El-Erian’s New Job: Egyptian Prime Minister?
Anchor, CNBC (EMEA)
Egypt’s next leader could be a well-known U.S.-based investor and market commentator.
In a further twist to the country’s nascent democratic experiment, Mohamed El-Erian, chief executive of Pimco, may be chosen to lead a new cabinet as Prime Minister, Al-Watan newspaper reported late Monday.
El-Erian told CNBC's "Squawk Box" Tuesday that he had not been approached and "didn't know where" the reports were coming from.
The chances of his selection has become the center of heated debates in local media over the last few days.
The newspaper cited Ahmed Abu Baraka, an official with the Freedom and Justice Party (FJP), the Muslim Brotherhood’s political wing, as saying that El-Erian was being “studied” as an option. The source went on to describe him as a strong contender for the coveted post, which analysts agree should be held by a person with a business background.
“It would be a very positive signal from my perspective, for a brighter economic future for Egypt,” Angus Blair, founder of the Signet Institute, a Cairo-based think tank, told CNBC.
El-Erian, who manages the world’s largest bond fund, has spent most of his adult life outside Egypt, and it was not immediately clear how Egyptians, and other political parties, would react to his possible appointment.
Despite being based abroad, he has been a prolific commentator on post-revolution Egypt and the path forward.
“Having left, I never anticipated that, one day, I would again experience such feelings of intense Egyptian pride,” El-Erian wrote in the Financial Times shortly after Hosni Mubarak stepped down last year.
“Mohamed has a profoundly good mix of talents to be Prime Minister, not least his economic background and experience of running a large business,” Blair added.
Egypt’s economy has struggled to recover since the Arab Spring in 2011, with growth for 2012 projected by the International Monetary Fund at 1.5 percent this year, a far cry from pre-revolution levels. The Arab World’s most populous country has only recently managed to arrest a sharp fall in foreign currency reserves, but significant devaluation pressures on the local currency remain as concerns about its political future continue.
A widening budget deficit and questions over sustainable financing in light of rising government borrowing costs have added to the sense of urgency. External support has been slow to trickle in, while a $3.2 billion loan from the IMF has suffered repeated delays.
In a piece in the Huffington Post in late May, El-Erian wrote that the country needed to move “decisively to address its mounting economic and financial challenges”.
Other names have been floated, but in many cases their seniority during the Mubarak-era is likely to draw criticism, as is the case with the current Central Bank Governor Farouk Al-Okda, and predecessor Mahmoud Abul-Oyoun. The name of the new Prime Minister is expected to be announced in the coming days.
Egypt’s stock market has been among the most volatile and best performing worldwide, having gained over 30 percent so far this year. It opened marginally higher in early trade on Tuesday.
Yousef Gamal El-Din is CNBC's Middle East Correspondent and contributes to the channel’s flagship shows, as well as analysis for CNBC.com.
Stay in touch with him on Twitter at http://www.twitter.com/youseftv @youseftv