Egypt political risk assessment

07 March 2011

The country is being run by the Supreme Council of Egyptian Armed Forces

20 October 2011

Alaa and Gamal, the two sons of former Egyptian President Hosni Mubarak, have $340m in Swiss bank accounts, according to the country’s deputy justice minister.

Both sons are standing trial on corruption charges and complicity in the killing of protesters. Mubarak himself is also charged with killing the protesters, who were campaigning in January and February to depose him after three decades in power.

On 18 September, former Tourism Minister Zoheir Garranah was sentenced to three years in prison for corruption. On 15 September, steel tycoon Ahmed Ezz, an insider in Mubarak’s party, received 10 years in prison for corruption. Former Trade Minister Rachid Mohammed Rachid was also sentenced in absentia to 10 years in prison.

Egypt’s first parliamentary elections since Mubarak was ousted in February are scheduled for 21 November.

26 May 2011

Egypt’s former president Hosni Mubarak could face the death penalty if convicted of corruption charges and sharing responsibility in the deaths of protesters during the uprising that removed him from power.

Mubarak’s two sons, Gamal and Alaa, will be tried alongside him, the country’s prosecutor-general announced. A government fact-finding mission has put the death toll during the 18 days of protests at about 850.

A conviction could persuade embattled leaders, such as Yemen’s Ali Abdullah Saleh, to cling on to power rather than face a similar fate.

On 24 May, the World Bank announced it is willing to give Egypt grants and loans to encourage reforms and help its struggling economy back off the ground. The bank said it would provide $2bn in grants and a further $2.5bn in loans should certain reform criteria be met.

19 May 2011

Egypt’s ruling military council has dismissed speculation that it will pardon former president Hosni Mubarak.

Mubarak and his wife were spared time in jail after falling ill and are now detained in the Red Sea resort of Sharm al-Sheikh. Suzanne Mubarak was freed from jail on 17 May after giving up assets worth $4m.

The military leadership rejected talk that the couple were receiving special treatment, adding that it would not interfere in judicial affairs. Mubarak is being investigated for abuse of power, embezzlement and for his role in the deaths of protesters during the recent upheaval. His wife is accused of using her husband’s influence for unlawful personal gain.

Due to their sudden illnesses, neither spent time in prison, but their two sons, Gamal and Alaa, were moved to jail with other top officials and are being probed on corruption charges.

12 May 2011

On 8 May, clashes broke out between Muslims and Christians in Cairo, leaving 12 dead and more than 100 injured. The clashes erupted in the capital after a Coptic church of Saint Mina was burnt down in Imbaba in the northwest of Cairo on 7 May. Fighting broke out over rumours, which later turned out to be false, that a Christian woman was being held inside a church and prevented from converting to Islam.

Elsewhere in Imbaba, Muslim protesters threw firebombs at another church, setting it on fire.

Essam Sharaf, prime minister of the interim government, later held an emergency cabinet meeting where he announced compensation payments for the dead, as well as bringing in new laws to ban gatherings outside places of worship.

21 April 2011

On 17 April, an Egyptian court ruled in favour of dissolving the National Democratic Party (NDP), the only political party that was officially allowed to operate in Egypt under former president Hosni Mubarak’s regime.

On 20 April, judge Omar Marwan announced that Mubarak was ‘complicit’ in the shootings of anti-government protesters that led to him leaving office on 11 February. The judge said that 846 civilians died in the protests according to his report. The report also found that most of the dead had been shot in the head and chest, which indicated the use of snipers.

Mubarak was detained on corruption charges on 13 April. His sons Alaa and Gamal were also arrested and were taken to Tora prison on the outskirts of Cairo.

Former interior minister Habib al-Adli is on trial on charges of ordering the shooting of anti-government protesters.

14 April 2011

On 14 April, Egypt’s prosecutor general detained former president Hosni Mubarak for 15 days ahead of an investigation into allegations of corruption. His sons, Alaa Mubarak and Gamal Mubarak, have also been detained in Tora prison, on the outskirts of Cairo, amid allegations of corruption and violence.

Mubarak is expected to be interrogated at Sharm el-Sheikh International Hospital, where he is being treated after suffering a minor heart attack during questioning earlier in the week. Mubarak denied allegations that he had stolen money or acquired his wealth illegally. Meanwhile, the Egyptian military continued to clear protesters from Tahrir Square, which was the focal point for protests in February.

31 March 2011

Egypt’s stock exchange has had a turbulent week. Trading resumed on 23 March after nearly two months’ suspension.

If the exchange had remained closed for longer, Egypt risked having its exchange delisted from the MSCI Emerging Markets index. Prices fell once the exchange opened and trading was briefly suspended, before being resumed hours later. It has since started to post moderate gains from 28 March.

24 March 2011

More than 77 per cent of the estimated 14 million Egyptians, who voted in the referendum on 19 March supported amendments to the country’s constitution.

The strong support means that a parliamentary election can now take place as early as September. The amendments include reducing the presidential term from six years to four years and limiting a president to two terms. Former president Hosni Mubarak ruled Egypt for nearly 30 years. Other amendments include obliging the president to choose a deputy within 30 days of election and installing new criteria for presidential candidates, such as that they must be more than 40 years of age and not married to a non-Egyptian.

The amendments will also restore full judicial supervision of elections, seen as key to preventing fraud.

In a sign that Egypt is to prioritise the economy, on 23 March, it was announced the General Authority for Investment will report directly to the Council of Ministers.

18 March 2011

Cairo is preparing to hold a referendum on 19 March on amendments to the constitution. The proposed amendments include a limit on the number of terms a president can hold from four terms to two. Independents and opposition members will also be allowed to run for president under the proposed amendments.

Former president Hosni Mubarak, who was removed from power on 11 February, held his position for almost 30 years. The amendments would also allow for early elections.

The timing of the referendum has been widely disputed. Presidential candidates, Amr Moussa, the head of the Arab league and Mohamed Elbaradei, former chief of the UN nuclear watchdog IAEA, are both calling for the referendum to be postponed. The Muslim Brotherhood, suppressed under Mubarak, supports the referendum taking place as planned.

10 March 2011

The country is being run by the Supreme Council of Egyptian Armed Forces, who have promised to hold elections within six months of taking power on 12 February or to step down. Protests continued following the deposal of Hosni Mubarak, and, on 3 March, led to the resignation of Prime Minister Ahmed Shafiq. US- trained former transport minister Essam Sharaf has been asked by the military to form a government. Opposition groups say they will continue to protest until a new government is formed with no links to the previous regime.

Government actions:

  • A 15 per cent increase in wages for public sector workers
  • An additional $800m-$1.2bn promised for food subsidies, up from original forecasts of $430m-700m
  • A referendum on changes to the constitution is planned for 19 March, parliamentary elections for June, and a presidential election in August

Political Risk assessment

Egypt is key to the wider stability of the region and the policies of the new government will be eagerly awaited. At this point, an obvious leader has yet to emerge and the Muslim Brotherhood is not appearing to exploit the situation. With no clear leader, there is a significant risk that the political uncertainty will continue beyond the elections. Growth forecasts for Egypt are already being reversed due to the disruption to the economy.

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