Egypt Starts Planning For Life After Mubarak

President Hosni Mubarak's absence from Egypt since June 20 for back surgery in Munich has sent shock waves through the Egyptian Establishment. Mubarak, 76, has ruled Egypt since the assassination of Anwar Sadat by Islamic militants on Oct. 6, 1981. Once considered a caretaker, the stolid former Air Force commander has lasted in office nearly a quarter of a century. No wonder his absence has set off rumors that he is gravely ill. His never having named a successor adds to the angst. "With the President's surgery, the issue [of succession] is more pressing than anytime before," says Abdel Monem Said Aly, director of the Al-Ahram Center for Political & Strategic Studies in Cairo.

The prospect that the Mubarak era might be drawing to a close is both an opportunity and a worry for the Arab world's largest country. It's an opportunity because the conservatism of Mubarak's twilight years has stifled badly needed change. While Egypt has a Parliament and elections, top leaders aren't accountable to the public, and Mubarak's economic management has been third rate. Egypt's living standards have declined in recent years. Yet Mubarak's possible departure is stirring worry because it could trigger a destabilizing battle among factions eager for the spoils. "I am not optimistic," says Mohamed Sid-Ahmed, a columnist for the Cairo newspaper Al-Ahram. "I am afraid we are sinking toward chaos." A power vacuum is cause for concern because the country plays a pivotal role in the Mideast.

Recently, Mubarak has taken measures that are seen as preparations for his eventual departure. He transferred autocratic Information Minister Safwat al Sherif to a ceremonial post and signaled that a bigger Cabinet shuffle is on the way. The victims are likely to be Old Guard figures such as Sherif, whom the press blames for blocking reforms proposed by younger members of the ruling National Democratic Party (NDP), increasingly dominated by Mubarak's son, Gamal. "The transition process has already begun," says a businessman in Cairo. "Everybody is positioning themselves on how to handle it."

Sign of Backwardness?

Younger members of the business community would like to see Gamal, 41, succeed his father. They hope the former Bank of America (BAC ) exec would push for market-oriented reforms. But many Egyptians feel it would be a sign of backwardness for the President's son to follow him. Other names circulating include intelligence chief Omar Suleiman, Mubarak's troubleshooter with the Palestinians and Israelis. A lesser-known possibility is Alexandria Governor Abdel Salam al Mahgoub, known for innovative development projects.

The outcome will depend on how Mubarak decides the next President should be chosen. He was vice-president when he succeeded Sadat but has always resisted picking a No. 2. Pundits speculate Mubarak may finally tip his hand before or during a September ruling party conference. If he chooses a vice-president or looks for consensus among the military and bureaucracy, Gamal is unlikely to emerge on top because he is viewed as lacking sufficient credentials. Some analysts hope Mubarak will make a bold gesture and change the constitution to allow direct elections -- a move that might favor Gamal. With other parties weak, the NDP would be a formidable force during this key transition period for Egypt.

By Stanley Reed in London

Edited by Rose Brady

    Before it's here, it's on the Bloomberg Terminal.