When the military ousted former president Mohammed Morsi on 3 July, it also suspended the 2012 constitution and dissolved the Shura Council, which held full legislative powers, in response to the nationwide protests staged on 30 June. As a result many economic and other laws endorsed or being discussed by the now-dissolved Council are now in limbo, among them controversial measures passed by the Council's Islamist majority. Among these laws are the controversial sukuk, or Islamic bonds, law, the Suez Canal Corridor Development Project and the budget for financial year 2013/14, which started on 1 July, two days before Morsi was toppled. “The laws passed by the Shura Council under Morsi's rule will not necessarily be cancelled,” said one legal expert who preferred to remain anonymous, adding that the constitutional declaration since issued by Egypt's interim president Adli Mansour had stipulated that previous laws would not necessarily be annulled. “The new government might amend the laws or even ignore them, but it will not cancel them,” the source said. One of the heavily debated proposed laws was the law regulating the development of the Suez Canal Corridor, which was supposed to be discussed by the Shura Council soon. Taher Hozayem, a member of an advisory group to the Suez Canal Development Project told the Weekly that the team that had worked on the project was determined to do what it could to make sure it continued. Hozayem was a member of the advisory group, headed by ex-prime minister Essam Sharaf, which helped the ministry of housing prepare the Suez Canal Project. However, the group resigned last April in protest against the law that eventually emerged, saying that it opened the door to letting foreign investors control strategic areas in Sinai and the Suez Canal. Hozayem stressed the importance of executing the original project as soon as possible and not waiting until the end of the country's transitional period to begin the work. Any delay would favour similar projects being set up in places like Greece and Djibouti, he said. According to Hozayem, the development should start with the East Port Said development project, which was kick-started under former president Hosni Mubarak but was then delayed. It was then replaced under Morsi's rule by the “mega” Suez Canal Development Project, which in turn disrupted execution of the plans. Another law that has attracted its fair share of controversy and whose fate is now surrounded by question marks is the sukuk law that was approved by the Shura Council last May. In a similar way to the Suez Canal Project, the sukuk law had faced criticisms that it could open the door to selling public assets to foreigners. However, government officials had stressed the advantages of the law at the time, with Ahmed al-Naggar, the former finance minister's advisor on sukuk, saying that the bonds could bring in some US$10-15 billion annually. Egypt was supposed to see its first sukuk bonds put on the market following the holy month of Ramadan, according to al-Naggar. “Sukuk bonds are a financial instrument that is available in many countries and could help in economic development,” said Mohammed Moeet, vice-chairman of the Egyptian Financial Supervisory Authority. He added that the sukuk law should be respected and should not be cancelled, even if the state decided to amend controversial items. Head of the Egyptian Stock Exchange Atef Yassin agreed with Moeet, saying that Egypt would not be the first country to issue sukuk bonds and that these bonds had a huge market worldwide, especially in the Islamic world. However, Yassin ruled out the possibility that the new government would consider introducing the law according to the original timeframe, due to the shortened transitional period that is set to last for only six months. A more pressing issue facing the new government is Egypt's 2013/14 budget, about which many experts have had reservations, saying that it does not meet the demands of the 25 January Revolution and that it could threaten increased poverty and unemployment. Experts say that allocations for housing for limited-income families have been cut, and increases in the health and education allocations have not been satisfactory. One legal expert, speaking on condition of anonymity, said that the new constitutional declaration gave the interim president the right to legislate after consulting the cabinet. “As a result, the president could amend some articles in the budget,” he said. In a bid to address the country's untenable energy subsidies that add significantly to the budget deficit, the former government had aimed at phasing out such subsidies for heavy industries, such as fertiliser and cement companies. Wael Zeyada, head of research at EFG Hermes, believes that addressing the energy subsidies is essential for any government that wants to see economic development in Egypt, adding that without measures taken to address the problem the budget deficit will increase and the state will have to borrow to bridge its financing gap. According to the new budget, Egypt needs some US$20 billion to bridge the state's financing gap, and since Morsi's ouster, the United Arab Emirates, Saudi Arabia and Kuwait have promised US$12 billion in cash, loans and fuel. Meanwhile, negotiations with the International Monetary Fund (IMF) over a US$4.8 billion to Egypt have been temporarily suspended amid ongoing political changes in the country.
