This week’s dissolution of Egypt’s parliament and imposition of martial law were the first steps of a military-led coup. As a result, the ruling military council has taken over legislative powers and the committee for writing a new constitution no longer exists. The decision has plunged the political transition into crisis just one day ahead of the presidential election.
Companies should expect short-term political instability, making it more difficult to make the case for investment and delaying the reinvestment timeline for Egypt. While the Muslim Brotherhood’s initial investment policies left much room for improvement, the dissolution of parliament delays Egypt’s efforts to pass legislation that will improve the economy and attract investment.
This weekend’s presidential election will determine whether or not the military coup is successful. If former Prime Minister Ahmed Shafiq, who is backed by the ruling military authority, beats the Muslim Brotherhood candidate Mohamed Morsi, then it will be the second stage of the coup. The military is counting on Egyptians to be too disenchanted to put up a serious fight if at all. Martial law was reinstated earlier this week as a precautionary measure.
No related posts.
