Egypt’s Constitutional Panel Meets Amid Sinai Violence

Photographer: Khaled Desouki/AFP via Getty Images

An man wearing a mask of ousted Egyptian President Mohamed Mursi shows his handcuffed hands outside the presidential palace in Cairo, on July 19, 2013. Close

An man wearing a mask of ousted Egyptian President Mohamed Mursi shows his handcuffed... Read More

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Photographer: Khaled Desouki/AFP via Getty Images

An man wearing a mask of ousted Egyptian President Mohamed Mursi shows his handcuffed hands outside the presidential palace in Cairo, on July 19, 2013.

Egypt’s constitutional amendment panel met for the first time to initiate a process leading to fresh elections, as supporters and opponents of ousted President Mohamed Mursi engaged in street fighting for a third week.

The 10-member committee of legal experts has given political parties and other groups a week to present proposals, the state-run Middle East News Agency said yesterday. The panel has 30 days to present the amendments to a second committee made up of 50 public figures before a referendum on the charter, followed by parliamentary and presidential elections. The benchmark EGX 30 stock index gained 1.4 percent, the most since July 9.

The fractious transition follows the July 3 removal of Mursi by the military. At least 70 people were injured in clashes last night between supporters of the Islamist leader and his opponents in the coastal city of Suez, police said.

The military and police are also struggling to end militant attacks in Sinai, which have intensified since Mursi’s removal. Clashes in Sinai killed three soldiers, two policemen and one civilian, the state-run news agency reported, while a further five policemen and one civilian were wounded in an attack on a central security camp in Rafah in north Sinai today.

“There is no way the transition phase is going to be smooth,” said Ziad Akl, senior analyst at Al Ahram Center for Political and Strategic Studies in Cairo. “It’s very possible that it will be extended, and could be sort of prolonged, until a deal is reached with the Muslim Brotherhood.”

Road Map

The Brotherhood, which fielded Mursi for elections last year, has refused to recognize the transitional authorities, vowing instead to press on with protests until the Islamist politician is released from military custody and reinstated.

Mursi pushed a constitution through a referendum last year, ignoring opponents who said the document favors Islamists and infringes on basic rights. Under the road map announced by interim President Adly Mansour, elections will be called after a new charter is approved.

Underscoring the political polarization in the country, the April 6 movement, one of the groups that campaigned for Mursi’s ouster, said it will propose a “ban on religious parties,” according to an e-mailed statement. The clause was included in a charter passed under Hosni Mubarak, who persecuted Islamists during his three-decade rule that was ended by the 2011 uprising.

Public Consultation

Tamarod, the movement that helped mobilize the street protests that called for Mursi’s removal, has started to collect suggestions from Egyptians on the document, said Islam Hammam, a member of its central committee.

“There’s no way the Muslim Brotherhood are not going to be part of Egypt’s political scene,” Akl said. “What they are doing now by the daily protests is trying to apply political pressure to enhance their position in negotiations.”

The army cordoned off the road leading to the headquarters of the defense ministry in Cairo to prevent a march by Muslim Brotherhood women from reaching the site, Mena reported yesterday. The demonstration was to protest at the killing of three pro-Mursi women in the Nile Delta city of Mansoura on July 19.

The interim cabinet, convening for the first time yesterday, endorsed efforts by security services to restore order, according to an e-mailed statement.

‘Social Justice’

Prime Minister Hazem El Beblawi and his ministers also said that it will prioritize policies that protects the poor, without providing details.

“The stress on social justice was expected,” said Mohamed Abu Basha, a Cairo-based economist at investment bank EFG-Hermes. “It was a weakness of the previous government, which didn’t have specific policies to address it. However, today’s statement isn’t enough to give an indication of what policies this government will take.”

El Beblawi inherits record unemployment and a budget deficit that may widen to 12 percent of economic output this year, according to the estimates of 11 analysts on Bloomberg. Economic growth may slow to 2 percent, near its worst pace in two decades, while inflation, at 9.8 percent in June, is the highest in two years.

The central bank has received a $2 billion interest-free deposit from Saudi Arabia, state-run Ahram Gate reported yesterday, citing Central Bank Governor Hisham Ramez. The funds are part of a $12 billion package pledges by the United Arab Emirates, Kuwait as well as Saudi Arabia.

To contact the reporters on this story: Salma El Wardany in Cairo at selwardany@bloomberg.net; Alaa Shahine in Dubai at asalha@bloomberg.net

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

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