Supporters of Egyptian president Mohammed Morsi have begun putting up billboards around Cairo that read: “With the Constitution, the wheel will turn“, suggesting that the economy is at risk without the stability offered by the new constitution, which goes to a referendum Saturday.
Yet, reality paints a wholly different picture.
Morsi’s dogged determination to hold a referendum without the support of the opposition continues to hurt his credibility as president, that of the people he governs and the country’s economic state.
In fact, though the president promises with this slogan that the wheels of production will keep turning in Egypt, he has stopped them in their tracks because he refuses to open up to the opposition.
In the biggest blow to Egypt’s economic recovery for several months, Egypt and the International Monetary Fund have agreed to postpone a decision on a $4.8 billion loan that had been scheduled for discussion by the fund’s board next week. An IMF statement suggests it was Egypt’s decision to postpone negotiations:
“In light of the unfolding developments on the ground, the Egyptian authorities have asked to postpone their request for a Stand-By Arrangement with the IMF.”
However, it is unlikely the IMF would lend in the current circumstances.
Other programmes that form part of Egypt’s economic recovery plan, including tax reforms and drastic cuts in wasteful energy subsidies, are yet to see the light of day.
The country’s finance minister, Mumtaz al Saeed, told Bloomberg earlier that the economic programme has been “misunderstood” (presumably by the public who have reacted negatively to austerity measures):
“We have an Egyptian economic and social program, and it seems that some have misunderstood the measures, so the president decided to give more time for social dialogue to stress that the measures won’t harm people with limited income.”
But a lack of real, grassroots dialogue with the public has left many wondering exactly what the government means by “societal dialogue”.
Meanwhile, the wheels of production are grinding to a halt as foreign investors reassess whether to pour money into an unstable Egypt. The delay of the IMF loan will also have a knock on affect on other loans pledged from the European Union and the African Development Bank.
Morsi’s supporters may consider opting for a simpler strategy when it comes to showing their support for a referendum, because so far the leadership of the Muslim Brotherhood and the country’s president has led to anything but wheels of production.
It begs the questions of whether Morsi is holding the country hostage to his own ambitions.