Time to move

...I was just about to post on Soros column in the Financial Times, taken from the same article in the New York Book Review, but focusing on the Palestinian national unity government. Here are two excerpts:
The Bush administration is again committing a blunder in the Middle East by supporting the Israeli government in its refusal to recognise a Palestinian unity government that includes Hamas. This precludes any progress towards a peace settlement at a time when such progress could help avert conflagration in the greater Middle East. The US and Israel seek to deal only with Mahmoud Abbas, Palestinian Authority president. They hope new elections would deny Hamas the majority it has in the Palestinian legislative council. This is a hopeless strategy, because Hamas would boycott early elections and, even if their outcome resulted in Hamas's exclusion from the government, no peace agreement would hold without Hamas support. Meanwhile, Saudi Arabia is pursing a different path. In a February summit in Mecca between Mr Abbas and the Hamas leader Khaled Mashaal, the Saudi government worked out an agreement between Hamas and Fatah, which have been clashing violently, to form a national unity government. Hamas agreed "to respect international resolutions and the agreements (with Israel) signed by the Palestinian Liberation Organisation", including the Oslo accords. The Saudis view this accord as the prelude to the offer of a peace settlement with Israel, to be guaranteed by Saudi Arabia and other Arab countries. But no progress is possible as long as the Bush administration and Ehud Olmert's Israeli government refuse to recognise a unity government that includes Hamas.
[...]
There is now the chance of a political solution with Hamas brought on board by Saudi Arabia. It would be tragic to miss out on that prospect because the Bush administration is mired in the ideology of the war on terror.
Meanwhile, as expected, there is some movement in Europe towards dealing with the new government and ending the financial boycott, notably from Norway. Probably soon from France, too. I understand that Germany could be more flexible as well in dealing with Hamas, but is a bit tied at the moment as it performs EU Presidency. (Another problem is that the US anti-missile shield for Poland and the Czech republic complicates relations with Washington.) If the EU dealt with the new government, as I think it should, it would probably not immediately make a difference on the international scene. The US and Israel would hardly be impressed. But it would for sure strenghten Hamas' moderates (the two ideologues Zahar and Siam are already no longer members of cabinet) and improve conditions on the ground for the population. I see no reason why a cabinet with moderate people such as Finance Minister Salam Fajad, Information Minister Mustafa Barghuti and Tourism Minister Abou Daijeh could not be dealt with.
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the crossing (and the CSF conscript)

Inspired by sandmonkey’s remark on gifts to Egypt from foreign revolutionaries, I went to see the 1973 War Panorama the other day – also to learn more about the war’s first half. (For some reason, the show stopped before the IDF built four pontoon bridges crossing the canal into the other direction and before Egypt’s Third Army got trapped.) The panorama is a gift from North Korea: Now my visit got quite a sad note to it, if you see this CSF conscript who is so scared from his superiors that he does not dare to answer which two countries were fighting in the 1973 war and in which year it started. (See this post on 3arabawy.) Back to The Crossing: I’ll hire these guys next time I need to cross Salah Selim during rush hour. I’ll hire these guys next time I need to cross Salah Selim during rush hour. PS: On a (maybe not) related note, I’d sponsor one shark soup for anyone who can tell me the secret history of the Korean restaurant deep inside the Cleopatra bunker on Midan Tahrir. Update: The sign on the first picture reads Panorama creators D.P.R. Korea 1989. I'll try to enlarge the pictures.
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Who trains Egypt's teacher?

From the Egypt Human Development Report 2005:

The Ministry of Education, as the main provider of in-service teacher training, does not have the capacity to cater for the training needs of all employees, even within the traditional parameters. This has led to the adoption of the ‘one size fits all’ strategy whereby all teachers receive the same training at the same time irrespective of the wide variation of their qualifications (only 46% of employed teachers are graduates of Faculties of Education).

Others are filling in, namely international IT companies, most recently under the Egyptian Educational Initiative. I wrote a piece on it for qantara.de, trying to show how these companies take over government tasks – out of their own interest, but for the benefit of school teachers (at least those who participate), I believe.

Excerpt:
Independently of the current initiative, Intel plans to train an additional 650,000 teachers on its own. The company has thereby shown itself to be even more ambitions than other businesses active in the IT field in Egypt. The Egyptian Ministry of Education presents a rather different, seemingly uninvolved image. Its press spokesman referred to the participating companies and the responsible department head in the IT Ministry. In the end, he refused to answer any questions about the program.

(This week google announced another cooperation with the Ministry of Education, bringing its products to students in Egypt.)

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Arab Human Development Report 2005

UNDP’s Arab Human Development Report 2005 has been launched this week – this year it focuses on women in the Arab world. Next to a lot of valuable data and figures, it discusses progress and continuous discrimination of women. It makes some interesting points – for instance arguing that moderate Islamic groups with their increasing respect of human rights, minorities, internal democracy and good governance are balancing the noise that extremist Islamic groups are making in public. The report also criticizes some Arab states for claiming to have ratified international conventions, without adapting national legislation to an extent where women and men would be fully equal before the law. Overall, the report seems to argue that it is much less Islam but rather deep-rooted traditionalism in Middle Eastern societies which is responsible for the situation of Arab women.
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Hairy relations

Our good friend Dr. Zahi is furious, of course, but the attempted sale of some hair of Ramsees II. by the son of a French archaeologist has led to serious diplomatic trouble between Egypt and France.
A French postman who tried to sell online what he claimed were strands of hair from the mummy of Egyptian pharaoh Ramses II was being held by police yesterday. Jean-Michel Diebolt, 50, was arrested at his home in Grenoble after he placed an advertisement on a website offering strands of hair and tiny fragments of the funeral cloth from the 3,200 year-old mummy for €2,000 (£1,300). He claimed to have obtained the pieces from his late father, a researcher who had been part of a French team which analysed the mummy in the 1970s.
Here’s the revenge? Nine French nationals were arrested during the past week-end in Egypt on charges of planning terrorist attacks in the region.
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Syria: The wannabe China of the Middle East?

There are few articles in the Western mainstream press on single Middle Eastern economies, and this one by Damascus-based freelancer Gabriella Keller on the Syrian economy for the online edition of Der Spiegel is quite well researched and sharp. She argues that while the political leadership has realized the need to open up the economy, to substitute domestic energy sources and to build up a competitive private sector, the lower levels of the administration as well as certain clans are opposing any change. Very much what can be observed in other Middle Eastern countries in their economic transition. Some excerpts (own rough translation): “At the highest level, we received a lot of support�, says Hanna [an investor that started a local production of La Vache qui rit]. “But the authorities on the lower levels have not yet made that about-turn. When we needed permissions, we had to get signatures at some 20 places. So everything took a lot of time and efforts.� Last year, President Bashar Al Assad announced a move from socialism to free market economy. „The government has realized, that the old system doesn’t work“, says consultant and former WB economist Nabil Sukkar. “The economy stagnated, the call for change became imminent.“ But in daily life, encrustations resulting from 40 years of socialism are slowing down liberalisation – the more so, as abuses can’t be criticized openly, as those in power have in mind a future based on the Chinese model: reforms are not to touch the political setting. Not only the administration slows down. Also a handful of influential families close to the regime have little interest in change. Large tenders and licences go to these clans without competition. Enormous amounts are disappearing in the administration. At the same time, the state keeps expenses low, subsidizing rice, sugar and fuel. Even at an average monthly income of €100, Syrians are able to satisfy their basic needs. Until today, oil revenues financed this system, but that source is running dry. “The reserves are almost gone“, says Ali. „In four years from now, we will have to import.“ If until then no competitive economy has been built up, collapse is near.
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TI and other corruption indexes

Al Masry Al Youm yesterday carried a nice photo series on its (print only) back page: Someone with a camera at hand observed a police officer stealing fuel out of one of the dark-blue police cars (“boks�). He then infuses it into a private car (probably his).

This rather amusing example ranks at the very bottom of the misuse of public funds (or materials), which is wide-spread in Egypt, as Transparency International’s Corruption Perception Index 2006, which was released two days ago, suggests once more. Egypt ranks 70th, with a score of only 3.3 out of 10 (last year it was 3.4).

Highest-ranking country in the Arab world is Qatar with a score of 6.0, the lowest is Iraq with 1.9.

I think corruption is still the best example for why economic reform can’t be sustainable without political reform. Countries with wide-spread corruption attract much less foreign investment, and innovative companies have lesser chances to gain grounds against the established ones. But in Egypt, corruption is too important for the regime to stay in power, so the fight against corruption will always serve only its own interests. So, Egypt just came in 165th on the World Bank’s annual “Ease of doing business� ranking.

Speaking of cars and corruption: The US scholars Ray Fisman and Edward Miguel published a study in which they draw a correlation between the amount of parking fines of foreign diplomats accredited at the UN in New York and the level of corruption in their home countries. In other words: ‘show me where you park, and I tell you how corrupt your home country is’.

Here is the link to the study (pdf-file): Cultures of Corruption: Evidence from Diplomatic Parking Tickets

Results: First Kuwait, second Egypt.

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My first time

One more remark on the NDP’s annual conference: I think it’s the biggest (and maybe only) surprise that Gamal has declared Egypt’s ambitions to start a civil nuclear program.

As posted a few days ago, several states in the region could be pushed to start civil nuclear program as a reaction to Iranian nuclear ambitions.

As far as I recall, this is the first time for an Egyptian government or party official to talk about it publicly. I think it is also the first time for Gamal to talk about national security issues, which so far have been the domain of Hosni Mubarak and some security officials. This further positions Gamal, by adapting Ahmadenijads tactics of playing around with the national pride.

The US envoy to Cairo said soon afterwards that the US could be willing to cooperate with Egypt on its program.

So I would speculate that the issue was already raised when Gamal recently went to renew his pilot’s license in the US, as the NDP tried to sell his trip.

Otherwise, I think the best commentary on the NDP conference has once more been chipped in by inerrant Egyptian street humour:

“They called it ‘New thought and a second leap toward the future?’ When was the first time?�

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A nuclear Arab world?

While the stand-off between the US and Iran gets the most attention, I think it is equally important to look at the regional dynamic that has been kicked off by Tehran’s nuclear ambitions.

At a Bahrain sponsored GCC security conference that took place September 10 – 11, the Gulf countries discussed what to do about the Iranian nuclear program, by which they feel increasingly threatened, both militarily and environmentally. (Iran’s Busheer reactor is just some 200km away, across the Persian Gulf.)

During the conference, GCC’s general secretary Abdulrahman bin Mohammed Al Attiyah urged the Arab world to consider starting its own peaceful nuclear program.

Algeria (as well as Turkey) is already working on large-scale nuclear programs. Analysts say that others, notably Egypt and Saudi Arabia, could quickly follow suit, once Iran’s nuclear program is up and running, as they want to avoid Tehran being the uncontested regional super power next to Israel.

Here’s an excerpt from an article in which I gave an overview on regional dynamics and different Arab interests regarding Iran’s nuclear program:

The Gulf States do not want to end up in the crossfire between Israel and Iran. Shortly before Christmas, they surprised the world by suggesting the creation of a nuclear-free zone expressly for the Gulf. This would include Iraq and Iran, but not Israel. Amr Moussa, General Secretary of the Arab League, protested angrily behind the scenes. "That would weaken the Arab position versus Israel and would imply that some of the Arab states are worried only about Iran’s atomic weapons," Salama explained. Thus, each country in the Arab world seems to be watching out for its own interests first.

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EU inches towards Hamas

EU’s Foreign Ministers continued to reluctantly inch towards accepting Hamas in a Palestinian government of national union during their meeting yesterday.
BRUSSELS (Reuters) - European Union foreign ministers agreed on Friday to back a Palestinian national unity government being formed by President Mahmoud Abbas with the Hamas Islamist movement, despite U.S. misgivings. "We agreed that we have to support the new Palestinian government. It's a very important turning point for the situation," Italian Foreign Minister Massimo D'Alema told Reuters.

While some countries such as France, Finland or Slovakia appear to be ready to accept Hamas in government, others such as the UK, Germany or the Netherlands hesitate, also considering that the Bush administration has not changed its position.

Washington said on Thursday it saw no grounds so far to lift the embargo on contacts and aid. But many European governments are anxious to end the stand-off, which has contributed to aggravated poverty and lawlessness in the Palestinian territories.

I think it’s a mere question of time when the EU will come to terms with the new reality in Palestinian politics, and in the end the EU’s desire to play a more active role in the region independent from Washington could be the last push to normalize relations with Hamas.

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Mubarak impression

It looks very much as if Hosni Mubarak has started to prepare himself for his new life, after handing over presidency to whomever.

Out of his many options, he picked driving around DHL cars. No surprise actually, as he told the media in spring 2005 how much he has to sacrifice for serving his country, such as simply strolling Cairo's streets.

I think we should understand that he is still very much into his old job, as you can see on this video clip, that has now been youtubed.

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Software Arabization

Researcher Rashad Mahmood has written a well-researched article on the Arabization of software for the current issue of Business Monthly. It gives an informative overview on the history of attempts to bring software to the Middle East, and explains the main obstacles. Excerpts:
Despite the huge potential for Arabization, companies face several hurdles in adapting western software for Arabic users, says Maged Makram, localization project manager at Microsoft Egypt. “Arabization is much more challenging than converting to another western language. For example, if converting to French, a company simply has to replace the English text with French text, then do a quick check on the interfaces, and then they’re done. For Arabic, it is completely different. All screens need to be mirrored (switched to read right to left), icons and arrows need to be flipped, and menus need to be reversed.�
Another difficulty is the lack of agreement over PC-related terminology. “Some companies use one Arabic word, while others use another,� Makram says. For example, some software companies translate the word “disk drive� as “sawaq al-aqras,� literally “driver of the disk.� Microsoft, however, prefers “muharrik al-aqras,� literally “disk engine,� which is closer to the original English meaning. Such discrepancies can confuse users when switching between programs, especially those unfamiliar with computers.
....and on the English characters domain name system:
Perhaps the last major barrier to a fully Arabic Internet is the domain name system – traditionally the realm of English characters. As it stands, at least a basic familiarity with English characters is necessary to browse websites. However, the latest versions of web browsers such as Internet Explorer 7 beta and Firefox 1.5 make it possible to type in website addresses in non-English scripts including Arabic, Cyrillic and Chinese. These browsers have a built-in conversion tool that changes the non-English characters of so-called internationalized domain names (IDNs) into Punycode, an encoding system that lets browsers visually represent domain names in multilingual script.
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The NDP’s electricity bill

Last week, Al Masry Al Youm summarized a report issued by the South Cairo Company for the distribution of electricity, that put the outstanding electricity bill’s by the NDP as well as ten government-owned newspapers at LE22 millions. The NDP economic reformers in cabinet can talk about attracting foreign investment forever, it will never take off as they desire if they don’t get these hidden subsidies and irregularities inside the state economy fixed. (The fact that this report gets public probably indicates that the Nazif cabinet is serious about putting the state press on a sounder economic basis and cut corruption and mismanagement there.) To pay the bills of their own party would be a good start, too. It's LE 59258.
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Back to school

School in Egypt starts these days, and the local papers are quoting a study conducted by the Ministry of Education that estimates annual spending on private lessons to have reached some LE13 billion. This does not even include private lessons for university students.

This turn-over makes the private lesson industry one of the largest sectors of the Egyptian economy, I guess. For comparison, the Egyptian construction industry is not much heavier. (It's amazing how much money Egyptian households are able to mobilize given the official GPD per capita.)

Meanwhile, the government tries to attract private investments under public-private partnerships to build 50 new elementary and secondary schools. As part of his presidential campaign promises, Mubarak promised 3,500 new schools until 2011.

However, I’ve heard of newly built schools financed by international donors that 12 months after their inauguration are falling apart, as no funds and capacities exist for maintenance.

I’m wondering what over 700,000 civil servants working in the administration of Egypt’s educational system are actually doing. They are the true obstacle to reform in this sector.

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Google in the Middle East

As posted before, google has based its Middle East activities in Egypt, to the surprise of observers who expected the search engine would select Dubai.

I spoke to the regional manager of google, Sherif Iskander, a few days ago, and he told me that it was simply the size of Egypt that has attracted google here (time zones also were an issue).

Egypt has the region’s largest number of internet users as well as small and medium entreprises (and advertisers), the market segment that google’s business model is based upon. The booming tourism industry is a major client for google, and financial services which are underdeveloped in Egypt could become another major source of revenues soon.

But google can only sell its products if there’s content. Less then 1% of the internet’s content is in Arabic, although it is one of the world’s most spoken languages.

The research that Iskander referred to showed that 85% of the region’s internet users would in fact prefer content in Arabic. Google is thus working on creating more content. Until now, it has arabized its search function, its news portal and its email service. It also offers translation tools from English to Arabic and vice versa.

It also hopes to lower the significant cost barrier to local content, by offering advertising tools that automatically generate ads on local websites.

As access to the internet improves across the region – in Egypt ADSL prices came down recently – now it’s limited PC penetration and the lack of local content that is preventing the region from seeing higher numbers of internet users, it seems.

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EU summit on Middle East conflict

This gets little attention at the moment, as the dispute with Iran over its nuclear program and international assistance to Lebanon dominate international diplomacy headlines, but I was disappointed by the outcome of the summit of the EU foreign ministers.

It was hosted in Finland (which is currently performing EU presidency), and the Finish foreign minister made an interesting remark before the summit, indicating a softening of the EU’s stance on Hamas.

Disappointingly, he draw back soon afterwards, saying that Hamas would have to accept preconditions before any talks, including the recognition of Israel. While there was certainly debate on integrating Hamas, this shows that there is no majority amongst EU members.

But if the EU wants to launch an initiative on the Israeli-Palestinian conflict in the shadow of the other regional issues, it needs to do find a more pro-active stance on Hamas, then just replacing the Palestinian authority by paying cash sums to the population.

However, the EU appears to increasingly see itself as the main player in the Palestinian-Israeli conflict, as several European nations are preparing to send strong troop contingents to Southern Lebanon, and as the Bush administration is busy with November elections in Iraq and elections to Congress.

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Motives of German train bombers

More information is coming out on the motives of the two train bombers that failed to blow up two regional trains in Western Germany about two months ago.

The head of the German Federal police, Jörg Ziercke, told the magazine Focus that – based on first interrogations of one the subjects who is held in Lebanon – the “initial detonation� for the plans was the publication of the caricatures of Prophet Mohammad in the German press.

“Youssef el Hajdib, who was arrested in Kiel, understood this as an attack of the Western world on Islam�, Ziercke is quoted as saying.

By accident, one of the bombers was later on discovered on footage of a local TV station that showed him during a demonstration in Kiel, a city in Northern Germany, in February, protesting the publication of the caricatures in German papers. On the footage, he is walking right next to the leader of the demonstration.

I find this interesting, as I have rarely read something on specific motives of Islamist terrorists beyond a general rejection of the West, as well as the specific events that radicalized them.

Ziercke adds that the death of el Zarkawi in Iraq on 7 June further encouraged the terrorists to carry out their plans.

Luckily, they didn’t manage to build their bombs (which didn’t explode anyways due to errors in their technical design) in time for the soccer world cup.

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Scissors in Egypt

It’s not exactly the topic of the day, but privatization (‘As’assa, as many Egyptians refer to it, mixing Arabic for scissors 'As and privatization Khas'khassa), will continue to be an issue in Egypt, as this summer we can rather see the limits the government still faces in the program.This week the Ministry of Investment stated that it would not sell shares in important companies such as Egyptian Iron and Steel or Egypt Aluminium Company. Ten days before, the government stepped up its efforts to open Egypt’s National Railways to private investment. But the sharp debate in parliament casts light on the increasing resistance it is meeting in its privatization program, in particular in transportation, probably the sector of the Egyptian economy that needs modernization and investment like no other. In my contribution to the annual review “Egypt in the year 2005� published by the French research centre in Cairo CEDEJ (which by the way contains excellent contributions, amongst others, on the Coptic question, the brotherhood and the fate of the Egyptian health reform) on the Egyptian privatization program during 2005, I argued that the government met surprisingly few criticism in public for its revival of the privatization program. While hopefully the basic conclusions of my contribution (see below) are still valid, … … ever since the year turned public discourse on privatization became more aggressive. The sale of shares in Egyptian American Bank owned by the Bank of Alexandria to French bank Calyon earned a lot of criticism, as cabinet members owned shares in Calyon, as well as the ever-lasting struggle of the Ministry of Investment to get rid of public retailer Omar Effendi. In my contribution, I concluded that the privatization program between July 2004, when the Nazif cabinet took office, and the end of 2005 moved ahead with unprecedented speed and consistency compared to the 1990s, when the Egyptian political and business elites largely outsmarted the call for privatization imposed by foreign institutions and donors, with ownership structures persisting. This is different under the Nazif cabinet, not only in terms of numbers of companies (partly) sold and privatization proceeds generated, but, more importantly, the program is also touching strategic sectors that were previously taboo either because they generate the strategic rents for the regime such as petrochemicals and tourism, serve to control the economy such as the banking sector or play an important role in Egypt's contrat social such as in transportation. I basically argued that this change is a result of a change in the political setting, related to the rise of Gamal Mubarak inside the NDP and the installation of the reform cabinet under Nazif almost two years ago. In other words: today ministers are regulating the economy who during their biographies adopted the thinking of the exact same institutions World Bank and IMF whose input was largely opposed during the 1990 resulting in fake privatization. What I find ironic today is that with Omar Effendi the critics have picked just the company that symbolizes like no other the bourgeoisie class that some Free Officers in dire need for an ideology (i.e. a pretext to cling to power) collected. I think this basically shows the critics’ powerlessness. The debate really lacks a discussion on what privatization is supposed to achieve and on the criteria that should be applied to measure the success of the privatization program. The government appears to focus only on numbers of companies sold/privatization proceeds generated, while critics in a way follow the government here by comparing the value of companies sold – or more often their perception thereof – to the actual value of the sale.
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