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Key political risks to watch in Egypt
Key political risks to watch in Egypt
ncertainty about who will lead Egypt after President Hosni Mubarak, 82, who has been in power for almost three decades, is the overriding risk to watch in the next year as the 2011 presidential election approaches.
Friday, September 3,2010 16:16
by By Edmund Blair The Peninsula

ncertainty about who will lead Egypt after President Hosni Mubarak, 82, who has been in power for almost three decades, is the overriding risk to watch in the next year as the 2011 presidential election approaches. Added to that are some lingering worries about governance, social unrest and Islamic militancy. Below are the main political risks for Egypt:


Mubarak has no designated successor and has not said if he will seek another term in 2011. If he does not, the most common view is that he will hand power to his politician son Gamal, 46. That might please business, as Gamal’s cabinet allies are behind liberalisation measures that have secured rapid growth over the last five years. But the president’s son has no military background, a possible hurdle in a country ruled since 1952 by former senior military officers.

Egypt held its first multi-candidate presidential election in 2005. But rules make it almost impossible for anyone to mount a realistic bid without the ruling party’s backing. So, any new president is still likely to be chosen behind closed doors and not at the ballot box.

Presidential transitions passed off before without a power vacuum. But in 1970 when Gamal Abdel Nasser died and in 1981 when Anwar Sadat was assassinated, both had vice presidents. Mubarak has not picked a deputy, creating uncertainty about how a transfer will proceed. Most analysts see little chance of social upheaval but questions remain.

A campaign calling for political change led by former UN nuclear watchdog head Mohamed ElBaradei, who has said he might run for president, is nearing a target of 1 million signatures, reflecting pent up frustation. This adds to pressure on the government but analysts say turning that into a street movement needs a bigger grass-roots network.

The Muslim Brotherhood, a banned group who analysts say has the capacity to muster thousands of supporters onto the street, has eschewed open confrontation with the government but could yet be a potent force if it changed tack. Leading ratings agencies place Egypt just below investment grade. Succession risk is not exerting strong pressure but is a constraint on a higher grade, say analysts.



Capital inflows have surged during economic liberalisation in the last five years, despite a credit crunch hiccup, showing that investors still feel secure. But without more oversight or political accountability the hidden costs of business may rise.

Transparency International ranked Egypt 11th of 19 Middle East and North African states and 111th of 180 states worldwide in its 2009 corruption perception index, where No. 1 is judged the least corrupt. The watchdog said in May that nepotism, bribery and patronage in Egypt were common. Investors closely watched a legal tussle between Orascom Telecom and France Telecom over ownership of mobile firm Mobinil. The two owners reached a settlement in April, but only after an Egyptian court halted the French firm’s bid for Mobinil. A dispute between an Egyptian firm and Japan’s Mitsubishi Motors Corp is now in court and may also provide a barometer.


Inflation in Egypt rocketed to 23.6 percent in August 2008, pumped up by surging world commodity prices. Angry worker protests turned violent, which the government first met with heavy handed security and then a promise of higher wages. Inflation has tumbled though it remains stubbornly above 10 percent, as the authorities avoid interest rate or budgetary tightening for fear of hurting growth.

But price rises remain a delicate issue in a country where many of the 78 million people struggle to make ends meet and a fifth live on less than $1 a day. Strikes for better pay have become increasingly common, although activists’ efforts to encourage solidarity action have not succeeded. Reflecting their sensitivity amid the latest surge in world wheat prices, the government has repeatedly assured Egyptians that bread subsidies were secure.


Security forces crushed an insurgency in the 1990s by militants, who targeted banks, ministers and top officials. In 1997, militants gunned down 58 tourists at a Luxor site. Leading figures of Al Gama’a Al Islamiya, which led the revolt, were jailed during the insurgency, but many were freed earlier this decade after renouncing violent ideologies. Analysts see little sign of such organised militancy re-emerging but say sporadic bomb attacks like those that rocked Sinai resorts from 2004 to 2006 are likely. reuters


tags: Political Risks / Hosni Mubarak / Presidential Election / Islamic Militancy / Transfer Of Power / Political Change
Posted in Election Coverage  
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