The Honeymoon Is Over

“Let us savour the moment now, and we’ll worry about the future later,” some Egyptians said yesterday hours after Egypt’s military had ousted the country’s president Mohammed Morsi.

Led by General Abdul-Fattah el-Sisi, the army – backed by the heads of Al Azhar, the Coptic Church and Mohamed ElBaradei – moved swiftly and confidently to suspend the country’s Constitution and create an interim government. Crowds erupted in cheers and screams.

Some say the military was working on behalf of the people of Egypt and that the country’s first democratically elected president had to go. Others say the army’s decision was carefully orchestrated, and cannot be described as anything but a military coup.

But as the jubilant atmosphere of Tahrir Square begins to fade, there is one certainty: Egypt’s economy must be made an absolute priority, or risk repeating this scenario in another 12 months. 

This is really a mirage.  The immediate gratification gained at getting rid of Morsi is at the expense of solving the basic bread and butter problems that helped push Egyptians onto the streets in the first place.

For example, resolving Egypt’s ever-increasing budget deficit, finally getting over a costly addiction to energy subsidies and actively creating jobs for the 1.2 million Egyptians who lost a job under Morsi (and the millions more who have been seeking formal employment).

Whoever takes over the helm inherits these problems and will likely meet a public backlash to any reforms.  The economic challenges have not gone away just because a Muslim Brotherhood leader was booted out.

In fact there are many more questions now lingering:

What of the $4.8 billion loan from the International Monetary Fund? Egypt still desperately needs this but the last time the army was in power (in June 2011), the loan was refused because it was considered too much of a public debt burden. Fast forward two years and you have an intractable crisis made worse by the fact international lenders won’t touch Egypt until this loan is signed.

Also, Egypt currently has no constitution: is it even possible for the IMF to sign a deal with a country with no governing charter?

What of the the billions from vehement Muslim Brotherhood ally Qatar? Will the Gulf state pull out now that the Brothers are gone? As Emad Mostaque, strategist at Noah Capital Markets says:

[There are] big question marks over $8 billion of existing Qatari cash being rolled over in a couple of years [and] $19 billion of pledged foreign direct investment in next 4 years (more than everyone else put together over last five [years])

Egyptians may be celebrating now, but hardship is yet to come for the poorest Egyptians who need immediate reforms, and the price we have paid for accepting the military’s aggressive move will no doubt set the tone for the next few months.

One Comment

  • Posted July 17, 2013 at 10:41 pm | Permalink

    I seek refuge in Allah in order to be saved from the accurse Satan. In the Name of Allah, the Most Beneficent, the Most Merciful. Oh Allah I seek refuge in you from the mischief of the Dajjal.

    This thing will not be over until the Will of Allah is done.

    The Heads of Al Azhar was appointed by Mubarak regime and he and the Coptic Church leader both stay out of politics. Therefore, it leads me to believe that they were tricked by the God-less communist atheist General Sisi.

    Even a 5th grader can do the math and see that Tahir Square can not hold several million people. And any minor reader of Arabic can see that the State Controlled media showed video of Pro-Morsi crowds and said they were with the Temerod Movement. –Logistically impossible to go from an alleged 2 million signatures to 20 million (Pure fraud)

    Several of the groups who are now seeing that El Baradei and other Mubarak cronies and communist commisars are in place in the so-called interim government have left the coup.

    Even other military men in Egypt are seeing another Moumar Khadafi in the making in this young General Sisi.

    The possibility of a civil war is more now than had a simple election been done, but you might have found that President Morsi would win a United Nations sanction vote. –Again

    Get use to it, Islam is here and we are not Al-Quaeda, we reject terrorism and torture. –We also repect private ownership or property

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