Egypt swears in 10 new ministers in shuffle

CAIRO (AP) -- Egypt's government swore in 10 new ministers on Sunday in a Cabinet shake-up aimed at improving the government's handling of the country's struggling economy.

The top posts that changed hands were the ministers of interior, which handles the police, and finance. Also included in the shuffle are the ministries of civil aviation, communication and information technology, environment and electricity. A new minister for legal and parliamentary affairs was named after the former had resigned.

Three of the new ministers hail from President Mohammed Morsi's Muslim Brotherhood, the spokesman for the group's associated political party, Ahmed Shabee, told The Associated Press. The Brotherhood members will head the portfolios of transportation, local development and supply and interior trade.

This brings the total number of Brotherhood Cabinet ministers to eight. Brotherhood members already hold the ministerial posts of information, higher education, housing, labor and youth.

It is the first major Cabinet shake-up since Morsi appointed Hesham Kandil as his prime minister and named a new government in August.

Newly sworn-in Interior Minister Mohammed Ibrahim was formerly in charge of prisons for three months and prior to that was director of security in the province of Assiut, which has a large Coptic Christian population and has also been home to a number of militant groups including al-Takfir wa al-Higra and al-Gamaa al-Islamiya before the latter gave up arms.

Meanwhile, the finance ministry changed hands in the midst of talks with international lenders, including the International Monetary Fund. The new minister is El-Morsi Hegazy. The state media did not provide background on him, but he replaces Mumtaz el-Said who was first appointed by the country's transitional military rulers and widely viewed as being at oFdds with the Brotherhood.

Morsi met with the new ministers after their swearing in at the presidential palace in Cairo where they discussed ways to revive tourism and attract foreign investors, a presidential official said, speaking on condition of anonymity because he was not authorized to speak to media.

Egypt has requested a $4.8 billion loan from the IMF, saying the funds are needed to bolster confidence in the country's ailing economy and attract foreign investors again.

Officials have said that the country's budget deficit is likely to reach 200 billion Egyptian pounds ($31.5 billion) by mid-2013. The nation's foreign currency reserves have dropped by more than half from $36 billion before the January 2011 uprising to around $15 billion, a figure Egypt's central bank says represents a "critical minimum" level.

An upswing of political turmoil in the past two months that led to deadly clashes over the constitution further affected major foreign currency earners, such as tourism and foreign investment. The unrest led to a rush on dollars by worried residents and spurned a devaluation of the Egyptian pound, which lost nearly four percent of its value against the dollar over the past two weeks. The upheaval also pushed back IMF loan talks for several weeks.

The implementation of austerity measures, much of which is believed to be linked to conditions attached to the IMF loan, was also delayed last month due to the political situation.

The opposition, a coalition of liberal, secular-leaning, and leftist groups, has said that any Cabinet shake-up that excludes replacing Prime Minister Hesham Kandil falls short of what is needed. They say he is weak and not qualified to hold the post.

Kandil's government is expected to announce tax hikes and cuts in subsidies soon. Talk of restructuring the current system is sensitive in a nation where half of its 85 million people live just at or below the poverty line of $2 per person a day.

An IMF statement said that Director of the Middle East and Central Asia Department Masood Ahmed will meet with Egyptian authorities in Cairo on Monday.

The statement said the purpose of the visit is "to discuss with the authorities the most recent economic developments, their policy plans for addressing Egypt's economic and financial challenges, and possible IMF support for Egypt in facing these challenges."