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IN THE SPRING OF 2002, THEN-LAWMAKER Mohamed Morsi took a visiting journalist on a tour of the university in his home district in the Nile Delta. Morsi was a professor of engineering there, and he lamented the widening gulf between the demands of Egypt’s youth and the economy’s ability to meet them. “When these students graduate,” he asked, gesturing to the young people around him, “where will they go? We have 200,000 graduates in the market, and there are no jobs.”

A decade later that number has risen to 750,000 and Morsi, now Egypt’s president, has done little to salve his country’s ailing economy. Instead, the veteran Muslim Brotherhood leader has polarized the nation by indulging his Islamist base while antagonizing secularists and liberals. He has aggrandized power at the expense of a dissolved Parliament and signaled ambitions to control the judiciary, prompting critics to compare him with Hosni Mubarak, the dictator toppled by a revolution two years ago. Morsi has also sowed confusion with ad hoc policy prescriptions and cabinet appointments, which analysts say have complicated talks with the International Monetary Fund for a $4.8 billion bailout package. While the two sides haggle, the country’s foreign exchange reserves have slipped to critical levels and the Egyptian pound has declined, to 6.51 to the dollar.

Discontent erupted in a wave of protests late last month, on the second anniversary of the revolution, that left dozens dead and prompted Morsi to declare a state of emergency in the provinces of Port Said, Ismaïlia and Suez, which straddle the Suez Canal.

“People of talent do not want to serve in this government,” says Angus Blair, president of Signet Institute, a Cairo think tank. “They see many negative factors and few positive ones. A lot of wealthy people have taken money offshore, and they’re worried about the fact that the government does not have a viable economic plan.”

The IMF expects Egypt’s economy to grow by 3 percent this year, up from 1.5 percent in 2012 but far short of the pace needed to reduce a 13 percent unemployment rate. More than three quarters of the jobless are between the ages of 15 and 29. In December, Standard & Poor’s cut the country’s long-term debt rating to B– from B and cautioned that another downgrade was possible without a comprehensive and compelling economic reform effort by Cairo.