The Egyptian presidential victory of Mohammad Mursi now triggers a series of events that will be far more complex than those normally associated with the arrival of a new incumbent. It is not simply that after Mursi is sworn in, probably in four days time, he must put together a new government. There is also a major question over the extent of his presidential powers, given the Egyptian military's maneuverings, which have seen the Supreme Council of the Armed Forces announce self-serving constitutional changes. The courts have also dissolved parliament, declaring the elections to have been invalid. With no legislators and no new constitution, other than that which the military under Field Marshal Mohamed Hussein Tantawi is seeking to impose, Mursi's position is going to be extremely difficult. When he promised that he would be governing for all Egyptians and not simply Muslim Brotherhood supporters, he clearly recognized that the 52 percent of the votes cast for him in the second round, does not give him an unassailable electoral mandate. He has promised a government of “all the talents". And there is one talent on which he absolutely needs to focus and to which he must devote all the power of his office - economics. Egypt's economy is a mess. Its tourism revenues have collapsed. Its manufacturing sector has suffered from the long months of civil protest. Its banks are under-capitalized and credit is hard to obtain and costly. Moreover, supporters of the old order have moved much of their capital out of the country, thus further limiting the stock of money that can be used for productive investment. Existing foreign investors have put their fresh commitments on hold and new strategic investors are waiting until there are clear signs of political stability. The person to whom Mursi hands the economy portfolio will have the second most important job in government after his own. The task is daunting. Not only must investor confidence be rebuilt, but clear rules must be established to assure owners of capital that they will have proper recourse to the commercial courts, and will not be subject to arbitrary actions by the authorities. Nor will the new economy minister be concerned purely with wealth generation. There will also be the pressing issue of protecting the state budget. The better collection of taxes will probably prove less difficult than the progressive reduction in subsidies on fuel and staples, such as bread. Costing tens of billions of dollars every year, subsidies were used by former governments as a way to buy the cooperation of the country's millions of poor. The subsidy on fuel oil was also a sop to Egyptian industrialists. The person in the economy hot seat will have to create the jobs, that will generate the incomes (and taxes), that will enable citizens to pay something steadily approaching the market price for everything. The great danger of course is that the new administration will become so embroiled in a struggle for who really governs Egypt, the generals or the people, that these crucial economic challenges will not be properly addressed, let alone solved to any significant degree. Yet without economic success, Egypt's prospects, whoever wields the real power, are bleak.
