Whither Egypt?

On Sunday, one year since President Morsi’s arrival in office, Egypt saw what might have been the largest protests in the history of the country. The anti-Morsi ‘Rebel’ campaign claims they have collected over 22 million signatures asking for his departure, and they are asking the Egyptian head of state to resign by 5 p.m. tomorrow.

The current events were predictable. There was a long build-up of popular dissatisfaction with the direction Mr. Morsi and his Freedom and Justice Party (FJP) had taken the country. Little has been done to reduce the deficit, restore robust growth and tackle the country’s debilitating subsidy problem. To the extent to which the events of the Arab Spring were driven by people’s desire to access economic opportunity, Mr. Morsi’s presidency has been a lost year.

Politically, Mr. Morsi’s presidency has been marked with a disdain for civil society, and few signs of a genuine commitment to limited, constitutional, and democratic political order. So is it time for Mr. Morsi to go, as many in Egypt seem to believe?

Though we may agree that Mr. Morsi is an inept leader, what are the alternatives to the continuation of his presidency? Given the severity of the country’s economic problems, and the existing political uncertainty, a protracted transition – with a likely involvement of the Supreme Council of the Armed Forces – might be even worse than the status quo. The journalist Farah H. Hope, who runs the blog Rebel Economy, says:

While politically his exit may be required by the millions who want him out, economically, the last thing Egypt needs is another period of chaos, uncertainty and confusion. Investors and Egyptians alike are looking for rule of law and order, not another limbo period.

However that may be, Mr. Morsi’s political mandate is tenuous. If he goes, it is imperative that the transition is orderly and planned. Setting a firm early date of the parliamentary election – which has already been postponed – would be a good place to start, accompanied by a broad agreement to shorten Mr. Morsi’s presidency and convene an early presidential election.

Although it looks like Egypt is quickly running out of good options, it may well be that the current unrest is exactly the impetus needed for political elites to start addressing the country’s economic problems. The sooner we see credible reformers fixing the country’s public finance problem and removing barriers to trade, entrepreneurship and innovation, the better.