An abrupt departure of the president would send alarm bells to all the major Egypt-watchers: international lenders (the country would kiss goodbye to any chance of an IMF loan until a new president was democratically elected), investors looking at sectors that have been neglected, namely oil and gas, and even Egyptians themselves. Ultimately, replacing the President only delays the country’s transition to democracy.
While politically his exit may be required by the millions who want him out, economically, the last thing Egypt needs is another period of chaos, uncertainty and confusion. Investors and Egyptians alike are looking for rule of law and order, not another limbo period.
If anything, the parliamentary elections should be brought forward, giving Egyptians a chance to channel their frustration and elect a new parliament that can pass and amend laws.
What is more, history shows that speed is essential for democratic transitions, as Caroline Freund, former chief economist for the Middle East and North Africa at the World Bank writes in this excellent op-ed for Bloomberg:(...)
A new president will have the same challenges as Morsi: he would also need to impose new reforms on Egyptians and he would also be fearful about going through with it. Delaying these reforms now will cost the nation too much.
The best chance for Egypt would be for the president to announce early presidential elections for the end of the year, bowing to the force of the protesters but not sending the country back to square one.
Then, the new president’s first course of action could be to hold parliamentary elections within a few months and create a new committee representing the whole spectrum of Egypt (i.e., not dominated by Islamists) to amend the constitution.
But considering yesterday’s turnout and Egypt’s political history, this may not be a viable option. Like Mubarak, Morsi is doing everything too little, too late and the people who will suffer the most in the end are the country’s neediest who have already seen their quality of life badly impaired by the instability.
The Egypt Monocle