Tag Archives: Orascom

Naguib Sawiris’s Fiefdom

Naguib Sawiris wants to plop hundreds and thousands of Syrian refugees on isolated islands for sale off the coast of Italy or Greece, and use this manpower to build a new country that he would own. Almost at the same time as the billionaire philanthropist was giving an interview to CNN, saying he “cannot just sit … and do nothing…and pretend it’s not my problem,” Egyptian security forces gunned down at least 12 tourists and guides in Egypt’s White Desert.  It was an accident, of course.

For a telecoms magnate worth approximately $3 billion, it is hard to dismiss Sawiris, especially as the UN call this the worst global refugee crisis since World War II. But the motive behind this plan is questionable when Sawiris’ agenda in one country – his home in Egypt – does not align with his interests elsewhere.

In Cairo, the Sawiris family, who control the Orascom conglomerate spanning telecommunications, construction, tourism, industries and technology, have turned a blind eye to the ruthless crackdown of their fellow countrymen and women, thousands of whom are political prisoners, in exchange for a favourable business environment, where big corporations are rewarded while small business is plagued by red tape. Egypt still ranks 112th on the World Bank’s ease-of-doing-business index, trailing behind Zambia and Swaziland. But the disappearing of people and the silencing of dissent is not a worthy cause.

Sawiris told CNN (taken from a rough transcript):

I would build temporary housing and temporary school and temporary hospital, you know. And then we will use these people and provide them jobs to build a new city on the island, to build this island, you know. Because this war is not going to end in weeks or in months. It may be years even.

The exodus of millions of Syrians is devastating, and perhaps solutions should be unconventional,  but is Sawiris the right person to be proposing and controlling such a project, when he is politically implicated in Egypt’s own disastrous government? And then there’s this fantastical promise of a haven for Syrians, that in reality, will become a massive refugee camp, lacking in infrastructure, on an island cut off from society. This is a temporary solution, at best, and at worst, it is an over-populated, under-served fiefdom controlled by a telecoms magnate. This is not how cities and societies are built.

 

 

 



The Return Of Egypt’s Elite

Those who were punished under Mohammed Morsi are getting their own back.

The chief executive of Egypt’s biggest construction company, Orascom Construction Industries, has signalled that the firm is “currently exploring its legal options” with regards to the $1 billion (EGP7.1 billion) tax settlement it agreed in April with the Morsi administration.

If the decision is overturned, it would be a symbolic victory for the business tycoons who have laid low since the end of the Mubarak era.

The signs are clear. Others who faced trial for more serious charges, including steel tycoon Ahmed Ezz, have been released and will likely live in luxury as they await retrial. Egypt’s prosecutor general has frozen an investigation panel sponsored by Morsi to probe crimes committed during the January 25 revolution and its aftermath.

And as the 85-year-old Mubarak was himself released from jail last month, the prospect of a return of the old guard has become all too real.

So what’s the background to the OCI case?

Nassef Sawiris, the head of OCI, was for much of this year entangled in a tax case with the former Islamist government, which claimed Orascom evaded taxes worth $2.1 billion after the sale of its cement business to French firm Lafarge in 2007.

OCI denied any wrongdoing. The government responded by placing a travel ban on both Nassef Sawiris and his father Onsi.

In April, the company finally agreed to repay $1 billion over a five-year period.

The Sawiris family struggled with the Islamist government, and Naguib Sawiris, Nassef’s brother, admitted he backed one of the biggest rebellions against Morsi, the Tamarod movement.

So what could happen now? 

With the change of government, OCI looks like it is trying to reverse the tax decision. After all, why would the company stick to a settlement that was made with a government the Sawiris family consider as totally illegitimate?

Nassef Sawiris, clearly very happy about the removal of Morsi, blamed the former Islamist government for everything from the stagnant tourism sector to the lack of investment. Now the interim government “must learn from the failures of the previous government,” he told me just days after Morsi was overthrown.

While there is no doubt that after just one year in office, Morsi did nothing to prevent a looming economic collapse, businessmen like Sawiris have seized an opportunity to blame Morsi for much more than he is responsible for.

Ultimately, it doesn’t matter whether Morsi is wholly to blame or note or even whether OCI really evaded taxes or not. What is clear is that Morsi is powerless and under the purview of the military, while others in the opposition are rising again.

So if other ongoing court cases and deals done under Mohammed Morsi are anything to go by, it’s likely OCI won’t have to pay a penny.

The ease at which these decisions could be reversed sets a dangerous precedent for the return of a powerful elite, who are able to influence politics as much as they do business.