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Helal: Egypt is in a state of collective coma and economic suicide - Part 1

Reading into Egypt’s economic state and future, Board Member of CI Capital Holding Karim Helal states that post-Jan25-Egypt has not moved forward.
As a former Group CEO of CI Capital in Egypt and the current Chairman of the Egyptian ASEAN Business Association, Karim Helal is a sought-after expert in the financial and economic field. The above-mentioned titles are only a few that Helal has acquired over his years of work experience and dedication.

Egypt Business Directory met the man himself, to ask him about Egypt’s current financial difficulties, the role of the Central Bank of Egypt in dealing with the country’s economic dilemma, the opportunities in the Asian market and the future of domestic entrepreneurship.

Helal is a strong believer in the slogan of the uprising that occurred in January last year: Bread, Freedom, Social Justice. Yet, he is confident that the key to the fulfillment of those rosy objectives is economic prosperity. “Politics is just the reflection of a country’s economic state. If you are not secure in your daily bread, you are not free. I’ve been waiting for a leader to focus on the economic file from the very beginning, because this is the core of our problems.” Unfortunately, this has not been realized till now.

The cautiously optimistic financial expert expressed his worry that Egypt has not moved forward since the revolution, which is a shame. Helal believes that Egypt has a tremendous, economically prosperous potential and various drivers, so there is no real reason why it should not advance exponentially.

“The uprising was impressive, spontaneous, youth-ignited and without a leader – this came back to stab it in the back,” Helal explains.

He elaborates: “The main cause for the current confusion and lack of clarity – especially when talking about investments – is Egypt’s leadership problems. We should have had a very open and transparent diagnosis [of Egypt’s economic state]. A leader should’ve come out and told the nation ‘Houston, we have a problem. And it is very serious.’ It is not the time to put on silk gloves because people need to realize that we are in serious trouble. Nobody understands the problem and thus, we are in constant denial. As a leader, you need to come clean and say that we have inherited a huge legacy, and the solution will not be tomorrow or overnight, but long and painful. We have to suffer and sacrifice [in order to move forward].”

In reply to the question of whether it is possible to ask the Egyptian people “to suffer and sacrifice” for long-term solutions, Helal assured: “Nobody ever told them to, so we can’t just exclude their capability of dealing with it. How to put it and sell it to them is a leadership quality.”

Despite his concerns, Helal believes that the Central Bank of Egypt (CBE) has played a very significant role in assuring that Egypt’s financial and economic future is somehow safe – for now. Lately, the CBE has been the target of heavy criticism, most of which was not very constructive. “The people who do not have a more involved understanding of financial markets tend to be harsh with the CBE. They’re managing an extremely difficult situation as best as anybody possibly could.”

Currently, the CBE is caught between continuously bleeding foreign reserves, lack of daily income in terms of foreign currency, strong inflationary pressures, and an increased pressure on the Egyptian pound.

It has partly been trying to buy time by pumping money from foreign reserves in support of the Egyptian Pound – an astonishingly effective method to keep the EGP’s value relatively stable, considering that there is no Foreign Direct Investment that the CBE can depend on. Desperate times call for desperate measures, and currently, Egypt is in a desperate state to get out of its “collective coma” or “economic suicide”, as Helal calls it.

He believes that tourism has become Egypt’s most essential lifebelt – in terms of being the short and long-term’s largest and quickest foreign currency provider. “Individual acts that defy the prosperity of tourism – such as kidnapping tourists, hotel staff taking their manager hostage in a hotel-room, etc. – tells me that we are in a coma. People are completely disconnected and do not know what is going on [with their economy] – otherwise, they would not resort to such acts.”

Lately, the news has been taken by storm with stories about kidnappings of tourists in the Sinai-region and the increase of sexual harassment on the streets of Egypt – two main factors that reflect insecurity and lack of safety for tourists. Even though numbers of tourists seem to increase according to official numbers, many believe that this is merely impossible and far from reality. “We need to do more to get tourism back on track,” Helal assures.

Part 2 of the interview can be found here:
Karim Helal talks about Asian-Egyptian relations and opportunities and the future of Egyptian entrepreneurship.