By Oren Laurent
President, Banc De Binary
On Sunday, after his swearing-in ceremony, the new Egyptian president, former army head Abdel-Fattah el-Sisi, told dignitaries in Cairo that “the presidency of Egypt is a great honour and a huge responsibility.”
Indeed, the responsibility on his shoulders should not be underestimated. Sisi has promised to work towards national and regional stability in a nation of divided political factions that is currently experiencing its slowest economic growth rate in two decades.
The western world watched as Mubarak was overthrown in the 2011 Arab Spring and hoped for a democratic outcome. However, Mursi, the country’s first freely elected ruler, was criticised for imposing the extremist views of the Muslim Brotherhood, a denounced terrorist organisation, as well as mishandling the economy.
Sisi deposed him and took control. Controversially, under his leadership, hundreds were killed in street protests and thousands were imprisoned, including those who supported Mursi’s defeat along with Brotherhood members, thanks to a new law restricting protests. However, he argued that free speech for Islamic militants should not take priority over national security. Many supported his case, and in the formal elections last month, Sisi, albeit with weak competition, soared to victory with 97% of the vote.
Since Mubarak was toppled, in the resulting three years of instability and uncertainty, the Egyptian economy has been in a dire state. Unemployment and inflation are ongoing problems, corruption is widespread, and foreign reserves are now about half of their December 2010 levels. Sisi’s answer is greater government involvement. He has talked about setting certain food prices and about state-sponsored projects to create jobs, but simultaneously promises to make the country business and investor friendly.
His economic policies will certainly benefit from greater international support now that the Muslim Brotherhood no longer holds sway. The UAE, Saudi Arabia, and Kuwait have sent almost $12 bln in cash and petroleum products. The country may also be eligible for a loan from the International Monetary Fund, which would raise confidence and investments. It is suspected that Sisi will consider implementing austerity measures should it help prove to the IMF that Egypt is now moving in a more sensible direction.
In a TV interview before the election, Sisi claimed that the Egyptian people will notice the economic improvements within two years. The economy is estimated to grow at a rate of 3.2% in the next fiscal year. The public certainly hope that his policies will work, and their vote expresses their desire for change after years of unrest. However, these are not a people known for their patience. Words are not actions. Sisi will have to prove himself in the coming months if indeed he wishes to stay in power and put the days of political revolution to rest.
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