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Egypt: presidential elections from Sunday, towards the reconfirmation of Al Sisi and austerity measures


© Agenzia Nova - Reproduction reserved

Around 65 million Egyptians will vote in the presidential elections from Sunday 10 December to 12 December. There are four candidates in the running: the current head of state, Abdel Fattah al-Sisi, who in the event of victory would remain in power until 2023; Abdel Sanad Yamama, leader of the Al Wafd party, the oldest free political group in the country; Farid Zahran, president of the Social Democratic Party; Hazem Omar, head of the Republican People's Party.

In advance of the natural expiry of the presidential mandate, in recent months Al Sisi announced the early vote which will most likely see his reconfirmation and a period of economic austerity for Egypt and its over 105 million inhabitants. "Nova Agency" he talked about it with Roberta La Fortezza, geopolitical analyst expert in the Middle East and the Arab world. The decision to advance the vote "was probably taken by the current leadership of the country due to the need to implement, as quickly as possible, new austerity measures, but first ensuring President Al Sisi a third mandate", explained La Fortezza. According to the expert, "there are in fact, at the moment, no particular doubts about Al Sisi's re-election". However, the need to implement economic reforms has pushed the current leadership to secure leadership of the country before resorting to austerity measures.

In this regard, La Fortezza stated: "Restrictive economic policies, by affecting the real economy and therefore the daily management of citizens' expenses and lives, could have caused negative consequences on social stability, potentially generating growing discontent and therefore an increase in protest social; all dynamics, these, which could also have had a negative impact on the expression of the vote". “Furthermore, confirmation of the seats, with a percentage of support that can now be assumed to be particularly high, will mean for Al Sisi strengthening his legitimacy and, therefore, having more solid justifications for any restrictive policies and even for any campaigns of repression of the dissent".

The results of the first round of the presidential elections in Egypt should arrive by December 23, while, in the event of a run-off, voting would return by January 16, 2024. Egyptians abroad have already voted from December 1 to 3, at the 121 embassies and consulates of Egypt. What appears certain is the launch of measures aimed at supporting the economy, tested first by the Covid-19 pandemic and then by the war in Ukraine and more recently by the renewed conflict between Gaza and Israel. “In all likelihood, after the presidential elections, Egypt will proceed with a new devaluation of its currency, the fourth since March 2022, and with a further increase in interest rates,” La Fortezza said in the interview with “Nova” .

Among the conditions envisaged in the agreement negotiated with the International Monetary Fund (IMF) in October 2022 for a 3 billion dollar loan over 46 months as part of the Extended Fund Facility (EFF), there was also the need to operate a move to a flexible rate regime, putting an end to the mechanism of forced maintenance of the desired exchange rate level through a drain on foreign currency reserves. In this regard, the expert said: "After having adopted a flexible exchange rate regime for a certain period, precisely to facilitate negotiations with the IMF, since March 2022 the Egyptian Central Bank has returned to following an almost fixed".

The economy and relations with the IMF will shape the choices of the next Egyptian leadership. “Relations with the IMF will be a central dossier for the next Egyptian presidency. As confirmed by the managing director of the IMF, Kristalina Georgieva, the international financial institution could decide to increase the EFF credit line provided to Egypt, bringing the loan from 3 to 5 billion dollars, due to the impact of the war in nearby Gaza Strip,” La Fortezza recalled. According to what was declared by the IMF leaders, in fact, the ongoing war between Israel and Hamas risks having consequences on the countries of the region, and in particular on Egypt, through a further loss of revenue deriving from tourism and through a increase in energy costs. In this regard, the geopolitical analyst La Fortezza stated: “The feared hypothesis of an increase in credit to Egypt by the IMF appears in strong contradiction with the line followed before the Gaza crisis by the financial institution itself: a March the IMF, at its first review of the program, had in fact suspended the disbursement of the second tranche of the loan, precisely due to the choice of the Egyptian Central Bank to maintain an almost fixed exchange rate, as well as due to a general poor implementation of the agreed reforms".

In the interview with "Nova", the expert on geopolitical issues in the Middle East clarified that "the new positions of the IMF and the possibility of increasing the credit line to Egypt are explained by the need to ensure greater stability for a country that is considered too important in the regional dynamics to be allowed to fail. This vision has undoubtedly been strengthened by the role that Cairo is having in the events related to the Gaza Strip, especially for the passage of humanitarian aid and for the humanitarian corridors". “Precisely this newfound centrality of Egypt's political role will probably give greater support to the country's positions in further negotiations with the IMF, favoring a greater propensity of the international community to intervene in favor of Egyptian finances, also by extending the terms of the 2022 agreement, precisely to avoid any significant further imbalance in the country's finances", added La Fortezza.

Not only the IMF has moved to support Egypt, but also the European Union. “The recent visit of the President of the European Commission, Ursula von der Leyen, to Cairo is part of a framework in which the EU itself intends to support Egypt's economic development, mitigating the impact of the current Israel-Hamas crisis ”, said La Fortezza. According to several sources - continued the expert, "the EU should propose an investment plan with the injection of 9 billion euros into the country in favor of sectors such as digital initiatives, energy, agriculture and transport" . Finally, “in light of the regional instability resulting from the ongoing Israel-Hamas conflict, the Gulf States are also considering strengthening their policies to support the Egyptian economy. If in recent years the Gulf actors have been less generous towards Cairo, the Gaza crisis could also push the Gulf Monarchies to resume a more vigorous aid program, especially through new cash deposits at the Central Bank currency and further operations to support the Egyptian currency in the event of future devaluations", concluded La Fortezza.

© Agenzia Nova - Reproduction reserved


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