print logo

Dear Muslim Brotherhood, how about business?

What can the Muslim Brotherhood promise Egypt in the business and economic sector, and what does their history and their members say about them?
“In a Muslim country, no soul shall die of hunger” – this famous sentence is what the Egyptian population held on to when the majority voted for the Muslim Brotherhood (MB) in the parliamentary and presidential elections. But can and will the MB really live up to that principle?

The MB is not only known as a political entity in Egypt, but also as an economic organization, that had managed to keep its businesses up and running, despite severe circumstances.

These circumstances all come down to one main reason: The Muslim Brotherhood was “forbidden” and outlawed for quite a while. Being founded in 1939, the organization never had a fair, lovely stroll in the park – on the contrary, it was rejected on many levels, especially by the military and former presidents Gamal Abdel Nasser, Anwar ElSadat and Mohamed Hosni Mubarak. Yet, its members have managed to fully run their businesses, despite jail-time, burdens by authorities and rejection.

In 2006 to 2007, several businessmen of the MB were tried in front of a military court, which forced about 70 companies to shut down – a rivalry and settlement of accounts was at the core of these trials. Professor of History and Political Economy at AUC Zeinab Abul Magd claims that the trials were the “result of underlying competition between two groups that controlled capital in Egypt, namely between Gamal’s [Mubarak] group and the Brotherhood. [It was a] settlement of accounts between two capitalist rivals, one of whom was forced to leave power only to be replaced by the other.”

After the revolution and the ousting of the Mubarak-regime, the MB is more courageous in opening big factories and companies, because they believe that the corruption and culture of favoritism has come to an end. Avi Asher-Schapiro, Middle Eastern researcher and writer, wrote in his article “The GOP Brotherhood of Egypt” that the MB “hails free-market capitalism” and consists of “wealthy businessmen whose economic agenda embraces privatization and foreign investment.”

Until today, there are no clear numbers that reveal how many companies and how much of the economy the MB actually owns and controls.

When talking about MB, economy, finance, and business, there are two names that continuously appear: multimillionaires Hassan Malek and Khairat ElShater. Both having similar backgrounds and having worked together, each of them built up a financial kingdom of their own, even throughout the “hard times”.

Yet, some people still have little faith in them. In April 2012, online news portal The National released an article entitled “The economic vision of Muslim Brotherhood’s millionaires”, where it clearly stated: “Some elite businessmen say they don’t think men like [prominent MB businessman Hassan] Malek are sophisticated enough to transform Egypt’s economy on their own.”

In order to understand the MBs possible economic outlook, one should take a closer look at both men’s background and journey:

1. Hassan Malek:
Born in 1958, serial entrepreneur and businessman Hassan Malek has been establishing companies ever since 1983 – the most famous being “Salsabeal” for software and IT, which he founded with fellow MB member Khairat ElShater. Malek was imprisoned – like most MB members – in 1992 for a “false case” that was “fabricated” against him during the Mubarak regime and forced his company to close. After being released, being imprisoned, and being released again, he reopened the company one more time and started establishing several others, such as Istiqbal, AlMalabis AlJahiza, and Sarar. He believes that the key factor for the economy’s survival is local manufacturing and cutting loose from being a consumer market, according to Reuters. Earlier this year, Malek and several other MB-businessmen founded the “Egyptian Business Development Association” (EBDA), which aims at promoting and developing the Egyptian economy, adopt many investment projects which will contribute effectively to a tremendous economic revival, and launch Egypt into the ranks of advanced and leading countries in all fields. Malek believes it necessary to focus on training efficient and professional labor force, since this could be a way to attract foreign direct investment (FDI).

2. Khairat ElShater:
“We strongly advise the Americans and the Europeans to support Egypt during this critical period as compensation for the many years they supported a brutal dictatorship.” Prominent MB businessman Khairat El-Shater has always been known for his strict, bold, non-joking, direct approach – a treat that made him more popular than rejected when the MB nominated him as their presidential candidate for 2012. He was soon replaced by Dr. Mohamed Morsy, after Shater got disqualified, as less than six years had passed since his release from jail. Being the chief strategist of the MB and its main source of funding, he was imprisoned several times for money laundry and similar charges. His businesses cover diverse sectors, such as furniture, fabrics, tractors, car manufacturing, chemicals and management consultancy. Shater has succeeded in silently overstepping the fine line between his own business interests and the MB’s finances, and merging both in a way that made it impossible for state security to trace the money that went to the “outlawed organization”. Even when he and Malek were jailed in 2006, the MB’s financial situation did not deteriorate and his businesses kept flourishing, as he met his business associates and officials in several sectors during his jail-time until 2011.

While many socialists and communists accuse the MB of capitalistic perspectives and ideologies – just like Mubarak and his regime -, Magda Kandil, executive director of the Egyptian Center for Economic Studies admits that it is easy to confuse the economic platforms of the official MB Freedom and Justice-party (FJP) and the ousted regime, yet she begs to differ: “It’s very easy to confuse their [FJP] economic platform with the previous regime: private-led growth, free market economy, scaling down the role of government, empowering the private sector. The big difference is which private sector you are talking about. Previously the regime had its focus toward mobilizing investment, but the beneficiaries were those who were well-connected, brand names in the investment world. It didn’t trickle down. In the best-case scenario, a Muslim Brotherhood-led economy could open up opportunities to those who never had them, perhaps giving rise to an entirely new business class. If they succeed in doing this, I think that will be the best model for the so-called private-led growth,” Kandil says. “We can’t just tax and subsidize—it’s not sustainable.”

After perhaps coming to the conclusion that the MB does have a fair chance in promoting the economy in a sustainable manner, one question remains: Will the Supreme Council of Armed Forces (SCAF) let them rise? It is known that the Egyptian military has built its own economic and capitalistic empire during the Mubarak-regime, and it is believed that it owns about 40% of the country’s stock market (For reference: “The Egyptian Military between Politics and Economy” http://www.egypt-business.com/Paper/details/1206-xg-The-Egyptian-Military-between-Politics-and-Economy/3808). How would the leaders of this independent empire react to the rise of a similar one, and how will the beneficial interests be divided between both? What measures will SCAF take to ensure that it loses nothing and gains more?

To understand the economic plan of Egypt's president Dr. Mohammed Morsy, please read "The elected president & the economy: The new era of "Morsy"-ism":
http://www.egypt-business.com/Paper/details/1226-xg-The-elected-president--the-economy-The-new-era-of-Morsy-ism/5754