The Egyptian Prime Minister's New Problems Look a Lot Like His Old Problems

Two and a half years after the fall of Hosni Mubarak, Hazem el-Beblawi must be experiencing a wave of déjà vu. Egypt watchers may recall that during the second half of 2011, Beblawi served as the minister of finance for the military's transitional government. Now, he has been elevated to the position of prime minister in the wake of President Mohamed Morsy's ouster. And the challenges he faces are remarkably similar to those he confronted two years ago.

Then, he faced an anemic Egyptian economy weighed down by slumping tourism revenues, shortages of basic goods, and a lack of foreign-exchange reserves. As if that wasn't enough, his term was marred by violence carried out by the army. Now, well, he faces an anemic Egyptian economy weighed down by slumping tourism revenues, shortages of basic goods, and a lack of foreign-exchange reserves. And as if that wasn't enough, the army just massacred at least 50 Muslim Brotherhood supporters.

In short, Beblawi's recent career is a case study in how maddeningly difficult it is to carry out reforms in Egypt today.

When he assumed the position of finance minister in July 2011, Beblawi had a clear agenda: Figure out a way to phase out energy subsidies, restore some dynamism to the economy, and secure the funding to cover Egypt's budget deficits.

"Subsidies make up 33 percent of Egypt's spending, two-thirds of which go to oil," Beblawi said in October 2011. "The cancer in the budget is subsidies," he added.

"If we don't get loans from international institutions how will we deal with the budget deficit?" he wondered aloud that same month.

Addressing the threat posed by instability to the economy, he argued just before taking office that "what is needed is to restore the trust and the credibility of the government. The basic problem facing us now in the short run is restoring security, not just security but the perception of security."

But two years later, the problems Beblawi vowed to fix remain -- if anything, they're worse. Unemployment is stubbornly high, shortages persist, and an IMF loan package must still be negotiated. A "perception of security" is nowhere to be found.

A technocrat with a Ph.D. in economics from the University of Paris, Beblawi was the perfect man to carry out a reform agenda. Having emerged as a critic of the Mubarak regime, he had credibility with the protesters -- even if his free-market ideology would never make him a crowd favorite. Having served in a series of heavyweight economic positions -- including a stint as undersecretary general at the United Nations -- he had the economic chops to find solutions. But instead of implementing an agenda to restore a semblance of growth to the Egyptian economy, his term was torpedoed by instability stirred up in part by the army.

When, in October 2011, the army killed 25 Coptic Christian protesters, Beblawi resigned in protest. "Despite the fact that there might not be direct responsibility on the government's part, the responsibility lies, ultimately, on its shoulders," Beblawi said in explaining his decision. "The current circumstances are very difficult and require a new and different way of thinking and working."

Ultimately, Egypt's military rulers refused to accept his resignation.

Now, with the Egyptian pound devalued, food prices high, and gas maddeningly hard to come by, Beblawi has a second chance to tackle Egypt's bread-and-butter issues. That is, if the chaos gripping Egypt subsides long enough for him to try.



Egypt's Bloomberg Outlasts His Islamist Enemies

CAIRO -- It wasn't long ago that Egypt's second-richest man was being publicly shamed by his political enemies in the Muslim Brotherhood. So you might think that Naguib Sawiris would never want to see the Brothers back in the seat of power again.

Yet Sawiris, an Egyptian businessman and founder of the liberal Free Egyptians Party, says he wants to get Mohamed Morsy's clique back into politics, ASAP. He's also pressing his family to sue for the $1 billion that they feel the Morsy administration unfairly took from them.

"First, [the new government must tackle] national unity and national reconciliation. We need to reach out and get the Muslim Brotherhood back into the political game without any violence," he told Foreign Policy. After that, it will be a matter of getting Egypt's economic house in order: "[W]e need to confront our people with the truth of our economy -- we need to tell them that Egypt is broke, and we cannot continue the subsidies [on energy and food]."

Sawiris was one of the businessmen hostile to the Muslim Brotherhood who was targeted by Morsy during his time in office. The then-president singled out his family by name in an Oct. 6 speech, saying that they owed over $1 billion in back taxes. The Sawiris-owned firm eventually agreed to pay the government; Naguib, however, said that he opposed paying from the beginning and was overruled by his father and brother. Now, he believes his family should challenge the case to prove that it was politically motivated.

"I'm trying to tell my dad and my brother that they should sue and get the money back, and they should donate the money to Egypt. Then it's cleaner -- because we need to show that there is no tax case to start with ... it was blackmail, you know," he said.

Sawiris has already been successful in altering the political playing field. He said that he has been active in supporting the Tamarod movement, which gathered millions of signatures for a petition demanding Morsy's exit from power and was integral in organizing the massive June 30 protests against his rule. Through a spokesman, Sawiris later clarified that his support involved his personal signing of the call for Morsy's resignation, and using the Free Egyptians Party branch offices and members to collect signatures for the petition.

Nor does the Egyptian businessman see any contradiction between the liberal, democratic values he espouses and the ouster of an elected president. "There is democracy and then there are the rules of democracy. You might be elected democratically, but this doesn't give you the right to overrule democratic rules," he said, citing Morsy's November constitutional declaration granting himself sweeping new powers, and his appointment of a sympathetic prosecutor general that pursued legal cases against his opponents.

Whether Egypt's secular forces can turn Morsy's missteps into popular support is still an open question. But for the moment, Sawiris believes that his side has the wind to its back. "You can be sure that Egypt's liberal, secular people are democratic. You can be sure that we are going to fight to implement the right steps -- army or no army," he said. "You can be sure that this was not a military coup, because it would be the first military coup in history where 30 million people go to the streets and demand the president to leave."