For Egypt’s new Islamist government, jobs are first priority
By Steve Hendrix,
CAIRO — After their dramatic rise to power — and it’s hard to imagine one more operatic than the clash of revolution, democracy and religion that swept the formerly outlawed Muslim Brotherhood into Egypt’s presidential palace — the country’s untested new leaders now face a more prosaic first priority: Egypt needs jobs.
The Arab Spring has left the Egyptian economy in shreds. As crowds filled Tahrir Square, foreign investors fled, tourists stayed away and businesses closed. Unemployment soared, especially among the young. Growth has nearly flat-lined, and by some measures, more than half of Egyptians have slipped below the poverty line.
For President Mohamed Morsi, the first freely elected leader in a history that stretches to the pharaohs, expectations are crushingly high. The Arab world’s most populous country is struggling to pay its international bills, and Morsi’s moves will be watched to see whether the rise of Islamists will be more about ideology or competence.
On the street, his supporters expect results.
“Morsi is going to solve unemployment, fix security and improve pensions, may God assist him,” said Mohamed Salah, 28, a jobless jewelry maker and Muslim Brotherhood voter, idling in the tiny shade of a vending cart awning on a Cairo sidewalk.
Morsi and his advisers know that Egyptians expect them to make jobs their job one.
“The economic crisis is at the top of our priorities,” said Jihad el-Haddad, a member of the economic planning committee of Morsi’s Freedom and Justice Party (FJP). “We’re nearly out of foreign currency reserves. Foreign investors have come to have no confidence in Egypt. It’s a very, very urgent situation.”
In the short term, Morsi is scrambling to avoid a balance-of-payments crisis that could lead to a ruinous devaluation of the Egyptian pound. A billion-dollar loan from a Saudi-based development bank has bought Egypt a little time, and there are signs that Morsi and the International Monetary Fund are close to an agreement on a $3.2 billion infusion.
Such a deal would be a huge relief to those who have worried that the Islamist group would not accept the IMF’s strict conditions. But doing so would help attract additional international funding and, even more, signal a willingness by the new government to do what it must to shore up finances.
“It’s an encouraging first step,” said Mustafa Kamel el-Sayed, a political science professor at Cairo University. “They’re saying the right things.”
But the longer term is full of unknowns. Morsi has yet to name his cabinet, which is when Egyptians will know whether he can fulfill his pledge to staff the government with technocrats rather than the Islamist ideologues secular Egyptians fear.
And it is far from clear just how much economic authority he will be able to wrest from the military’s ruling council, which last month dissolved parliament and usurped a huge swath of presidential powers, including control of the budget.
“They don’t have a free hand,” said Ahmed Galal, a former World Bank economist and the managing director of Cairo’s Economic Research Forum. “They have the army on one side, and they won by less than 2 percent of the vote. They have never governed before; this is a book yet to be written.”
Platform under scrutiny
But Egyptians have begun to read between the lines, parsing the FJP’s economic platform and scrutinizing its key players. What they detect is a party deeply, and perhaps equally, committed to both free-market economics and Islamic-based social welfare.
“Ideologically, they are actually quite conservative on the economy and markets,” Galal said. “But they have a very strong sense of social justice and worrying about those who did not get much in the past. The real question is how they will combine the two.”
The party’s economic blueprint, known during the campaign as the “Renaissance Plan,” describes an ambitious (some critics say unrealistic) drive to attract more than $200 billion in foreign investments, particularly from powerhouse Muslim economies such as Turkey, the Persian Gulf states and Malaysia.
And for locals, the FJP wants to clear away the maddening obstacles to launching a business that have thwarted Egypt’s instinctively entrepreneurial culture for decades. Under the rule of Hosni Mubarak, who was ousted as president in February 2011, only cronies or the military could easily start a business, and even the anointed ran into a byzantine tangle of regulations.
The Brotherhood has said it wants to make Egypt friendlier to mid-scale enterprises, an outlook that can be traced to the movement’s financial backbone, a large cadre of professionals and merchants who managed to make fortunes in spite of withering persecution under Mubarak. Khairat el-Shater, for example, the Brotherhood’s political leader until he was declared ineligible to run for the presidency, built a furniture and software empire even though he often had to run things from a prison cell.
“They have shown the ability to start and grow a large business,” said Magda Awadallah, deputy director of the Egyptian Center for Economic Studies. “We will see how that translates into running the economy.”
To gauge the Brotherhood’s basic competence, Egyptians are looking at what it has been running: the expansive network of Islamic charities that gave it such popular electoral support among the poor. For decades, the group has operated health clinics, schools and food drives. Its know-how has impressed even some opponents.
“I voted against Morsi, but clearly they are well organized,” said Hisham Tawfik, an investment banker who brought one of his employees to the 42-bed Central Charity Hospital, a Brotherhood-run facility in Cairo’s Nasr City. “This is superior to anything you would see in a public hospital.”
Charities provide model
In the airy and spotless corridors, people waited to enter modern exam rooms devoted to ophthalmology, radiology and a score of other specialties. Egypt’s premier neurologist runs a weekly clinic there. His private fee would amount to thousands of pounds, said Tawfik, but patients at the hospital pay only what they can afford.
Doctors donate their time, according to hospital director Mohie Eddin el-Zayyet, and Brotherhood members donate cash as part of their zakat, an Islamic obligation to donate a portion of their income to charity.
The hospital, which is about to open a new multimillion-dollar wing despite having the new construction partially demolished by pro-Mubarak thugs three years ago, is part of a national network of 24 health clinics run by the Brotherhood. In all, the system serves more than 2 million patients a year, performing more than 70,000 surgical procedures.
“These clinics have been experiments in struggling against all difficulties,” said Zayyet, a dermatologist who was jailed eight times by the former regime. “We resisted all forms of corruption, and we succeeded. And we will succeed in the presidency.”
The Brotherhood’s charity networks may also offer hints about how the free-market-oriented government would approach social spending. Morsi and his aides have said they want private and religious groups to do more to aid the poorest, leaving some social-welfare advocates worried about their commitment to government spending on the poor.
The Brotherhood has also been noncommittal on reforming the country’s huge subsidies of wheat and fuel, which critics say flow disproportionately to the wealthy.
“The flour goes to the big hotels, and the gasoline goes into the big cars,” said Sayed, the Cairo University professor, who is a member of the Popular Socialist Alliance. “It needs to be more targeted to reach to the poor.”
Whatever the coming policy fights in Egypt’s fledgling democracy, there are unmistakable glimmers of optimism that last week’s swearing-in of a new president will mark an economic turning point. Morsi’s first steps and the simple stability of having a government in place will give the country of 85 million people a chance to get back on track. The country’s stock market posted its biggest gain in nearly a decade after the election results were announced.
“Egypt has a lot of untapped promise,” Galal said. “It will take years rather than months, but it has nowhere to go but up.”
Ingy Hassieb and Mohannad Sabry contributed to this report
More world news coverage: - Afghan official’s big job: Clean up banking scandal - Saudi tilt helps India fight terrorism - Editor’s choice: The world in photos - Read more headlines from around the world