Egypt rulers woo former regime tycoons
24 May 2013, 12:38
Cairo - Almost three years after an uprising fuelled by the
old regime's venality, Egypt's cash-strapped Islamist government is making
amends with businessmen who offer to pay their way back into the fold.
The presidency, strapped to a free falling economy, has said
it encourages reconciliation with the businessmen.
The presidency has sent "a positive message to
businessmen to encourage them to settle their situation legally, and the state
strongly welcomes them to participate," said presidential spokesman Ihab
Fahmy's statement came after the country's tax authority
reconciled with the multi-billionaire Sawiris family, accused of tax evasion
through a company in their Orascom conglomerate.
The dispute was settled with an agreement to pay a little
over $1bn over a five year period, with an immediate payment of
Authorities are now negotiating with Hussein Salem, on trial
in absentia along with the toppled president Hosni Mubarak on corruption
Salem, once a close associate of Mubarak, fled to Spain
after the early 2011 uprising that overthrew Mubarak. He has already been
sentenced to 15 years in prison in another corruption trial.
The prosecution announced that Salem has offered to forego
75% of his family's wealth in Egypt, and more than half of its properties and
The prosecution said it was still in talks with Salem's
It demands Salem's former business partners abroad to drop
their claims against Egypt after the cancellation of contracts with Salem's
former company, East Mediterranean Gas.
Salem's lawyer, Tareq Abdel Aziz, has been quoted in
Egyptian press estimating his client's worth at $1.6bn.
The reconciliation deals are rooted in a decision by the
former military rulers, who took charge of the country after Mubarak's
overthrow and before President Mohammed Morsi's election last June.
The military's decree allows for reconciliation as long as court
sentences against the businessmen convicted of corruption under Mubarak can be
Economic analysts say the overtures to the businessmen aim
at scraping in funds to cushion the economy, which has sharply declined since
the 18-day uprising that ousted Mubarak.
The uprising ushered almost two years of political
instability, punctuated with often deadly protests and a deadlock between the
Islamist Morsi and his secular leaning opposition.
"The deal the government made with the Sawiris family
which brings in £2.5bn almost covers an important part of the budget,
social security payments," said Ahmed al-Sayyed al-Naggar.
Naggar, an analyst with the Al-Ahram Centre for Political
and Strategic Studies, a government-funded think tank, believes there could
also be a political aspect to the reconciliation deals.
Morsi's movement, the Muslim Brotherhood, "believes
that Mubarak's businessmen are capable of funding election campaigns against
them", he said.
Desire to reconcile
Egypt is expected to hold a parliamentary election later
this year to replace the Islamist-dominated house annulled by a court before
Abdul Hafiz al-Sawi, who sits on the economic committee of
the Brotherhood's Freedom and Justice Party, defends the controversial deals as
long as "the state's funds are not lost and they are done legally".
"We have an unemployment rate higher than 13% and a
budget deficit," he told AFP.
"Is it in our interest to continue with this stagnation
for years to come or to reconcile, within a legal framework, to benefit the
economy?" he said.
The government wants to ensure the businessmen keep their
money in Egypt, said Nassir Amin, the head of the Arab Centre for Judicial
"There is a political desire to reconcile with
businessmen affiliated with the former regime, to keep them in Egypt," he
In a televised statement on Wednesday, Morsi reached out to
businessmen and investors, as part of a wider call for national unity.
"Let's look forward, not back. Let's reconcile with
those who seek reconciliation, including investors and businessmen," Morsi