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Egypt constitution no remedy for economic woes

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CAIRO, Dec 23 – The adoption of a divisive new constitution in Egypt looks unlikely to solve growing problems for the nation’s economy, which has been limping along ever since the 2011 revolution that ousted Hosni Mubarak.

Climbing debt, plunging tourism revenue, a tottering currency, fleeing investors and the hesistancy of creditors to step in to help President Mohamed Morsi’s Islamist-dominated government are adding to a sense of crisis.

“I’m more worried about the economic future of the country today than I was just a few weeks ago,” Angus Blair, a veteran financial analyst and head of the Signet Institute think-tank in Cairo, told AFP.

“Voting yes in the constitutional referendum will not stop the economic malaise,” he said.

Egypt’s opposition is showing no signs of letting up its pressure on Morsi’s government, prolonging a month-long political confrontation that has led to deadlock on urgent decisions.

Topping those is a $4.8-billion loan Egypt had been seeking from the International Monetary Fund, needed to stave off what analysts feared could be an unmanaged currency collapse within the next three to four months.

That is the estimate of how long the central bank has before it has burned through its remaining foreign reserves, which have more than halved in the past two years to less than $15 billion.

An IMF loan was put on hold this month, at the same time as Morsi went back on tax hikes on alcohol, tobacco, steel and cement that were meant to underpin agreement on the credit.

That has caused many investors to rethink plans for Egypt.

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