Egypt’s stock market soared on Monday, following the official election of the country’s new president, Mohammed Morsi of the Muslim Brotherhood. In his first address to the nation, Morsi called for national unity as he sets about building a civilian administration for the country.
But one analyst told CNBC that despite Morsi winningthe vote, his power is limited.
“Morsi remains at risk of being little more than an interim president,” David Hartwell, Senior Middle East and North Africa Analyst at IHS, said on European Closing Bell. “The powers retained by the military mean that in practice Morsi’s power and room for maneuverability will be limited.”
Ahead of the elections, the Supreme Council of the Armed Forces(SCAF) dissolved parliament and issued a ruling claiming sweeping legislative powers and oversight of the transition process in the future, Hartwell pointed out.
“They’ve (the military) effectively left very few areas in which the new president can have any meaningful impact,” he said. “One of the few areas in which Morsi can have a meaningful impact is the economy. So there may well be some census in letting Morsi implement some sort of social economic reforms. But of course if those fail, then the military would be able to blame Morsi for those failures as well. So we are still in the middle of a political game, I think.”
The Muslim Brotherhood has been vehement in addressing the court’s ruling on the illegality of the elections that caused it to dissolve parliament. However, according to Hartwell’s sources the Brotherhood has now accepted the court’s ruling in exchange for the presidency.
“The Brotherhood’s record is pretty patchy when it comes to making concessions dealing with the real political world, where they are having to make these concessions on a daily basis and having limits on the power of what they are actually able to achieve,” he said.
“We are going to see battles over the constitution over the longer term,” Hartwell said. “But I think in the short term there is a position for unrest…at least for the next six months, while the constitution committee gets underway, and while the reform process - arguably which has been stalled for the best part of 18 months - really begins to get going.”