As time runs out for the two contenders in the run-off round, the race is getting increasingly competitive and desperate. The Freedom and Justice Party’s candidate Mohamed Morsi and former Prime Minister Ahmed Shafik are vying for the support of the 50 percent of voters who chose losing candidates in the first round. Shafik, eager to bolster his revolutionary credentials in the aftermath of the controversial sentencing of Hosni Mubarak and acquittal of former Interior Ministry officials, is trying to scare liberal and non-Islamist voters into supporting him by playing up the threat of a religious state under Morsi’s rule.
Shafik has endorsed a “pledge” document that would bind the next president to protecting a civil state and the rights of women and Christians, but Morsi has yet to declare his position on the document drafted by revolutionary and non-Islamist forces. As the fight for the presidency heats up, Morsi and Shafik are trading daggers. Shafik has accused the Brotherhood of killing protesters during the revolution and warned that Morsi would take Egypt "back to the dark ages." Meanwhile, the Brotherhood is warning that voting for Morsi is “the only way to save the revolution” from the candidate of the former regime. As mass demonstrations erupt again in Tahrir Square to demand accountability for the former regime, an election that was heralded as a milestone leading to civilian-led democracy now stands to deepen Egypt’s domestic turmoil.
While a victory for Morsi will likely aggravate friction with the ruling Supreme Council of the Armed Forces (SCAF) and stoke fears amongst secularists and liberals that politics will be monopolized by Islamists, especially after their landslide victory in the parliamentary elections, a victory for Shafik could trigger a prolonged period of conflict and political gridlock. Ironically, Shafik’s electoral campaign has consistently promised a return to security and stability, but his success could bring precisely the opposite. The following scenarios, in order of descending probability, are all possible, but none of them bode well for the restoration of political and economic security:
Scenario 1: Shafik Victory (significant probability)
Ahmed Shafik wins the run-off vote, causing political upheaval and effectively paralyzing the political process. Shafik is clearly SCAF’s favored candidate, owing to his credentials as former head of the air force, former minister of civil aviation and former prime minister (even if very briefly) under Hosni Mubarak. He will guard the interests of the military leadership because he is himself a product of the military establishment and shares its core interests. Even if legitimate, Shafik’s victory would likely be seen by opponents of the former regime as a rigged vote and an attempt to derail Egypt’s already fragile shift towards democracy.
- The Muslim Brotherhood’s Freedom and Justice Party (FJP), which in combination with the ultra-conservative Salafists, controls approximately 70% of parliamentary seats, may react to a Shafik victory by indefinitely suspending the People’s Assembly, staging persistent protests and encouraging strikes. This would be a dangerous move as the FJP has already faced criticism for failing to formulate strong policies in parliament to revive the ailing economy and improve the plight of Egyptians despite not holding a single post in government. Yet the Muslim Brotherhood may be willing to take the risk of bringing the legislature to a standstill in a bid to force political concessions from the SCAF.
Economic implications of Scenario 1:
A victory for Shafik will dramatically increase the risk of street clashes between supporters of the SCAF and supporters of Shafik on the one side and Islamists and liberals on the other. The news that Shafik had made it to the runoff has already provoked protests involving thousands in Cairo and Alexandria, which would likely be dwarfed in magnitude by those that would follow the former minister’s electoral victory. Only a week ago, protestors sabotaged Shafik’s Cairo headquarters in Dokki,an ominous incident that many observers interpreted as a forewarning to the SCAF suggesting what might happen in the event of a rigged election. This scenario could severely disrupt and damage businesses with operations or logistical networks that run through cities such as Alexandria, Cairo and/or Suez.
- Political paralysis resulting from a Shafik victory would also mean that plans to form a 100-member constituent assembly to draft a new constitution and put it to a referendum would remain frozen. This would not only mean that the powers of the president, the prime minister and parliament would remain undefined, but also further delay the formulation of a clear economic and investment policy to encourage economic growth and FDI flows. The IMF projects real GDP growth of 1.5% in 2012, rising to an estimated 3.3% for 2013. Yet, this expansion will depend on a combination of domestic political normalization, strong political leadership with the popular mandate to see reform through, and a rise in confidence from investors and potential tourists – unlikely to materialize if the election results deepen domestic turmoil.
Scenario 2: Morsi Victory (significant probability)
Morsi wins the presidential vote, consolidating the Muslim Brotherhood’s grip on the civilian levers of power. Such a result would likewise aggravate friction between the Muslim Brotherhood’s FJP and the SCAF with the former emboldened by its sense of popular legitimacy. The SCAF, whose members are committed to ensuring that Egypt remains non-theocratic and are concerned about the Muslim Brotherhood’s true agenda, is likely to become all the more uncomfortable about the FJP’s rising political power. This would be the case even if the Muslim Brotherhood seeks to avert a head-on collision with a military establishment that it knows cannot be defeated and forced from power in the short- or medium-term. The SCAF’s concern will persist irrespective of whether Morsi wins the runoff vote by a mere fraction or a landslide, and regardless of whether he fulfill his promise to form a broad coalition government if elected. The SCAF would still view the Muslim Brotherhood with the same deep-rooted suspicion and distrust.
- Although not wanting to be held responsible for the day-to-day running of Egypt, the SCAF may resort to radical measures to reduce the institutional power held by the Muslim Brotherhood. The incentive to do so would be all the greater were Morsi to win the presidential election. It is not surprising, therefore, that the SCAF is attempting to issue a constitutional declaration before the run-off vote to clarify the powers of the presidency, despite this being the privilege of the yet-to-be formed constituent assembly. In addition, the Supreme Constitutional Court is expected to rule on whether the electoral law which was applied during the parliamentary elections of late-2011 and early-2012 was constitutional. If the law is found to be unconstitutional, the decision could necessitate the dissolution of the FJP-dominated Parliament. As with scenario 1, the second scenario would likely trigger mass protests leading to a prolonged period of severe political instability that would reverberate across the entire Middle East.
Economic Implications of Scenario 2:
As with scenario 1, Egypt would enter a period of political paralysis and conflict. More than 50% of Egyptians did not vote for Shafik (a candidate who won 23.6% of the vote in the first round of the elections) or Morsi (who secured 24.7%) and opted for more moderate or secularist candidates. They will now play a key role in determining the election outcome and level of stability, or more appropriately instability, in Egypt. There is however little to suggest that these individuals will stand squarely behind any one of the two candidates. Sabbahi and Aboul Fotouh initially implied that they would urge their followers to give their vote to Morsi in the runoff, but have since back-pedaled. Choosing between a conservative Islamist and old-guard secularist who may seek to derail the revolution is a hard call for liberals and supporters of the Egyptian revolution. Many may be tempted to boycott the runoff vote entirely, rather than pick their poison. A victory for Morsi under these conditions could encourage the SCAF to take a more confrontational approach in dealing with a president lacking a strong popular mandate. With the Islamists and liberals all the more convinced that the SCAF has no intention of relinquishing power, calls for a ‘second revolution’ would likely become louder.
- Even if Morsi were to assume office and the SCAF were to accept the result, the challenge of leading Egypt remains monumental. The Islamist leader lacks the political experience of an experienced politician (such as Shafik) to lead Egypt during an extremely difficult period of transition. Apart from having to juggle social demands to reduce unemployment (officially at 12% but unofficially estimated to be significantly higher), reduce poverty and debt, Morsi would need to be cautious of threatening the SCAF’s significant economic, commercial and political interests. The military, estimated to control anywhere between 15% and 40% of the economy, is adamant to maintain n a strong level of political influence and is determined to prevent Egypt from ever evolving into a theocracy. While seeking to attract investment to Egypt, Morsi would also face pressure to fulfill his promise to improve the lot of ordinary Egyptians, most likely by implementing populist policies and spending on subsidies and welfare measures.
Scenario 3: Election Results Are Accepted (moderate probability)
- The election of Morsi or Shafik does not provoke a large-scale political crisis. Protests occur but lose steam. Whichever candidate wins registers some success in reassuring different segments of society that he will be inclusive, act in accordance with the national interest and not favor any single segment of society. The Muslim Brotherhood will seek to accommodate the SCAF and allow its interest to remain intact. The constituent assembly will form but with a more balanced representation of liberals versus Islamists and Egypt will eventually adopt a new constitution that clearly defines the distribution of power and enshrines the principles of democracy and liberty. This scenario is unfortunately less likely than scenarios 1 and 2, given the current political dynamic and the current state of polarization.
Economic Implications of Scenario 3:
- Investors who are mindful of Egypt’s significant growth potential as an N11 emerging economy would seek to rapidly take advantage of political normalization. Yet, Egypt’s current challenges will not disappear overnight. The SCAF’s withdrawal as a behind-the-scenes operator is unlikely to take place without turbulence, and friction between Islamists, secularists and members of the old guard as a distinct category will persist in the political sphere and in public. Reducing poverty, unemployment and national debt will be a long and painful process. Local economists maintain that Egypt needs at least US$11 billion over 12 months to manage a current account crisis and ward off devaluation. Yet, the formulation of a clearer economic and investment policy designed to encourage investors would help instill greater confidence in a market with very significant growth potential.
- Given the U.S. interest in regional stability, the prospect of chaos following Egypt’s election should be deeply alarming to policymakers. The U.S. should maintain pressure on the SCAF to conduct free and fair elections whose results will be accepted as legitimate, whatever the outcome. The SCAF will need to meet high expectations for neutrality and transparency in the administration of this all-important election, with an eye toward minimizing the likelihood of another uprising — one in which Islamists would likely play a leading role.
Merit Al-Sayed is a Projects Manager in the field of Strategic Planning and Performance Analysis at the Arab African International Bank based in Cairo. She is a founding member of two of Egypt’s post-revolutionary parties, El Adl and the Free Egyptians Party.
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