June 25 (Bloomberg) -- Egypt’s Islamist president-elect Mohamed Mursi appealed for national unity as he prepared to take up a post whose powers have been curbed by the ruling generals. Stocks and bonds surged on the prospect of stability.
In a televised address after becoming the first democratically elected president in Egypt’s history, the 60-year-old U.S.-trained engineer, a onetime prisoner under Hosni Mubarak, said he would be a “president for all Egyptians.” Mursi, whose win was confirmed yesterday after a week of tension since voting ended, pledged to heal rifts that had deepened in the 16 months since Mubarak’s overthrow in a popular uprising, and said he would honor Egypt’s international agreements.
Egypt needs unity “so that this great and patient people could reap the fruits of its sacrifices,” Mursi said, as millions took to the streets overnight to celebrate his win over Ahmed Shafik, who served as premier under Mubarak. Election officials said yesterday that Mursi, the Muslim Brotherhood’s candidate, got 51.7 percent in the runoff vote to Shafik’s 48.3 percent. Both men had claimed victory.
Mursi must address the tensions between the army and civilian politicians and activists that have overshadowed Egypt’s transition to democracy, escalating in the past 10 days with the army’s appropriation of wider powers and a court order dissolving parliament. He also faces the challenge of reviving an economy that slumped after Mubarak’s ouster in February 2011.
Mursi may put the dissolution of parliament to a referendum if it is confirmed by the Supreme Administrative Court, Sobhi Saleh, a senior official with the Brotherhood’s political party, said today, according to the state-run Middle East News Agency.
Egyptian stocks and bonds surged for a second day on expectations Mursi’s win will avert the prospect of renewed violence. Opponents of Shafik had charged the former air force commander with seeking to restore the old regime, and vowed to contest the result if he had been declared the winner.
The benchmark EGX 30 stock index gained 6.7 percent at midday in Cairo, heading for its biggest gain in five months. Yields on Egyptian dollar bonds due in 2020 dropped 51 basis points to 7.36 percent, the biggest drop since February 2011.
Egypt’s central bank has spent more than half of its international reserves since the start of last year, while a $3.2 billion International Monetary Fund loan has repeatedly been postponed.
Mursi’s victory should ensure the credit is agreed, and Egypt needs IMF approval of its economic policies to encourage other donors, said former Finance Minister Samir Radwan, who requested the money last year before being vetoed by the military. “Even the Gulf states will not give you money before he signs with the IMF,” he said.
Mursi said that relations with other countries would be based on mutual respect and pledged to respect Egypt’s international treaties, in comments aimed at allaying worries about the fate of the peace deal signed in 1979 between Egypt and Israel.
Israel, which has expressed concerns about a Brotherhood presidency, said it looked forward to “continuing cooperation with the Egyptian government on the basis of the peace treaty between the two countries,” according to a statement by the prime minister’s office.
The White House in an e-mailed statement congratulated Mursi on his victory and called on him “to advance national unity by reaching out to all parties and constituencies in consultations about the formation of a new government.”
Iran’s state-run Fars news agency cited Mursi as saying in an interview hours before he was announced as winner that he would seek to improve relations with Iran to “create a strategic balance” in the region. Iran’s joint chiefs of staff drew a parallel with Iran’s 1979 Islamic revolution in a statement congratulating Egypt, saying that “the world is witnessing the overthrow of another U.S. backed regime.”
Mursi’s win marks a change of fortunes for the Brotherhood, which endured repeated crackdowns under Mubarak and his predecessors. Since its party won the largest bloc in parliament this year, the group has been locked in a power struggle with the ruling military council that took over after Mubarak.
Before the presidential election, the ruling council boosted its authority at the expense of the presidency after a court ordered the dissolution of the Islamist-dominated parliament. Decrees granted the military legislative powers and the ability to play a direct role in shaping a new constitution. The military says it plans to hand over power this month.
Mursi won support from some of the mostly secular and youth-led activists that played a key role in last year’s uprising, in an alliance based mostly on mutual opposition to Shafik and the military. Ahmed Maher, co-founder of the April 6 group, said Mursi must fulfill campaign promises including naming vice presidents from a range of backgrounds. Mursi has said his deputies may include a woman and a Christian.
“The Brotherhood wants to have a stronger presidency, and they are going to use their popular mandate and their democratic legitimacy now to aggressively push against” the ruling generals, Shadi Hamid, director of research at the Brookings Doha Center in Qatar, said by phone. “That’s a key struggle to watch.”
Other analysts argued that the announcement of Mursi’s victory heralds a deal between the Brotherhood and the army. It signals that “the military council has accepted to have the Brotherhood as a junior partner,” said Ashraf el-Sherif, a professor of political science at the American University in Cairo. “There will be a tug of war, but I don’t think that it will be a full-fledged confrontation.”
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