A PECULIARLY EGYPTIAN PROBLEM
By Glenn M. Stewart
Much to many people’s surprise, the Egyptian government is putting Hosni Mubarak on trial for corruption. Unfortunately, I have to take a cynical view of this situation and I conclude that this trial is being staged as a sop by the ruling military council to appease the Egyptian people rather than a sign of the emergence of the rule of law in Egypt.
From what I have experienced in Egypt attempting to do business there, corruption is rife at all levels of society. At one point I was sent on a fool’s errand to Cairo by a Kuwaiti businessman who owned some land near the airport in Heliopolis that was zoned as agricultural land. He wanted to get the land rezoned so that he could build a waterslide park on it. To get this done it needed the approval of the Minister of Agriculture, The Minister of Tourism and because of the proximity of the land to the airport, The Minister of Transportation. I was accompanied on this mission to obtain these approvals by one of the Kuwaiti’s staff members.
When an American banker and a Kuwaiti showed up in Cairo together, every door in the city opened to us. The Egyptians saw the potential combination of Kuwaiti money and American technocracy for this project as a goldmine to be milked for all it was worth. However, a major problem with doing business in Egypt is that corruption is not contained to the highest levels. It is endemic throughout the society. One of the reasons that the Egyptian economy has never expanded or grown particularly well is a result of the dead weight of corruption that attaches itself to all business endeavors that are launched there.
Too many people attempt to write themselves into a position to take a piece out of any project that comes along. Foreigners trying to start businesses in Egypt can often get buried by the petty bribery and corruption that goes along with the cumbersome bureaucratic red tape in the country. One of the tricks to getting a project off the ground in Egypt that isn’t going to get buried by corruption at the lower or mid levels of the bureaucracy is to concentrate the bribes at the top. That was the job my Kuwaiti compatriot had.
However, the amount of money that each of the people who had approval power over this potential project wanted, made the economics of the project untenable.Â Forget about going by the book and conforming to published regulations that give an approximation of a rule of law in the country. This is typical and it is not a new phenomena. The degree of corruption in Egypt has strangled its economic growth. In 1956 for example the GDP of Egypt was equal to that of Korea. Today Korea’s GDP is 4 times the GDP of Egypt.
When you combine the corruption in the society as a whole with the untenable population growth rates it is no wonder that large sections of the society are frustrated, disaffected and angry. But trying Mubarak and his sons is a political show for the masses and not a movement towards the establishment of the rule of law in some emerging democracy. That is a fantasy. Mubarak is one of their own and this step is recognition by the generals that they need to do something to legitimize themselves in the eyes of the masses, but creating a society based on the rule of law, no. Egypt has always been ruled by pharaohs and it always will be.
Glenn M. Stewart is a renowned expert on Middle Eastern affairs and business. a graduate of Oxford University, Glenn M.Stewart holds an advanced degree in Islamic History and Arabic and lived in the Middle East for 27 years. A successful entrepreneur and businessman, Stewart has a unique insight into this critical and important area of the world.
If you would like to see my other writing, please visit www.glennmstewart.com
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