Image by Jim Mattis, via Wikimedia Commons.  Accessed 01.11.17

 

Key Points

  • The Tahya Misr Fund was set up three years ago to alleviate Egypt’s financial hardships; it calls for mass donations from Egyptians in support of the government’s funding drive.
  • The Fund has since become a source of political capital for President Sisi and his allies. It is arguably one of Egypt’s most informal, yet most influential, institutions and is littered with powerful figures from the worlds of commerce, media, and politics.
  • The entity’s accountability should be a source of intrigue for investors, as it is still not entirely clear who benefits most from the Fund i.e. whether it complements the overall integrity of the state or merely benefits its chief decision makers.

President Sisi arrived in Paris last month to meet with France’s premier, Emmanuel Macron, and several of the country’s top business leaders. Although areas for potential future investment formed the basis of coverage during his visit, analytical insight can also be drawn from the trip’s more subtle details.

Adorning the side of Egypt’s presidential jet, for example, is the emblematic slogan ‘Tahya Misr’. Translated as ‘Long Live Egypt’, these words continue to follow the Egyptian President around in his bid to reinvigorate Egypt’s economy; more so as the curtains slowly begin to draw on what has been Sisi’s first, and what could still theoretically be his only, term in office.

Nowhere is this clearer than the Tahya Misr Fund (“the Fund”), the slogan’s namesake funding body which was established upon Sisi’s election victory. Ostensibly geared towards boosting Egypt’s economy, the Fund taps into nationalist sentiments held by the more ‘pro-regime’ members of the public. Consequently, it is an extremely politically exposed entity, whose projects are widely publicised and are often as much about securing political capital as they are about having an economic impact.

But as Sisi continues to pursue inward investment, the shadow of the Tahya Misr Fund follows him closely as a reminder of the promises his presidency once held. Most poignantly, the difference made by the Fund in Egypt is never contextualised by the government or discussed to any great extent. This leads to questions about what the Fund actually represents and enquiries into the true nature of its modus operandi.

With hundreds of millions of dollars in donations already pledged, those at the heart of its decision-making are in positions of genuine influence, yet with little to no accountability. As such, it could be argued that the Fund is ultimately a vehicle for regime prestige in the post-2014 era above all else.
 
Economic Recovery ‘Made in Egypt’
It seems a distant memory since Sisi officially established the Tahya Misr Fund on the 1st of July 2014 (Tahya Misr, 2015), but the sentiment underpinning its establishment has not since faded from memory.

At the time of the Fund’s announcement, Egypt was still emerging from the rubble of a prolonged period of political and economic instability, where recovery sat firmly at the heart of the government’s agenda. Eleven months of interim rule, a failed yearlong Presidency under Mohammed Morsi, and two preceding years of turmoil set in motion by the departure of Hosny Mubarak, left the country crippled.

Hindsight now shows that the Fund was an early sign of the new elite’s modus operandi; exploiting Egyptian symbolism to entrench new networks of power. Sisi’s government has sought to use security threats and the fear of instability to embed strong Presidential control into the political system. Protecting Egyptians and safeguarding Egypt’s interests resonates among the populist factions of society, which the current government speaks to directly.

The Tahya Misr Fund filters neatly into this context, as it is another vehicle being used by the political elite to leverage their agenda, in the name of ‘rebuilding Egypt’.

Underlining this, it is unclear why a new fund was necessary to perform the role that strong state institutions (Treasury Office, Central Bank, Finance Ministry etc.) are usually mandated to fulfil. It also begs the question as to how the capacity of existing (but failing) financial structures has been upgraded to function at a time when Sisi & Co are no longer in power.

A general trend in the Egyptian government’s style of governance, as is demonstrated by the Fund, has been to take decisions that generally do not promote transparency, accountability, and strong governing structures.

The Power Players Setting the Agenda
It was not long before Tahya Misr attached itself to Cairo’s top brass, thereby showing what the modus operandi of this Fund would be.

President Sisi himself whipped up somewhat of a sensationalist fervour around the Tahya Misr fund, even promising to donate half of his own salary to it for “the sake of the country”. Likewise, this time last year, Sisi’s wife Intissar Amer led other cabinet members’ wives in making a highly publicised trip to the bank to donate to Tahya Misr, accompanied by the Ministers of Investment and Solidarity in a pre-planned public relations stunt (Egyptian Streets, 26.11.2016).

Of course, the military also underscored its centrality to the new political era by pledging EGP 1 billion to Tahya Misr. Interestingly, it announced its intention to do so when the fund was still only just a bank account at the Central Bank (Ahram Gate, 26.06.2014). If anything, the military’s early fingerprints in this regard hint that it may have even been an idea proposed to Sisi by Egypt’s senior military personnel in the first place.

In the period since, the Tahya Misr has signed contracts with the Ministry of Military Production and issued grants to military linked companies, suggesting that the Armed Forced have in fact found a novel way to fund their own projects, but under the façade of Egypt’s prosperity.

The fund’s grandeur and ideological association to the military was epitomised during the opening of the new Suez Canal in August 2015. A French built FREMM frigate (a multirole vessel), aptly named ‘Tahya Misr Frigate’, arrived in Egypt in time for the Canal’s inauguration ceremony.

It was purchased by the Egyptian government in early 2015, and the Tahya Misr rhetoric was firmly adopted by the military elite in pursuit of their own economic interests, and has been ever since.

Long Live the Elite
The cadre of individuals selected to sit in the management structures of Tahya Misr is indicative of who makes up Sisi’s list of ‘chosen loyalists’. Likewise, it is worthwhile monitoring who throws their weight behind the new political elite’s vehicle for prestige.

In particular, Sisi’s choice of non-political appointments to the Board of Trustees is perhaps the most intriguing, as this illustrates who the regime believes yields a special level of commercial influence, and hints at state sponsorship of their positions.

Unsurprisingly, Naguib Sawiris features on the fund’s board; he is one of Egypt’s richest and politically active businessmen. His wealth was built by his father Onsi during previous political eras, and although Naguib painted an ‘independent’ picture of himself during the revolution, he has since espoused support for Sisi’s government. He is a political and economic force in his own right, and it is likely that the government benefits from co-opting Sawiris by including him in its ranks.

The business line-up also contains Carbon Holdings’ Chairman Basil El Baz, who has been one of the more successful entrepreneurs in the post-2011 period. Notably, Basil’s father, Osama El Baz, was a senior advisor to Hosny Mubarak; and his uncle, Farouk, is a high-profile scientist at NASA. Basil entered into a partnership with Sawiris in the mid 2000s when he developed various ammonia plants across Egypt, suggesting that he is now enjoying his most influential phase as a business personality in the country.

Mohammed El Amin is another high-profile member of the Board of Trustees at Tahya Misr. El Amin is arguably one of Egypt’s media mogul’s and runs the CBC network in Cairo. He fell out of favour with Mohammed Morsi and was placed under house arrest in June 2013 – reportedly owing the government EGP 427 million (Ahram Online, 27.06.2013). El Amin sits on the board of Amer Group, ran by Mansour and Omar Amer, which has extensive real estate interests in Egypt. His fortunes have clearly turned the corner under President Sisi, and his position at the Fund suggests he is back among the crop of golden boys.

Despite his absence from the board, Ahmed Ezz has bought into Tahya Misr’s prestige by sponsoring the Fund through his company Ezz Steel. Having long been Egypt’s primary steel magnate, Ezz has arguably been usurped by Ahmed Abou Hashima of Egyptian Steel over the past several years. Abou Hashima does not sit on any of Tahya Misr’s managerial boards, but he owns Al Masry Al Youm and ONTV, which gives him a platform to act on behalf of the state.

Of course, government oversight of the fund is maintained by the inclusion of key cabinet members, including Prime Minister Sherif Ismail, Finance Minister Amro Garhy, Investment Minister Sahar Nasr, and Trade Minister Tarek Kabil. Their respective portfolios make their inclusion to the board obvious, but they are only in position because they have won the trust of those within the ‘deep state’ already.

Outlook
Securing a U.S. $12 billion IMF loan in August 2016, and cutting an array of state subsidies, were seen as last resorts in Egypt. The fact that these moves went ahead infers that Tahya Misr did not go on to become the vast pool of sovereign wealth that its founder envisioned over three years ago.

As such, the Fund remains an intriguing, and slightly obscure, body. If not achieving its primary duties of repairing Egypt’s faltering economy, its very existence serves to undermine official arteries of the state, and most likely creates an elite network of influencers.

This leads to profound questions about reform in Egypt, and the integrity of those pulling the political strings.