Tycoon Sawiris: Repression, poor laws deter investment in Egypt
“I do not plan to invest in Egypt until there are changes to the legal system to support and protect investors,” Egyptian billionaire Samih Sawiris said
Egyptian billionaire construction tycoon Samih Sawiris said he has no plans for new investments in his country while political oppression and legal failings continue to obstruct economic revival.
The largest Arab state is in urgent need of major stakes from magnates like Sawiris, who could invest millions of his own fortune and in so doing mobilise much from foreign investors.
It will be hard for Egypt to recover otherwise, since aid from Gulf Arab allies will eventually dry up and growth forecasts of about 3 percent are far below the level needed to create enough jobs to keep up with rapid population growth.
New President Abdel Fattah al-Sisi has made security and the economy his top priorities, pledging to pursue a crackdown on the outlawed Muslim Brotherhood and seeking local and foreign investments to supplement billions in Gulf aid.
More than three years of political turmoil since the ouster of veteran autocrat Hosni Mubarak in 2011 has scared off investment and tourism in the most populous Arab country.
Sisi, who toppled elected President Mohammad Mursi last July and as army chief launched a campaign against his Brotherhood supporters, must act quickly to address economic grievances which helped bring down two presidents in the past three years.
Sawiris, a member of the Christian minority that comprises about 10 percent of Egypt’s population and largely backed Mursi’s removal, said he was hopeful about Sisi but called for an end to the state’s use of force and intimidation.
“If the oppression of innocents ... does not stop, the government will not take bold decisions to revive the economy and investment,” he told Aswat Masriya, a news website sponsored by the Thomson Reuters Foundation.
Leaders from Mursi’s year in office have been rounded up and prosecuted, sometimes in mass trials, with many sentenced to death. Courts this month sentenced three Al Jazeera journalists to seven years on charges including supporting the Brotherhood, stirring an international furore.
Several Mubarak-era ministers have also been jailed on corruption charges, including former finance minister Youssef Boutros Ghali and former trade minister Rachid Mohamed Rachid.
The primary barrier to investment in Egypt now is the fear generated by such tactics that prevent officials from taking bold decisions that might later land them in jail, Sawiris said in an interview earlier in June.
“I do not plan to invest in Egypt until there are changes to the legal system to support and protect investors,” he said.
“Investments will not come to Egypt unless the legal system which governs executive action is revised.”
The government approved a law in April preventing third parties from challenging contracts between the government and an investor, a tactic used by anti-corruption activists.
The new law was seen as a positive step for attracting investment, but Sawiris said other legal gaps mean officials remain afraid to take decisions, discouraging new investments.
Sawiris hails from a prominent family which controls the sprawling Orascom corporate empire. He runs Swiss-based Orascom Development Holding, which operates tourist resorts and real estate projects in Egypt and Europe.
His brothers, Nassef and Naguib, hold top managerial positions in Orascom Construction Industries and Orascom Telecom, respectively.
Naguib, who backed the opposition to Mursi, told Reuters days after the Islamist president’s overthrow that he and his brothers would be “investing in Egypt like never before”. Nassef set up an investment firm this month that announced two projects worth about $300 million.
For now, Samih seems to be breaking stride with his brothers, preferring to resolve a long-standing dispute with the government over land allocation before entering new projects.
Underlying his tempered approach is unease about the fate of Egypt’s already dwindling middle class.
He said planned cuts to Egypt’s bloated energy subsidies would hit this segment of the population the hardest.
“The coming period will be a massacre for the middle class ..., which will witness a new period of deterioration in its standard of living,” said Sawiris.
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