Jan. 27 (Bloomberg) -- Egyptian opposition leader Mohamed ElBaradei returned to Cairo and said he will join demonstrators in the capital tomorrow in a fourth day of anti-government protests inspired by the revolt that toppled Tunisia’s leader.
“Egyptians have broken the barrier of fear,” ElBaradei, a Nobel Peace Prize winner, told reporters at Cairo’s airport late today. “There is no going back. The regime should stop violence, stop detaining people, stop torturing people.”
The 68-year-old former head of the United Nations nuclear agency, a possible presidential candidate, has urged President Hosni Mubarak to leave office. ElBaradei helped set up the National Association for Change last year to campaign for democracy and against corruption in his homeland. He has said he will run for president if the government removes constitutional restrictions on independent candidates.
U.S. President Barack Obama today said he has consistently told Mubarak that it is “absolutely critical” for Egypt’s long-term well-being to be “moving forward on reform -- political reform, economic reform.” Answering questions on Google Inc.’s YouTube, Obama said the Egyptian government “has to be careful about not resorting to violence.”
State Department spokesman Philip J. Crowley told reporters in Washington earlier in the day that who runs for office is “a matter for the Egyptian people” and “what happens going forward will be something that develops indigenously.”
Clashes between protesters and security forces continued for a third day today in cities including Suez and Ismailia, both east of Cairo, sending Egypt’s benchmark EGX30 index tumbling by the most in more than two years. While the capital remained quiet, riot police have been deployed downtown since demonstrations on Jan. 25 in which four people were killed.
White House spokesman Robert Gibbs today called Mubarak “a close and important partner” of the U.S., and declined to comment on the challenges to his rule, saying we “aren’t here to pick the leaders of countries.” Gibbs also said he believes Mubarak’s government is stable.
ElBaradei held out the prospect of working with the Mubarak government to bring about political change without violence.
“Change is not going to happen overnight,” ElBaradei said. “I am still here hoping to continue to manage the process of change in an orderly way, in a peaceful way. I hope the regime will do the same.”
ElBaradei’s organization and the Muslim Brotherhood, Egypt’s biggest opposition group, said they would both attend the demonstration after Friday prayers in the mainly Muslim country.
“We’re going to join in tomorrow’s protests because we’re a part of this society,” Hamdy Hassan, a former parliamentarian and member of the Brotherhood, said by telephone from Alexandria. “We won’t make up the majority of protesters, but our demands are aligned with those of the youth that are leading this movement.”
The secretary-general of Egypt’s ruling National Democratic Party called for calm after tomorrow’s prayers. Safwat El-Sherif also told reporters in Cairo before ElBaradei’s arrival that the organization is open to a dialogue with legitimate political parties. He said the ruling party was meeting to discuss the protests in Egypt.
Demonstrations have erupted in the past month in several Arab countries including Algeria, Morocco and Yemen, which all face high unemployment rates and rising living costs, factors which fueled the uprising that ousted Tunisian leader Zine El Abidine Ben Ali on Jan. 14. Mubarak, in power since 1981, hasn’t said whether he will run in presidential elections later this year and hasn’t spoken publicly since the demonstrations began.
“Part of the reason Mubarak hasn’t responded is because by responding to the protesters it gives them credence,” Hani Sabra, a Middle East analyst with the Eurasia Group, said in an interview. “He doesn’t want to look weak. Mubarak doesn’t want to appear weak and embolden protesters.”
The EGX30 plunged 11 percent, the most since October 2008, to 5,646.50 at the 2:30 p.m. close in Cairo. That brought the two-day drop to 16 percent. The cost to insure against the country’s debt soared 38 basis points to 383, the highest since May 2009, according to CMA prices.
Egypt, home to Orascom Construction Industries, Talaat Moustafa Group Holding and Orascom Telecom, has the biggest stock market by market capitalization in North Africa.
The government will probably weather the current wave of protests, though a presidential election due later this year will ensure that political tensions persist, Fitch Ratings said today.
“Egypt’s regime has been in place for several years and there have been protests in the past and the regime is used to dealing with them,” Richard Fox, Fitch’s London-based head of Middle East and Africa Sovereign Ratings, said in a conference call today. Strong ties between the military and the ruling establishment are a “linchpin” of stability, he said.
Low wages and high prices have sparked frequent protests in Egypt since 2004. About 1.7 million workers engaged in 1,900 strikes and other forms of protest between 2004 and 2008, the Solidarity Center, a U.S. labor-rights group, said in a study last year.
The central bank kept its benchmark interest rate unchanged at a four-year low today to support economic growth. The Monetary Policy Committee left the overnight deposit rate at 8.25 percent and the overnight lending rate at 9.75 percent, the central bank in Cairo said on its website today. All seven economists surveyed by Bloomberg News forecast no change.
Mubarak, 82, has no vice president or designated successor. Opposition groups, including the Muslim Brotherhood, say the president is grooming his politician son, Gamal Mubarak, to succeed him, a claim both men deny.
Egypt, Algeria and Yemen all rank in the bottom half, well below 59th-placed Tunisia, in Berlin-based Transparency International’s 2010 Corruption Perceptions Index of 180 nations. All Arab countries except Lebanon and Iraq are classified as authoritarian regimes in the Economist Intelligence Unit’s 2010 Democracy Index.
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