Egypt's president Morsi holds a poisoned chalice

New leader faces daunting challenges as he attempts to unite a polarised society, regain control over writing a new constitution and steer the economy back from the edge of collapse.

President elect Mohammed Morsi (second from right) arrives in his office in ousted leader Mubarak’s former palace.

CAIRO // More than 80 years after its founding, the long-banned Muslim Brotherhood has achieved its dream of placing one of its own at the top of the Egyptian government.

But the new president faces daunting challenges as he attempts to unite a polarised society, regain control over writing a new constitution and steer the economy back from the edge of collapse.

Mohammed Morsi, 60, who was declared the winner of the presidential race on Sunday, yesterday arrived in one of the palaces once occupied by the ousted former president Hosni Mubarak to begin putting together a team of advisers.

How he fares during the next year will have lasting effects on how Egyptians view Islamist political groups and whether the Muslim Brotherhood's political dominance can last.

Mr Morsi officially resigned from the Brotherhood and its political arm, the Freedom and Justice Party, after he became president, but many believe that was a mere formality and that the group now has strong influence over the presidency.

Any perception of failure could have ramifications in other countries building new democracies after the Arab Spring uprisings, where Islamist groups are also on the rise.

The immediate obstacle to Mr Morsi's initiatives is the Supreme Council of the Armed Forces (Scaf), a group of generals who have controlled Egypt's democratic transition and who have long viewed the Muslim Brotherhood with suspicion. In the past two weeks, the Scaf have dissolved parliament after a ruling from the Supreme Constitutional Court that some of the elections were unconstitutional, given itself broad powers to arrest civilians, stripped some of the powers from the presidency and taken control of the committee that will rewrite a new constitution.

If the Scaf's new powers are not curtailed, then they can veto the new president's initiatives. Even more ominous is the possibility of new presidential elections being held in a year, after a new constitution is drawn up - a move suggested as likely by the civilian advisory council to the Scaf.

The situation has led to fears that Mr Morsi was being handed a poisoned chalice by gaining the public responsibility for Egypt's path to stability and prosperity without the executive powers to make meaningful changes.

Some observers believe that Mr Morsi, supported by the Muslim Brotherhood, will be able to wrench some of the traditional roles of the presidency back from the military in the weeks ahead.

"The deck is stacked against him, but I certainly don't think it will stay that way," said Eric Trager, a fellow with the Washington Institute for Near East Policy who is in Cairo. "Even if he doesn't have formal power for awhile - and I don't think that will last long - he'll still be able to use the bully pulpit in a very influential way."

Despite Mr Morsi's seemingly diminished role, he will have control over the government through a new cabinet that he is expected to appoint this week. He has pledged to focus on pressing domestic issues, rather than more sensitive topics such as oversight of the military and its economic interests.

A non-profit group in Egypt has launched a "MorsiMeter" website to track his adherence to his list of promises for the first 100 days of his presidency. Those include pledges to restore security, increase pay for police and ease the fuel, food, housing and unemployment crises that have wracked the country for years.

Mostafa Rafaat, a founding member of Zabatak - the group that created the MorsiMeter (http://morsimeter.com) - said he was confident Mr Morsi would meet many of the challenges.

"Even with the military taking some of his powers away, he can still use the cabinet to make changes," he said.

The biggest problem, from Mr Rafaat's perspective, is reforming the ministry of interior because of a "culture of corruption" within the police force.

The economy is also a priority. Since Mubarak resigned 17 months ago, unemployment has increased to more than 12 per cent and there are regular shortages of bread and fuel.

The central bank has had to spend more than US$20 billion (Dh73.46bn) in international reserves to prop up the domestic currency, leaving it with enough money to pay for three months of imports, economists say.

The country's balance of payments, one of the most closely watched indicators of an economy's performance, has doubled to $11.2bn in the nine months to March, the central bank said this month, as the country's instability caused tourism revenues and foreign direct investment to fall.

Mr Morsi will also have to balance his former group's plans for pushing the country closer to an Islamic state while many Egyptians are fearful that the Muslim Brotherhood wants to turn the country into a theocracy. He won the presidency with just a 3 per cent margin, with many citizens supporting Mubarak's last prime minister, Ahmed Shafiq.

"How the Muslim Brotherhood will balance the need to make pragmatic policy choices with the need to appease those of a more hard-line orientation will be a key challenge," said Alison Pargeter, the author of The Muslim Brotherhood: The Burden of Tradition.

One of the areas where that tightrope walk will play out initially is foreign policy. Mr Morsi rattled some international observers by announcing that Egypt would restore its relationship with Iran during his victory speech on Sunday night.

"My guess is that in order to prove to their support base that they are not reliant on western support, they will try to reorient the country towards the Gulf for investment and tourism," Ms Pargeter said.

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