Economic Interests

If you owe the bank £100, that's your problem. If you owe the bank £100 million, that's the banks problem.

Egypt’s new Pharaoh?


On the 23rd/24th May the first round of Egyptian elections took place, this saw the race narrowed down to two candidates, who will now compete to become president on the 16th and 17th June.  This should be a defining moment in Egypt’s history as only the second presidential election in their history with more than one candidate and the first since the revolution in 2011. But the shortcomings of both candidates are clear to see, while a year on from the revolution Egypt still seems as divided as before. The presidential choice has become a question not of who is the best candidate to run the country, but rather which candidate would be the lesser evil.

First up is Muhammad Morsi, an engineer that was backed by the Muslim Brotherhood (albeit their second choice) and won 25% of the vote (the biggest share). The Muslim Brotherhood won a majority of seats in parliament last year, so if Mr Morsi was to win they would have a clear say in how the country is run. This would almost certainly mean the inclusion of Islamic Sharia law and an intertwining of state and religion.

Muhammad Morsi

His opponent Ahmed Shafiq was the Prime Minister under former President Hosni Mubarak, who is currently facing charges of corruption, abuse of power and premeditated murder and has been sentenced to life imprisonment. Mr Shafiq finished with 24% of the vote and benefits from the backing of businesses, Christians and those wary of another revolution.

Ahmed Shafiq

The trouble is that neither might not accept defeat, with the Muslim brotherhood and the Egyptian army backing each candidate and reluctant to give up on power. This could lead to clashes and undemocratic leaders – the opposite point of what this election hopes to bring. The elections also showed a lack of support for any candidate with a turnout of just 46%, though many were happy that the candidates were at least arguing with their mouths and not their guns as in earlier debates.

Election results from first round.

But who is the best choice? This is hard to decide, as both represent such extremes and the more centralist vote which probably would have won, was split between three candidates resulting in neither getting enough support.  Whoever does win will need to kick start an economy that has slowed down with such political uncertainty. Egypt is one of the strongest economies in Africa, just below South Africa in GDP terms and a potential beneficiary of the FDI pouring into the continent right now.  But the revolution has caused quite some damage; with unemployment around 13%, growth predicted at 1.8% (not enough for a country that needs high growth) and around 40% of the population now living in poverty. The president also won’t even know what powers he has yet, as the new constitution promised after the revolution remains unwritten and will likely remain that way until after the elections are finished. Then there is the Egyptian army that is currently in charge, they will need to be convinced to let go of their power and return to their original roles, a task that could prove tricky.

Egypt GDP not far off South Africa’s in 2011. 

So who will win? Mr Shafiq may get the centralist vote as a more reliable choice but Mr Morsi can rely on the Islamic vote to boost his numbers, so it will be extremely tight. I would probably suggest Mr Morsi will edge it, but to be honest neither candidate seems able to lead Egypt into the new future promised in the revolution.

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