Violence, Protests, Celebrations - and Challenge

Egyptians voted yesterday and today, the second time in little over a year, on another new Constitution. There is virtually no doubt regarding the outcome of this vote -  the Muslim Brotherhood, recently designated as a terrorist group by the military government, is boycotting the vote, as are young, secular activists who may detest the Brotherhood but remain loyal to the ideals of the 2011 Arab Spring revolution. So it would appear that most of the Egyptians who are bothering to vote at all are voting yes. Voter turnout, estimated at no more than 50%, is occurring within the framework of a huge security presence, with some 160,000 soldiers and 200,000 policemen - and low-flying military helicopters - deployed throughout the country. Reports suggest a mostly peaceful voting process, even a celebratory atmosphere around polling stations. But clashes between security forces and supporters of former President Morsi have resulted in several people killed.

This constitution is quite different from that drawn up and hastily passed into law under Mr. Morsi, before he was removed and placed under arrest last July, and now facing several criminal charges relating to his time in office. Notably, under the new charter, the President may be impeached by parliament, contrasting sharply with Mr. Morsi's decree in late 2012 granting him the powers to issue any decision or law without any alternative authority, including parliament and the judiciary, having the power to oppose or revoke it. As well, while this Constitution again names Islam as the state religion, and the "principles of Sharia" remain "the main source of legislation", the decision whether legislation conforms to such principles is restored to the Supreme Constitutional Court from the clerics of Al-Azhar. Freedom of belief is "absolute", as distinct from merely "protected" under Morsi's rule. Political parties may not be formed based on "religion, race, gender or geography", effectively excluding the Muslim Brotherhood and its Freedom and Justice party. Finally, personal and political rights, to protest, and as between men and women, are enshrined in much stronger language than past constitutions.

Assuming today's conclusion of the referendum leads to the passage of the draft Constitution, there will be parliamentary then presidential elections within the next several weeks. General Abdel Fattah al-Sisi, Egypt's interim ruler, is considered almost certain to stand for, and win, the post of President, thus completing what he has described as Egypt's "transition to democracy". It is clear, however, that his "transition" will have done little to resolve at least one core issue that will almost certainly continue to destabilize Egyptian society in 2014. It's the economy, which now relies on aid flows from Saudi Arabia, the UAE and Kuwait just to keep it from complete collapse. Tourism receipts are down sharply, as is foreign direct investment, while unemployment, inflation, current account and government budget deficits and outstanding debt continue to expand from record high levels. Recent IMF forecasts indicate a drop in GDP this year and next, and negotiations with the IMF for a $12.5 billion standby loan remain stalled. Within this recessionary environment, the challenge for Egyptian policymakers will be, among many, modifying the long-standing system of subsidies for foodstuffs and petrol without somehow sparking broad reaction from the Egyptian populace that would cut across all political lines. Failure to implement difficult reforms and ultimately restore economic health, or at least to impart a sense among Egyptians that economic prospects will improve relatively soon, could easily undo General Sisi's transition, and lead to a second "revolution" much like the demonstrations in 2011 that ended Hosni Mubarak's long rule.

The World Economic Forum, in its just-released "Outlook on the Global Agenda 2014", notes that its experts "overwhelmingly agree that rising societal tensions in the Middle East and North Africa will be the defining trend of 2014...". Sadly, Egyptian developments in the coming year will be at the forefront of this trend.