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Al-Ahram Weekly 29 June - 5 July 2000 Issue No. 488 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 29 June - 5 July 2000 Issue No. 488
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Travel Living Sports Profile People Time Out Chronicles Cartoons Letters Overcoming irregularities
By Ibrahim Nafie
The recent court ruling in what has become known as the "loan deputies" case has once again renewed my faith in the autonomy and integrity of the Egyptian judiciary. This ruling is not only something all Egyptians can be proud of, it has firmly grounded the role of our judiciary in protecting the Egyptian economy. The ruling also reaffirms several fundamental principles that are particularly vital to our current phase of economic development, during which the government and the people must work hand in hand to steer our economy over the various hurdles towards a brighter future.
The most striking aspect of this case was the fact that the defendants who were eventually found guilty were either members of the legislative authority who had enjoyed parliamentary immunity or top figures in the Egyptian banking sector. This combination of immense political and financial power could not dissuade the court from reasserting in the most explicit terms that no person stands above the law, and that all citizens are equal before the law. Indeed, every phase of the investigative process reaffirmed that no attempt to bring undue influence or pressure can undermine the integrity of the investigative process or the firmness of the resolve with which government seeks to protect society, build confidence in development and foster respect for the law and the rights of others.
The second important point to note is that the Central Bank was the agency that discovered the irregularities and exposed the paper trail that led to the discovery of those responsible. In so doing, the bank not only remained true to its obligation to protect its clients and safeguard their deposits, but implicitly justified our respect for the rules and codes of ethics that govern the banking system and its operations. In short, the Central Bank, in this case, demonstrated its power to back the government's mission to safeguard the integrity of all financial transactions.
Thirdly, the recent ruling established a historical precedent for the judiciary's role as a monitor of the probity of banking practices. With this precedent, justice is now in a position to play a proactive role in the fight against economic irregularities, again reaffirming the principle of sound government through institutions that provide the fundamental checks to protect national welfare and establish secure foundations for its future.
Finally, the loan deputies case was a high-profile case precisely because it concerned banking irregularities that can have vast repercussions on the health of the economy and the welfare of society. Bank loans are vital to society because they help spur the process of economic development. They are essential to banks because they generate profits that enable them to thrive as economic institutions. And, above all, it is from income on loans that banks pay the interest on people's deposits. The entire loaning process, therefore, must be governed by an array of strict regulations and procedures to ensure that loans can be channeled to meet the needs of the Egyptian economy, that applicants for loans stand an equal chance to secure the credit they need and that sufficient guarantees are exacted for repayment. Only through the most exacting application of these regulations and procedures can the banking system sustain its credibility and secure the confidence of all its clients.
While the recent court ruling reaffirmed the fundamental principles mentioned above, however, the case itself should not be blown out of proportion. In all societies where the rule of law prevails, there are individuals who will try to work around the law, but that does not mean that such irregularities are the rule rather than the exception. Thus, rather than tarnishing the image of Egyptian society, the "loan deputies" case has, in fact, corroborated the robustness of our institutional and legal edifice and its ability to check corruption.
Still, while the recent ruling in this case stands as a deterrent against corruption, it is still imperative that we do everything in our power to enhance the efficacy of those agencies, such as the Central Bank and the Capital Market Authority, responsible for monitoring and enforcing the implementation of the rules and regulations governing economic activity. Such support, which is essential to ensuring transparency in economic transactions and improving the investment climate as a whole, should include financial allocations enabling these agencies to perform to their utmost capacity.
Furthermore, we must take all measures to ensure that the individuals selected to head these institutions are of the highest possible caliber, so as to improve these institutions' chances of realising the goals they set for themselves and meeting society's expectations. The recent case involving banking irregularities brought to the fore the need for much more highly qualified professionals in the upper echelons of this vital sector, which in turn entails a much more scrupulous screening process to ensure the selection of those candidates who, in addition to economic expertise, have the best records of leadership and administrative skills and have demonstrated their ability to steer these institutions through emergency situations. Moreover, as outstanding candidates are hard to come by, it is also important to hone potential talents in the work place, generating a larger pool of prospective candidates while simultaneously improving the institution's performance in the short run. Toward this end, too, it could also be useful to engage companies specialised in managerial talent scouting and training.
The recent "loan deputies" case also underscored the need to tighten management systems in the banks, and in Egypt in general, in order to close off all possible avenues to financial mismanagement and irregularities. Simultaneously, we must remain relentless in our pursuit of all offenders. Economic freedom is not synonymous with negligence. Rather, it can only thrive under the most stringent enforcement of the laws and regulations governing all aspects of the economic process. This, in turn, demands the fullest vigilance of all society, from its governing institutions and regulatory mechanisms, through all employees of the various economic organisations, to the public at large. The recent landmark court ruling also emphasised the importance of legislating for the harshest penalties against all who attempt to abuse the banking system, because economic freedom must be protected by a rigourous legal framework. Only then can we ensure the health of the economic structure for Egypt's future development and progress.
