Financial markets wary of the Islamic leadership

EGYPT finally has a President, the Muslim Brotherhood's Mohammed Morsi, but its future is still very much in doubt.

Morsi, 60, a US-educated engineer and academic, has made history in several ways.

He's the first Islamist to be elected leader of Egypt and the first person without a military background to run the most populous Arab country in 55 years.

His most fundamental challenge is the economy. If Morsi cannot improve the economic wellbeing of his 80 million people, he faces massive upheaval.

Financial markets are wary of a Brotherhood President. A country in desperate need of foreign investment is unlikely to receive much in the near future.

As Egypt tries to find its way to democracy, it can easily stumble into chaos.

The country fell into anarchy in January and February last year, during the 18 days of protests in Cairo's Tahrir Square that brought down dictator Hosni Mubarak.

Vital questions arose from those historic moments. Can Morsi restore law and order when he has defeated a man who ran on a campaign of law and order and was backed by Egypt's security apparatus?

What elements of Islamic law or sharia will he try to introduce?

Will he honour the peace treaty with neighbouring Israel?

Morsi's first priority will be to manage relations with the military.

Through the Supreme Council of the Armed Forces, 19 generals have run Egypt since the fall of Mubarak.

The military will continue to wield enormous power. If Morsi and the army cannot come to some accommodation, Egypt will suffer.

Crime in Cairo is becoming out of control, and the tourism industry - which has traditionally accounted for 10 per cent of the economy - has collapsed.

On the positive side, Egyptians have achieved something remarkable.

In 16 months, they have gone from a military dictatorship, enforced by a notorious Interior Ministry and unaccountable plainclothed thugs to largely peaceful parliamentary and presidential elections.

Many people around the world will dislike the result.

Indeed, many people in Egypt will hate the result.

Of the 50 million people eligible to vote, only 51 per cent did.

And of those, 51 per cent voted for Morsi.

Not ideal, but certainly better than the alternative - bloodshed in the streets

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Original piece is http://www.theaustralian.com.au/news/world/financial-markets-wary-of-the-islamic-leadership/story-e6frg6ux-1226408303608

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Financial markets wary of the Islamic leadership