EGYPT: Crises will weaken government
19 March, 2008 (Excerpts)
"....Opposition movements will score political points in the short term as the government finds itself pressured over both the bread crisis and its crackdown on the Muslim Brotherhood ahead of the 8 April municipal council elections.... likelihood of political violence, particularly during the elections. Since it instituted significant economic reform, the government has been able to weather political storms with relative ease, but it will come out of this episode weakened, making it harder for authorities to move forward with other reforms.
On the bread crisis
The Egyptian public is growing increasingly impatient with rising food prices. And soaring wheat prices are putting a financial strain on the government, which spends billions on importing wheat for subsidized bread. According to local sources, Egypt, the world's second largest wheat importer, will spend almost $1 bn more on wheat this year. (In the US, wheat prices have tripled over the last year.) Authorities are keen to avoid a repeat of the 1977 bread riots and Hosni Mubarak's government, which values stability over all is almost certain to maintain the subsidized 5 piaster bread loaf (less than $0.01) in the short and medium term, regardless of the stress it puts on government finances....
Long lines outside government bakeries have generated tensions and violence in some cases, which is making authorities jittery....avoid[ing] any talk of lifting subsidies in the short and medium term.....continue spending billions on food subsidies.... Mubarak's recent announcement that the army will assist in bread production and distribution is unlikely to quell public discontent with the government....
19 March, 2008 (Excerpts)
"....Opposition movements will score political points in the short term as the government finds itself pressured over both the bread crisis and its crackdown on the Muslim Brotherhood ahead of the 8 April municipal council elections.... likelihood of political violence, particularly during the elections. Since it instituted significant economic reform, the government has been able to weather political storms with relative ease, but it will come out of this episode weakened, making it harder for authorities to move forward with other reforms.
On the bread crisis
The Egyptian public is growing increasingly impatient with rising food prices. And soaring wheat prices are putting a financial strain on the government, which spends billions on importing wheat for subsidized bread. According to local sources, Egypt, the world's second largest wheat importer, will spend almost $1 bn more on wheat this year. (In the US, wheat prices have tripled over the last year.) Authorities are keen to avoid a repeat of the 1977 bread riots and Hosni Mubarak's government, which values stability over all is almost certain to maintain the subsidized 5 piaster bread loaf (less than $0.01) in the short and medium term, regardless of the stress it puts on government finances....
Long lines outside government bakeries have generated tensions and violence in some cases, which is making authorities jittery....avoid[ing] any talk of lifting subsidies in the short and medium term.....continue spending billions on food subsidies.... Mubarak's recent announcement that the army will assist in bread production and distribution is unlikely to quell public discontent with the government....
On the municipal council elections
.... fear of a sweeping Islamist victory, the Egyptian government has arrested hundreds of Muslim Brotherhood activists and potential candidates. The local municipal councils have long been dominated by the ruling National Democratic Party, which has no intension to relinquish control of the municipalities. The government will likely succeed, as it did with Shoura Council (parliament's upper house) elections in June 2007 of freezing the Muslim Brotherhood out of participation. This will obviously not bolster the Brotherhood's legislative power but will likely increase its popularity.
....the government's more long-term goal is keeping the councils free of Muslim Brotherhood supporters to ensure that they do not have the ability to put forth an independent presidential candidate in the 2011 election. Based on constitutional amendments, independent candidates can run for president if they have the endorsement of the aggregate of at least 250 MP's and local councilors (and the local councilors must represent a majority of the 26 governorates.) The Muslim Brotherhood currently has 88 parliament members, so the government wants to ensure that they do not capture anywhere near 162 of the almost 4500 municipal council seats up for election. This equation will likely increase speculation that Mubarak is paving the way for his son Gamal to be elected president in 2011.
The combination of these crises will complicate the Egyptian government's position in the short and medium term. It will be more difficult for Cairo to implement challenging economic reforms, but it is unlikely that there will be any major policy reversals...."
.... fear of a sweeping Islamist victory, the Egyptian government has arrested hundreds of Muslim Brotherhood activists and potential candidates. The local municipal councils have long been dominated by the ruling National Democratic Party, which has no intension to relinquish control of the municipalities. The government will likely succeed, as it did with Shoura Council (parliament's upper house) elections in June 2007 of freezing the Muslim Brotherhood out of participation. This will obviously not bolster the Brotherhood's legislative power but will likely increase its popularity.
....the government's more long-term goal is keeping the councils free of Muslim Brotherhood supporters to ensure that they do not have the ability to put forth an independent presidential candidate in the 2011 election. Based on constitutional amendments, independent candidates can run for president if they have the endorsement of the aggregate of at least 250 MP's and local councilors (and the local councilors must represent a majority of the 26 governorates.) The Muslim Brotherhood currently has 88 parliament members, so the government wants to ensure that they do not capture anywhere near 162 of the almost 4500 municipal council seats up for election. This equation will likely increase speculation that Mubarak is paving the way for his son Gamal to be elected president in 2011.
The combination of these crises will complicate the Egyptian government's position in the short and medium term. It will be more difficult for Cairo to implement challenging economic reforms, but it is unlikely that there will be any major policy reversals...."
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