When a popular uprising overthrew President Hosni Mubarak after three decades in power, Egypt’s political transition was only beginning. Mubarak’s removal reflected the formation of a wide-ranging coalition of interests, crossing class and ideological boundaries, which agreed on a shared interest in his departure. Since then, this temporary coalition has become more fragmented, and different political groups are contesting the extent to which Egypt’s political transition may involve structural changes to the distribution of power and wealth. It is presumed that the military council now ruling the country, the Supreme Council of the Armed Forces (SCAF), aims to preserve much of the existing political and economic structures, while permitting different political elites to contest a degree of power within that system.
While political uncertainty has increased Egypt’s
already substantial economic challenges, and has alarmed some investors, the period of political change presents an opportunity to build a stronger, more inclusive and more politically legitimate economy in the medium to long term. The current uncertainty about future investment is weighing on business confidence, but uncertainty is inevitable at a time of political transition. There are even positive aspects in that Egypt is breaking away from one party rule and discovering fresh policy options. Building confidence among local and foreign investors will depend in part on Egypt’s progress in moving ahead with a clearly defined political transition process, and on improving the transparency of policy-making. These are areas where the role of the ruling military council will be critical, and the military needs to be aware that future economic development will depend not only on security but on transparency and accountability.
While political uncertainty has increased Egypt’s
already substantial economic challenges, and has alarmed some investors, the period of political change presents an opportunity to build a stronger, more inclusive and more politically legitimate economy in the medium to long term. The current uncertainty about future investment is weighing on business confidence, but uncertainty is inevitable at a time of political transition. There are even positive aspects in that Egypt is breaking away from one party rule and discovering fresh policy options. Building confidence among local and foreign investors will depend in part on Egypt’s progress in moving ahead with a clearly defined political transition process, and on improving the transparency of policy-making. These are areas where the role of the ruling military council will be critical, and the military needs to be aware that future economic development will depend not only on security but on transparency and accountability.
