September 8, 2010 / 11:39 AM / 9 years ago

CORRECTED - UPDATE 2-Key Egypt reformer to leave cabinet for WBank

* Mohieldin was core part of economic reforming team

* Possible replacements include financial regulator head

* Successor seen needing to court investors from Asia, Gulf

(Corrects in last paragraph to make clear Mohieldin had planned to run for parliament but is not a member now)

By Patrick Werr

CAIRO, Sept 8 (Reuters) - Egyptian Investment Minister Mahmoud Mohieldin, a prominent economic liberaliser, will resign from the government to take up a senior post at the World Bank beginning next month, the cabinet said on Wednesday.

Speculation he would join the World Bank has already sparked media discussion about possible successors for his ministerial portfolio, seen as vital to an economic team that has pushed through controversial free market reforms since 2004.

Mohieldin told the Arabic satellite channel al-Arabiya that he was nominated to one of three managing director positions that report directly to World Bank President Robert Zoellick.

“Several candidates are being studied (for the ministerial post) by the prime minister, so that he can present the names at the appropriate time to the (Egyptian) president,” he said.

The state-run egynews.net website said possible nominees to head the ministry included Ziad Bahaa el-Din, a fellow supporter of liberalisation who works under Mohieldin as chairman of Egypt’s financial regulatory authority.

“His successor will have to work hard to court foreign investment from fellow emerging market countries, particularly those in East Asia and the Gulf,” said EFG-Hermes strategist Simon Kitchen, adding tens of billions of dollars of foreign direct investment had flowed into Egypt under Mohieldin’s watch.

Cabinet spokesman Magdy Rady said Mohieldin would leave the cabinet on taking up the World Bank assignment on Oct. 4. He said the World Bank’s board approved the appointment on Tuesday and Egypt replied with its approval the same day.

Mohieldin is one of three leading ministers who spearheaded liberal measures taken by the government of Prime Minister Ahmed Nazif. These included the sale of major state assets and sharp reductions in income taxes and tariffs.

Investors will be watching closely to see who will replace Mohieldin, who is close to President Hosni Mubarak’s son Gamal.

Although both father and son deny any succession plans, Gamal Mubarak, 46, is considered a top contender to succeed as president if his father, 82, chooses not to run in 2011.

Mohieldin is also expected to scrap his plans to seek a seat in parliament for the ruling National Democratic Party in an election due in November. (Additional reporting by Ashraf Badr and Yasmine Saleh; editing by Toby Chopra)

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