- By David KennerDavid Kenner is the Middle East editor at Foreign Policy. He is based in Beirut, Lebanon, and has been with FP since 2009 (a long time, he knows). He worked for FP previously in Cairo, where he covered the early days of the Arab Spring, and before that in Washington. He has attended Georgetown University and the American University of Beirut and has reported from Libya, Egypt, Gaza, Turkey, Lebanon, and Iraq.
The big news in Cairo is that a long-awaited cabinet reshuffle has finally become a reality. President Mohamed Morsy swore in nine new ministers today in a move that increases the Muslim Brotherhood’s representation in the government. The shakeup comes as Egypt is deep in talks with the International Monetary Fund (IMF) about a $4.8 billion loan intended to help the country jumpstart its stagnant economy.
The IMF talks mean that the replacement of Egypt’s finance minister is the most important change to come out of the reshuffle. The new finance minister is Fayyad Abdel Moneim, who previously worked as an economics professor at al-Azhar University, the oldest Sunni Muslim educational institution in the world.
Abdel Moneim, however, may not have a great deal of experience cutting deals with the IMF. According to his biography — published on the prospectus of an Islamic capital holding where he served as sharia advisor — Abdel Moneim has made his career entirely in the insular world of Islamic finance. He received his master’s degree and Ph.D. from al-Azhar University — his master’s thesis tackled the issue of how the money supply should be organized in Islamic thought, while his Ph.D. thesis addressed the performance of Islamic banks in Egypt.
The new finance minister parlayed this knowledge of Islamic finance into a successful career in the field. He was the manager of the Islamic Research Center in Cairo’s International Islamic Investment and Development Bank, and a consultant to numerous Islamic banking enterprises. He also conducted research "on the international economic crises from an Islamic economic perspective," as well as "the economic roles of the Islamic country in the Prophet’s and major eras."
A strict interpretation of sharia forbids paying interest or engaging in other activities that form the basis for the modern banking system — Islamic finance is an effort to align Islamic law with today’s investment practices. Sharia-compliant financial products boomed in the 2000s, and Islamic finance assets hit $1.3 trillion in 2011. The growth may be impressive, but Islamic finance is still a niche field — the Islamic bond market, for instance, represents only 0.1 percent of the global bond market.
The IMF has studied Islamic finance in the past, and some of Egypt’s ultra-conservative Salafist leaders have made their peace with the prospect of an international loan. A deal, therefore, is still likely possible — and a government spokesman was quick to argue that "[t]here will be no impact on the IMF discussions," according to Bloomberg. But with negotiations having already dragged out for the entirety of Morsy’s term, that may not be good enough.