Egypt

Egypt’s new Prime Minister, ‘Atef ‘Obeid (See the lead story and the Profile in the last issue), has named a new Cabinet which retains 19 ministers from his predecessor, Kamal al-Ganzouri’s, government, while introducing 13 new faces. (Because of the creation of new portfolios, only 10 of the old ministers were actually dropped.

Despite press speculation that some major figures might be shifted, the Foreign Affairs, Defense, Interior and Information Ministries remained unchanged. Many had thought that longtime Information Minister Safwat al-Sharif was particularly vulnerable, but he was retained. Although there were a number of new faces, particularly in the all-important economic sector, opposition parties and other critics tended to dismiss the new Cabinet as largely a reshuffled version of the old.

While the most powerful ministers remain in place, that criticism is probably not entirely fair. In particular, ‘Obeid seems to have restructured the economic and financial sector in his own image. Ganzouri had long been accused of blocking reforms pushed by ‘Obeid, who was previously Minister of Public Enterprises (the privatization slot) in Ganzouri’s Cabinet, and Economy Minister Yousef Boutros-Ghali. Boutros-Ghali, who entered the government several years ago after years with the IMF, not only kept his Economy Ministry but also added the External Trade portfolio. He is considered one of the key supporters of privatization and economic reform in Egypt, and his hand now appears to have been strengthened.

Throughout the economic and finance sector of the Cabinet, the emphasis was clearly on bringing in technocrats. Another key change was in the Ministry of Finance. Mohieddin El-Gharib was replaced by Medhat Hassanein, a 60-year-old University of Pennsylvania Ph.D. who has been an economics and finance professor at the American University in Cairo and has held positions with several Egyptian and Gulf banks. To replace himself in his old privatization job, ‘Obeid named Mukhtar Khattab and Minister of the Public Enterprise Sector, a US-educated Ph.D. who had been serving as an advisor to ‘Obeid.

Among other changes in the economic sphere, the Communications and Transport portfolio was divided in two, with Communications expanded to include the information technology sector. The new Minister of Communications and Information is Ahmad Nazif, a 47-year-old professor and former manager of the Cabinet’s Information Center with a Canadian Ph.D. in computer engineering. The new Minister of Transport is Ibrahim El-Demeiri, a German-trained engineer who had been Dean of the Engineering Faculty at ‘Ayn Shams University.

There is also a new Minister of Petroleum, Sameh Fahmi, formerly Deputy Chairman of the Petroleum Authority; a new Minister of Planning and International Cooperation, Ahmed El-Darsh, who has taught in both the US and Kuwait; as well as new ministers in the Supply, Industry, Local Development, and Social Affairs ministries.

Although Defense Minister Field Marshal Muhammad Hussein Tantawi retained his post, there  is a new Minister of State for Military Production. (Tantawi technically holds the title of Minister of Military Production, but that ministry, which runs Egypt’s defense industry, is usually entrusted to a Minister of State.) Sayed Mesh‘al replaces Mohamed Ghamrawi in that job. Mesh‘al is both a Military Academy graduate and a Ph.D. in science, who formerly headed the Armed Forces’ National Service Authority.

Among those departing the Cabinet were the two longest-serving ministers, dating from the Sadat era: Suleiman Mitwalli had entered the Cabinet in 1978 and had run the Transport and Communications Ministry since 1980; Maher Abaza had been Minister of Electricity since 1980 as well. Mitwalli has particularly come under fire for the frequency of bus and rail accidents in Egypt. But many others of the old guard kept their jobs. There are two women in this Cabinet, as in the previous one, though one is a newcomer.

Working Groups

Prime Minister ‘Obeid also announced that the new Cabinet will be divided into six ministerial working groups: one on the Production sector with Deputy Prime Minister and Agriculture Minister Yusuf Wali heading it; one on National Security headed by Field Marshal Tantawi; one on the development of human resources headed by Information Minister Sharif; one on the Economy headed by Boutros-Ghali; one on “mega-projects” headed by Public Works and Water Resources Minister Mahmoud Abu Zeid; and one on public utilities headed by Utilities and Urban Communities Minister Ibrahim Suleiman.

The new economic team generally won an  optimistic reception abroad and in the business community; Egypt’s Hermes share index soared by 3.76% of its total value on the Monday after the Cabinet was announced.

Given a series of crises in the foreign exchange area in recent months, there has been speculation that there may be changes in the leadership of Egypt’s Central Bank and other major banks. Reports had claimed that the chairmen of both the National Bank of Egypt and Banque Misr were “on extended leave” and that Central Bank of Egypt Chairman Isma‘il Hassan might be removed. But President Mubarak announced that there will be no leadership changes in the banking sector, apparently intending to rely  on the new Cabinet to resolve the monetary questions.

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