The Arabist

The Arabist

By Issandr El Amrani and friends.

Egypt cabinet shuffle coming up?

I usually disregard these rumors about impending cabinet shuffles, but this one may be more credible than most. There has been a low hum of rumors coming from ministers' offices in the last few weeks, and today al-Masri al-Youm suggested a small shuffle is underway. From Beltone Financial's daily newsletter:

Egypt may see minor cabinet reshuffle

Egypt may see a minor cabinet reshuffle, Al Masry Al Youm newspaper reported, citing an unnamed government official.Prime Minister Ahmed Nazif is likely to stay in placeAl Ahram newspaper reported further, also not disclosing the official. According to the source, the Presidency is considering a change of leadership in the ministries of culture, higher education, economic development, administrative development, health, electricity, manpower and justice. The source cited “failure of its policies and the escalation of the crisis in wheat, rice, and other crops, in addition to the crisis in state-owned land distribution,” as the reasons behind the possible change of the minister of Agriculture. The source further added that removal of Minister of Health, Hatem al-Gabaly, has been set “for a long time because of the crises in state-funded medical programs and pharmaceutical companies. The government is prepared to hire the head of the National Democratic Party’s Health and Population Committee, Madiha Khetab, to replace al-Gabaly,” he added. Comment: While no official statement has been issued on the subject, should this news turn out to be correct, we believe a reshuffle of cabinet for the functions stipulated earlier would provide  a further boost to the government’s economic reform agenda, and would not affect its continuation, going forward. In fact, it would, in our view, represent a turn in the right direction as it signals an acknowledgement of the need to gear more effort and commitment toward areas such as education, health, and power generation that are, crucial for the well-being of the population, and are important conditions for the maximisation of Egypt’s economic growth potential in the long-term, as they currently suffer from capacity constraints. 

Here is the al-Masri al-Youm article (I think it actually came out in the English edition only). I can only add to this that I'd heard similar speculation from a well-placed cabinet source suggesting that Nazif may exit the cabinet, but I'm not so confident he will. I recently spoke to a minister who suggested that the next year's legislative agenda will be quite heavy, and we are seeing some major technocratic reforms in transport, energy and water being implemented over this period too. The "reformists" in the cabinet are fighting an uphill battle to accelerate the pace of implementation of these new policies after the 2007-2010 slowdown (outside of financial markets reform) against the expectation that 2011 will be a frozen year because of the presidential election. But enough ongoing projects have enough momentum going to start, although I'd be surprised to see any new taxes and especially the implementation of the twice-delayed real estate tax. A top concern for foreign investors and Egypt's Western allies alike is that either a presidential transition or a continuation of Hosni Mubarak in power could slow down government activity. Personally, I think that the cabinet may have secured enough room for autonomy to proceed on what's been agreed so far, notably with all the technical backing and funding coming from the EU for various technocratic reforms.

We should see whether this shuffle happens within a few weeks — Mubarak's speech to the new parliament in mid-December or the NDP party conference on 25 December would be normal days. This shuffle will be of little relevance to the whole succession issue unless the following unlikely steps take place: a) Gamal Mubarak gets a cabinet position, or b) the ministers of Interior or Defense are changed (if the latter there's a strong chance he would be the next president).

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