Egypt's problematic presidency

What began as a fight for freedom and democracy has resulted in a severe economic crisis. This week, Egyptians are going to the polls to elect a president for the second time in the three years since long-term ruler Hosni Mubarak was toppled. And if the prognoses are correct, Abdel Fattah el-Sissi is set to become Egypt's new head of state.

"His main theme is improving the security situation," says Egypt expert Stephan Roll from the German Institute for International and Security Affairs (SWP) in Berlin. As a result, el-Sissi's election campaign focused on the fight against Islamists, especially the Muslim Brotherhood.

The former army chief used the uprising against ex-president Mohammed Morsi to sideline the Muslim Brotherhood leader in July 2013, clearing the way for himself to become president. Attacks by suspected Islamists now occur on an almost a daily basis in Egypt. Sissi supporters are confident that he will put an end to the unrest.

Saving the economy

For the majority of Egyptians, however, the more urgent issue is the disastrous state of the economy. They expect the president to bring about a rapid improvement in living conditions.

Egypt's coffers are empty; its budget deficit is more than 14 percent of the country's gross domestic product and unemployment stands at around 13 percent. It is particularly drastic among the under-30s, who account for almost a third of the unemployment figures an all-time high.

This is the backdrop against which whoever takes office will have to secure his power. But how does el-Sissi plan to combat the poverty of the people and the continued bankruptcy of the state? He has promised that, if he wins, he will improve the overall situation within two years, but he has not divulged how exactly this will come to pass.

"He's always very vague," says Stephan Roll from the SWP. Savings must be made and taxes must be raised, el-Sissi has said. The question is how that can be done when it is estimated that every fourth Egyptian lives below the poverty line.

The power of the military

"If this man becomes president, Egypt will not experience a radical economic reform, because such a reform could not ignore the army, with all its many activities," says Josef Janning, an expert on international relations with the German Council on Foreign Relations (DGAP).

This presents el-Sissi, as the former head of the army, with a dilemma. Regardless of whether he was put forward as the generals' candidate or ran of his own accord, he still needs the support of the powerful Egyptian military. The generals have their very own economic empire, and various estimates say that it accounts for around 40 percent of the country's entire economy.

The army's businesses are not controlled by the state in any way. They are tax-exempt, and even subsidized. Furthermore, the generals' empire provides jobs to large sections of society. And as they are primarily interested in their own economic advantage, they have no interest in promoting reforms that will require them to hand over some of their cash.

Avoiding difficult topics

Subsidies are another obstacle to establishing economic stability. Bread and fuel are hugely subsidized to keep the prices down, but for a long time now this has in fact been unsustainable for the Egyptian economy. Yet anyone who attempts to abolish these subsidies will face a storm of protest. So far, both Abdel Fattah el-Sissi and his opponent, Hamdien Sabahi, have avoided commenting on this issue.

Instead, el-Sissi announced vague gigantic development projects which he says will exploit new areas for tourism over the next ten years. There are extremely high costs associated with these projects, but it is not clear how they will be financed.

Stephan Roll says that with this announcement el-Sissi has "above all, the interests of his most important groups of supporters firmly in his sights". In addition to the military, these include the Gulf states. Egypt would have gone bankrupt long ago had it not been for cash injections from the United Arab Emirates, Saudi Arabia and Kuwait. In the summer of 2013, the three Gulf monarchies approved financial aid of 12 billion US dollars, and earlier this month el-Sissi said that aid received from the Gulf now totaled 20 billion dollars.

Money from abroad

Officially, the Gulf states have supplied this money unconditionally. However, they have economic interests in Egypt, and supplying it with billions of dollars of financial aid is sure to facilitate future investments in the Egyptian market. In addition, the Gulf states appreciate el-Sissi's hardline approach to dealing with the Muslim Brotherhood, whom they, too, consider a threat in their own countries.

But the money from the Gulf States will not be enough to improve living conditions for the population - and a new president cannot plan his long-term budget on the assumption that he will receive payments from abroad.

"I'm afraid that el-Sissi is not going to get the economic situation under control. The only answer he has will be to extend the security apparatus in order to eliminate protest," says Roll. He adds that el-Sissi has already made initial provisions for this by stepping up state repression over the past few months. He has banned the Muslim Brotherhood, the only powerful opposition force, and is arresting everyone associated with it.