Analysis: Egypt's Islamists Tighten Grip on Power

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An election worker shows his colleagues an invalid ballot at the end of the second round of a referendum on a disputed constitution drafted by Islamist supporters of president Mohammed Morsi on Dec. 22, 2012.

Associated Press + More

More serious challenges to Morsi's leadership may lie ahead. The millions who voted "yes" for the constitution are hoping for stability, jobs and business opportunities that may be slow in coming.

The president will soon have to introduce painful economic reforms to salvage a deal with the International Monetary Fund for a $4.8 billion loan that was delayed at Egypt's request because of the political turmoil of the past month.

A glimpse of what may be in store on that front emerged Sunday after Prime Minister Hesham Knadil met with the Cabinet's economic team.

"The current financial and economic situation is in grave danger," said Cabinet spokesman Alaa el-Hadidy. "Leaving things the way they are is not something we can afford to do," he said, hinting at the necessity of structural reforms. These will include price and tax hikes as well as lifting subsidies on fuel.

Morsi recently rescinded a package of price and tax hikes hours after he decreed them, saying he did not want to burden poor Egyptians with a higher cost of living. But economists say it is only a question of time before the package is re-introduced.

With foreign currency reserves around half of what they were two years ago and tourism revenues hard hit by resurgent political turmoil, the economy has been in a free-fall for months. Deepening the nation's economic plight is the seemingly endless series of strikes and demands for salary increases and better benefits.

Price hikes, warn many analysts, could prove to be the last straw for the nearly half of Egypt's 85 million people who live around the poverty line of surviving on $2 a day.

Many Egyptians want to see Morsi's government moving aggressively to tackle the nation's pressing problems such as security and reviving the vital tourism sector.

"We want factories to work again so we can find jobs here instead of traveling abroad to find work," said Mohammed Sweilam, a metal worker who spent seven years working in oil-rich Saudi Arabia. "When stability prevails, I will consider coming home to stay. Let us give the Brotherhood a chance. We owe them this," he said as he waited in line on Saturday to cast his vote in the town of El-Saf in Cairo's neighboring Giza province.

Another pressing issue for the new legislators may be the anti-Islamist editorial policy of the independent media, particularly privately owned TV networks whose political talk shows are watched nightly by millions and shape public perceptions.

Already, Morsi's allies have been filing numerous complaints against media celebrities who criticize or mock the president and the Brotherhood, including hosts of satirical shows and newspaper columnists. Several of them are on trial or being investigated on charges of "insulting" the president or undermining national security.

Since Morsi took office nearly six months ago, Brotherhood members or sympathizers have been named editors of most of the roughly 50 state-owned publications. The powerful information minister is a prominent Brotherhood leader.

A recent court ruling also shut down a TV network whose owner is a harsh critic of Morsi. Salafis who support Morsi have been staging a sit-in outside a media complex in Cairo for weeks to protest against what they say is the anti-Islamist policies of private TV networks housed there.

The constitutional crisis has re-energized and united the once-fractured opposition, turning it into a force to be reckoned with in the fight over Egypt's future. In a sign of its newly found strength, the National Salvation Front, the main opposition group, on Sunday scornfully rejected a Brotherhood invitation for dialogue.

The opposition has dismissed the constitution as the fruition of an illegitimate process.

The low turnout for the referendum — 32 percent of the more than 51 million eligible voters, or 20 percent of Egypt's 85 million people, according to unofficial results — has shown the limitations Islamists face in marketing an Islamic state in a nation still largely loyal to secular traditions.