Egypt's Ruling Party Tightens Grip as Mubarak Succession Nears

Egypt’s ruling party is poised to sweep the Nov. 28 parliamentary election, tightening its grip on power as it prepares for a 2011 presidential vote that may see the first change of leadership in three decades.

Police have detained hundreds of supporters campaigning for the Muslim Brotherhood, the country’s biggest opposition group, in the run-up to the election, in what the Islamist movement says is part of the ruling National Democratic Party’s efforts to drive it out of politics. The Brotherhood said Nov. 22 that police had detained more than 1,200 of its supporters.

“The regime doesn’t want things to get out of hand ahead of the presidential election,” said Amr El-Shobaki, a senior analyst at the Al Ahram Center for Political and Strategic Studies, a Cairo-based research group. “It’s why they are clamping down on the opposition now.”

President Hosni Mubarak has no designated successor or a vice president, a fact that has fueled concern about the stability of Egypt, which the 82-year-old has ruled since 1981. A succession crisis in the Arab world’s most populous country may spark political unrest and hurt foreign investment inflows necessary for economic growth and job creation.

Photographer: Khaled Desouki/AFP/Getty Images

Egyptian President Hosni Mubarak. Close

Egyptian President Hosni Mubarak.

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Photographer: Khaled Desouki/AFP/Getty Images

Egyptian President Hosni Mubarak.

When the president, who hasn’t announced whether he will seek another six-year term, underwent surgery to remove his gallbladder in March, investors dumped Egyptian shares. The benchmark EGX30 index lost 6.7 percent in a week. It has shed a further 0.5 percent since April.

Grooming Gamal

“You have a crisis of decision making in Egypt because of the issue of succession,” said John Sfakianakis, the Riyadh- based chief economist of Banque Saudi Fransi. The longer Mubarak takes to decide if he’ll run, the harder it will be for the government to carry out necessary economic measures such as cutting energy subsidies, Sfakianakis said by telephone.

Opposition movements say that Mubarak has been grooming his son Gamal to succeed him. Both have denied that, saying a multi- candidate electoral system introduced in 2005 has made the political process more transparent.

Safwat El-Sherif, secretary-general of the NDP, raised the possibility that the president might not seek another term when he said in August that the elder Mubarak will be the party’s presidential candidate only if he chooses to run. El-Sherif spoke in an interview carried by the state-run Middle East News Agency.

Gamal Mubarak, the assistant secretary-general, has avoided giving clear answers on the subject. He told a television interviewer this month that he wasn’t driven by “personal ambition.”

Suleiman, ElBaradei

Intelligence chief Omar Suleiman has been mentioned by the London-based Economist Intelligence Unit as a possible presidential contender. Mohamed ElBaradei, the former head of the United Nations nuclear agency, said in February he would run if the government removed constitutional restrictions on independent candidates.

The younger Mubarak has been at the forefront of economic policies initiated in 2004, including the reduction of income tax and a program to sell state assets to foreign companies such as Turin-based Intesa Sanpaolo SpA, Italy’s second-biggest bank. This helped boost foreign investment and accelerated economic growth to an average of 7 percent in the three years before the onset of the global financial crisis in 2008.

Gamal Mubarak’s critics say that the changes have widened the gap between the country’s rich and poor and left the latter grappling with an inflation rate that has exceeded 10 percent in the past two years.

The government’s “overriding” objective will be to maintain economic growth and job creation, though “concerns over political unrest are likely to slow progress in some key areas,” the Economist Intelligence Unit said in a report on Nov. 10.

Economic Pledges

Over the past two months, the 47-year-old Gamal, a former investment banker, has campaigned to promote the party’s economic program for the next five years. The pledges include reducing the budget deficit to as little as 3 percent of gross domestic product from 8.1 percent in the fiscal year that ended in June, along with doubling the wages of public-sector workers. The government agreed this month to raise the monthly minimum wage to 400 pounds ($69) from just 35 pounds.

Other NDP policies, such as reducing subsidies, may prove less popular. Discontent over the rising cost of living and low wages sparked riots in 2008.

Analysts including El-Shobaki say the NDP will increase its absolute majority in parliament in the Nov. 28 vote. The Muslim Brotherhood, which won a fifth of the seats five years ago in its best showing, has nominated about 130 candidates for the 508-seat assembly, compared with more than 800 fielded by the NDP. The Brotherhood has accused the ruling party of rigging the vote, a charge the NDP denies.

Brotherhood Banned

As it is officially banned, the Muslim Brotherhood has to field its candidates as independents. The NDP said yesterday that it filed a complaint with the public prosecutor, accusing “members of an illegal organization,” the term it usually uses to refer to the Brotherhood, of violating the law by running for parliament.

The government rejected a U.S. call this month to allow international observers to monitor the balloting, saying that its election commission and civil society groups are capable of doing the job.

The ruling party “doesn’t want pluralism, nor does it want democracy,” said Essam El-Erian, a member of the Brotherhood’s top executive council, in a telephone interview in Cairo. “It wants a fake stability, stability on top of a volcano.”

To contact the reporter on this story: Alaa Shahine in Cairo at asalha@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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