Egypt The Mirage

A collection of “inspiring” quotes from some of Egypt’s biggest international investors have been making the rounds on social media:

“Advice: Stop whining. The future will come down to the private sector. … This is a democracy with an enormous amount of legitimacy. I know what an illegitimate government looks like and smells like.” —Timothy Collins, CEO, Ripplewood Advisors

“You don’t commit to a $12 billion investment unless you believe in what is going on in the country.” —Bob Dudley, Group CEO, BP

“Everyone decides on which risks he’ll bite into, and in Egypt, I’ll bite into any risk, any day.” —Emaar Chairman Mohamed Alabbar

“I wish we had as many opportunities in Europe as we have in Egypt” —Joe Kaeser, President and CEO, Siemens

Rebel Economy cannot verify whether these are real quotes or made-up by people who got a bit too much sun in Sharm.

It is an impressive display of support and a vote of confidence for Egypt, the “democracy.” But as Egypt basks in the financial and political support of the world, as deal after deal is signed, and $138 billion dollars of investment is secured for the country in just a couple of days, the truth behind this high-profile economic conference in Sharm El Sheikh is a little harder to swallow.

The floor-to-ceiling glossy signage declaring, somewhat ambiguously, “Egypt the Future”, ignores the fact that Egypt needs to do a lot more than ask for investment. The tourism industry, which at one point contributed over 10% of GDP, is in a pathetic state: the number of visitors last year was a third below the level of 2010.

But more critically, it is the bones of the country that are creaking. Egypt needs power, proper roads, better and more schools, hospitals and housing. Jobs are scarce and the ones available are low quality and pay below what is considered an internationally acceptable minimum wage.

The population is predicted to grow to 116 million by 2030. Egypt’s president, Abdel Fatah El Sisi, wants to ditch the 1000-year-old Cairo, for a brand-spanking new $45 billion, Dubai-style capital in the desert. But we all know that’s pie in the sky.

So what about all these deals? The Gulf has promised $12 billion to Egypt. The reality is that the country has spent $12 billion several times over in the last three to four years. What is another $12 billion going to do but keep Egypt operating weakly at a unsatisfactory level.

But most importantly, most of the companies investing are ones already in the country (BP, Siemens, ENI, etc), and all these Gulf companies (Masdar, Emaar etc) are merely doing as their government’s tell them – “Keep the Brotherhood out.’

Officials, business people and Egyptians are genuinely excited for the future, there’s no denying judging by the inordinate number of Sisi Selfies, and exclamation marks punctuating lofty ideals about the country. But the multi-billion dollar PR push to showcase the North African nation as a place worth pumping money into betrays the truth, not just because of the country’s inescapable human rights atrocities but because Egypt is lacking the bread (literally) and butter infrastructure it needs to survive.

Sissi said so himself in this bizarre interview with the Washington Post’s Lally Weymouth where he talks about himself in the third person (He said, “Sissi reflects the popular will of Egyptians.”).  He tells Weymouth that the country needs $130 million subsidies to support 90 million people:

Where can we get the money to provide for these needs? Who would come to invest in this country if it is not stable? We have an overwhelming unemployment rate of 13 percent.

So what is his response? More money of course. Another $300 billion to be exact. This economic conference is not The Future, it is a mirage that shines the light away from the population’s plight, where thousands are wrongfully imprisoned and thousands more are still hungry, with no access to basic resources and education.

One person asked on Twitter: Does investing in an economy of a potentially unstable and authoritarian regime make business sense? It’s not business anymore. It’s politics when it comes to the Gulf and it’s cautious agreements, with disclaimers as long as scrolls for the companies involved.




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