Egypt’s New Government Prepares to Take Helm of Nation

Egyptian Prime Minister Hisham Qandil called for unity as he was sworn in to head a government largely of technocrats that will be faced with leading a nation mired in economic troubles and political infighting.

The Cabinet picked by Qandil took the oath of office before President Mohamed Mursi. It includes many little-known figures and isn’t stacked with Islamists, a concern of some secularists given that Mursi was drawn from the Muslim Brotherhood’s ranks.

“It is time to line up around the elected president and the new government,” Qandil told reporters in Cairo hours before the swearing in ceremony. “This government will not work alone and will definitely not succeed alone. We are the people’s government. We do not represent this or that affiliation.”

Mursi succeeded Hosni Mubarak, who was toppled in a popular uprising almost 18 months ago, and promised a diverse, inclusive Cabinet. Qandil said that Egypt faces “huge” challenges including a 135 billion-pound deficit ($22.2 billion) that amounts to 7.6 percent of gross domestic product, internal debt of 1.18 trillion pounds and foreign debt of $33.8 billion.

“The appointment of Egypt’s first permanent government since the revolution is a significant step forward in the country’s political transition,” Dubai-based HSBC senior economists Liz Martins and Simon Williams said in an e-mailed statement. “Most immediately, it offers some prospect for a resumption of policy making after 18 months of political drift, including the resumption of talks with the IMF.”

‘Wide Consensus’

Egypt’s need to secure a $3.2 billion loan from the International Monetary Fund enjoys “wide consensus” in the new government, Qandil said. Ministers in charge of economic portfolios will meet next week to discuss it, he said.

The loan, first sought by Egypt more than a year ago, remains unapproved, with the political consensus that the lender had sought as a precondition elusive amid a tug-of-war over power between Mursi and the generals from whom he inherited power. More than 50 percent of Egypt’s foreign reserves have been spent since January 2011.

Secularists, youth activists who played a key role in the unrest and the minority Coptic Christians had expressed concern the new government would mostly be drawn from the Brotherhood’s political arm, the Freedom and Justice Party, or other Islamists. Protests over issues such as daily power and water outages combined with labor strikes to heighten tension.

“This is the government tasked with achieving the revolution’s goals: bread, freedom and social justice,” Qandil said.

FJP Portfolios

The appointment of Qandil, a U.S.-educated former irrigation minister, fell short of expectations that secularists and others had about the naming of an independent national unity figure to lead Egypt through its worst economic crisis in more than a decade.

The FJP secured at least three portfolios, based on the list released so far -- a far cry from the 25 percent to 50 percent of the posts that some in the party had said they were targeting. While many of the ministers selected were technocrats, it’s unclear if they have Islamist sympathies.

Salah Abdel-Maqsoud, a senior member of the Freedom and Justice Party, will be the country’s minister of information. Also drawn from the FJP was the youth minister, as well as one other post, so far.

Defense Minister

Field Marshal Mohamed Hussein Tantawi, who heads the military council that assumed power after Mubarak’s ouster, will retain the post of defense minister in the new government.

Qandil said the criteria he used for the selection were individual expertise and the nominee’s commitment to public service.

At least nine ministers also served under the outgoing Cabinet, including Finance Minister Momtaz el-Saieed and Foreign Minister Mohamed Kamel Amr.

The Salafi al-Nour Party, which came in second to the FJP with 25 percent of the seats in the now-dissolved parliament, has refused to join the new government, the state-run Al-Ahram reported, citing senior party member Younis Makhyoun. The party had been given the relatively low-profile Environment Ministry, he said.

To contact the reporters on this story: Abdel Latif Wahba in Cairo at alatifwahba@bloomberg.net; Tarek El-Tablawy in Cairo at teltablawy@bloomberg.net

To contact the editor responsible for this story: Louis Meixler at lmeixler@bloomberg.net

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