Is a public finance professor who specialises in Islamic finance really the CV that jumps out at you for Egypt’s critical post of finance minister?
But to President Mohammed Morsi, the unknown Cairo University professor El Morsi El Sayed Hegazy was the right choice to replace Mumtaz El Saeed, an advocate of the $4.8 billion International Monetary Fund loan. El Saeed had been one of a few ministers to retain his position since his appointment to Kamal Ganzouri’s interim government in December 2011.
Hegazy, whose political experience appears to have only just started, may find it difficult to reconcile his Islamic finance specialism with the modern economic framework needed to push Egypt out of its economic lull.
In the book The Long Divergence: How Islamic Law Held Back the Middle East, author Timur Kuran argues that the real cause of underdevelopment and economic stagnation in the Middle East is the Sharia, or Islamic law. The author argues that while other countries adapted their philosophies and approach to economy according to modern times, the Middle East was very late in adopting key institutions of modern economy.
The law has not evolved and adjusted to the new world of business and finance. It’s not an impassioned critique of Islamic law but more of a reflection of how Sharia essentially lacks innovation and does not fit in to the 21st Century.
However, there is a catch to the idea as Ziauddun Sardar, who reviewed the book, writes in The Independent:
It is based on the assumption that Western financial institutions, and self-serving corporations, are the best possible model for development. Given the havoc that these institutions have caused in recent times, and the fact that injustice and obscene wealth is integral to their make-up, I think it is an assumption too far.
He adds, though “Kuran’s thesis is contentious; it does provide us with an incentive to reformulate Islamic law. It is an excellent starting-point for a debate long overdue.”
The question(s) I have is: Will Mr Hegazy be open to debate or will his thought process be driven by his boss (Morsi and the Muslim Brotherhood)?
The Morsi administration’s biggest failing has been to lead the Islamists rather than the country. There is no space for such polarization in a modern economic framework. Islamic finance is not going to save Egypt’s economy but can play a part in redefining the country’s aims – a focus on the middle and lower class rather than the rich, and a method of relieving the millions who are suspicious of conventional banks and their high interest rates.
If Egypt’s new finance minister lasts long enough to make any critical decisions, let’s hope he can think past religion to the nation.