Graft, stagnation persist in post-Mubarak Egypt

CAIRO Fri Apr 29, 2011 2:57pm IST

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CAIRO (Reuters) - When President Hosni Mubarak was driven from power in February, millions of Egyptians believed the graft and stagnation that blighted his 30-year rule would go too. Two months later, some people are having second thoughts.

Frustrated by high prices, the scarcity of jobs and endemic corruption, the pro-democracy demonstrators that deposed Mubarak on Feb. 11 had demanded change.

So far, little has changed in their daily lives apart from a new-found ability to voice their complaints after years of repression, leading some Egyptians to wonder how long they will have to wait before they can shake off Mubarak's legacy.

Anyone expecting the generals now ruling Egypt to lay out a vision for the future, beyond a promise of elections, is still waiting, and Mubarak's opaque decision-making style remains.

The longer it takes for Egyptians to feel their lot has improved, and their uprising has succeeded, the longer it will take for stability to return to one of the Middle East's biggest and most influential countries.

"The Egyptians brought down the head of the system, not the system itself," said Adel Soliman, director of the International Centre for Future and Strategic Studies, a think tank.

"The system has not changed yet, but it needs to change drastically. Some things need to be fixed quickly, while others will take decades. But there has to be change for stability to return and that will be difficult," he told Reuters.

ECONOMIC COLLAPSE

The problems facing the military generals until parliamentary and presidential elections are gargantuan and likely to take decades to resolve. But analysts say the generals could help themselves by showing more urgency.

One of the most pressing concerns is reviving an economy saddled by a huge public sector and a vast subsidy programme.

The economy had been expected to grow at about 6 percent and attract foreign direct investments (FDI) worth $7.7 billion in the 2010/11 financial year.

But growth forecasts were revised to 2 percent after the uprising, a level newly appointed Finance Minister Samir Radwan has described as inadequate to help bring about a recovery.

Radwan also said his government was under pressure to quickly meet "high and mounting" demands for jobs and better wages, and to tackle inflation that officially runs at almost 12 percent. Food prices are rising by between 16 and 24 percent.

A stalled economy will inevitably fuel discontent in this country of 80 million people, and could trigger instability.

"Our economy is in shambles, millions have barely enough to eat and our youth are sitting around jobless, all because of Mubarak and his gang of thieves," said Mohammed Younis, a waiter at a five-star Cairo hotel. "The new government needs to make things better, quickly, so we feel things have moved on."

Egypt's economic recovery is hinged on political reforms, analysts say, which can only happen in earnest after the election of a new president. In the meantime, the current government needs to work fast or risk scaring off investors.

"At the moment you're in an interregnum awaiting this final stability. That noted, the interim government should, and ought to, do more to focus on improving the investment climate," said Angus Blair, head of research at investment bank Beltone Egypt.

"OPEN DRAWERS"

Another major concern for investors and ordinary Egyptians, is the pervasive corruption that helped ignite the revolt. Egypt scores a 3.1 on Transparency International's 2010 corruption perceptions index, where a 0 corresponds to highly corrupt and 10 very clean.

Egyptians live with graft on a daily basis: to get anything out of a bureaucracy which they joke has not advanced since Pharaonic times, most people still need to bribe civil servants.

Traffic police still take cash instead of handing errant drivers a ticket. "Everyone still 'opens the drawer'. There's no difference between now and Mubarak's time," said architect Mohammed Fathy, who still shows up in Cairo's Tahrir Square every day to voice his disgust at graft.

'Opening the drawer' is Egyptian slang for taking bribes. In an attempt at discretion, many government workers open their desk drawer, expecting cash to be dropped in.

"The fall of one leader will not cure the weakness of institutions that until now have not been able to enforce anti-corruption rules," said Omnia Hussein of Transparency International Egypt.

The ruling generals are trying to show their commitment to battling corruption, and the president himself, his sons and many senior officials are on trial, or being interrogated.

Activists say a return to the rule of law -- from respecting traffic signals to the right to a fair trial -- is essential.

Mubarak's police force was reviled for its brutality, and was implicated in the killing of more than 800 pro-democracy protesters. An investigating committee said that enacting a public enquiries law was necessary to prevent another revolt.

Many Egyptians want Mubarak put on trial, but it remains unclear if he ever will be, since the ruling generals appear willing to shield their 82-year-old, ailing former commander from what they see as public humiliation.

Bringing Mubarak to justice was one of the main demands of the protesters who deposed him, and is also regarded as key to ending the state of flux now afflicting Egypt.

"If the generals are serious about moving Egypt to democracy, then the judiciary must expedite his trial," said rights activist Mohammed Abdullah Khalil.

Writing in the Financial Times, Egyptian Nobel laureate Ahmed Zuwail, who advises U.S. President Barack Obama, contrasted Egypt's decline with China, which lifted hundreds of millions out of poverty during the 30 years of Mubarak's rule.

"It is in the best interests of everyone... who wants long-term stability in the Middle East that the peaceful democratic revolutions in Egypt and elsewhere succeed. Time is of the essence!" wrote Zuwail.

(Editing by Mark Heinrich)

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