Coming Economic Crisis in Egypt?

Here at CLR Forum, we’ve been thinking about the role of Islamic law in Egypt’s new constitution, which voters approved last month. The new constitution represents a significant victory for Morsi’s Muslim Brotherhood. But, as Walter Russell Mead points out on his blog today, the Brotherhood still faces major problems. Egypt is on the brink of an economic crisis that the Morsi government seems unable to handle.

Since the Arab Spring, foreign investors and tourists have fled Egypt and the country’s currency has plummeted. Regional allies like Turkey and Qatar have lent Egypt billions of dollars, but the IMF, which has the real money, is refusing to advance roughly $5 billion until the Morsi government implements an austerity package. This would mean political disaster for Morsi, since many Egyptians depend on government food subsidies to survive. So things are in a holding pattern. Meanwhile, the bad economy is creating a security crisis. Egyptians complain about a lack of basic safety.

It’s hard to know what will come next. Perhaps frustrated Egyptians will decide that the problem is that the Muslim Brotherhood is not Islamist enough and turn to the even more radical Salafis. I can’t imagine the Salafis would have a better relationship with the IMF, though. Or perhaps a military strongman who mouths the correct pieties will take charge. Anyway, it’s hard to imagine a situation in which Egyptians turn to the secular liberals whom the West hoped would run Egypt after the fall of Mubarak.

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