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Egyptian government faces difficult times in 2010 - Ikhwanweb

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Egyptian government faces difficult times in 2010
Egyptian government faces difficult times in 2010
The Egyptian government faces a very difficult time in 2010, with historically prominent issues such as the succession of President Hosni Mubarak, the use of military courts, emergency rule and the parliamentary electoral system, and the country's relations with Israel, Fatah and Hamas all likely to come even further to the fore.
Tuesday, March 2,2010 20:32
pr-inside
We believe new electoral legislation and the weakening of the Muslim Brotherhood (MB) in recent years ' through arrests, imprisonment and asset freezing ' will allow the National Democratic Party (NDP) to win back some of the 88 seats it lost to 'independent' MB candidates in the 2005 parliamentary election. With this done, the NDP will likely try to move presidential polls forward before the opposition gains too much momentum. Its candidate should win easily but putting forward someone other than Mubarak's son Gamal would increase its chances and reduce the opposition's momentum.

We have revised up our FY09/10 growth forecast for Egypt on the back of a more resilient than expected performance from the domestic private sector in 2008/09, but remain wary of the sustainability of the bounce. Most of the growth in the previous quarter was driven by government spending, and while we expect this to continue, because 2010 is an election year, we do not think the private sector is out of the woods yet. The figures are very mixed, but a 41.5% decline in real imports in the April-June 2009, the latest period for which data is available, does not suggest a particularly buoyant recovery in our view. We have previously said that domestic demand in Egypt was strong, with the main downside risks coming from outside, but the extent of this resilience has, on the surface at least, been remarkable. Egypt's growth appears to have bottomed out at 4.1% in the second quarter of FY08/09 (October- December 2008) and bounced back to 4.5% by the Q4, taking the full year rate for FY08/09 to 4.7%. In the current economic climate, it is countries with large, growing and increasingly wealthy consumer markets that we are most positive about. For example, we are much more confident about growth in India than China, at least over the next couple of years. Egypt certainly fits into the positive category and we expect good growth for it throughout the forecast period.

Egypt's external security has improved since US President Barack Obama took office. Obama said in his speech in Cairo in June 2009 that he would not seek to 'impose' democracy on Egypt, especially if that meant giving power to groups such as the Muslim Brotherhood. The Obama administration has also been more critical of Israel than the Bush administration, perhaps reducing the risk of provocative Israeli military operations in the Middle East. The increased tension at Egypt's border with the Gaza Strip highlights how much Egypt's overall security situation is still tied to the vicissitudes of the Israeli- Palestinian conflict. Cairo's construction of a steel wall, ostensibly to crack down on smuggling, along its border with Gaza and its highly publicised harassment of an aid convoy to Gaza in December 2009 are at odds with the solidarity it says it has with the Palestinian cause. Such solidarity is strongly felt by the Egyptian public and the government is therefore taking a risk by openly undermining Gaza's security and nationalist aspirations so overtly.

In mid-2009, we introduced an innovative City Terrorism Rating (CTR) system. The CTR provides an at a glance assessment of the risk of a terrorist attack in a given city by weighing a number of significant measures. We assess the CTR for Cairo at 62.5 out of 100 ' the 10th highest of the 23 rated cities in the Middle East and Northern Africa (MENA) region. The CTR is based on our detailed Terrorism Rating for the country taken as a whole and an assessment of the prevalence and threat of terrorism for the city in question. This latter assessment takes into account the frequency of past attacks, whether the city is a target for terrorist activity and the likely extent of possible future terrorist attacks.
 

tags: Egyptian Government / Mubarak / Military Courts / Emergency / Parliamentary Electoral / Fatah / Hamas / NDP / Presidential Polls
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