Which way ahead?

July 22nd, 2012

Experts are unsure which economic model Islamist President Mursi will follow, though it is unlikely to mark a radical shift from existing policies – Published on Al-Ahram weekly online, by Nesma Nowar, 19 – 25 July 2012.

Mohamed Mursi’s inauguration as Egypt’s first democratically elected president has raised many questions concerning the outlines of his administration. One of the pressing concerns is how an Islamist president is likely to run the country’s economy. Many economic challenges lay ahead, including modest growth rates, high rates of unemployment, poverty, rising inflation and a gaping budget deficit. Experts believe that the measures Mursi would take to address these challenges depend on the economic model he adopts. But what is this model? … //

… According to Fathi Sakr, professor of economics at Cairo University, the Turkish and Malaysian models are both applicable and could be embraced equally by Mursi. He excludes the idea of adopting the Iranian model because “it is a closed economy that did not achieve any success.”

Sakr pointed out that there are similarities between the Malaysian and Turkish models, as they both sought to establish equity among citizens and enhance education. One privilege of the Turkish model, according to Sakr, is that Turkey succeeded in becoming a major exporting country while bringing the army under government control, reducing its autonomy. Like Helmi, Sakr believes that the role of Islamic finance will be enhanced under Mursi.

Sakr agrees with Helmi that it is unclear at this time which direction President Mursi will go. He stated that Mursi did not yet move beyond his electoral vows; that he is currently being subjected to many pressures from different parties with whom he should compromise. This is in addition to the people’s heightened demands, which he should meet in the first 100 days in office.

Farag Abdel-Fattah, professor of economics at Cairo University, also believes that the economic policies Mursi would follow would not differ from those adopted by the former regime. He argues that the Muslim Brotherhood, from which Mursi hails, is a business-oriented group. Abdel-Fattah said that if the Turkish and Malaysian economic models are to be followed, they should be adopted while taking Egypt’s context into account.

Over the last three decades, former president Hosni Mubarak’s government adopted market economy policies that enabled seven per cent growth rates for several years until the world economic crisis hit in 2008. The bulk of Egyptians gained little from such high growth rates, however, while the wealthy class close to Mubarak’s family benefited dramatically, widening the gap between the rich and the poor.

Regardless of which economic policy Mursi will follow, he has first to set the ground for development. According to Sakr, Mursi needs to gain the trust of all Egyptians, showing them that he does not have any political leanings when it comes to wealth creation and distribution. Also, restoring security is vital for economic development.

Sakr believes that economic development is likely to take off after the new constitution is written, and new parliamentary elections are held. For Helmi, restoring trust between citizens and various state institutions is crucial to achieving economic development. She states that in the recent period, people’s trust in the country’s institutions was shaken. “If there is no trust, there is no development.” (full text).

Links:

The US, the Brotherhood, Nasser, 1967 and now,with the Brotherhood engaged in a cordial dance with Washington, next week marks the 1952 Revolution anniversary, from which Nasser arose, in contrast standing firm against encroaching US hegemony, on Al-Ahram weekly online, by Galal Nassar, 19 – 25 July 2012.

The three-year war, on Al-Ahram weekly online, last interview by Galal Nassar with Lieutenant General Mohamed Fawzi, by Galal Nassar, 19 – 25 July 2012.

The Rise (And Fall?) Of Adidas, on ZNet, by Ashok Kumar, July 20, 2012;

Millions Take Streets As Spain Unites Against Austerity, on ZNet, by Santiago Carrion, July 20, 2012: On Thursday, millions of Spaniards took to the streets in over 80 cities around the country in the largest protest since the past 15th of October, just hours after the Rajoy government ratified the largest budget cuts in the history of Spanish democracy …

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