On the eve of the formation of Egypt’s interim government on July 3, the country was dangerously low on foreign reserves. Tourism, which Egypt depends on, had pretty much ground to a halt. Egypt’s interim Prime Minister Hazem el-Beblawi begged Ziad Bahaa Eldin to take a post as deputy prime minister for economic affairs. One of America’s leading investors, Mohamed El-Erian, calls Bahaa Eldin “Egypt’s future.” Last week, The Post’s Lally Weymouth visited Bahaa Eldin in his office in Cairo, where he’s trying to sort out Egypt’s economic plight — while the army and the Muslim Brotherhood face off on Cairo’s streets. Excerpts:
How do you see the situation in Egypt right now?
It’s a difficult situation because we find ourselves in yet another transition period and people are tired of transition periods. The one good thing about this transition period is that we should move quickly to elect a parliament and a president and make whatever changes are necessary to the constitution.
Were you surprised that the government changed on July 3?
No, frankly, I had no doubt towards the end that the June 30 [rally] would result in a massive change. It was clear to me that popular opinion had really turned against the Muslim Brotherhood. The president and his regime had lost legitimacy in the sense of being accepted by the population. It seemed to me it would be impossible for him to continue in his office in light of this massive protest. Something had to happen — whether it was the president quitting, being forced out of office or calling for an early referendum.
In the West, people were shocked by the events of July 3.
I am surprised that to the Western press and Western circles, this was so unexpected. To me, this was the result of the West having ignored too many obvious signs that something was going wrong. I had been arguing for weeks: Don’t judge the level of resistance to President Morsi by looking at the political parties. [I said that] real resistance lay outside the parties in the social circles, the civil society, in the protests movements.
How does it work between the army and this interim government? Do you have to run all decisions by the army?
How much power does this interim government have?
This government was formed under exceptional conditions . . . It is a technocratic government that has very broad support in Egypt. . . . But the specificity of what powers are with the president, the government, the army are not spelled out clearly.
Will you try to start negotiations with the International Monetary Fund?
The IMF has to negotiate with a government that can deliver in the long-term. I am all for discussions with the IMF when they are ready. There has to be a better understanding by the Egyptian people of the economic conditions that may be involved in an IMF agreement.
Are you worried that the ongoing violence could impair aid and investment?
There is no doubt the political situation impacts the economy in more than one way. One of them is how it affects partner countries and countries with economic interests. We have to continue to have our eye on the goal, [which is] a better form of democracy. I appreciate the worry of the outside world as to the current state of democracy in Egypt, but as long as the goal is to reach democracy again, they should work with us and tolerate some of the imperfections.
Fuel and wheat are subsidized fully for both rich and poor. Yet 40 percent of your population lives on less than $2 a day.
Targeting is the name of the game. The money that we are spending on subsidies has got to be better spent in order to achieve better social and economic results.
How do you plan to handle NGOs?
They would have to be registered. What you need is a new law to make this process much more transparent. So if you file and you get no objection within a certain period of time, then you are deemed to be operational.
Shouldn’t the NGO workers who were convicted be pardoned?
The legal process of pardon in Egyptian law is either by presidential decree or if a law that comes out in the future makes whatever they did in the past legal. None of this has happened yet.
What else did the Muslim Brotherhood do to the economy?
I think the worst thing was this paralysis of the bureaucracy and the inability to move things forward. Then, there was tremendous confusion about the tax policy. You introduce a tax and a few days later you say you are going to abolish it but you don’t abolish it formally so you’re not clear whether that tax is applicable. The unclarity for business is the most damaging thing.
Do you think Islamists need to be included in a future government?
Anybody who has been part of violence cannot be included. There has to be space for everybody but within the confines of not violating the law.
Are you in favor of Morsi being prosecuted?
It has to be a legal process. If he committed crimes, then yes.
It seems late to be investigating a jail break that happened two years ago.
Yes, but there are other crimes. It was important to accuse him of something. The situation of keeping him without pressing charges wasn’t right.
U.S. officials say they weren’t allowed to see him. Even [Hosni] Mubarak was allowed access to his family.
There is no way I can describe the situation we are in as the right one or a democratic one — it isn’t. What matters is are we heading towards democracy or not?
How long do you think it will take to get there? Six months? Nine months? Who is drafting the constitution?
There will be a committee to review the substance. The committee that drafted [the constitution passed under Morsi] was completely biased. The majority was Muslim Brotherhood. They tried to get things done quickly using their majority. Morsi declaring himself above the law was the breaking point. They ignored any sign of protest that came afterward.
So he seized all power?
Yes. From that point, the level of protest rose significantly. By April it became clear that this wasn’t going to continue. The Christians in this country and the women had been alienated by the Morsi regime.
Are you disappointed by the American administration’s reaction? They did say it was not a coup.
Yes, that was very good. You cannot say it was a coup. It was very annoying to Egyptians who had been on the streets not just since June 30 but for many months. A lot of people had been frustrated with the Morsi government. So this reaction is very insulting to those who had been against the Morsi government.
Do you think the Muslim Brotherhood will go underground and start civil strife now?
I hope not. There has to be a restoration of law and order. But that, too, has to happen within the context of law and human rights.
Do you think Egypt is on the verge of civil war?
No, but the healing process needs to begin. The overall sense of the country coming together is very much needed for the Egyptians.
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