Feb. 25 (Bloomberg) -- Egypt prepared to name a new government after the military-backed interim cabinet resigned abruptly in a move widely seen aimed as paving the way for a presidential run by Defense Minister Abdel-Fattah al-Seesi.
Prime Minister Hazem El Beblawi’s eight-month-old government had come under increasing criticism for failing to revive the economy, with labor unrest compounding the turmoil caused by surging militant violence and a bloody crackdown on the Muslim Brotherhood since President Mohamed Mursi’s ouster in July. The resignation yesterday followed weeks of speculation about what could be at least a partial reshuffle.
The outgoing premier, in a televised address, said the government was stepping aside after doing its best to steer Egypt out of a “narrow tunnel” since the military toppled Mursi. While he didn’t offer a reason for the resignation, local media and some political parties saw the step as the military’s way of trying to calm increasingly irate Egyptians ahead of a potential presidential run by Al-Seesi, who has yet to declare his intentions.
President Adly Mansour accepted the resignation last night, according to a statement from his office, thanking El Beblawi for taking on the responsibility at a “critical and difficult time” following the mass uprising that led to Mursi’s fall. Housing Minister Ibrahim Mahlab was expected to take on the task of forming a new government, the state-run Ahram Gate reported.
The next cabinet will be charged with moving ahead with the outgoing government’s declared plan to steer the Arab world’s most populous nation toward democratic rule. Attention is largely focused on the presidential election, which Al-Seesi is seen as dominating should he choose to run.
The U.S.-trained officer has rocketed in popularity since he led Mursi’s overthrow, and is promoted in the media and on billboards across the nation as the person best suited to lead Egypt out of the economic, political and social tumult that followed Hosni Mubarak’s toppling in 2011. Critics accuse him and the military of seeking to curb freedoms and carrying out the harshest crackdown on Mursi’s Muslim Brotherhood and allied Islamists in decades.
Al-Seesi “will be an empowered leader with much political capital. However, he will not micro-manage the state,” Hani Sabra, Mideast and North Africa director at the Eurasia Group in New York, said in e-mailed comments. His views “remain enigmatic. In part, this is probably because he lacks a real political ideology. He is likely to depend heavily on experienced advisers.”
The speculation around Al-Seesi’s bid has buoyed the stock market, and the government’s resignation further boosted investor confidence. The benchmark EGX 30 stock index reversed a loss after the resignation to close 0.5 percent higher yesterday, taking its surge since Mursi’s removal to 62 percent.
While Al-Seesi may bring strong backing to the presidency, Egypt’s challenges will remain formidable, including net international reserves around 50 percent of their December 2010 levels.
“Social tension -- already high -- is very likely to worsen as authorities continue their crackdown on the Brotherhood and attempt to implement sensitive reforms,” Sabra said. “Also, at a micro level, the massive Egyptian state bureaucracy means that the while investors will get more predictability, the pitfalls of operating in Egypt will persist.”
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