Corruption In Mubarak’s Egypt

Cottage industries through which local craftsmen eke out a living are threatened by development projects whose ties to political figures make them untouchable either by law or protest.

A couple of students pointed out that although I mention corruption several times as a reason for the uprising in this blog, it is missing from my list of reasons for the uprising. So here goes:

In 2005, I spoke with some businessmen in Luxur who made their living creating souvenirs for tourists. For generations these families had carved souvenirs out of alabaster and other local stones. In recent years, however, they were watching their lives and livelihoods stolen from them as their houses, shops and open-air “factories” were bulldozed by developers. The goal was apparently a beautiful, self-contained Luxur tourist complex that would allow a single corporation to monopolize tourism, cutting most of the local community out of the revenue stream  from visitors to Karnak, the Valleys of the Kings and Queens and other tourism areas.

Arcane regulations akin to “eminent domain” were put forward. People were paid for their land, but it was a pittance, nowhere near enough to buy a new plot of land in Egypt, a river valley surrounded by desert, where land is at a premium.

Efforts at taking the developers to court were futile. Protests were put down by the police. Finally, in a secret meeting in one of the local mosques, a community leader revealed the truth: he had been to Cairo and seen the papers. Several high ranking ministry officials owned shares in the company, and so did Gamal Mubarak.

“Who here is man enough to fight this?” my informant said the local sheykh asked them. “He shamed our manhood, all of us.  But he was right. Who can fight these men? To whom could we turn for help against such men who control the laws, the police and the courts?”

(When I asked him where the new tourist complex would get its souvenirs if they put the locals out of business, he took me into the back room of his shop and showed me beautiful resin imitations–made in China. He asked me to guess who owned the company importing them…).

Corruption has long been a part of everyday life in Egypt. From police extortion to the petty bribes one pays bureaucrats to do their jobs to fees that help clear away red tape.

But the rise to power of powerful business men in the National Democratic Party (NDP) and the People’s Assembly–men who popular discourses say bought their rights to run for election with suitcases full of cash, as described in the novel (and film and television series) The Yacoubian Building—took corruption to an entirely new level.

Many of these politicians took advantage of their positions to build vast financial empires. Ahmed Ezz, for example, joined the NDP with an estimated net worth of $300,000 USD, and was able to grow this into a fortune of $300,000,000 by gaining 60 percent of the market share of Egypt’s steel industry, according to the newspaper.

Similarly, the wealth of former Housing Minister Ahmed al-Maghraby is estimated to be more than 11 billion EGP, that of former Minister of Tourism Zuhair Garrana is estimated to be 13 billion EGP, the fortune of former Minister of Trade and Industry, Rashid Mohamed Rashid, is estimated to be 12 billion EGP, and that of former Interior Minister Habib al-Adly is estimated at 8 billion EGP.

The average Egyptian, according to Egyptian government statistics, earns about  300 EGP (~$60 USD) per week. But many people make much less; one estimate claims that as many as 40 percent of Egyptians live on less than 80 EGP (~ $15 USD) per week.

Like many countries, Egypt protects itself against corporate imperialism by insisting that a certain percentage of shares in any company be held by Egyptians. But corporations find it useful to choose as local partners those with strong government connections who can cut through red tape and make things happen–as in Luxur. Much of this wealth then leaves the country in the form of land (such as the palatial Mubarak house in London) or other investments.

Ultimately, all lines of economic advantage flowed up to Mubarak. Aladdin Elaasar, author of The Last Pharaoh: Mubarak and the Uncertain Future of Egypt in the Obama Age, estimates that the Mubarak family is worth from $40 to $70 billion. (This number seems impossible, as it would make him the richest man on earth. I suspect the true figure is in the $4-7 billion range at most. But many Egyptians believe it).

In 2010, Transparency International‘s Corruption Perceptions Index report assessed Egypt with a CPI score of 3.1 (with 10 being completely clean and 0 being totally corrupt).

In the popular imagination, the country has come under a system in which money fuels political power and political power in turn creates wealth–but only for a few thousand people.

One of the turning points in the uprising came when the labor movement began to strike and protest in solidarity with the “Facebook youth” and other groups in the urban centers. It is no coincidence that many were shouting in anger over the reports of how much wealth Mubarak had accumulated.

I do not think most Egyptians believe they will achieve a new society without corruption as a result of the uprising. But they certainly believe that a state without Emergency Laws–in which labor unions can strike and newspapers can publish investigative journalism and social media can spread news and gossip–will have to be more responsive to public pressure.

For More Information:

Al-Jazeera English. 2011. How did Egypt become so corrupt? Feb. 08.

Mitchell, Timothy. 2002. Rule of Experts: Egypt, Techno-Politics, Modernity. Berkeley: University of California Press.

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