Cut through the analysis, theories and counter theories, and one fact is undisputable: Egypt has a democratically elected president, and that's reason enough to have hope.
Sure, many voters were not roused by either of the candidates that were in the running; the elections were held under the shadow of a technically dissolved parliament and there were question marks over the real powers of the president. And, at every turn, the powerful Supreme Council of Armed Forces (SCAF) seemed to be managing the process.
But Muslim Brotherhood candidate Mohammed Morsi's election as the first democratically-chosen president in the history of Egypt, is certainly a milestone.
Even as many in Tahrir Square were savouring this moment, the stark reality of politics has brought to light the challenges facing the newly democratised country and its new president.
As Farouq Sultan, the head of Egypt's presidential election commission, read out his excruciatingly long ruling on the elections, the crowd gathered at Tahrir Square erupted when they realised Mohammed Morsi garnered 13,230,131, edging out former prime minister Ahmed Shafiq who secured 12,347,380 votes - a difference of a little over 880,000 votes.
While the election of Ahmed Shafiq, who represented Hosni Mubarak's regime would have been an insult to the revolution, it's important to remember that it is not a landslide victory for the Muslim Brotherhood's candidate.
"It is fair to say that more than a few Egyptians are comforted by Ahmed Shafiq's loss, if more than the win for Mursi," says James Petretta, Principal Analyst at risk management consultancy Maplecroft. "This is short-term comfort, however. For the terms of the new president are yet to be determined and may still be unduly controlled by the military establishment."
Mr. Morsi realises the distrust of Muslim Brotherhood from those who led a largely secular uprising to oust Hosni Mubarak.
Mohammed Morsi's spokesperson Gehad el Haddad told Al Jazeera, that religion will not be a major factor in decision-making: "There will be no religious dominance over political decisions whatsoever."
In his speech, Mr. Morsi was also at great pains at trying to unite the fractious political landscape.
"I will be a president for all Egyptians," Mr. Morsi said in a speech in Arabic. "I call on you, great people of Egypt ... to strengthen our national unity," he said, adding that national unity "is the only way out of these difficult times."
This promise will not sit well with many, as the perspective on values and just what 'protecting' would mean in practice differs widely between supporters of the Muslim Brotherhood and less conservative Egyptian Muslims and non-Muslim Egyptians, says Maplecroft's Petretta.
"Morsi's claim to be a uniter, not a divider, can therefore be seen as unsurprising political rhetoric - rhetoric which will be exceptionally challenging to put into action."
And even though Mr. Morsi has resigned from the Muslim Brotherhood's Freedom and Justice Party, many observers believe he remains a Brotherhood man through and through.
That's likely given that Muslim Brotherhood's preferred candidate was Khairat El-Shater, who was barred from competing in the election. And Mr. Morsi must thank his rise to the top job primarily due to the Brotherhood's enviable organization structure and ability to rouse its supporters, rather than Mr. Morsi's own personality, which did not inspire much excitement among voters.
Already the President is under the scanner. A new website morsimeter.com has already been set up to monitor whether Mr. Morsi lives up to his key pledges of resolving five key issues within the first 100 days of his election: security, traffic, bread, cleanliness and fuel.
The clock is already ticking for the President, which underlines the heavy burden of responsibility and scrutiny he faces from a very sceptical electorate.
A PRESIDENT WITHOUT POWERS?
Even before the presidential winner was announced, the army had clipped its power and ring-fenced key areas of security and its own budget to ensure that the new president's role was limited. Crucially, the new president will not be involved in writing the constitution
"The SCAF has made clear its intention to keep charge of all security affairs and institutions," says Petretta. "This will likely be codified through the new constitution. Even outside of legal parameters protecting the military and internal security apparatus any Brotherhood president will find it extraordinarily difficult to win the loyalty of the security forces who have long suspected the Brotherhood. Morsi has already indicated that he will keep the ministry of interior filled by a military official."
Significant uncertainty remains with regard to the political transition process, says ratings agency Standard & Poors' which put the country's long-term ratings on negative watch after Mr. Morsi was announced as the winner.
On June 14, the Supreme Constitutional Court (SCC) effectively dissolved parliament. The SCC ruled that the law governing the parliamentary elections was unconstitutional because party members had been allowed to contest seats in the lower house, which were to have been reserved for independents. The conclusion of the parliamentary elections in January 2012 had been an overwhelming majority vote for the Islamist parties. The Muslim Brotherhood, which won 47% of the parliamentary seats in January, is among those who do not accept the authority of the SCC's ruling.
By decree, the SCAF has extended its control to encompass legislative as well as military affairs until parliamentary elections are re-held, notes S&P, and said that a new parliament would be elected once a new constitution is passed. The SCAF has given itself a significant role in running the 100-member assembly, which is set to draft the country's new constitution.
"In our view, it is likely to attempt to curtail the president's powers," says S&P. "The timing of the announcement of the new constitution and the parliamentary elections is unclear. As such, the incoming president is likely to take office without a parliament being in place, and without a permanent constitution to define his powers and duties. We understand, however, that the president will be able to form and dismiss a government, and ratify and reject laws. Still, we believe the SCAF will remain in overall control."
ARMY'S ECONOMIC INTERESTS
While S&P was quick to put Egypt sovereign rating on negative watch, the Egyptian stock market responded with a strong 7.5% gain the next day. There are hopes that Muslim Brotherhood - which has typically favoured compromise - and the armed forces - which have significant economic interests - will make this work, if imperfectly.
Meanwhile, the economy continues to suffer. While the Central Bank's foreign exchange reserves increased in April and May by USD0.1-billion and USD0.3-billion, respectively, after falling on average by USD1.5-billion since the start of 2011.
"But the underlying balance of payments dynamics remains weak and reserves would have declined further if it was not for the USD1-billion in deposits parked at the CBE by the Saudi government and the issuance of FX denominated local government debt," says Cem Akyurek, an analyst at Deutsche Bank. "The current level of reserves corresponds to little over three months of imports and the trade balance continues to deteriorate while receipts from the Suez Canal are showing some weakness as of late."
The first quarter trade deficit is almost 60% larger than the comparable figure last year while there is a visible declining trend in canal receipts (lower by 20%). The price of 12 month EGP non-deliverable forward contracts have moved above 7.50, pricing in a devaluation of the EGP against the USD of more than 25%.
"Treasury bills are hovering in the 14.5% vicinity (11.7% at mid-2011)," wrote Akyurek in a note to clients. "It is clear that the current conditions remain very fragile and absent external financing from bilateral sources and the IMF, the outlook for the EGP and growth seems to be very negative."
S&P notes there is a 50% likelihood of a downgrade over the next three months, if political tensions escalate and the authorities are unable to address economic challenges or donors' and multilateral lending institutions' support dries up.
But the Egyptian market appears to have dismissed these fears for now, because they see hope, where others see delays to reforms.
Egypt's transition is far from over, and there are many twists and turns before all the legislative framework is in place before the country can function normally. There might well be setbacks - as there have been already - but Egypt remains a country that is moving forward, though not always in the direction everyone wants.
Seventeen months ago, Hosni Mubarak, sitting in his presidential offices, would not have imagined that a member of the Muslim Brotherhood he had jailed decades ago, will be taking his seat. If that's not progress, we don't know what is.
© alifarabia.com 2012
