Mansour Seeks to Form Government Ahead of Planned Protest

Supporters and opponents of deposed Egyptian leader Mohamed Mursi rallied today in rival demonstrations that risked new violence as interim leader Adly Mansour sought to pull together a government to restore order.

As demonstrations jammed streets, talks continued on the makeup of an administration. Ziad Bahaa-Eldin, a former lawmaker and ex-head of the Egyptian Financial Supervisory Authority, was being “strongly” discussed as a potential prime minister, with opposition leader Mohamed ElBaradei a possible vice president, Ahmed El-Meslemani, media adviser to Mansour, said by phone. The new premier is likely to be announced tomorrow, he said.

Waving Egyptian flags, anti-Mursi protesters descended on the iconic Tahrir Square and on a presidential complex in Cairo. Backers of the ousted Islamist president also gathered including in the capital’s Nasr City district, with some chanting “Mursi is my president,” according to television footage. The military vowed to protect “peaceful protesters in all of Egypt’s squares” and warned against any “provocative acts” in a statement on the Facebook page of its spokesman.

The turmoil convulsing Egypt after Mursi’s removal by the military sparked clashes on July 5 that killed about three dozen people and wounded more than 1,000. Compounding the unease is what Mursi’s backers say has been a crackdown on the Muslim Brotherhood, the party from which Mursi hailed.

“This is a return to the practices of the past that Egyptians revolted against,” Muslim Brotherhood spokesman Ahmed Aref said by phone. “The security-oriented mentality is forcing itself on the scene.”

Foreign Reserves

Prosecutors ordered the detention for 15 days of the Muslim Brotherhood’s deputy chief, Khairat el-Shater, and Salafi leader Hazem Abu Ismail. The two are being probed for their role in the deaths of protesters at Cairo University. Authorities also ordered the arrest of two other Brotherhood members. Salafists follow of an ultra-orthodox brand of Islam.

Against the backdrop of violence, Mansour, tapped by the military to lead the Arab world’s most populous nation, is seeking to lift Egypt from its political crisis, made worse by a weak economy. Net international reserves fell to $14.9 billion in June, the central bank said today, less than half the level when Hosni Mubarak was overthrown about two years ago.

A late-night turnabout yesterday in the announcement of the appointment of Egypt’s next premier highlighted Mansour’s challenges. Nobel Peace laureate ElBaradei posted on his Facebook page that he had accepted the job, until objections from the Salafi Nour Party and a threat it would withdraw support of the military-backed transition quickly led to a backtracking.

Islamist Opposition

Complicating the situation were objections to the change in plan by the Tamarod, or Rebel, campaign that had served as a catalyst for the latest protests against Mursi. Mahmoud Badr, one of the group’s founders, said on his Facebook page that they “utterly reject” the selection of a different premier.

The Nour Party said appointing ElBaradei as prime minister would deepen divisions among Egyptians, given his opposition to Islamist groups.

“Whoever made this decision didn’t take into consideration the difficult situation Egypt is going through,” Bassam Al Zarqa, a deputy leader of the party, told Al Hayat television. A “non-biased economic figure should have been selected instead.”

A former head of the International Atomic Energy Agency, ElBaradei became one of Mursi’s main opponents. He was one of the opposition figures who flanked Defense Minister Abdelfatah al-Seesi when he announced Mursi’s ouster.

BP Staff

His appointment would be “good for foreign investment that Egypt desperately needs to fill its financing gap, especially if we see strikes and rising violence denting tourism,” said Emad Mostaque, a London-based strategist at Noah Capital Markets EMEA Ltd.

Violence in the country led BP Plc to withdraw about 60 expatriate staff from the country last week, spokesman Toby Odone said, while Royal Dutch Shell Plc said it was monitoring the situation “closely,” according to its spokesman, Ali Khan.

An Egyptian pipeline that supplies Jordan with natural gas was hit by explosions in the southern Arish area of the Sinai peninsula, said Sherif Sousa, first undersecretary at Egypt’s oil ministry. Special forces troops were deployed near the Suez Canal to secure the waterway, which hasn’t been affected by the unrest, the state-run Al-Ahram reported.

Shares Fall

Fueling the angst is Egypt’s economy, which is in worse shape than it was during Mubarak’s last days in office. Growth is near its weakest in two decades and unemployment at a record 13.2 percent. A bid for a $4.8 billion International Monetary Fund loan has yet to be accepted, and the country has been relying on aid, primarily from Qatar.

The U.A.E. foreign minister will visit in two days and meet with Egypt’s interim leader to discuss economic cooperation, El-Meslemani said today by phone.

The EGX 30 Index fell 0.4 percent today, the most since June 23, to 5,311.51 at the close in Cairo. Shares valued at about 525 million pounds ($75 million) traded compared with a six-month daily average of 304 million pounds. The measure surged 14 percent last week, the most since the week ended June 28, 2012, when Mursi was declared president.

Mursi’s supporters have demanded that he be restored to power, arguing that he was democratically elected and that any change should take place at the ballot box.

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