Egypt Analysts Comment on Next Steps After Mubarak’s Ouster

The ouster of Hosni Mubarak from Egypt’s presidency today, after protests that started Jan. 25, prompted the following comments from analysts:

Angus Blair, head of research at Cairo-based Beltone Financial:

“The army needs to move quickly to remove obstacles to private investment, such as overhauling the bureaucracy, and cutting tariffs.”

“The private sector needs to be as liberated as the people have been today.”

Mona Mansour, a research director at Egyptian investment bank CI Capital:

“Even if this means military rule at least it brings stability. This could be positive for the economy. It may take some time for investment flows to come in but it is positive.”

Moustafa El-Husseini, Egyptian author of Egypt on the Brink of the Unknown:”

“The military cannot stop this momentum.”

“The military knows that if it tries to stop the transformation to democracy the price it will have to pay may be steep.”

Karim Mezran, professor of international relations at the Johns Hopkins University campus in Bologna, Italy:

The Egyptian people’s “demands have basically been met, and at this point continuing the protests means going up against the military. I think most of them will go home. The army will tell them that the transformation is under way, that the economy is suffering, that people have to get back to work.

“The people are not fooled. They know the system is still in place. But they have gotten much of what they wanted and they know they can’t provoke the military.”

“It will become a semi-democracy. The emergency laws will be lifted. There will be more freedom of speech. There will be a political opening. But it will be a supervised democracy, a bit like Turkey in the 1990s. It will be much better than what it is now, but I wouldn’t expect a 100 percent democracy.”

“America has switched sides. Obama has made it clear they won’t stand by dictators.”

“Regimes across the area will open up to oppositions to try to calm things down. Algeria is most at risk because of the internal dynamics there. But they seem to have managed to keep things calm by making concessions.”

Hani Sabra, New York-based Middle East expert, Eurasia Group:

“I don’t think it’s the start of a domino effect but it puts other Arab governments on notice. Some will take more aggressive pre-emptive steps to prevent what we saw in Tunisia and Egypt from happening.

“Obviously the opposition protesters and leaders are rejoicing at Mubarak’s announcement, but there is still a lot of work to be done in terms of creating the new political order in Egypt. The military will be the power they negotiate with directly. Military indicated they want free, fair presidential elections, to eliminate the emergency law and so on. So people will be watching very closely to see that they follow through with their promise.”

On the military relationship with the U.S. and the European Union: “On some levels it will give the EU and the U.S. some breathing room at the negotiating table and allow them to say democracy was won by the activists in Egypt. They will see the army as ruling only in a transitional capacity.”

On whether a dictatorship will emerge: “I don’t think it’s the most likely thing to happen. It’s pretty clear that the opposition can bring millions into the streets. From the military’s perspective they seem less likely to pursue that course. The opposition have calmed fears that this is an Islamist-dominated movement, so they will be more open to instituting changes. I don’t think the military will usher in a transition that makes Egypt as open as Norway, but the military will play an important role in seeing that the country progresses, and doesn’t go back to the old order.”

On stabilizing the country: “The main issue that needs to be addressed, in terms of maintaining stability, is how long the transitional period will last, what the composition of the transitional leadership will be, those are the priority issues in the near term.

Richard Dalton, former British ambassador to Iran, now with the Chatham House foreign-affairs institute in London, on Bloomberg Television:

“There are parallels. The slogans in 1979 were also about justice and freedom. What we are seeing in Egypt was very much like the early stages when there was a broad coalition. But what’s different is that it’s a people’s revolution in Egypt that hasn’t yet coalesced around a strong leader.”

“The Muslim Brotherhood are saying they won’t put forward a candidate for the presidency. That might not be the end of the story in terms of their ambitions, but they are responding to the fact that only a minority of Egyptians want to rally behind their banner. The majority want a secular state, which is the Egyptian tradition”.

“What is worrying at the moment is that the military appears to be divided. They are not putting out a single message. The majority in the military appear to want a rapid transition. They are getting their act together.”

Mohammed bin Essa al-Khalifa, chief executive officer of the Economic Development Board of Bahrain, on Bloomberg Television:

“In Bahrain we have had a successful 10-year run of reform. It has been a story of development, growth, and political freedom. We are confident what we have done meets the aspirations of the people of Bahrain.”

“People in the region are asking for more openness, more growth, and this is positive for investment in the region.”

“Each country has its own unique set of circumstances. The message between Tunisia and Egypt is that people want a better life, so development must meet the demands of the people. Countries that don’t improve the quality of their peoples’ life will face difficulties in the Arab world.”

Yazan Abdeen, a Dubai-based fund manager who helps oversee $250 million at ING Investment Management (Dubai) Ltd.:

“This is new to the political culture in the region. Questions need to be answered related to the transition mechanism between the military leadership and civil democratic leadership.

“Subject to a transition to rational civil democratic leadership, the economic drivers that are specific to Egypt may attract more foreign direct investment. There remains a lot of uncertainty, and that uncertainty is translated into risk. The risk profile of the country will increase until clarity is available. At the beginning there may be panic, and we will see volatility for sure” in the markets.

On reaction in regional markets: “There are companies that have exposure to Egypt, and their risk profile might increase because of that uncertainty. You could see some euphoria. But because of foreign institutional participation, the risk profile of Egypt will increase until there is more clarity on the transition. The effect on regional markets could be limited. We have already seen that.”

“On a regional level the risk profile has increased. But rich people do not demonstrate.

James Wolfensohn, chairman of Wolfensohn & Co., head of World Bank from 1995 to 2005, on Bloomberg Television:

“The reason you get uprisings is not that people foment to create a problem, it’s because there is dissatisfaction. Throughout the Middle East that dissatisfaction is caused because people have no money and they can’t eat and they get mad. It’s a very human reaction.”

“With the creation of networks like the Internet, ideas from one country instantly get transmitted to other countries, so what happened in Egypt I think you will find infections across the Middle East.”

“We had reactions from leaders from other countries saying they will react. They are saying we are not going to get into this situation, we are going to make people freer. The leadership throughout the Middle East is showing they understand there can be an infection.”

“The autocrats have had it pretty good, they have gotten pretty rich. What is being tested is whether millions of people can change the minds of people at the top.”

“The Jordanians must be very worried. The king has support from tribal leaders but the majority of the population is Palestinian.”

”People are most worried about the Suez Canal and the flow of oil. The past days there have been very few problems. The big issue is energy and oil from the Middle East.”

“Financial markets are saying the militaries will win and you will get stability in these countries. Markets are always happier with stability. They prefer certainty.”

Brian Katulis, senior fellow at the Center for American Progress in Washington:

“The Egypt scene is as complex for us, the regional scene is more complex now that Mubarak has stepped down.”

“The song that keeps playing through my head is the Who’s ‘Won’t Get Fooled Again,’” Katulis said. “The guys who have essentially run the country for the last 60 years are the guys who are still running the country.”

“So when the euphoria fades -- and I think his stepping down obviously relieves come pressure -- this whole process of negotiation and negotiation for power among Egyptians will go on for a long time and the negotiation between the U.S. and the Egyptian authorities will go on for a long time.”

“The opposition is very fractious,” he said. “Now, you’ll have competing agendas and it will take some time for different opposition groups to coalesce around issues and stands.”

Mohammed Ali Yasin, chief investment officer at Abu Dhabi-based financial services company CAPM Investments PJSC:

“The succession for the president needs to be acceptable to the people. If so, it will prompt a strong rebound in the stock market and the economy in general. People had expected markets to sell off, you may find them now talking about opening limit up and not limit down. It is important that the damage that’s been done in past 20 days is manageable.

“The exchange rate may go back to attractive levels. And the Egyptian economy may go back to where it was. You’d see influx of liquidity in loans from regional players” in the Gulf Cooperation Council. “That would have positive effect on equity markets and the exchange rate and it even could have positive effects in the entire region. In my mind the new blood that may come to the system may come up with new ideas that will help the economy” significantly.

To contact the reporter on this story: Gregory Viscusi in Paris at gviscusi@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.

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