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Impotent Mursi Losing Grip on Egypt as Unrest Prompts Reversals

March 06, 2013

Impotent Mursi Losing Grip on Egypt as Unrest Prompts Reversals

Egyptian protesters run as riot police fired tear gas on March 5, 2013 in Cairo, Egypt. Photographer: Hong Wu/Getty Images

Egyptian President Mohamed Mursi’s declaration of a state of emergency in three restive provinces had all the earmarks of an autocrat’s command, right down to the 9 p.m. curfew.

“When I see the security of the nation is in peril, then I act. And I now act,” Mursi thundered in a Jan. 27 late-night television broadcast.

After protestors ignored him -- some in the port of Ismailia played 9 p.m. soccer games in front of the provincial government headquarters -- the president backed down. Within 48 hours, he allowed local officials to relax the late-night ban.

Mursi’s surrender wasn’t unusual. Though assailed as “Egypt’s new pharaoh” following a late-November assertion of unchecked power, Egypt’s Islamist president has often retreated when challenged, especially to avoid provoking unrest.

He has stalled on policy changes demanded by the International Monetary Fund in return for a desperately needed $4.8 billion loan. He’s let stand the military’s hold on the economy, which is sapping the nation’s wealth. And he’s shied from confronting a police force that has brutalized protestors, though he and his allies were frequently its victims before assuming power. Just yesterday, an Egyptian court defied Mursi, suspending his decision to hold legislative elections starting next month.

Presidential impotence has left Egypt drifting. Two years after public disgust with a widening gap between rich and poor toppled President Hosni Mubarak, Egyptians are saddled with rising prices and 13 percent unemployment. Stocks are worth less than half their 2008 peak value and foreign reserves are down 60 percent, while Mursi’s popularity fell below 50 percent last month for the first time since his June 2012 election.

Spring Deferred

“In the West, everybody thinks Mursi has all the authority,” said Nabil Fahmy, dean of the School of Public Affairs at the American University in Cairo and Egypt’s former ambassador to the U.S. “You come here and see that nobody has authority at all.”

To a people scarred by generations of absolute rulers, Mursi’s November 22 announcement that his decisions were beyond challenge suggested that the Arab Spring’s promise of a better life had curdled into renewed dictatorship. Egypt’s first democratically elected president, Mursi, 61, hails from the Freedom and Justice Party, the political wing of the Muslim Brotherhood, which was outlawed during Mubarak’s 30-year reign and was late to join the 2011 uprising.

Mursi won the presidency only after Egypt’s electoral commission disqualified the Brotherhood’s first choice, Khariat el-Shater, because of a criminal conviction related to his Brotherhood membership. Mursi won just 52 percent in the runoff election. Even now, Shater and Mohammed Badie, the Brotherhood’s supreme guide, are seen by many in the opposition as the real powers in Egypt.

Traffic Vow

Ill-considered promises for his first 100 days in office, including a doomed vow to improve Cairo’s notorious traffic, opened the new president to ridicule. Last month, the 6 April youth movement tweaked Mursi by entering him in a deodorant company’s marketing contest. The “prize” was a free trip to the edge of space in a private spacecraft.

For his part, Mursi emphasizes his credentials as a democratically elected leader and labels as “thugs” many of those protesting. “We’re in an era of freedom and social justice, but we’re still at the beginning of a long road to stability,” the president said in a February 25 interview with Al-Mehwar television.

Mursi has deferred even on symbolic matters. Egyptian journalist Shahira Amin says she was surprised when Mursi, unlike many conservative Muslims, shook her hand before a November 29 interview in the presidential palace.

Covered Legs

Yet moments later, a presidential aide asked Amin, whose lower legs were visible beneath a skirt, to change into an even more modest outfit before the cameras started rolling.

When Amin explained there wasn’t enough time for her to return home and come back, the aide shrouded the reporter’s legs with a dark scarf. Amin, a freelance television journalist, says she was told the president was concerned about the potential reaction from his ultra-conservative Islamist allies.

“They were worried the Salafis would complain,” Amin said.

To be sure, Mursi has taken authoritarian actions. His November 22 decree stoked opposition concerns of a new dictatorship and prompted Nobel LaureateMohamed ElBaradei to label him “Egypt’s new pharaoh.”

Mursi said his maneuver was needed to prevent elements of the Mubarak regime from derailing Egypt’s transformation. The Islamist leader also rammed through parliament a new constitution, which offers women and non-Muslims weak protections, before canceling the decree giving him unquestioned power after 16 days.

Comedian Inquiry

The Muslim Brotherhood spent 80 years as a secretive underground organization, which has left it with an ingrained us-against-them view of politics. Under Mursi, the government has sought to control the independent labor movement and has cracked down on critical journalists. On March 4, Egypt’s prosecutor-general ordered an investigation of comedian Bassem Youssef for insulting Mursi on his satirical television program.

“They’re definitely authoritarian. I don’t think they have democratic impulses at all,” said Heba Morayef, Cairo-based Egypt director for Human Rights Watch. “There seem to be no limits on what they’re willing to do to stay in power.”

Political volatility has taken a toll on investors. Egypt’s benchmark EGX30 stock index stands at less than half its 2008 peak while the premium investors demand to hold Egyptian government debt over similar-maturity U.S. securities has more than doubled since Mubarak was unseated. The yield on Egypt’s dollar bond due in 2020 is 7.14 percent

Top Spots

Mursi has appointed his allies to the top spots in government ministries. He has been unable, however, to vanquish “the deep state,” the layers of government officials who form the permanent governing apparatus and oppose Islamist rule.

While Mursi in August cashiered Egypt’s defense minister and army chief of staff, the president left untouched the military’s lucrative economic interests, including its ownership of retail gas stations, port facilities, construction companies, and real estate.

Mursi also has done little to rein in the Interior Ministry police even as they have beaten protesters, much as they mistreated members of the Muslim Brotherhood under Mubarak. The Egyptian Initiative for Personal Rights says that between June and November, 10 suspected torture victims died in police stations or prisons, including three whom the Cairo-based human rights group confirmed had been tortured.

“He is weak,” said Anwar Sadat, the leader of a small opposition party and the nephew of the Egyptian president assassinated by Islamic radicals in 1981. “He is not a dictator. I feel very sorry for him. He is not as everyone believes.”

Budget Deficit

Executive timidity has been especially costly in addressing the country’s financial woes, including a budget deficit of 10.8 percent of gross domestic product. Wary of a public backlash, Mursi has yet to conclude negotiations on the IMF loan, which is needed to plug the hole in the country’s finances. Additional financial help from the World Bank, the European Union and the African Development Bank hinges on the IMF’s seal of approval.

Mursi may have reason to worry about the potential public reaction to any IMF deal. Egyptians already are struggling with 6.3 percent inflation, which is expected to reach 8.3 percent this year, according to economists surveyed by Bloomberg.

Samir Radwan, finance minister in the aftermath of the 2011 revolution, says he worries rising property crime shows that a “revolt of the hungry” may be in the offing. “People are taking the redistribution process into their own hands, kidnapping people, taking cars, stopping you in the street,” he said.

Tax Reversal

Though Egyptian officials signed a standby agreement with the IMF in November, they have balked at implementing the subsidy cuts and tax increases that are part of the deal. Egypt spends roughly 6 percent of its economy on fuel subsidies, with the richest households receiving more than twice the benefits of the poorest, according to a 2005 World Bank study.

On December 9, Mursi announced plans to raise taxes on 25 items, including cigarettes, beer, soda, electricity, and water, as a first step toward accepting the IMF financing. Within hours, as the public howled, he revoked the tax hikes.

A new economic plan, released February 25, trimmed the affected items to six. Three days later, the government officially invited IMF officials to return to Cairo to finalize the loan. Mursi promised the visiting U.S. Secretary of State John Kerry on March 3 that he would soon complete the deal.

Foreign Reserves

As the IMF talks drag on, Egypt’s financial condition deteriorates. The country’s foreign reserves sunk in February to a new low of $13.5 billion, down from $36 billion before the 2011 anti-Mubarak uprising.

Even as he shrinks from unpopular choices, the president becomes increasingly unpopular. In a February 18-19 poll of 2,275 adults, the percentage that approved of his performance fell to 49 percent from 78 percent four months earlier, according to the Egyptian Center for Public Opinion Research in Cairo. The share disapproving rose to 43 percent from 15 percent; the margin of error was less than 3 percent.

“We need a powerful government,” says Amre Moussa, who spent 10 years as Mubarak’s foreign minister before losing to Mursi in last year’s presidential balloting.

Despite Mursi’s missteps, the Brotherhood remains Egypt’s best organized political force, especially in the country’s populous rural areas. The ineffectual National Salvation Front, split among competing secular factions headed by Moussa, El Baradei and Hamdeen Sabahi, plans to boycott parliamentary elections scheduled to begin April 22.

The alliance has gained little ground amid Mursi’s stumbles: 35 percent of Egyptians say they’ve never heard of it, according to the February poll. Among those who have, the NSF is opposed 53 percent to 35 percent.

That means Mursi and the Brotherhood are unlikely to leave power any time soon. Says Sadat: “You have no one else.”

To contact the reporter on this story: David J. Lynch in Washington at dlynch27@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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