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Egypt opposition calls for protests against basic law

Source: Thomson Reuters Foundation - Mon, 17 Dec 2012 10:56 GMT
Author: Reuters
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* Opposition calls for protests on Tuesday

* Narrow victory leave Mursi in economic policy bind

* Second stage of referendum to be held on Saturday

* More support for measure likely in second round

By Giles Elgood

CAIRO, Dec 17 (Reuters) - Egypt's opposition called for nationwide protests against a constitution backed by President Mohamed Mursi, after a vote exposed deep divisions that could undermine his efforts to build consensus for tough economic measures.

The Islamist leader won a 57 percent "yes" vote for the constitution in a first round of a referendum at the weekend, according to state media, a margin that was less than his party had hoped for and which is likely to embolden the opposition.

The second round, due to be held on Saturday, is expected to give another "yes" as voting will be in districts seen as even more sympathetic towards Islamists, which would mean the constitution should be approved.

The opposition National Salvation Front urged the organisers of the referendum to investigate what it said were widespread voting violations and ensure that the second round of balloting was properly supervised.

It called for protests across Egypt on Tuesday "to stop forgery and bring down the invalid draft constitution" and urged organisers to consider re-running the first round of voting.

Senior opposition politician Mohamed ElBaradei, a Nobel prize winner, used his Twitter account to call for "cancelling the notorious referendum and entering dialogue to mend the rift."

The closeness of the first-round tally and the low turnout give Mursi scant comfort as he seeks to assemble support for difficult economic reforms to reduce the budget deficit.

One newspaper calculated that in the first round, out of every 100 Egyptians, 18 voted "yes", 13 voted "no" and the rest did not participate, buttressing opposition claims that Mursi had failed to secure real backing.

BUILDING CONSENSUS

Simon Kitchen, a strategist at Egyptian investment bank EFG-Hermes, said much would depend on whether Mursi took the result as "an endorsement of his policies ... or does he recognise that he may need to spend more time building consensus ahead of major policy changes?"

"I think he will continue to push ahead on reforming taxes and subsidies because, at this stage, Egypt has little choice but to make such reforms," he said.

However, some analysts said they remained concerned by voting patterns that seemed to show a deepening sectarian divide, notably in Alexandria, Egypt's second city, where tensions between Christians and conservative Muslims run high.

The result of the first round of voting cast serious doubts on the credibility of the constitution, said Mustapha Kamal Al-Sayyid, a professor of political science at Cairo University.

"This percentage ... will strengthen the hand of the National Salvation Front and the leaders of this Front have declared they are going to continue this fight to discredit the constitution," he said.

"The polarisation is far from being ended," Sayyid told Reuters. "The unpopularity of Mursi will increase with economic measures he is planning to introduce."

If the constitution passes, national elections can take place early next year, something that many hope will usher in the stability that Egypt has lacked since the fall of Hosni Mubarak nearly two years ago.

Economists said the parliamentary election timetable could affect the timing of government reforms, encouraging Mursi to delay tougher measures to avoid scaring away voters.

To rein in a crushing budget deficit, the government needs to raise revenues with tax rises and to cut back on subsidies on fuel, one of the biggest drains on state coffers.

UNPOPULAR MEASURES

Both will be unpopular, and the government has outlined plans to target fuel subsidies more directly at the poor, in a nation where everyone has become used to cheap energy.

Reflecting investors' concerns, the cost of insuring Egypt's debt against default climbed to trade around three-and-a-half month highs, rising to 490 basis points on Monday from 480 on Friday, the day before the vote.

Uncertainty surrounding economic reform plans has already forced the postponement of a ${esc.dollar}4.8 billion loan from the International Monetary Fund. The Egyptian pound has fallen to eight-year lows against the dollar.

Mursi and his backers say the constitution is vital to moving Egypt's democratic transition forward. Opponents say the document is too Islamist and ignores the rights of women and of minorities, including Christians who make up 10 percent of the population.

The build-up to the forst-round vote was marred by violent protests. Demonstrations erupted when Mursi awarded himself extra powers on Nov. 22 and then fast-tracked the constitution through an assembly dominated by his Islamist allies and boycotted by many liberals.

Despite earlier violence, the vote passed off calmly, although unofficial tallies indicated turnout was around a third of the 26 million people eligible to vote this time. The referendum is being held over two days because many of the judges needed to oversee polling staged a boycott in protest.

Violence in Cairo and other cities plagued the run-up to the referendum. At least eight people were killed when rival factions clashed during demonstrations outside the presidential palace earlier this month.

In order to pass, the constitution must be approved by more than 50 percent of those casting ballots. There are 51 million eligible voters in the nation of 83 million.

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