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Egypt After the Election

Issandr El Amrani, Council On Foreign Relations  |   23 May 2014

Field Marshal Abdel Fattah al-Sisi only released his economic program less than a week before elections, perhaps thinking it a waste of energy to put it up for debate. His priorities are nonetheless clear. Sisi wants to get the Egyptian state, battered by three roller-coaster years, back in shape, and with it, the country's economy. Belts must be tightened as difficult, long-postponed reforms are carried out, he argues. As he recently told a television audience, he has "nothing to give" the Egyptian people.

This brutal honesty is what differentiates Sisi's economic outlook. The challenges he has highlighted are the same ones that others, including former president Mohammed Morsi, whom he deposed last July, centered upon: conserving electricity, reforming fuel subsidies, creating jobs, improving infrastructure, reducing the fiscal deficit, and weaning Egypt off foreign assistance. What may give Sisi a better chance is the strong support he has received from major state institutions, as well as from the Gulf countries that have channeled some $20 billion to Egypt since last July.

Economic success, however, will hinge upon political choices. Two questions will loom large over prospects for Egypt's economy.

The first is whether the rift in Egyptian society caused by the overthrow of Morsi and subsequent crackdown on the Muslim Brotherhood and other groups will impede reform and recovery. Sisi has vowed that there is no role for the Brotherhood in Egypt's future, but he will face unrest by disgruntled Islamists who want him to fail, just as Morsi's opponents continuously undermined him in 2012–2013. Major economic reform is likely impossible while that rift lingers, and growing state repression alienates even Sisi's one-time allies.

The second question is whom Sisi will surround himself with. His regime is still being formed, and competition to be in its circles of influence is fierce. The lobbies that made radical reform difficult, if not impossible, during Hosni Mubarak's rule are still present in the bloated, often corrupt state and among a business class that often benefited from cheap energy and other state favors. Private-sector businessmen worry about an outsized role for the military, Sisi's base, in the economy. And ordinary Egyptians, the biggest lobby of all, desperately want to see improvements in their lives. This battle to define economic policy is bound to impose constraints on Sisi's avowed "tough love" agenda.

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