A few weeks before the Egyptian army removed Mohamed Mursi from power, a team of his advisers visited London, bringing the message that there were signs of the economy starting to turn the corner and that the signature of an IMF loan agreement was imminent. As well as seeking to drum up investor enthusiasm, the delegation was also tasked with preparing for a state visit to the UK by Mursi in mid-July.

A more sombre message came from Amr Moussa, a leading figure in the National Salvation Front (NSF), which had lined up behind the populist campaign to force Mursi to call an early presidential election. Moussa’s argument was that although Mursi had indeed been elected fair and square, the scale of his abuse of power and his mismanagement of the Egyptian economy was such that the Egyptian people needed to be spared having to endure his rule any longer.

Mursi’s removal

Mursi’s removal, whether described as a military coup or euphemised as ’popular impeachment’, was greeted with celebrations by much of the Egyptian population, with the exception of his considerable support base in the Muslim Brotherhood and among those viewing any army move against an elected head of state as repugnant. The mood in the business community was reflected in the sharp uptick in the Egyptian Stock Exchange index, which rose by 7.3 per cent on the day after the 3 July intervention.

The subsequent violence has produced a more cautious mood among business people, but the modest strengthening of the Egyptian pound against the dollar points to a sense of expectation that the new government will bring dramatic improvements to the management of the economy.

The names being mentioned in the Egyptian media as being in line for senior cabinet positions point to a conviction among the powerbrokers that there is no alternative to embracing the neo-liberal economic policies that brought high rates of growth in the latter part of the Mubarak era, but which also bred huge social discontent.

One of these names is Ziad Bahaeddin. He headed the General Authority for Investment during a period in the mid-2000s when foreign direct investment averaged about $10bn a year, and was involved in setting up the Egyptian Financial Supervisory Authority, which he headed at the time of the overthrow of President Mubarak.

He went on to be one of the founders of the Egyptian Social Democratic Party, and was among 16 members of the party to win seats in the end-2011 election. He was courted by Mursi, but showed little interest in working within a Muslim Brotherhood-dominated system. His weekly columns in El Shorouk newspaper have been scathingly critical of the Mursi government.

New government

Bahaeddin would be an asset to any new government, but he may have reservations about serving under what is in effect military rule. On the eve of the 8 July incident outside a Republican Guard facility in Cairo that left an estimated 51 pro-Mursi protesters dead, there had been speculation that Bahaeddin was in line to be prime minister. He himself declined to confirm these reports and the spotlight has shifted to Samir Radwan, who was finance minister for the first six months after Mubarak’s overthrow, and whose May 2011 deal with the IMF was vetoed by the military.

One of the clearest symptoms of economic policy dysfunction under Mursi was the instability at the finance ministry. After senior officials in the ministry had successfully negotiated a fresh agreement with the IMF in November 2012, Mursi backtracked after the Muslim Brotherhood advised him that proposed increases in sales tax rates would harm their prospects in the election, which had been expected to take place in February and March.

A new minister was appointed in January (and replaced in May), and most of the officials that had been dealing with the IMF left. One Western banker who had worked closely with the ministry over many years observed that most of the key positions in the ministry had been occupied by Muslim Brotherhood figures, with limited experience of the technicalities of financial management.

There has been speculation that the new finance minister will be Hany Dimian, who joined the ministry in 2004 and served as deputy or assistant minister between 2007 and his resignation in early 2013.

Dimian and Hisham Ramez, the governor of the Central Bank of Egypt, have detailed understanding of the requirements for securing an IMF loan and how to attract international investment in Egyptian securities. Ramez has also been in the Gulf since 3 July, seeking to capitalise on the evident delight of the UAE and Saudi governments in the demise of Mursi and the Muslim Brotherhood.

Egyptian economy

The chances of a business-led revival of the Egyptian economy rest on both finance and politics. Securing $15-20bn from the IMF, the World Bank and Gulf donors could turn out to be the easy part. The most obvious political problem is the bitter division between the anti-Mursi camp, which is exhibiting a cruel vindictiveness out of all proportion to the real or imagined sins of the Muslim Brotherhood, and the supporters of the former president, who now have little reason to participate in formal electoral politics.

There is also a risk that the liberal economic elite could once more find itself targeted by the revolutionary activists who spearheaded the anti-Mursi uprising, and by the military, whose entrenched privileges could be compromised by liberal economic reforms.