, better management of Egypt's resources through rationalising state expenses could make funds available to the cabinet for implementation of the president's programme. Pointing to Egypt’s bloated state subsidies, for which LE146 billion has been allocated in the 2012/13 state budget, El-Sawy blamed the current moribund state of Egypt's economy entirely on bad policy under the former regime.

"The solutions to our economic problems have been well known for thirty years,” he added. “But the existing network of corruption prevented positive action from taking effect."

As for the economic orientation of the incoming government, El-Sawy describes a “free-market approach,” but also speaks of "directing" investments and welcoming private-sector involvement in infrastructure investment and privatisation.

"Some sectors [of the national economy] are severely lacking,” he said. “Private capital, domestic and foreign, will be directed towards these sectors."

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