Sunday, April 01, 2012

The carousel of elites in Egypt

An interesting article from the Egypt Independent ("The Brotherhood's businessmen") discusses the candidacy for the presidential elections of one of the leaders of the Muslim Brotherhood, Khairat al-Shater.

The Brotherhood hails free-market capitalism; wealthy businessmen whose economic agenda embraces privatization and foreign investment, the writer said, lead its party. The Brotherhood does not espouse the idea of redistribution of wealth, preferring charity instead as a means of combating poverty.

The article adds that Khairat al-Shater, arguably the most powerful man in the Muslim Brotherhood, is a multimillionaire tycoon whose financial interests extend into several fields of business. “A strong advocate of privatization, Al-Shater is one of a cadre of Muslim Brotherhood businessmen who helped finance the Brotherhood’s Freedom and Justice Party’s impressive electoral victory this winter and is now crafting the FJP's economic agenda,” the article reads.

After Egypt got rid of the National Democratic Party’s cabinet of businessmen, it seems we are currently witnessing another illegitimate marriage between capital and power. Paradoxically, Mubarak’s son Gamal — who is currently facing trial over several charges, including corruption — and Shater were both bankers in the past.

In fact, the military trial of Brotherhood members in 2006 to 2007 was only the result of underlying competition between two groups that controlled capital in Egypt, namely between Gamal’s group and the Brotherhood. All of those who stood trial were leading businessmen in the Brotherhood, the most important of whom was Khairat al-Shater.

Consequently, more than 70 companies owned by the Brotherhood were shut down. The trial was in fact a settlement of accounts between two capitalist rivals, one of whom was forced to leave power only to be replaced by the other.

The Brotherhood’s projects and the extent to which it has penetrated Egypt’s economic structure remains a secret, like much of the Brotherhood’s affairs. It is impossible to determine the number of companies it owns or how much the group makes every year. We have, however, a list of its companies that were confiscated during the 2007 military trial. A quick look at the trial gives us much insight into the Brotherhood’s business.

Seventy-two Brotherhood-owned companies were confiscated as a result of the trials. They were rentier-based and primarily produced consumer products that targeted upper and middle classes.

This is the least beneficial form of economic activity as opposed to building factories or inventing computer software.

Like the NDP’s businessmen, the Brotherhood’s businessmen registered their projects under the names of their wives or sons-in-law so they would be hard to track down. Shater is one example. The branches of the Shater’s shops are located in the most luxurious shopping malls in Cairo. One of the most famous stores is a furniture shop named Istiqbal, which sells couches for around LE6000, when many young men need a similar amount to finance their marriage. This probably explains the Brotherhood’s uneasiness when dealing with the revolution’s socio-economic demands.

It looks like Egypt is one of those classical cases where one part of the elite is replaced by another part while for much of the rest of the population there isn't much change. Plus ça change, plus c'est la même chose or as it was expressed in Il Gattopardo: If we want things to stay as they are, things will have to change.

But Washington gets what it wants: a consistent sticking to the free market dogma no matter how harmful it is for the country.

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