ElBaradei Sounds Warning as Egypt’s Mursi Sees More Defections

Nobel Peace laureate Mohamed ElBaradei sounded a warning about growing polarization in Egypt, criticizing President Mohamed Mursi just hours before U.S. Defense Secretary Chuck Hagel’s arrived today.

“Egypt is a train wreck waiting to happen,” ElBaradei, a leader of the National Salvation Front opposition bloc, said in a post on his Twitter account late yesterday. “Mursi’s aides jumping ship. National reconciliation crucial.”

ElBaradei’s new jab highlighted the discord that has deepened in Egypt since the Islamist leader was elected in June, including the resignation of yet another adviser yesterday. Unrest is growing over Mursi’s failure to turn around the economy, mounting tensions between the president and the judiciary, and critics’ allegations that he is more interested in promoting the Islamist agenda of his Muslim Brotherhood group than tackling the country’s problems.

Egypt’s economy is slowing, foreign reserves are more than 60 percent below their December 2010 levels and the budget deficit for this fiscal year may mushroom to 11.7 percent of gross domestic product, Finance Minister El-Morsi El-Sayed Hegazi forecast yesterday

Mursi suffered another blow yesterday when his legal affairs adviser, Fuad Gadallah, became the 11th of his original 17 advisers to quit, according to the state-run Ahram Online.

No Vision

Gadallah accused Mursi’s government of having no vision for running the nation and letting the Muslim Brotherhood influence policy.

Tensions between Mursi and the judiciary have been building since he temporarily assumed virtually unassailable powers with a November decree. They’ve compounded broader unrest over the country’s direction that has played out in sometimes violent protests that have hurt the economy and hobbled efforts to conclude a $4.8 billion International Monetary Fund loan that Mursi says is vital to restoring investor confidence and unlocking other foreign assistance.

Hagel, who arrived in Cairo early today, will probably address Egypt’s political situation and relay Washington’s concern over the security situation in the Sinai peninsula, Washington Institute for Near East Policy analysts David Schenker and Eric Trager wrote in a report yesterday. Various militant groups are believed to be operating in the area bordering Israel and Gaza.

“The Brotherhood’s refusal to govern more inclusively has only exacerbated the situation,” they wrote, referring to the recent unrest. “Absent an unlikely change in Mursi’s approach, the deterioration will continue in the coming months.”

Israel has accused Gaza militants of firing rockets from Sinai at a southern Israeli city last week.

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To contact the reporters on this story: Tarek El-Tablawy in Cairo at teltablawy@bloomberg.net; Salma El Wardany in Cairo at selwardany@bloomberg.net

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

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