Gung ho for capital
The economic policies of the Mubarak regime were "on the right track" says a leading member of the Muslim Brotherhood. So does the group have anything new to add? Sherine Abdel-Razek
Politically excluded for decades the Muslim Brotherhood, whose name was until recently banned from the local media, is now making headlines that reflect its increasing weight in the decision-making processes that will determine Egypt's future. What does the group's seemingly inexorable rise to prominence bode for Egypt's economy? It is a question that is taxing business people, foreign investors and the general public in equal measure.
Anyone reading the outline of economic policies published on the website of the Freedom and Justice Party (FJP), the Muslim Brotherhood's political wing, might be forgiven for assuming it is business as usual, at least in so far as the embrace of neo-liberal economics is concerned. It is a message reinforced by the group's business tycoons, men like Khairat El-Shater and Hassan Malek, who are evangelical in their support of private enterprise, the stock market and full engagement with the global economy.
The FJP, says its website, aims to create jobs by focussing on increased investment in manufacturing, agriculture and information technology. It will also seek to cut the projected budget deficit of 8.6 per cent of GDP and promote the use of non-interest bearing bonds known as sukuk.
A recent report by Bloomberg News noted that in meetings between foreign investors and Khairat El Shater, the Brotherhood's deputy supreme guide, many participants "were positively surprised to find... the Brotherhood to be mostly capitalist in nature".
The meetings were organised by Egypt's biggest investment bank, the Cairo-based EFG- Hermes Holdings, which brought 14 managers of foreign institutional funds based in the US, the UK, Africa and the Middle East to meet El-Shater.
"They all have questions about one issue: what impact will the Muslim Brotherhood have on the investment climate?" El Shater, told Bloomberg.
"We believe in a very, very big role for the private sector... The Brotherhood also wants to attract as much investment as possible."
El-Shater's own business interests include furniture, clothing, the assembly of buses and pharmaceuticals.
His long time business partner Hassan Malek told Reuters last month that economic policies enforced during Hosni Mubarak's rule were on the right track, but had been overshadowed by corruption and a culture of favoritism.
Malek, whose assets were frozen during the 2006 crackdown on Brotherhood affiliated businessmen, added that he supported decisions made by Rachid Mohamed Rachid, Mubarak's last minister of trade and industry, to liberalise Egypt's industrial sector and attract more foreign direct investment (FDI).
Shadi Hamid, director of research at the Brookings Doha Centre, wrote earlier this month in Foreign Policy that the Muslim Brotherhood was seeking to position itself as a voice for the poor despite an unabashedly free market-oriented economic platform designed to appeal to foreign investors. He cited the group's Millioniyat Al-Khayr (million-man act of goodwill) initiative providing 1.5 million kilos of meat to Egyptians for the Eid Al-Adha holiday as an example.
In the nine months since it ceased to be a banned, though variously tolerated, organisation, the Brotherhood's businessmen have moved fast. Deals in the textile sector have been concluded with Turkish businessmen. Out of prison, Malek has expanded his holding company, Malek Group, into textiles and furniture companies, with plans to open a furniture factory employing 1,000.
Malek joined with other Brotherhood businessmen to form the Egyptian Business Developmental Association (EBDA), set up to provide funding for development projects, mainly in the textile and food sectors.
"You cannot sustain developmental investment without raising manufacturing standards," says Malek. One of EBDA's goals is to provide workers with "professional training".
While the Brotherhood maintains it is committed to expanding the role of Islamic banks there has been no suggestion of legislation regulating traditional commercial banking in Egypt.
The Brotherhood has been less taciturn where the tourism sector is involved. The Freedom and Justice Party is demanding more regulations on what tourists can do, and wear, when visiting Egypt.
"Beach tourism must take the values and norms of our society into account," says FJP secretary- general Mohamed Saad El-Katatni. The party would like to see a ban on bikinis, and on alcohol, and has already set up a sub-committee to draft legislation following the parliamentary elections, a move that has put the wind up many companies operating in the already battered tourism sector.
Some economists believe the Brotherhood's regional influence and ties will necessarily mean a change in patterns of trade and investments as Egypt draws closer to the Gulf and other Islamic countries.
The impact of a stronger domestic role for the Muslim Brotherhood on American aid to Egypt -- including $1.3 billion annually to the military -- remains unclear. In September the US Army published a report warning that a Brotherhood-led Egypt could suspend military cooperation with Washington and deny the US transit rights to the Suez Canal.
In the early days of the revolution US officials hinted that aid could be cut if the Brotherhood came to power. In recent meetings, however, US officials have adopted a conciliatory tone. In a 4 November address to the Atlantic Council William Taylor, the State Department's special coordinator for Middle East transition, said Washington did not view an Islamic-led Egypt as a threat as long as it was the result of free and fair elections.