The era of Hosni Mubarak is finally over in Egypt as the President promises not to stand in September elections, and agrees to a review of qualifications for presidential candidacy, opening the way to the Muslim Brotherhood, and Muhammad ElBaradei to challenge his party NDP candidates. His suspected plan to replace himself with his son Gamal Mubarak is almost surely discarded by now, with Mr. Mubarak`s main concern limited to saving his legacy from being trampled by the hectic events of the past two weeks or so. Overall, it looks like the Egyptian president`s main concern is protecting his name in the face history`s verdict, and his honor from being smeared with the title of a fugitive president. Perhaps he may escape the latter, but if he does, he will have to be content with being the jailed president. 

The president`s rule has not been a complete failure. The fact that he has been able to protect the country from becoming embroiled in the dangerous Israeli-Palestinian issue is perhaps regarded as one of his major achievements by Western commentators, while the growth rate of the country under his leadership has not been lacklustre. But in both cases, the masses were disillusioned by the forceful imposition of the President`s vision, and were unconvinced that the President`s strategy represented the only viable, and the most profitable course for the country, and especially the poorer segments of society.

Hosni Mubarak has been one of the cornerstones of U.S. Policy in the region, as he remained highly predictable and friendly to the U.S. regardless of great changes and political turmoil. The collapse of the Soviet Union, the two Gulf Wars, the rise of China, and numerous conflicts in Palestine-Israel did not change the basic policy direction of Egypt, which has been maintaining a pro-Western, and almost pro-Israel stance since the days of the assassinated Anwar Sadat. Now that the President`s term is over, it is unclear whether this rosy alliance can be salvaged, especially because it has hardly any basis at all at the level of the electorate who are far more sympathetic to Arab causes than their leaders have been. At the same time, one must not overemphasize the nationalism of the impoverished Egyptian mass, as it is reported that almost half of the country live on around $2 per day. The main focus, therefore, must always be economics and survival for Egypt`s voters, provided that no Islamist takeover occurs.

Media sources have been worried about the latter for a while, but we don`t think there is a credible probability of it occurring, especially because the spirit of the times in the Arab World is against such a backward movement. Democracy is opposed only by a tiny group of radicals and fundamentalists who have little connection to the people at large, and from the highly influential Azhar University, to the main opposition movements in the country, the Muslim Brotherhood, popular rule remains by far the most common and sincere wish of political groupings. This is not surprising, since no segment of the population has been insulated from the arbitrary brutality of the Mubarak regime, and one can almost feel a sense of shared destiny among political actors as they confront the last convulsions of the system.

Markets have been mixed today, with Asia and Europe unsure about which direction to take in the face conflicting news and reports from the economic and political fields. This should be the case for a while, as the exit of Egypt`s president promises a great deal of turmoil for the region in even the most optimistic scenario, posing significant risks for commodity prices and interest rates. Leaders in the region are aware of this too, and just yesterday Jordan`s King Abdullah sacked his cabinet, Basshar Assad in Syria promised new reforms, and the Saudi regime took similar steps in order to avoid a repeat of Egypt`s events in their country. There is no shortage of candidates for the next leg of turmoil, and we`ll continue to monitor events in this exceedingly critical part of the world, and its repercussions in the wider global markets for our readers throughout the year.