Egypt’s Muslim Brotherhood Calls for Protests

Egypt’s Muslim Brotherhood plans new protests today against the army’s ouster of Islamist Mohamed Morsi as president and the military-backed interim administration that’s seeking to arrest its leaders.

“Millions of Egyptians are going to flood Cairo’s streets tomorrow defending their choice and their legitimate president and opposing dictatorship,” Hamza Zawba, a spokesman for the Brotherhood’s political arm, said yesterday by phone.

Security forces have arrested a number of Brotherhood officials since the military swept Morsi from power July 3 on a wave of protests by critics who accused him of leading an Islamist power grab. Prosecutors issued arrest warrants on July 10 for Mohammed Badie, the group’s top official, and nine other Islamists on grounds they ignited a confrontation in Cairo on July 8 in which more than 50 people, most of them Morsi loyalists, were killed in clashes with the army.

Militants fired rocket-propelled grenades today at a security checkpoint in the Sinai peninsula, killing a police lieutenant-colonel and wounding another policeman, Agence France-Presse said, citing unidentified security officials.

Amid the turmoil, the new prime minister, Hazem El-Beblawi, is trying to form a government that will be asked to revive a crumbling economy and end deep political rifts.

Sinai Security

The government’s priority will be “security first, then the economy,” El-Beblawi said in an interview with the Asharq Al-Awsat newspaper, expressing confidence the army will be able to restore security in the Sinai.

The political unrest and security incidents won’t affect the safety of navigation in the Suez Canal, he said. The 193-kilometer (120-mile) waterway handles 8 percent of world trade, connecting the Mediterranean and Red Seas.

Egyptian bonds gained for a second day yesterday, sending yields to the lowest level in five weeks, after $12 billion of aid pledges poured in from the Persian Gulf. Egypt’s default risk fell to the lowest in more than a month.

The arrests of Muslim Brotherhood members “are not in line with the reconciliation that the interim government and military say they are pursuing,” U.S. State Department spokeswoman Jennifer Psaki said yesterday. “If politicized arrests and detentions continue, it is hard to see how Egypt will move beyond this crisis.”

Complications

El-Beblawi said that while he’s talking to a variety of political groups, it will be difficult to secure the backing of all Egyptians, the state-run Al-Ahram newspaper reported.

“Everybody is requested to join this political process,” Badr Abdelatty, spokesman for the Ministry of Foreign Affairs, told reporters yesterday. Those involved in violence are being dealt with “within the existing judiciary system, nothing more, nothing less, nothing extraordinary,” he said.

Complicating El-Beblawi’s task is the Brotherhood’s refusal to participate in talks. The group rejects the opposition’s argument that the military intervened in response to mass protests fueled by complaints that Mursi hijacked the democratic process to try to impose an Islamist agenda and monopolize power.

“We’re back to the same old police state and tactics we used to see before the Jan. 25 revolution,” Zawba said, referring to the 2011 uprising that toppled Hosni Mubarak.

Protests Planned

The Brotherhood vowed to maintain peaceful protests.

“We will continue our peaceful resistance to the bloody military coup,” the Brotherhood said in an e-mailed statement, referring to the ouster of the democratically elected Morsi, whom it backed. “We are confident that peaceful popular will is going to triumph over aggression and injustice.”

The army won’t act as long as the demonstrations are peaceful and don’t approach or attempt to harm military and other vital installations or citizens, armed forces spokesman Ahmed Ali told reporters yesterday.

“If these protests, however, deviate from peacefulness,” he said, “there are rules of engagement that will be applied.”

Morsi is being “held for his safety,” because there are people who are “angry from both sides,” Ali said. The former president is “well treated” and hasn’t been charged with any crimes, he said.

Worst Slowdown

Even some members of the coalition that backed the military’s overthrow of Morsi have voiced reservations about interim President Adly Mansour’s blueprint for elections and the temporary legislative powers he has given himself.

Egypt’s economy is stuck in its worst slowdown in two decades. Employment is at a record high, and foreign reserves are less than half their levels in December 2010, two months before longtime leader Mubarak was toppled in the popular uprising that eventually ushered Morsi into power.

The U.S. will continue to provide assistance to Egypt and all aid programs “still are moving,” Psaki said in response to a question about whether the U.S. will deliver F-16 jet fighters to the country following Morsi’s ouster. “We are continuing to provide assistance and don’t see the benefit of changing that.”

Arab Aid

Egypt got some relief from announcements of aid from other Arab countries: Kuwait extended a $4 billion aid package July 10, adding to the $8 billion pledged by Saudi Arabia and the United Arab Emirates.

The yield on the government’s $1 billion of 5.75 percent notes maturing in 2020 declined 34 basis points on the news to 8.36 percent yesterday in Cairo, the lowest on a closing basis since June 6, according to data compiled by Bloomberg. The yield dropped 69 basis points, or 0.69 percentage point, after the aid announcements.

Five-year credit default swaps decreased 25 basis points to 650, the lowest since May 31, according to data provider CMA. The nation’s default risk is still among the 10 highest in the world.

Source:Bloomberg