Business community reacts positively to new Cabinet

While thousands of pro-Morsi demonstrators are marching today to the Cabinet buildings to contest its legitimacy, the freshly sworn-in government has generated optimistic reactions from the business community.

The composition of the new government shows a strong focus on the economy and improvement of foreign relations with the presence of high-profile personalities at key economic ministries.

Minister of International Cooperation Ziad Bahaa Eddin has been appointed deputy prime minister.

Recognized economists and technocrats Ahmed Galal, Osama Saleh and Ashraf al-Arabi have been appointed as minister of finance, minister of investment and minister of planning.

The business community has reacted largely positively to the announcement of the government.

“We generally view this Cabinet as highly competent, with the right mix of ministers and focus on the important portfolios,” Investment Bank Beltone Financial states in its daily economic outlook Wednesday.

“The economic ministers have very strong economic backgrounds and create a very good benchmark” says Allen Sandeep, head of research at Naeem Financial.

According to Sandeep, the positive reaction from the stock market is indicative of the optimism of the business community as a whole toward this strongly liberal-inclined government. The EGX 30 was slightly decreasing today after having gained more than 12 percent since June 30.

“It is a very strong message sent to foreign investors,” he adds.

However, the Cabinet remains an unelected and transitional government who will have relatively little time or mandate to implement bold reforms and change.

Recent reports stated that the main task of the current government will not be to tackle far reaching economic reform but rather to soothe the main pains of the economy.

“Restoring foreign reserves and investor confidence while avoiding shortages are the top priorities of this government,” confirms Sandeep.

Unsurprisingly, activists remain more skeptical with regard to the ability of the new government to address the core economic and social issues that ignited the social unrest of 2011 and 2013.

“I do not judge names but policies”, says Reda Issa, independent economist who was active in the the Popular Campaign for Dropping Egypt’s Debts.

“I expect the new government to review the rules of the game and to do the groundwork to put Egypt back on the right track”, he adds.

Tackling corruption, insecurity, poverty and budget opacity should be the top priorities, he says.