Cairo and Pyongyang

Here’s another chapter in the bizarre relationship between North Korea and Egypt. I understand it all begun when North Korea effectively ran Egypt’s air force (at least in Upper Egypt) around 1970, later sold scud missiles and related services, in 1989 built a war panorama, but also furnished Cairo with some of its best foreign cuisine restaurants. Now, there’s business, too. Maybe inspired by Orascom Construction Industries investments in the North-Korean cement industry, Orascom Telecom undertakes to build up North Korea’s mobile phone network. From afp:
It was unclear how widely the Orascom Telecom service would be available to the public. Spokespersons were not immediately available for comment. North Korea began a mobile phone service in November 2002. But 18 months later, it banned ordinary citizens from using the service and began recalling unauthorised handsets. There is still thought to be a mobile network in Pyongyang which is open for government officials. Most foreigners are not allowed to use mobile phones inside the country.
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In eigener Sache

Here’s Ulrich Ladurner of Die Zeit (one of Germany’s largest and most influential papers) travelling to a remote Iranian province to find out whether Ahmadinejad’s promises to improve life in the country’s regions were fulfilled. (Which is a laudable intention, as few bother to look at the country beyond nuclear bomb issue.) The article simply ends up being about how difficult it is to find information in Iran (title: The Persian labyrinth – Has President Ahmadinejad improved the situation of the poor in the provinces? To find an answer to that is as difficult as decoding the truth on the Iranian bomb.) Now, the author talks to a doorman working at a local authority:
“Our president is the best president in the world,� he says, without being asked. You don’t have to believe he means what he says. […] What he really thinks? Maybe he doesn’t know that himself. Iran is a country in confusion.
Isn’t this highly discriminating of Middle Easterners – just because the khawaga correspondent doesn’t understand what’s going on on someone’s mind doesn’t mean that someone himself doesn’t know what he has on his mind. This is a feature, ok, but if you ask whether provinces are benefiting from what the capital promises, the words economic growth, investment and unemployment shouldn’t be totally missing from your text, should they (he does mention inflation). Instead Ladurner travels to an industrial area and tries to measure the province’s economic development by glancing at factories and roads from the outside. One paragraph really struck me: The author finds out a school that gets promoted as being built within six months of Ahmadinejad’s arrival in fact was built by a local business man two years before Ahmadinejad got elected. He gets the business man’s mobile number, but then he stops short of calling the guy because he doesn’t want to endanger the one he got it from (well, you just don’t tell anyone). Local business men, affiliated with the centre of power or not, can be a good oral source in the absence of reliable social and economic data. So instead of calling up that potential source of information, he spends much of his text (and research, presumably) on complaining about Iranian state officials putting him off from office to office instead of giving him information. But the bureaucracy of some Middle Eastern states is a result of these countries’ political economy (for which the West often is responsible) and not of the mindset of Middle Easterners, as suggested by the author in an almost Michael Friedmanian manner. (In eigener Sache is the German media’s slug for announcements on internal issues.)
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There goes EgyptAir

It takes one of EgyptAir’s European offices more than three months to issue a simple refund (including what I thought were attempts to keep the money). If it continues to refuse improving its services, the airline will be swept away by competition once Egyptian civil aviation is liberalized (which is why that hasn’t happened yet, but there are hints the government is losing its patience with the airline.) Egypt has (except for regional airports) not yet signed the BlueSkies agreement with the EU (unlike Morocco, in a way a competitor on the Middle Eastern tourism market), which amongst other things allows foreign airlines to fly to Cairo and then on to other destinations, thus competing with EgyptAir’s domestic flights. EgyptAir did not renew its information systems between the 1970s (!) and the early 2000s, and there were years its subsidiaries didn’t even bother to issue annual reports to the holding company after the new structure was created in 2002. The situation is somehow similar to Italy: a big tourism nation, whose national carrier just doesn’t get its act together. Alitalia makes 1 million euro loss a day, and nobody wants to buy the carrier (let’s wait and see whether any of the three current bidder will actually buy it) as no one knows how bad it is. Except that in Egypt, and that’s the point I’m trying to make, national security issues are once again in the way of economic growth and jobs. Civil aviation is one of the last sectors still very much controlled by the security apparatus. It is full of former air force generals (and pilots?), of course, but for instance Cairo’s airport is also not part of any governorate, which means it is administered directly by the presidency – which means Zakaria Azmi and the likes from the presidential surroundings control which business man has to pay how much to get export licenses and so on. At least until very recently, the mukhabarat had stakes in what appeared to be private sector services companies at the airport, and forced the management of these companies to blow up staff numbers with additional pairs of eyes observing passengers instead of doing what these companies were supposed to do to render Cairo with the services-oriented airport it deserves. I always found it difficult to remain patient while the police guy who checks whether you got a border stamp about two meters after you got a border stamp is unable to find the border stamp in your passport if you know that at the same time there’s plenty of non-police guys available to carry your luggage right into the airplane without any controls whatsoever for just 50 euro (the business man who told me that didn’t have change ready when he tried to navigate around that big group of Italian tourists in front of him that made his flight very much look like taking off without him.) Getting back to EgyptAir, the issue is its protection prevents Egypt’s tourism industry from realizing its potential. Foreign carriers’ demands for more slots at Cairo’s airport are delayed or not approved, but this lowers the number of tourism arrivals other parts of the government (rightfully) hope for. Let's hope being a member of the Star Alliance will approve the service-side of things at EgyptAir (while the quality of its pilots and the modernity of its fleet are undisputed).
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Enter Nassef

Finally, Nassef Sawiris has moved out of the shadow of his brothers who made a lot of headlines with their emerging markets telecoms empire (Naguib) and Swiss alpine village (Samih), while Nassef’s Orascom Construction Industries (OCI) maintained such a low profile it could (reportedly) do business with the Pentagon and North Korea at the same time. Now, France’s Lafarge has bought OCI’s cement operations in a 14.9 billion dollar deal, and in return Nassef gets an 11.4 pct stake in Lafarge plus two seats on the company’s board of directors. Analysts say OCI wants to focus on construction and infrastructure, but – as you can never quite separate business from politics in the Middle East – I’m wondering whether the Sawiris’ truly believe the Middle Eastern cement boom is over or whether we’re rather seeing a long-term strategy of the three brothers to move part of their assets away from Egypt (and the Middle East). Their relations with the ruling family don’t seem to be as strong as in the case of other Egyptian business tycoons (which means the impact of Mubarak’s death will not be as strong), but I guess we’ll have to wait for the full picture (on this one as on so many other things) until the Pharao has moved on to another life. In any case, the proceeds from the sale will be paid out to shareholders as special dividend – i.e. mostly to the Sawiris themselves. I’m wondering what the brothers are up to with so much cash.
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Egypt and China - a win-win situation?

German scholar Thomas Demmelhuber recently presented an interesting paper on Egyptian-Chinese economic relationships at the German Orientalists Day in Freiburg, Germany. These are the main points:
The rise of Egyptian-Chinese economic relations needs to be seen in the context of the Nazif cabinet which took office in 2004 and tries to orientate the Egyptian economy towards foreign trade. But it is also a political manoever, a message to the established partners EU/US. However, the reality does not live up to the bullish statements made by economy minister Rashid and others on the potential of Egyptian-Chinese trade. Up until early 2006, China was only the 29th largest foreign investor in Egypt. Now a few committees and investment zones were created, and Chinese investment as well as mutual trade is likely to grow.
Personnally, I don't see a lot of trade potential for Egyptian companies here, other than production joint-ventures in Egypt, which could serve Chinese companies well to re-export to Europe and Africa, while creating desperately needed jobs for Egyptians. Other then that, Egypt will remain a market for cheap Chinese products (I guess nowadays few products under LE20 are sold in Misr which are not 'Made in China') which is smuggled into the country via the Gulf (much of Dubai's rise is down to smuggling). I heard from European diplomats that most of current Egyptian-Chinese trade takes place outside statistics, and I'd love to know how much Chinese companies are truly selling in Egypt (and elsewhere in the Middle East).
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WWII mines Egypt

I have this article on qantara.de on the WWII mines and other ammunition left behind on Egypt's North coast. The Egyptian government wants to re-launch its efforts to clear the zones that are affected, but wants to have it all paid for by its international donors. As Egypt has brought to perfection the art of donor-shopping probably more then any other nation, I guess in the end they'll find someone stupid enough to pay the bills submitted by the Egyptian army. In contrast to what appears to be common in other countries, the Egyptian army maintains its monopoly over mine-clearing. Which is why not much has happened until today and which is why most donors rightfully so are reluctant to contribute. Excerpt from the English translation:
It was not until 1982 that the Egyptian government acknowledged the problem. "It was a question of costs and priorities," Fathy El Shazly, director of the national northwest coast development program, frankly admits. He refers to the history of his country, which after the Second World War was first busy gaining independence and then tied up in four wars against Israel. A bit more haste would have been advisable, though. According to the NGO "Landmine Monitor," there have been 8,313 mine-related casualties in this region since 1982, including 619 deaths. As can be observed again and again whenever natural disasters or accidents occur, however, the Egyptian government evidently does not place much importance on its own citizens. It has done little to help the victims to date. The Egyptian army did clear some 3.5 million pieces of ammunition out of the desert between 1982 and 1999, but since then a lack of funds has slowed down their efforts – at least that's the official line. Since things are moving much too slowly for the private sector, which has great plans for the region, some hotels and oil companies have begun to remove buried ammunition at their own expense in order to build access roads to their projects.
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'The Source' found dead

Ashraf Marwan, maybe the most colorful person of London's Arab community, has died under unclear circumstances. Some believe him to be 'The Source' which tipped off Mossad prior to the 1973 war - others say he acted as a double agent misleading the Israelis. From The Times:
Mr Marwan’s death will send shockwaves across the Middle East and among some of Britain’s wealthiest people. His associates included Adnan Khashoggi, the arms dealer, Ken Bates, the football club chairman, the Libyan leader Colonel Muammar Gaddafi and the late Tiny Rowland. If found to be murder, his death will carry echoes of last year’s assassination of Alexander Litvinenko, the former KGB agent.
In any case, he was close to Nasser and Sadat and must have made his fortune thanks to the connections he developed during that time, in particular when he overlooked the businesses of the Egyptian military in the 1970.
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State Department: Human trafficking report

Most of the Gulf countries have made it onto the Tier 3 list (those countries with the worst record in human trafficking, according to the report) of the State Department's Trafficking in Persons Report 2007: Kuwait, Qatar, Oman, Saudi Arabia and Bahrain. UAE is on the Tier 2 watch list. So is Egypt. From the report:
Egypt is a transit country for women trafficked from Uzbekistan, Moldova, Ukraine, Russia, and other Eastern European countries to Israel for the purpose of sexual exploitation, and may be a source for children trafficked internally for commercial sexual exploitation and domestic servitude. Reports indicate that some of Cairo’s estimated 1 million street children — both girls and boys — are exploited in prostitution.
I'm surprised at this large number of street children in Cairo. Does anyone have other sources on this?
In addition, wealthy men from the Gulf reportedly travel to Egypt to purchase “temporary marriages� with Egyptian women, including in some cases girls who are under age 18, often apparently as a front for commercial sexual exploitation facilitated by the females’ parents and marriage brokers.
What I also heard is that Cairo's chronically underfunded state-run orphanages are using this to make some extra money (or their employees). The full report can be downloaded here.
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Iraq's war economy

Finally, here’s (part of) the story behind the news: The authors Christopher Parker and Pete W. Moore in the latest MERIP issue analyze Iraq’s war economy and see much of the motives behind the insurgency against the US-led occupation in decades-old gray economic structures that are challenged by the new guys in power.
Throughout the 1990s, most of Iraq’s oil was transported in relatively small tanker trucks—to Jordan and Turkey with dispensation from Washington and undercover to Syria and the Gulf. As the pipelines to Turkey and the Gulf were turned back on in 2003, most of these truckers—many of whom had close ties with, and indeed colleagues in, neighboring countries—were out of a job. Hence, it is not surprising to learn that pipeline attacks “are now orchestrated by [insurgents and criminal gangs] to force the government to import and distribute as much fuel as possible using thousands of tanker trucks.
The authors challenge the mainstream view (and thereby also the whole reconstruction ideology) that in pre-invasion Iraq the state still functioned as a regulatory agent and controlled much of the Iraqi economy.
Washing their hands of any responsibility for the violence that plagues Iraq, they present the insurgency as springing from a yearning for lost domination on the part of groups linked to the Saddam-era state. This is the statist narrative—the idea that Saddam’s regime controlled everything worth controlling before it was overthrown.
Highly interesting are the remarks on the links to Iraq’s neighbors, most notably Jordan:
The political and social histories of modern Iraq and Jordan are bound tightly together. The deep ties between families, tribes, political movements and economic actors across the borders of these two countries have a history that, by and large, has yet to be written.
From the article it also becomes clear that the 2003 invasion merely finished off what was left of the prosperous nation that Iraq was in 1980. The US got most of the job done by sponsoring Saddam in the 80s and engineering UN sanctions in the 90s.
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The Central Boycott Office

This news is a couple of weeks old, but I found telling what German news magazine Der Spiegel discovered in attorney documents which are part of the file on the Siemens corruption scandal (which also extends to bribery in Saudi Arabia – see this excellent WS Journal article): The documents suggest that a part of the €72mn which Siemens paid to a certain Mohiedden el Shatta was used to make sure that Siemens remained off the black list of the Central Boycott Office. This office which is Damascus-based but affiliated with the Arab League was founded in the 50s to organize the Arab world’s commercial boycott of Israel. Companies which are on the list face restrictions in doing business with Arab states. Here is some background on the office from a paper published by MEMRI:
In other words, the Boycott Office has now become an instrument to fight globalization which threatens primarily the Syrian state-run command economy drowning under the weight of stifling regulations, pernicious corruption and a mafia-style political system. Syrian staff are the primary beneficiaries of the salaries advanced by the Arab League. If the CBO were abolished, many of these bureaucrats will be out of work or will be working as civil servants in the Syrian government at a fraction of their current salaries and benefits.
MEMRI has its agenda etc, but to me it looks like this thing still exists only to organize some extra baksheesh for Syria’s state-class, as the Der Spiegel article also claims: “To be removed from the [boycott] list, Western companies allegedly paid millions.�
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Selling Sharm?

With Issandr having said 'Buy land in Sinai now!' in the discussion of the Saudi plan to build a bridge to Sinai, I think this interesting article on British property buyers which appeared in Business Monthly in a way supports what he added: 'if you have a well-placed uncle in the army or mukhabarat'. Property worth up to $250millions has been snatched up by foreigners over the past three years, the article estimates, but nobody is really sure on which legal basis that has happened.
The vague wording of the decree, combined with the fact that parliament has still not got around to approving it, has left the parties concerned in a considerable state of confusion. No one is really sure whether non-Egyptians can still buy property on a freehold basis. Certainly, resorts such as Delta Sharm in the Hadaba area of the city continue to sell and resell on this basis. “Technically, a decree does not cancel a [previously existing] law, it merely gives another option,� says El Bahrawy. Other observers add that a further unwelcome consequence of the legal confusion is some officials have been demanding unwarranted fees.
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LE 200

That's good news for those business men of Egypt’s parallel economy carrying around millions of pounds (khawaga hit men pay in hard currency, I guess?). The capacity of their black suit cases could now double, as Egypt’s Central Bank is to introduce LE200 notes. (And later on even LE 500 notes). On the lower end of Egypt’s cash economy (90% of transactions are estimated to be carried out in cash), many people would also welcome an initiative to improve the supply of SMEs with smaller denominations. Penetration of SMEs with banking services is low, agreed, but why is it that no-one has change? If you’re the first customer at your local grocery in the early morning or the first in a fast-food outlet in the late morning hours, it takes ages for them to scrape up your change together from all employees around. Anyways, even if banks don’t offer cash-flow services to SMEs, I think many would welcome it if shop owners found a way to keep change in their shop at the end of the day for the next morning (or bring it with them before opening), and I always wondered why they’re not doing so. Cash-flow of groceries and other shops is much higher then what you’d think. Another consequence of the fact that SMEs/shops and banks have in so far (now many banks consider it as an opportunity for growth) largely ignored each other, is the prevalence of worn-out banknotes. It is one function of the Central Bank (via banks) to separate them out, but that doesn’t work if banks never get to see them… (Besides that, I also don’t understand the Egyptian mentality here. Instead of fighting over it, you just pass that outworn khamza gineh right on to the next passenger (in case of taxi drivers), and everyone involved is muss less stressed. Iranians, for instance, are not at all obsessed about clean money. They just tear half-torn notes into two proper pieces and then tape them.)
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Bridging Sinai and Saudi Arabia

This is an interesting project:
Saudi Arabia's King Abdullah will next week lay the foundation stone for a $1.5 billion bridge project that will link the Kingdom to neighbouring Egypt. The bridge will link the Sinai region of Egypt, close to the Sharm el-Sheikh resort town, to the northwest of Saudi Arabia near Ras el-Sheikh Humayd. Two bridges will be built to span the Gulf of Aqaba and Tiran Strait, with Tiran Island used as a halfway point for the 25 km crossing.
While I generally think that more infrastructure is badly needed to support inner-Arab trade, I actually don't think this will immediately do much good to South Sinai's economy, which is relatively well-off thanks to its tourism resorts. (It would be the North around El Arish that needs development.) This giant project is likely to destroy more of its precious coral riffs, and certainly means more trucks shipping goods from the Kingdom to Cairo, polluting the air and further damaging already bad roads. There are also talks between Yemen and Djibouti, by the way, to connect their countries via a bridge as well. This one is planned to carry a railway connection, which definitely should have been contemplated in case of the Sinai bridge as well. But I guess ENR is too busy with repairing all its switches and electrifying its tracks.
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Poor Jeanne

Half way through the Presidential campaigns, another French champion national is threatened by foreign powers. A study has found out that relics attributed to Jeanne d'Arc are actually bones of an Egyptian mummy.
The charred bones that were long believed to be remains of St. Joan of Arc don't belong to the French heroine but are instead the remains of an Egyptian mummy, a new study has shown. Philippe Charlier, a forensic scientist at the Raymond Poincaré Hospital in Paris, France, obtained permission last year to study the relics from the church in Normandy where they are housed. The relics were said to have been retrieved from the French site where Joan was burned at the stake in 1431. Charlier's team studied the relics—including a fragment of cloth and a human rib—under the microscope and subjected them to chemical tests. Close inspection of the human rib showed that it had not been burned but may have been heated to create a blackened crust on the surface, Charlier said. Meanwhile the fragment of linen cloth had a coating characteristic of mummy wrappings and contained large amounts of pine pollen. "Pine resin was widely used in Egypt during embalming," Charlier explained, adding that pine trees did not grow in Normandy during Joan of Arc's time.
Zahi, could you please comment on smell artists from the French perfume industry also being used to find this out. (Where do pine trees grow today in Egypt?)
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Fire in Sayyeda, again

The same black, thick smoke again, as just ten days ago. Not having checked the source of the smoke, I'm assuming it's houses burning again. This will serve as another argument to those who claim that the government uses the fires to pursue its relocation plans for parts of Sayyeda Zeinab. But I remember Masr el Youm running a full-page report on the dangerous trade in gaz bottles, which is scandalously unregulated. Update: The smoke is already gone; maybe someone just made use of the holiday to get rid of some waste?
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horytna.net on air

After sorting out some technical problems (and coping with traffic much higher then expected), horytna.net is now on air! The internet youth radio aims to promote tolerance in Egyptian society, by discussing topics such as human rights, women issues, education and others. Good luck with that, of course, but at the very minimum the site produces badly needed local content to get more Egyptians online. horytna.net is run by the Egyptian NGO Al Andalus Institute for Tolerance and Anti-Violence Studies, founded by friend Ahmed Samih. Listen in!
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