Islamists set to gain majority of seats in Egypt's elections



CAIRO // Liberal youths may have led the charge against the regime of Hosni Mubarak but Islamists are claiming success in the first election since the president's downfall.

The Muslim Brotherhood-controlled Freedom and Justice Party, Salafist Al Nour Party and moderate Islamist Al Wasat parties are together expected to sweep more than than 65 per cent of seats allocated to parties in the first round of voting for the lower house of parliament, according to preliminary results from political parties.

The Egypt Bloc, made up of liberal and largely secular groups, is likely to come in third with 20 per cent of the seats.

The results are only from the first of three phases of voting for the lower house, but analysts said yesterday that the data indicated that the Islamists would likely grab a majority of the seats in the parliament and be well positioned to dominate the appointment of a 100-member assembly to rewrite the country's constitution.

The Higher Election Commission delayed the release of final results from the two-day balloting until today. The head of the commission, Abdel-Mooaez, was quoted as saying a large voter turnout had slowed the counting process.

The remaining rounds of voting are predominantly in rural areas where Islamists have a larger following, which means the Freedom and Justice, Al Wasat and Al Nour parties could see even greater support in the coming months.

Islamism is a broad term used to describe groups or people who use the teachings of Islam as their primary guidance for political action.

The success of the Freedom and Justice Party was long heralded by election observers but the strong performance of the Al Nour party in the first round was a surprise. The Al Nour party identifies as Salafist, an ultraconservative strand of Islam that has called for the stricter adherence of society to Islamic law and traditions.

"Now that these groups are expected to have a majority in parliament, their voices will be much louder," said Sameh Seif Al Yazal, a former general in Egypt's intelligence agency and head of the Al Gomhuria Centre for Political and Security Studies, who is a consultant to the Supreme Council of the Armed Forces (Scaf).

"You will see them talk about their plans," he added. "It will be a new era, a new way of talking by all of them."

The Muslim Brotherhood, which created the Freedom and Justice party after Mr Mubarak stepped down earlier this year, has long been suppressed by the Egyptian government.

These elections are the first time they are legitimately being made a part of the government in the group's 83-year history.

Gen Al Yazal said the Islamist groups would gain confidence from a popular mandate to reveal more ambitious plans for the government.

The country's first confrontation between a government elected by the people and the interim military rulers could also be on the horizon.

Scaf, the group that has led the country since February, was facing its most difficult period in the week before the elections.

An estimated 100,000 people went to Tahrir Square to protest the military's rule and the crackdown on protesters led to 43 deaths and more than 2,000 injured.

The Muslim Brotherhood, and their political party, largely stayed out of that fight.

But Essam El Erian, the vice president of the Freedom and Justice Party, struck a powerful note in an opinion article in The Guardiannewspaper on Wednesday.

He called on Scaf to give the parliament more powers, such as the ability to accept or refuse cabinet members.

"The military council must now announce the handover of legislative powers to parliament and the caretaker government must present any new legislation to the parliament for approval," he wrote.

Omar Ashour, a professor of Arab and Islamic Studies at the University of Exeter, said that Scaf might try to woo other political groups, such as the Egypt Bloc, to reduce the power of the Islamists in the parliament.

What makes this parliament different from future parliaments is its role in influencing the writing of the new constitution, which could have a lasting impact on the way the country is governed and everyday life.

Among the ideas that have come out of a body of work known as Islamic constitutionalism is the use of Sharia to rule how often divorced parents can see their children, the greater use of Islamic finance in the economy and the creation of a religious body to advise the parliament on new laws.

The phrasing of the country's new founding document could affect how the state spends money, including reducing funding for cultural projects considered to be immoral.

Some Salafist commentators and would-be politicians have even advocated the implementation of a punishment regime known as hudud that includes penalties such as stoning and "an eye for an eye", though this is not a widely accepted idea in Egypt.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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COMPANY PROFILE
Name: HyperSpace
 
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Sector: Entertainment 
 
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Date started: 2013

Founder/CEO: Othman Al Mandhari

Based: Muscat, Oman

Sector: Additive manufacturing, 3D printing technologies

Size: 15 full-time employees

Stage: Seed stage and seeking Series A round of financing 

Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now. 

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