Egypt economy heads toward cliff as leaders feud

Cairo, 13 Jul – (ANA) - Egypt's new Islamist president and his old military foes have come out swinging in a struggle for political power, but their countrymen need them to find a way to work together to avert economic chaos.

In the two weeks since his inauguration, President Mohamed Mursi of the Muslim Brotherhood has openly defied the entrenched military by summoning the Islamist-led parliament the generals dismissed on the eve of his election.

The political confrontation risks paralysing the government, and the first casualty could be Egypt's fragile economy, fast heading towards a balance of payments and budget crisis.

The past year and a half of turmoil has frightened away tourists, sent investors packing and wrecked economic growth. Egyptians need their leaders to set aside their political quarrel fast. "Both the military and the Brotherhood are here to stay for the foreseeable future and neither side is strong enough to defeat the other, so there has to be some compromise," said Shadi Hamid of the Brookings Doha Center.

The army, in power for six decades, moved to limit the power of the new civilian president even as voters were lining up to elect him. On the first day of a two-day run-off election last month, generals dissolved the parliament. On the second day, they issued a decree restricting the president's powers.

Mursi did not wait long to assert his own power either, issuing a decree summoning the disbanded parliament just days after he took office. The lawmakers met on Tuesday. Judges, seen as allies of the generals, responded by rebuking Mursi.

An economy in such straits will not long survive such confrontation, said economist Said Hirsh of Capital Economics: "Months, rather than years, they can hold on like this."

Mursi, whose Brotherhood was repressed under the rule of military men, wants to whittle away at the might of the Supreme Council of the Armed Forces (SCAF) and the sweeping economic interests they control. But he must also address demands of an electorate desperate for jobs and security after exhausting uncertainty since Hosni Mubarak was toppled by street power in February last year. "Confronting SCAF and improving the economy don't always go together. Sometimes you have to make a choice to prioritise one over the other," said Hamid. (ANA)

FA/ANA/13 July 2012--------