C HRONICLES T HE

THE
CHRONICLES
ECONOMIC
BUSINESS HISTORY RESEARCH CENTRE CHRONICLES
OCTOBER 2005, VOLUME 1 / ISSUE 2
AND
Inside this issue:
Business History and GLOBALISATION
GEOFFREY JONES
Singer in Egypt, 1880-1914
ANDREW GODLEY
In Anticipation
of Another
‘Harb’?
ABDELAZIZ EZZELARAB
The American University in Cairo
TABLE OF CONTENTS
EBHRC CHRONICLES
Editor: Dina Khalifa Hussein
Director, EBHRC:
Prof. Abdelaziz Ezzelarab
Project Officers:
Mostafa Hefny
Wael Ismail
Karim El-Sayed
Administrative Assistant, EBHRC:
Yasmeen Samir
Young Scholars Contributors:
Zeinab Abul-Magd
Amr Ismail Adly
Lina Atallah
Hoda Baraka
Mohamed I. Fahmy Menza
Guest Contributors:
Prof. Andrew Godley
Prof. Geoffery Jones
Layout &Design:
Magda Elsehrawi
Logo:
Nadine Kenawy
THIS ISSUE HAS BEEN COPY EDITED BY:
Prof. Sharif Al-Musa
Prof. Ibrahim El-Nur
Prof. John Salevurakis
Prof. Herbert Thompson
*******
About EBHRC
EBHRC Supporting Institutes:
Center for Middle East Studies,
Harvard University
Near East Studies Program,
Princeton University
Middle East Center,
University of Pennsylvania
Middle East Center,
University of Washington
Global Business Center, Business School,
University of Washington
Office of Provost, AUC
Office of Dean of BEC, AUC
EBHRC Collaborating Scholars:
Prof. Ellis Goldberg,
(University of Washington)
Prof. Roger Owen (Harvard)
Prof. Robert Tignor (Princeton University)
Prof. Robert Vitalis
(University of Pennsylvania)
1
The Editor’s Note
2
From our Archives
Outside the Family: Family
Businesses Going Public
3
An Economist Fascinated by
the Power of Making Money
5
The Creative Destruction of Economics:
The Role of the Enterpreneur
7
A Watch-Shop Where Time Stands Still
10
Guest Articles
Business History and Globalisation
13
Singer In Egypt: A Case of Multinational Investment
in the Middle East During the1st Globalisation Boom
16
History in the Making
Egyptian Workers Object! Resurgent Worker’s
Protests Make Headline News
19
Business and Politics: Siamese Twins of Power
22
Poor Man’s Country, Rich Man’s Industry:
The Export of Pollution to the LEDCs
25
Current Affairs and the Body of History:
Introducing ‘History in the Making”: A Seminar Series
27
Peasant’s Narratives: Egypt’s Economics Tale
30
In the Pipeline
Gamal Mubarak and Egypt’s Neo-Business Community
33
Historical Perspectives
In Anticipation of Another ‘Harb’?
37
The Arab Bank: A Palestinian National Bank of Jordan
40
Business Not as Usual
In Pursuit of Livelihood: Palestinian Refugees in Lebanon
41
Art on a Bottle: The Business of Art Making
43
Our Archives
45
Announcements
46
EDITOR’S NOTE
I
EDITOR’S NOTE...
n preparing for the second issue of The Chronicles we were faced with a number of challenges.
Due to the generous feedback we received, we were encouraged not only to proceed with our
project of producing a quarterly magazine, but also to live up to the expectations in the wake of
an admired first issue. We became courageous in asking for contributions by prominent scholars.
Gratitude goes to Professor Andrew Godley of the University of Reading and Professor Geoffrey Jones
of Harvard Business School for enriching this issue with their two articles, which are, published here and
address vital issues in the field of Business History in the Middle East.
Godley addresses how studying the business history of the Middle East through the archives of the
multinational enterprises is promising and shows this in a study on the Singer Sewing Machine
Company. Jones portrays the gaps in the research agendas of business historians and addresses how
business enterprises created global markets. The role of business enterprises in the inequalities
between the North and the South is one of the questions that the article raises for further research.
Both articles are good omens in our quest to solicit the contribution of the leading figures in the field
of business history to our Guest Articles section.
Fixing permanent sections in the magazine was a challenge. Our oral history archives were a secure
point of departure. Leaving their interviewees, the project officers would immediately formulate possible titles for a Chronicle's article. Credit goes to our oral history interviewees who have inspired us to
write historical glimpses, compiled in a section entitled From Our Archives.
The puzzling relationship between business and politics dominates this issue of The Chronicles. A number of articles address this network, whose major players are key figures in the business community
and government. The Egyptian system of patrons and clients is traced in Mohamed Menza's article
that inaugurates our In the Pipeline section, where we plan to include work in progress from ongoing
M.A. and PhD dissertations. Wael Ismail also investigates this relationship through a screening of news
and features in current newspapers and magazines.
The goal of our History in the Making section is to produce articles that explore dominant issues in current newspapers and magazines. This is not only a section in The Chronicles, but it is also the title that
EBHRC chose for a seminar series. Through this series, the centre hosts speakers and audience to discuss ongoing economic and business policies and events, which we believe, could have a lasting historical significance in a few years. Mostafa Hefny produces one of the possible readings of this seminar series in his article, where he attempts to place current events within a general political economy framework that does not negate other conceptions of the matter.
Refusing to abandon current affairs is one of our goals. However, history remains our main fascination.
It is paramount for EBHRC to be aware of the work of other centres and researchers, particularly if
they share a similar interest in oral history or other alternative means of approaching history.
Compiling narratives of Egypt’s economic history through peasants' oral history is a typical example
of material that would be included in our Alternative Histories section. The project covered in this issue
is conducted by the Land Centre for Human Rights and reported by Zeinab Abul-Magd. Through this
pioneering effort, voice is given to peasants to narrate a historical tale of land reform and agricultural laws in Egypt. This is a project that deserves a bow of respect and attention.
Finally, there is the curiosity to explore various ways of managing lives and livelihoods, of making business, through unconventional enterprise or under exceptional circumstances or other such matters.
This includes questions such as how artists make a living and how do Palestinians deal with the dilemma of finding work in refugee camps in Lebanon. These and other such questions will provide the substance and material for our Business Not As Usual section.
Hoping to go beyond mere reporting of the centre's activities, this issue includes 16 articles that vary
between the contemporary and the historical. It aims to present an amalgam of issues that manifest
the richness and potential of the field of business history in this part of the world.
Dina Khalifa Hussein, Project Officer, EBHRC
2
FROM
OUR
ARCHIVES
OUTSIDE
the
Family:
Family Businesses
Going Public
Karim El Sayed, Project Officer, EBHRC.
“T
he trend of younger generations joining the family
business seems to have
stopped!” This is how Mr. Nadim
Elias answered our question about
whether or not his two sons have
any plans to join the family business.
Mr. Elias is CEO of Elias Modern
Publishing House, a family business
his grandfather- Elias Antoine Eliasestablished more than 90 years
ago. The company started with the
publishing and printing of bilingual
dictionaries, and still retains this
activity as the primary function of
the company. It is arguably those
dictionaries that have managed to
transform Elias into a household
name not just in Egypt but also
around the Arab world. Over the
course of the past fifty years, however, the company has diversified
its activities to include translation
and publishing of literature books,
commercial printing as well as
publishing children’s books.
Mr. Elias officially joined the family
business in 1984 when he succeeded his sister, Ms. Eva Elias, as CEO of
the publishing house. Ms. Elias had
been managing the company with
their father since 1976, and she
later became CEO from 1979 till Mr.
Elias took over. Three years later, the
same year Mr. Elias reintroduced
the printing activities to the company after a fifteen-year halt, Ms.
Laura Kfoury- Mr. Elias’s wife- joined
the company to handle manage-
3
ment of the publishing division with
Ms. Elias, and she has been the
Managing Director of that division
since Ms. Elias passed away three
years ago.
“ family business
has been
ESSENTIAL
in the DEVELOPMENT
Middle
East and
of the
particularly in the
GULF REGION
since
before OIL was
discovered and
E X P O R T E D”
This corporate structure in itself
does not provide enough impetus
to study the Elias business or family.
For quite some time, family-run corporations have adopted similar
structures and modes for the transfer of power along the generations.
For relatively the same period, family businesses have been re c o gnized around the world, and in our
region in particular, as well-founded agents in the fields of business
and economy. In his keynote
a d d ress to a conference on
“Middle East Family Business”, Mr.
Hisham al-Razzuqi, CEO of the Gulf
Investment Corporation, emphasized “family business has been
essential in the development of the
Middle East and particularly in the
Gulf region since before oil was discovered and exported. Family business was the main driving force in
Gulf economies that were built on
entrepreneurship and enterprise,
trade and sea faring. It was family
business that financed public services such as security, health services
and the like”. As for the countries in
the region whose recent histories
comprise pseudu-socialist experiments, for many, one way to survive
the stock market closures and the
waves of sequestration and nationalization was to keep their business ventures in the family. That is why, perhaps, some of the family-run corporations thriving in Egypt today have
roots that go back to the preRevolution era.
In my opinion, what calls for further
attention, is a phenomenon, or rather
a trend, in the corporate structure and
environment of family businesses. Mr.
Elias told us that there was not much of
a decision-making process when he
came to join the family business and
that for him “it was only normal to join
the family business and complete
what the family has started”. He, however, reported that his t w o so n s d o
FROM
“...
one way
to
SURVIVE the stock
market closures
and the waves of
SEQUESTRATION
and
nationalization
was to keep their
BUSINESS ventures in
the
family...”
not seem to share the same feeling. His elder, Karim, works for the
Microsoft computer company in
Seattle, and his second son, Sami,
started his own product development and communications company, which ironically occupies a
floor in the same building of the
family company. Despite the fact
that Mr. Elias made sure to relay his
feelings about the family business
to his sons, and made them go
through an initiation program that
involved working in the presses
and witnessing the whole production process since a very early
age- similar to the program he
underwent himself, he is still not
sure if they would decide to join
the family business one day. Mr.
Elias’s conviction is that his sons do
not need to work for the company
to acquire specific experience
about the industry to be able to
take over the company one day.
“If tomorrow I go away, and they
need to take over, they will take
over without any difficulty”.
This trend also proved to have
more practical implications on the
corporate structure of family businesses. Mr. Elias asserted that the
general trend for family businesses
in the future would lead to transforming them to joint-stock com-
OUR
ARCHIVES
panies, and maybe even to publicly-traded companies to overcome the weakness that the offspring are obliged to handle management. Mr. Elias also added
that family disagreements might
lead to the breakdown of familyrun corporations, but the structure
of joint-stock companies ensures
that distribution of equity shares is
more transparent and family considerations will not influence management, which would ultimately
minimize problems and family disputes. Moreover, and contrary to
popular belief, Mr. Elias and Ms.
Kfoury both argue that family-run
corporations do not offer that
much freedom and flexibility for
managers as opposed to jointstock and publicly-traded companies. If the manager in the family
business does not have to report
to a board of directors, that manager would still be held responsible by the entire family for the performance of the company.
Besides, Mr. Elias continued, in any
company an alert and attentive
board of directors would empower the CEO and the Managing
D i rectors to take swift actions
when needed through a larg e
degree of flexibility. Alternatively,
the structure of joint stock and
publicly traded companies offers
many advantages that are lacking from family-run corporations.
Ms. Kfoury reported that the company loses chances to employ
qualified personnel because
many people think it would be difficult to get promoted and to
reach top-level positions in familyrun corporations, which is a real
loss to those companies. Mr. Elias
reported that allowing partners
and expanding through acquiring
other companies is much more
difficult for closed family-run corporations compared to joint-stock
companies. Mr. Elias talks fro m
experience. He is the CEO of
Sahara Printing, a joint-stock company registered under the Nasr
City free zone, in which the Elias
family represents only 65% of the
capital and the remaining equity
is held by distant relatives and
friends.
Mr. Al-Razzuqi, in the aforementioned address, echoed Mr. Elias’s
views about the future of family
businesses in the region. He
explained that the present “comprehensive and drastic privatization” waves taking place all over
the economies in the region aims
at providing “a level playing field
for the private sector to compete
efficiently [as] … governments
would limit their role to regulation”
and “in this environment, family
businesses would grow and prosper along the normal path of
development by becoming more
professional in its management
and more open to external capital. That will lead to increasingly
transforming family business to
publicly-traded enterprises”.
Whether through pre s s u res from
inside, or incentives for gro w t h
from the larger environment in
which they operate, it seems that
the future for family-run corporations is already set. The July 16
issue of the daily al-Hayat, which
reported that 56 family-run corporations in Saudi Arabia have
applied to the Ministry of Trade
and Industry to be transformed to
joint-stock companies, proves that
the trend has begun. A recent
study by Wharton pro f e s s o r
Raphael Amit and Harvard
Business School Professor Belen
Villalonga, entitled “How do family ownership, control and management affect firm value?”
could pose some concerns for
family members as well as potential investors. The professors’ analyzed data from all Fortune 500
firms in the United States from 1994
till 2000. Their sample included
Ford Motor, Motorola and Apple
Computer. The results from their
analysis showed that the firms’
market value declines when the
founders step down for descendants to handle the management
of the family-run publicly traded
firms. This could mean that what
the families think a cure for their
concerns might be the blow they
do not expect.
4
FROM OUR ARCHIVES
...an
by the
ECONOMIST
fascinated
POWER
of MAKING
An Interview
with Professor
Heba Handoussa
Bridges Gaps
between Research
and Practice...
MONEY
Dina Khalifa Hussein, Project Officer, EBHRC.
“W
hen I was six years old, my
dad asked me what I wanted
for my birthday. I asked him
how money was made. He
told me that there is a bank,
inside of which is a big room, where they have
machines that print money. So, I told him I wanted
one of those money machine for my birthday.” Dr.
Heba Handoussa reminisced in her house when we
asked her why she chose to study economics. She told
us how the thought of having the power of making
money always fascinated her. As an academic she
was never able to make much money for herself, but
instead always had these fantastic ideas of how the
Egyptian government could.
After obtaining her PhD in England and returning to
Egypt in the 1970s to become a professor at the
American University in Cairo, Handoussa knew immediately that what she was going to teach had to be
relevant to practitioners. Adopting a practical
approach to her career, she advised at least 22 ministers in the past 30 years. She worked with the ministers
of economy, industry (four in a row) and health, especially that PhD dissertation revolved around the pharmaceutical industry. In addition, she worked with the
5
ministers of agriculture, higher education, research
and technology, as well on civil service reform. In
short, on many areas that touched on human development. A puzzling thought that often crosses the
minds of researchers and academicians is a lingering
doubt about the benefits that accrue to society
because of their work. For Handoussa, the path was
clear: “My purpose was always to try to link between
knowledge, research and improving either the performance of particular sectors like manufacturing, job
creation, exports and so on or improving the lot of the
poor.”
As an advisor for ministers, Handoussa spent years in
public office, and how her research influenced decision makers therefore is a pressing question. “It has
always been a huge disappointment,” Handoussa
answered, “even though I may have all the credibility
in the world and all the hard work that I put into presenting proposals, comparisons and development
models-- such as South Korea’s in the early 1980s, for
example-- yet nothing gets done.” She mentioned
that she came to the realization that ultimately everything was politically driven and that if there was no
political will nothing can be accomplished on the
economic, social and administrative levels.
FROM OUR ARCHIVES
Handoussa worked about 15 years at the ministry of
industry. Her main challenge was how to make the best
out of a bad situation, particularly with regard to the
public corporations that dominated the work of industry. She struggled with the engineers’ ideology that
focused mainly on backward integration and ensuring
that everything was on site – where every firm’s focus is
on internal sourcing. In addition to the fact that importation was minimal. Economists were definitely alien to
this environment. Handoussa argued that, “ if the opinions and work of economists were taken seriously…we
could have been at least a Thailand, if not a Malaysia
or a South Korea.”
From 1979 to1993, Handoussa advised four consecutive
ministers of industry, who were all engineers and heads
of big public sector enterprises. How the decision-making process took place inside the ministry shifted the discussion in the direction the state’s public policy at
large. The ministry of industry, according to Handoussa,
was predominantly a ministry of public enterprise, yet a
vision for the entire manufacturing process was nonexistent. She explained how mega mining projects
were the legacy of the socialist planning. Some, like
Abu Tartur phosphate project, were, according to her,
“big mistakes” embarked upon by the ministry then
entitled The Ministry for Industry and Mining. She argued
that despite the shift to the open door policy, “the engineers won at the end of the day;” leaving behind
ambitious and visible projects that are economically
inefficient.
One may hastily assume that Handoussa, who was on
the negotiating table during Egypt’s signing onto the
World Bank’s Structural Adjustment Programs, is simply
against the public sector. Things are much more complicated than that. For she was one of the strongest
supporters and even a champion of public enterprise,
especially in 1975, on here re t u rn from abro a d .
I m p ressed by the pharmaceuticals sector and its
achievements in Egypt, she had faith in its potential. In
the ten years that followed she faced huge disappointments. Fighting to give public enterprises autonomy to
price, invest, export, employ and decide on salaries,
she was faced with the public sector managers refusal
of this freedom and rush to the ministry to ask for quotas. “It just took them 10 or 15 years, from the mid 1960s
to the mid 1970s, to become bureaucrats,” she said.
With the failure to push public enterprises to become
business oriented and independent, she gave up
advocating for state owned enterprises that could act
in the best interest of both efficiency and welfare.
It became irresistible, speaking with her, to try and get
a backstage glimpse of the ERSAP negotiations. “The
World Bank was banging at the door of the ministry
since 1986,” Handoussa explained. Negotiating on
behalf of Egypt in the World Bank, she described how
she battled to prevent privatization from being a condition for Structural Adjustment. “I was totally against
privatization then because we were not ready for it,”
she mentioned. Privatization was one of five elements
of the sector programs of reform. Handoussa stated
that they were finally able to get a sector reform program for industry that excluded privatization. This
arrangement lasted from 1986 to 1991 during which
developments in industrial reform in matters as central
as pricing and entry policies were achieved.
Handoussa also discussed Law 203/1991, which was the
first legislation allowing for privatization. She argued
“...ULTIMATELY everything
is politically driven
no
political will
and that if there is
nothing
can be
accomplished
on the
economic, SOCIAL and
ADMINISTRATIVE levels...”
that the law itself was good and that privatization was
not abusive of the public sector; rather, it was the overpricing of companies assets that led to major losses.
She described the lack of willingness to accept responsibility to sell as a major handicap in the process of privatization.
The catastrophe, as she described it, was finally not the
public enterprises, but the public authorities. “When
you hear that the Television Union has a deficit of over
a billion pounds in one year, when it has all the scope
to gain profit from advertisement, it is just unacceptable,” she stated. She expressed discontent at Egypt
Air’s monopoly control; a state of affairs that is leading
to tremendous loses in tourism revenue by keeping out
all kinds of charters and regular flights of other companies.
It should be clear by now that categorizing stances into
pro/ against privatisation, or advocacy of/ antagonism
toward, public enterprises, is a futile exercise. Hope
stems from more studies and research, which propose
recommendations that would help solve Egypt’s many
economic problems. Work such as The Egypt Human
Development Report on which Handoussa, along with
a large inter-disciplinary team, which is currently at
work gives hope for possible improvement on the socioeconomic fronts. However, one is sceptical whether the
policy makers would respond to such recommendations.
6
FROM OUR ARCHIVES
Creative
Destruction of E c o n o m i c s :
The
Entrepreneur
The Role
of the Egyptian
Mostafa Hefny, Project Officer, EBHRC
A Dismal Science
The rules of conflict stipulate that the messenger be
spared. The annals of the history of economics reveal
that one group of scholars has been heartened by this
civility, tailoring their output around assumptions that
preserve messages written beforehand in a different
age. The sum total of reports and books, papers and
conference proceedings, produced by this group of
scholars, amount to a convoluted rationalization of
inconvenient realities, based on the orthodoxies of lais sez-faire, historical materialism and other deities in
between. Economics has attracted an inord i n a t e
share of bearers of dead tidings.
The great depression in the late 20s of the past century is a demarcating line in economic thought. Or at
least that is the pretence to which historians of economics cling. The story is that the wails of the hungry
and unemployed finally got through to the economists
who had until then, in deference to John Baptiste Say
(died in 1832), held that the wailers did not exist. A
group of economists, led by one John Maynard
Keynes, formulated the heresy of the underemployment equilibrium to which we can trace the modern
acceptance of government spending as an economic stimulant. A direct result of this shift was the ascendancy of Franklin D. Roosevelt to the presidency of the
United States in 1932 and the adoption of the New
Deal in which the now legitimated role of the state led
to the birth of the modern welfare state.
The above, of course, is fiction. That economists have
failed as prognosticators has not in anyway impaled
the economist's view of himself and his role in history.
As John Kenneth Galbraith notes in his affectionately
derogatory account of his discipline Economics in
Perspective, the economic policy of the era was not
the work of Keynes or others: "Harsh circumstance, the
intractable force in economic policy, had already
7
required what Keynes was to urge…Keynesian economic policy would long be seen not as an act of economic wisdom but as a sophisticated rationalization of
what had been shown to be politically inescapable.”1
The modern welfare state is more likely German in origin, built as it was, by Otto von Bismarck towards the
end of the 19th century. Of course Bismarck surrounded himself with historians, not economists. That it took
the latter close to half a century to acknowledge the
expediency of the mathematically inelegant political
decision to ameliorate the working masses does not
speak well of the economist's usage of history. The discipline's many models, built to abridge historical narrative, has insulated economists in a cocoon of their own
making, conversing in their own language that has
steadily grown into a joyless mysticism of numbers.
They need not have looked back to Germany of the
19th century to witness the utility of state intervention in
the face of depression. Indeed just as Keynesians were
facing the forces of laissez-faire economic orthodoxy
in Europe and the United States, another German was
building an economic engine based on massive government spending on public works and the military –
but by the time economists considered the case of
Adolf Hitler and the Nazis, the world was at war.
The Spoiler
Fantasy can be a terrible burden. The more elaborate
the construction, the greater the effort required to shield it
from a geometrically awkward reality. Economists, who
are social scientists, have been able to shield themselves
from such intrusions by studying society en masse – the
blanket insurance offered by the law of large numbers
that removes distortions to the constructed model i.e. the
human being. The economist skates by a myriad of indicators, untroubled until the introduction of the entrepreneur, that irreducible figure whose central characteristic is innovation.
FROM OUR ARCHIVES
"The entrepreneur did – and still does – much for economics," writes Galbraith2. That he must. For Joseph
Schumpeter, who famously gave the entrepreneur
the starring role in economics, also recognized the
possibilities of this mysterious figure. Or perhaps he
feared him. Schumpeter realized that economics,
built in terms of abstract models, where all but a few
variables are frozen, was a dangerous tool; economists could argue that one caused the other in a simple monotonic fashion. This then led to the belief that
one could easily deduce policy conclusions directly
from a highly abstract theoretical model. By centring
his own work around the one variable that could not
be frozen by economists, entrepreneurship, , he preempted its danger. The entrepreneur is villainous presence to the economist, threatening to wreck the
elaborate model with idiosyncratic behaviour. With
foresight, Schumpeter placated this menace to economics by casting the entrepreneur as the hero of
capitalism. He further co-opted the most perilous
characteristic of the entrepreneur, his destruct fullness
by making that trait the fuel of progress. According to
Schumpeter, the entrepreneur is engaged in a continual process of "creative destruction" of the status quo
that acts as the engine for economic growth.
This deification of the entrepreneur is clever. The enigmatic figure becomes the resolution of the ills of economics even if his behaviour is at odds with the internal logic of the previously constructed theory; he
becomes a Deus ex machina. We must then look closer at the enigma that is the entrepreneur. Who, we
must ask, is the entrepreneur?
"The study of entrepreneurial behaviour," writes one
author on the subject," does not lend itself to precision."3 Indeed it cannot, for if the central trait of the
entrepreneur is innovation then it must follow that, to
some extent, the entrepreneur is travelling in uncharted territory. If, as the business economist Mark Casson
argues4, the entrepreneur is essentially a non-conformist with a tendency to opt out of social groups to
gain greater flexibility, then the study of entrepreneurship may in fact end up an inverted but equally fruitless version of fantastical macro-theory; The profile of
the entrepreneur may well become an atomistic exercise in psychology divorced from political and social
context.
There is a deeper paradox at work here. On the one
hand the entrepreneur is distrustful of the group. He is
unique and forges his own path. On the other hand,
the entrepreneur exists in a political, economic and
social system built on objective ground. As the system
evolves, its masses melt and shift. The entrepreneur
then exploits the cleavages in such a way as to alter
the entire system. The question is the age old one of
causation: whether the entre p reneur initiates the
change, as Schumpeter would have it, or whether he
is among those great men who "despite their illusions
are more acted upon than actors"5 as the historian
Fernand Bruadel would.
This is a closed circuit. The chicken and egg is far more
interesting in the abstract academic study then it is in
the actual narrative of society where an obsession
with causation is likely to come second to an appreciation of the complex historical system manifested in
the simultaneous incidence of economic change and
entrepreneurial activity. One of the problems with
studying entrepreneurship as an abstract concept is
the absence of a sense of scale. There exists the implication that the entrepreneur plays an equally important role in the economy regardless of what economy
and historical period are under consideration. More
importantly, an unfortunate legacy of Schumpeter is
the assumption of a central, even "heroic" role for the
entrepreneur. In fact whilst, given congruent political
inclinations, figures such as Henry Ford and Talat Harb
“... The
ENTREPRENEUR
may be a
savior,
or the culture's
prodigal
son though he need
,
not be
anything quite so
dramatic...”
may be regarded as heroic, the innovative quality
that defines the entrepreneur need not be admirable
or remarkable in any sense other then the fact that it
represents the exploitation of new opportunities or the
devising of new ways to exploit old ones. The entrepreneur may be a saviour or the culture's prodigal son,
though he need not be anything quite so dramatic.
An Egyptian Entrepreneur
The Economic and Business History Research Center has
begun an oral history project with Egyptian entrepreneurs.
The personal narratives of entrepreneurs must serve as the
touchstones around which an understanding of the historical
role of entrepreneurship in this country and beyond is constructed. As evinced by such pioneering works as David
Landes's Bankers and Pashas and Robert Vitalis's When
Capitalists Collide, entrepreneurs, Egyptian and foreign, were a powerful force affecting the course of
the 19th and 20th century political economy of Egypt.
8
FROM OUR ARCHIVES
The role of the business community, entrepreneurs and
rent seekers among them, has ebbed and flowed in
decades just past, yet this is an area in Egyptian history that continues to be neglected. In part, this project
also aims to unearth entrepreneurial behaviour in the
Egyptian milieu. It has been suggested by one school
of political conservatism in the West, and echoed by
not an insignificant group of Egyptian commentators,
that there exists in this country cultural impediments
not only to entrepreneurial initiative but to rational
economic behaviour in general. This assertion will
come under close scrutiny in the course of this project.
The first businessman chosen for this project was
Mohamad Elwi Taymour, the chairman of EFG-Hermes,
Egypt's leading fund and portfolio company and
investment bank. The choice of Taymour, who retires
at the end of the year, was an auspicious one inasmuch as he was a true pioneer both in his choice of
enterprise and the manner in which he ran that enterprise. In his focused but nonetheless detailed and
extensive reminiscence he imparted an autobiography proficient enough to include details of some contracts of his first financial services firm in the early
1980s, the Cairo Financial Group, and the legal skirmishes involved in its operations. On the other hand, it
was eclectic enough for Taymour to talk about his
education; from his wealthy family's then unusual
decision to have their son study in an exclusively
“... The role of
BUSINESS COMMUNITY,
entrepreneurs and RENT
SEEKERS among them,
the
has
ebbed and flowed in
D EC A D ES
just past, yet this is an area in
EGYPTIAN HISTORY
that continues to be
neglected...” .
Arabic language school to his reluctant study of engineering in college and PhD (in Systems Analysis) at
Dartmouth college in the United States in the late
1960s. It is an extraordinarily rich account by a man
who has obviously been mulling over his life’s journey
9
in view of impending retirement.
As rewarding as it is, Taymour's account also betrays
some of the potential pitfalls of the project. Whilst it
was never our contention that Taymour be representative of Egyptian entrepreneurs (indeed representativeness is somewhat at odds with the idea of entrepreneurship), we must consider the Egyptianity of
Taymour's entre p reneurship: Mohamed Taymour's
class background need not consign his experience to
a category of Egyptians whose assets were nationalized in the 1960s and whose family was involved in private enterprise before the 1952 revolution. As a professional, his career as a financial expert in the Arab
Fund (in Kuwait), among other entities is far too
accomplished to be so crudely defined. Yet in his
account of his method of running EFG-Hermes,
Taymour adopted what he saw as an idyllic version of
American management. Indeed he stressed that the
absence of patronage within the firm along with his
decision to retire at a time when he is still fully capable
of running the firm are concepts of business practice
that he hopes to introduce to Egypt. The implication
being that the management style at EFG-Hermes,
though clearly influenced by its founder's long experience, is also a partially transplanted one.
Yet can this, now, make Taymour's account a poorer
resource for study? "Nothing," the poet Paul Valéry
once claimed, "can ever happen again without the
whole world's taking a hand". It is perfectly likely that
entrepreneurs in Egypt would be aware of management techniques developed elsewhere. What validates the account is not the management philosophy
employed by the entrepreneur or the degree to which
such a philosophy can be traced to popular or
ancient Egyptian culture. Rather what we're looking
for is the entire experience of the entrepreneur of
which management is only a constituent. The key
being that it has been in an Egyptian context that the
entrepreneur has defined himself and conducted his
business.
Thorstein Veblen, a sociologist, has distinguished between
esoteric and exoteric knowledge. The first is of high prestige but little practical use. The second is of low prestige
but great practical use. Modern economic theory,
which is increasingly divorced from history, is of the first
kind, though it often disastrously poses as a utilitarian
remedy to societal ills. As the number of accounts of
entrepreneurs grows, we are likely to collect a historiography of the Egyptian economy through the eyes of various entrepreneurs. Each account will reflect the practical modifications of perf o rmance by a variety of people who have melded their behaviour to the cleavages
in an evolving economic and political system. A synthesis of these accounts will give us a history of Egypt that
has been largely ignored. A history that should leave
established economic discourse on Egypt in need of
restoration.
FROM OUR ARCHIVES
a Watch-Shop
Where
TIME
S TAN D S
ST I L L
Wael Ismail, Project Officer, EBHRC.
T
he contrast is overwhelming; you are suddenly
transported into an era of a time that has long
passed. This is the first feeling you are bound to
experience once you cross the threshold of Maison
Papazian, this watch-shop that has endured for a
century now. The shop lies in the often crowded and
cluttered il-‘ataba area. It is practically buried behind
a large number of kiosks and street peddlers selling all
kinds of commodities of our time from knock-off
watches to a variety of imported Chinese products.
Once you enter the shop, it is as if you have found a
portal in the time continuance.
There is no escaping the flood of nostalgic emotions
you are going to experience once you enter the
atmosphere of this old watch shop. You suddenly find
your self-living in early 20th century Egypt. It is a powerful break from the reality of the sights, sounds and
smell of the bustling streets of Cairo with its swarming
sidewalks. Maison Papazian was first brought to our
attention at EBHRC through a magazine article (1),
after reading it, we felt that there was much more to
be discovered about the shop. Inside, project officers
of EBHRC were greeted by Mr. Ashod Papazian, the
third generation family business owner. At his back
office, the theme is only bolstered; behind his desk lies
a canvas of family portraits and old newspaper clippings relevant to the shop.
Mr. Papazian started working in the shop since 1982,
however, his relationship with the place started as far
back as he can remember the times when his father
used to bring him and his brother -Nerses- to watch
the business and hammer around at old clocks. He
indicated that the detailed and complete history of
the shop would have been better told by his late
father, a statement that further assures us of the
importance of capturing the untold history in the
memories and minds of those people who witnessed
it first hand. The Papazian family originally came from
A l e x a n d retta, Syria and Mr. Ashod’s grandfather
established “Maison Papazian” in 1903. The story of
the shop and the family is what we tried to explore in
our interview with Mr. Papazian.
This article is not meant to be a summary of the interview conducted with Mr. Papazian, but rather a
reflection on how interviews like this might help historians and researchers delve into the detailed lives of
people that are usually overshadowed by the need
to generalize and theorize about societies. Those people walked the streets of Cairo witnessed its political
and economic change and bought their newspapers
and cigarettes from shops that with a few variations
here and there usually shared the same story of
“Maison Papazian”.
“...I don’t have
one-time clients.
I am
actually
very PICKY about
the work
I accept
….
”
10
FROM OUR ARCHIVES
“The shop was able to
SURVIVE these years,
unlike OTHER
shops around in the
Mr.
Papazian
area that
remembers,
because the business
always
remained
has
in the FAMILY and
was always run by a
family
member...”
The shop’s most enduring theme is the adaptability
and survival of foreign minorities through a century of
change in Egypt’s political, economic and social
structure. The study of the durability of the shop
through these years might be taken as a benchmark
for change in its area with possibilities for generalizations. However, the last statement should be carefully
looked at in order not to fall in the same trap that we
are warning against. It could be used to measure
change through the eyes of the Papazian family but
only to take a closer look at a slice of life in the past. It
should not be taken as the norm, as it cannot be
taken as an example for foreign minorities or small
business owners in general. Maison Papazian stood
11
witness to the complete restructuring of the Egyptian
society through different regimes, each one catapulting a new class to the forefront. Mr. Papazian indicated that the bulk of their clients remains rooted in the
“general class” (2) a fact that has allowed the shop to
serve the palace, and later on the military officials of
the subsequent era. The shop maintained a client
base through the generations by keeping operating
within long held traditions, most important of which is
the personal repertoire established with the client.
Papazian highlighted this point when he added, “ I
don’t have one time clients. I am actually very picky
about the work I accept…. We have a friendly like
relationship with our customers and when I can not
remember, them they remind me of themselves.” The
shop and the family were always in close connection
with people. Their focus on the repair business made
their shop the place to go if you want your watch
fixed. They have a staff of seasoned craftsmen, the
youngest of which has been working at the shop for
the past 25 years. Their approach in repairs is unlike
most of the shops around them, as they take great
pride in their one-year guarantee on repairs, a privilege their counterparts cannot give or promise. This,
he contended, has always managed to keep the customers coming back. When asked about his philosophy in attracting new clients and competing with the
new shops, Papazian said that,
“At Maison Papazian, you pay once and you get your
money’s worth. You have to replace the broken
pieces with new ones, you can not mend broken
pieces. The shops outside are only looking for 20 or 30
pounds they are going to get for the first time regardless whether the client comes back or not. I will be
quite happy actually if they continue in this way.”
The family and the shop open questions of identity,
belonging, entrepreneurship and survival. These issues
could not be truly appreciated unless we accept the
uniqueness of “Maison Papazian”. When asked why
his family chose not to join the large exodus of foreigners from Egypt in the years following the 1952 revolution, Mr. Papazian responded by saying, “We left
Egypt in 1966, but it was only for a year. However, after
that one year, my parents missed their friends and
their life in Egypt and it was also too cold for them in
Canada. We had a small business there as well. My
parents just wanted to get back to Egypt, with or without Abdel Nasser.” This was not to the liking of a young
Ashod at the time, because Egypt for him, “was grey
and gloomy.” Although his perspective must have
changed, something that could be easily detected
when you see him talking with pride about how his
brother and him are able to preserve the shop in its
original form and keeping the legacy of his father and
family alive. When asked if he ever contemplated
closing, selling or changing the nature of the shop, his
answer was concise and to the point, “ if you have a
gold mine would you close it down.”
FROM OUR ARCHIVES
Maison Papapazian burried behind street vendors
and peddalers in the new al-’Ataba Square
The shop’s front carrying the name of Francis
Papazian, the Armenian immigrant who founded
the shop in 1903
Mr. Ashod Papazian, the third-generation owner
standing infront of a wall covered by antique clocks;
the shop’s specialty
Portraits of the Papazian family mounted on the office wall
Maison Papazian is a distant reminder of a time when
most small businesses and shops were owned by families, and especially from the local foreign minorities.
The Armenians who once numbered over 50 thousand in Egypt are around 5 to 8 thousand now
according to Papazian. The shop was able to survive
these years, unlike other shops around in the area that
Mr. Papazian remembers, because the business has
always remained in the family and was always run by
a family member. It was able to preserve its unique
status and tradition alive because it was not over run
by short lived trends, it stuck to its own formula of success. A characteristic that comes to light through the
current shop’s timing schedule which is still divided
into two slots -one in the morning and the other in the
afternoon, unaffected by the change in most shops
and firms in Egypt to the full day system which
became the norm in the Egyptian market by the late
1960s. Papazian’s response was as expected defiant
of the general trend,
“People have changed but I am not going to change
my schedule for them, so whoever needs our services
is going to have to come on my own timing not his, I
don’t care about this extra buck and this is probably
making me lose a lot of clients. I am going against the
tide but I am never going to open till late at night. We
are not going to change. I feel we are crumbling
down slowly over the years just like the pyramids.
That’s why I am not thinking about expanding or anything I am happy right here the way I am; definitely if
I expand I will be making more money, however,
money is not the issue here.”
This 100-year-old watch shop is a living testament of
the endurance of the family businesses form of ownership; however, it is one of seemingly no importance
as we are slowly seeing this once widespread method
of doing business fade away into the 21st century.
During the interview Mr. Papazian recalled a number
of other family run businesses around the area that
have closed down primarily for the same reason, the
absence of a family member to take care of business
and succeed the original founders. Maison Papazian
faced no such problems, although the current owner
does not deny that it might a problem in the coming
years if his children show interest in some other activity. It is a shop that would truly help us in better navigating the lives and decisions of foreign minorities in
Egypt. To study the place, the area and the family
behind the shop would consequently resonate into
more than one path of discovery.
END NOTES:
1. Lindsey, Ursula. “The Test of Time; Third Generation Takes
Over a Century-Old Cairo Business.” Cairo, 7th of April,
2005.
2. Interview with Mr. Ashod Papazian on the 28th of June.
EBHRC oral history archives.
12
GUEST ARTICLES
Business History
& GLOBALISATION
Prof. Geoffrey Jones, Harvard Business School.
T
he timing, determinants and consequences of
globalisation remain highly contested, among
scholars and policy makers, as well as the citizens of the world, however all parties would agree
upon the central importance of globalization in
humanity’s development. Historians have been
important participants in globalization debates.
They have not only tracked the historical origins of
globalization, but have established both that much
that has been assumed to be new is not new, and
that globalization has been far from being a linear
process.
Many sub-fields of history have contributed to this literature. Economic historians have provided quantitative evidence on the integration, or otherwise, of
markets, over time. Imperial historians have re-cast
the history of European empires in terms of globalization. Business historians have made their own distinctive contribution. They have highlighted the
importance of entrepreneurs and firms, rather than
(say) markets and technologies, in the history of
globalization. They have shown that business enterprises have not simply responded to global markets,
but have often created them.
Origins and Dynamics
Business historians have traced when and why firms
began crossing national borders, and in the process
integrating economies. One quite recent book identified the first “multinationals” appearing in the Old
Assyrian kingdom shortly after 2000 BC. Whatever
the merits of that argument, it is evident that over
the subsequent four thousand years empires rose
and fell, trade routes opened and closed, and international commerce expanded and contracted in
response to this shifting environment. One constant
was that geographical distance remained an enormous obstacle to the growth of firms beyond their
local regions. It was exceedingly difficult to own and
control business activities spread over large distances. The level of cross-border economic integra-
13
tion remained low.
During the nineteenth century this situation
changed, and globalization intensified to such an
extent that business historians now talk of a “first
global economy” before 1914. Beginning in the early
nineteenth century, and accelerating from the
1880s, thousands of firms crossed borders, building
the sinews of this first global economy. Railroads
and steam ships shrank distance, opening new markets and making possible the exploitation of natural
resources in distant lands more feasible. As important was the revolution in communications caused
by the telegraph. Meanwhile the “political distance”
between countries also fell dramatically. As the
nineteenth century progressed, liberal economic
policies took hold in many countries as governments
withdrew from economic activities. Imperialism can
be seen as the forcible removal of political barriers
to globalization.
“IMPERIALISM
can be seen as the
FORCIBLE
R E M O VAL of
political
barriers
to
globalization...”
GUEST ARTICLES
Business historians have shown that firms drove globalization by creating trade flows, constructing marketing channels, building infrastructure, and creating
markets. By 1914 the production or marketing of
most of the world’s mineral resources was controlled
by Western firms. Much of the infrastructure of the
global economy – the telegraph, ports, and electricity and gas utilities – was put in place by international business enterprises. Trading companies both facilitated and created trade flows between developed
and developing countries, often investing in plantations, mining and processing.
The identification of the heterogeneity of business
enterprises involved in the first global economy has
been one of the main achievements of recent business history research. Large managerial firms co-existed with numerous small and family-owned firms.
“born global” firms, believed by management
researchers to be a novel feature of the contemporary global economy, existed in thousands before
1914. Nor was the creation of the first global economy the preserve of U.S. and western European firms.
The commercial networks established by diaspora
communities such as Greeks, Jews and Chinese were
important drivers of international business in the first
global economy.
The first global economy began to unravel in 1914,
and collapsed in 1929. The disintegration of global
commodity, capital and labor markets has been
well-documented. Business historians have made
their own contribution by demonstrating that business enterprises were often more robust than an
aggregate view of markets would suggest.
“business ENTERPRISES
have NOT simply RESPONDED
to
have
global markets, but
often created them”
A global economy began to be partially restored
after the end of the Second World War, although barriers to trade and labor flows persisted, and there was
a widespread decline in receptivity to foreign firms,
especially in developing and post-colonial countries,
between the 1950s and the 1980s. Globalization in
three decades after World War 2 was closely lined to
Americanization. Business historians have showed
how multinational service firms such as management
consultancies served as conduits for the transfer of
U.S. management practices and, more generally,
values and lifestyles to the rest of the developed
world. Multinational banking played a vital role in
rebuilding a global infrastructure. The development
of the Eurodollar markets in London from the late
1950s provided a dynamic new source of funding for
global capitalism.
From the late 1970s deregulation and liberalization
stimulated increased globalization. Business enterprises were once more the drivers of integration. Business
historians are only now beginning to explore the
dynamics of this second surge of globalization, but a
business history perspective does lend support to the
view that the second global economy was less
“global” than the first in important respects.
Organisation
of Global Firms
Business historians have shown how, in each generation, entrepreneurs and managers have struggled to
create and sustain organizations which could operate efficiently across borders, find an appropriate
balance between centralization direction and local
responsiveness, and which were able to transfer
knowledge and competencies inside their boundaries but across national borders. If there is one major
conclusion from this research to date, it is that organizational solutions have been heavily contingent on
time, industry, the state of technology, home economy and public policy, as well as the specific competences and routines of each firm. In itself, this is a
warning against excessive generalizations about the
“one best way” to organize global business.
Some general patterns can be discerned. During the
first global economy, a broad distinction can be
made between “informal” or “network” forms of
organization, and “formal” or “hierarchical” forms.
European, and also later, Japanese firms placed
much emphasis on personal relations and socialization, although this did not prevent the development
of quite bureaucratic structures in some cases. This
built on earlier traditions of international business in
past centuries when prevailing technologies left
managers with little choice but to rely on trust to control and monitor cross-border operations.
In contrast, U.S.-based firms developed an early preference for formal organization and bureaucratic
procedures. They expanded within the large domestic market of the United States using hierarchies and
rules, creating many of the world’s largest corporations by the early twentieth century. When they
expanded abroad, they also typically used hierarchies rather than networks to manage complex
processes. Rules and standardized reporting procedures were the norm in U.S. firms.
14
GUEST ARTICLES
Did the strategies of
global companies
contribute to the POVERTY
seen in much of the
TODAY, or has the
world
GREATER
responsibility rest with
POLICY-MAKERS, or
“culture”?
Business historians have shown that there was nothing
linear about the development of organizational
forms. During the interwar years, many firms, which
operated in several countries, became more national in their organization. However, there remained a
wide diversity of practice even among firms of the
same nationality and in the same industry. After the
Second World War many large U.S. corporations were
organized as co-ordinated federations in which the
parent company exercised quite a close control on
overall strategy, and sought to transfer knowledge to
foreign affiliates. This model contrasted with the preference of European companies for leaving national
entities possessing considerable autonomy. All organizational firms encountered problems when transferring knowledge and information within their enterprises.
Global Firms
and Global Welfare
It is often asserted that the globalization of the world
economy has co-incided with growing income
inequality, but such generalizations mask a wide variety of historical outcomes.
Business historians have provided important insights
on the impact of globalization at the firm and industry level. They have shown how companies transferred capital, technology, organizational capabilities and employment across national borders. They
have also shown that global business has, historically,
involved costs and losers as well as winners.
The nature of the historical impact of foreign firms on
developing countries remains controversial, and
much research still needs to be done. There were
income gains to many countries before 1914 as international firms turned them into major exporters of
petroleum, bananas, sugar, rubber and other commodities. Yet reliance on commodity exports turned
out to be risky when prices fell in the interwar years.
Corporate strategies also reduced the advantages
15
derived from host economies from their exports. Most
minerals and agricultural commodities were exported
with only the minimum of processing. Foreign firms
were large employers of labor, but expatriates were
typically used to handle the newest technologies,
and install and manage complex systems.
The establishment and maintenance of mines, oil
fields, plantations, shipping depots, and railroad systems involved the transfer of packages of knowledge
to developing economies. However the transferred
knowledge proved “sticky.” It would seem that knowledge spillovers from foreign firms to developing countries proved disappointing overall. Business enterprises
in many countries had limited capacity to learn and
absorb new technologies, but there were intriguing
regional and ethnic differences which remain to be
researched.
Future Research Agenda
Business history cautions against easy generalizations,
either positive or negative, about the role and impact
of globalization and global firms. In providing empirical evidence on the complexity of historical outcomes, business history enables debates about globalization to be conducted at a more nuanced level.
A challenge now is to diffuse business history research
into these wider debates.
Business historians face a huge research agenda.
Business history literature is particularly strong on the
historical evolution of global corporate strategies.
There is far more work to be done on impact. There is
little systematic evidence whether firms have sought,
or succeeded, in changing consumer habits and
consumption preferences. Have cosmetic firms, for
example, “globalized” images of beauty and personal hygiene? And is this a positive or negative thing?
The history of the environmental impact of multinational firms has hardly begun to be written. Nor has
there been much research by business historians on
the ethical practices of firms as they globalized.
Given that corruption has become a major developmental constraint for many poor countries, it is important to understand the historical role of foreign corporations in facilitating, or resisting, corrupt practices.
More widely, business historians need to address more
systematically the contribution of business enterprises
to the inequality between the North and the South.
This involves deeper investigation into the role of business enterprises as transferors of knowledge across
b o rders, and the nature of local entre p re n e u r i a l
responses to foreign firms. Did the strategies of global companies contribute to the poverty seen in much
of the world today, or has the greater responsibility
rest with policy-makers, or “culture”?
GUEST ARTICLES
Singer in Egypt, 1880-1914
A case of multinational investment
in the Middle East
during the
First
globalisation BOOM...
Prof. Andrew Godley, University of Reading
W
hile business history has become a
particularly fertile discipline in recent
years, exploring issues associated with
globalisation, entre p reneurship and
economic development in many
parts of the world, one particular geographical blindspot is any serious study of business development in
the Middle East. Outside a few studies of multinational
banks and oil companies, little business history
research has focused on the region (1). In part this may
owe something to the traditional view of the Ottoman
Empire as the ‘Sick Man’ of Europe, where political
and economic stagnation are viewed as proceeding
hand-in-hand (2). But recently economic historians
have revised this perception of the Middle East having
somehow missed out on the first globalisation boom
from 1870 to 1929. Recent estimates on real wage
growth suggest that living standards increased significantly during that time, especially in urban areas and
among skilled workers, implying that there was in fact
very significant business activity over the period as well
as a growing consumer demand (3).
A conference was recently held at the Centre for
International Business History at the University of
Reading which sought to bring together some of the
world’s leading experts on business history in the
Middle East and to identify some of the most likely
routes for advancing the discipline within Middle
Eastern studies (4). Compared with other regions, writing the business history of the Middle East poses particular problems because of a greater paucity of
a rchival documentation. One possible alternative
route to uncovering the written business record that
was discussed at this conference was utilising the
a rchives of multinational enterprises active in the
Middle East during the period. This essay tries to illustrate the potential for using such records to assist the
understanding of business development and the
emerging consumer market in the Middle East after
1880 by describing the history of what was the single
most important foreign multinational in the region
before 1914, the Singer Sewing Machine Company(5).
‘The Featherweight’ Singer sewing machine, Model # 221.
Courtessy of Singer Sewing Company Information website:
http://www.singerco.com/company/
16
GUEST ARTICLES
The sewing machine was one of the first standardised
and mass marketed complex consumer goods to
s p read around the world. It was the nineteenth century
antecedent of the motorcar, the radio, the television
and other more recent consumer durables. From very
small beginnings in 1880, Singer was eventually selling
almost 100,000 sewing machines per year in the
Ottoman region, generating over $3 million of revenue,
enjoying perhaps 80% to 90% share of the market and
c reating what was almost certainly the single most
important and sophisticated commercial infrastructure
in the entire Middle East.
Singer’s first venture in the region came when the company opened an office in Cairo probably towards the
end of 1880 or very early in 1881. Egypt’s open-door policy promoted economic development from the 1870s,
especially in cotton production, although most of the
gains went to the commercial elite rather than the ordinary farming families. But political turmoil characterised
Egypt after the government’s declaration of bankruptcy in 1876 and the forced sale to Disraeli’s British
Government of the Suez Canal shares. After the creation of the British Protectorate in 1882, rural unrest and
brigandage increased, not to mention the threat of military invasion from the Sudan. In such an environment of
political uncertainty, it was not the most auspicious
moment to enter the Egyptian market. As Table 1 shows,
Singer’s Egyptian experiment quickly failed and the
company withdrew.
Notes: Machines sold, Revenues, and Expenses are directly
from the sources. Revenue per machine is calculated by
dividing revenues by machines sold. Gross retail profit is cal culated by subtracting retail expenses from revenues.
Singer typically opened offices in new markets once
sales through independent merchants had reached
some threshold level. It can there f o re be inferred that
Singer was selling a small but growing number of
machines in Egypt before 1880. The office in Cairo initially saw quite promising sales, reaching 312 in 1881
and 372 in 1882. This compares quite reasonably with
some small, well-established provincial regions in the UK,
like Ulster (Singer sold around 1200 machines through its
Belfast office in 1881) or Cornwall and Devon (Singer
sold around 1300 machines through its Plymouth off i c e
in 1881)(6).
But the Table also indicates why Singer failed. They simply could not sell at sufficiently high prices in Egypt.
Singer fixed its prices across almost all its markets during
these years, and its prices were uniformly high (7). But in
Egypt after 1881, those prices simply could not be made
to stick. With its relatively expensive distribution model,
the implication for not being able to sell at premium
prices was clear. Singer’s Egyptian retail expenses
(which included the salaries of its sales staff, rental of
o ffices, advertising and other associated costs) were
too high, running at 85% of total revenues over the period. Once the consignment price (the factory selling
price, which typically
ran
at
£2
per
Table 1. Singer’s Sales in Egypt, 1880-1884
machine) is factored
into the calculation,
the gross retail profits
Revenues Revenue
Machines
Expenses (£) Gross
in Cairo over these
(£)
per
Retail
Sold
five years of some
Machine (£)
Profit (£)
£613 actually failed to
cover the total facto1880
No data
ry cost price of some
1881
312
1426
4.57
670
756
£2,500 on the 1,236
1882
372
715
1.92
847
-132
machines
sold (8).
1883
342
1265
3.70
787
478
Singer was losing
1884
210
786
3.74
1275
-489
money on each sale
18811236
4192
3.39
3579
613
in its Cairo office.
Singer’s sole branch in
Egypt was there f o re
closed
at
the
end
of
1884
or
early
in 1885 (9).
Sources: 1880 opening inferred from absence of any mention
of Cairo office in McKenzie to Woodruff, 16.4.1879, list of
offices (Box 93/9) and relatively low expenses in 1881. 1881 is
actually an annualised estimate of sales for five months to end
May, in ‘Comparative Statement of Business… 1881 and
1882’, (Box 103/4). 1882: see ‘New York Department, London.
Abstract of Business... 1882’, (Box 94/6). 1883: see ‘New York
Department, London. Abstract of Business… 1883’ (Box 95/1).
1884: see ‘Summary of Business… 1883-4’ (Box 95/4). That the
Cairo office was closed towards the end of 1884 is inferred
from the absence of any mention of it in the list of Foreign
Offices in ‘Statement Showing ratio of cash sales… 1885’ (Box
103/5) and that no book accounts (instalment purchases)
were left outstanding in the 1884 accounts.
17
The company’s second foray into the Middle East was
through a shop in Istanbul, opening perhaps as early as
1881, although it does not appear to have lasted
long (10). Singer may have re t reated after this initial
opening, but sales probably continued to grow, perhaps via independent dealers. The big gain in sales
came after 1890, by which time Singer was firmly established in the Ottoman region. By 1895 the
Constantinople office had fifteen other offices reporting
to it (11).
SERIES
EMINAR
GSUEST
ARTICLES
Table 2. Singer Sewing Machine Sales
in Turkey and Egypt, 1901-1913
1901
1902
1903
1904
1905
1906
1907
1908
1909
1910
1911
1912
1913
Turkey and Egypt
20156
19408
23807
28287
27561
30523
30144
26253
28968
36061
44542
48644
43123
Source: A. Godley, ‘Selling the Sewing Machine around the
World: Singer’s International Marketing Strategies, 18501920’, Enterprise and Society, (2006) forthcoming.
F rom October 1901 the Ottoman results were separately listed, so that from that time onwards sales in
Turkey and Egypt can be separated from the other
smaller regional markets that were previously aggregated as the Constantinople office, like the Balkans.
Table two there f o re lists the annual sales for Turkey and
Egypt together from 1901.
Evidently the region was experiencing rapid growth in
demand, with 20,000 machines sold in each of 1901
and 1902 and rising to nearly 50,000 by 1912. By June
1902 there were 100 branch offices in Turkey and
Egypt together, of which 19 offices were in European
Turkey, 75 in Asiatic Turkey and 6 in Egypt (12).
Unfortunately, the archival record is incomplete and it
is not known how many branches existed by 1912. In
all likelihood, however, Singer will have sold well over
600,000 sewing machines in Turkey and Egypt together during the period, and while the Egyptian market
was clearly of secondary importance to the Turkish,
sales there were far from insignificant.
The implications of such a widespread diffusion of the
sewing machine in Turkey and Egypt before the First
World War are only just beginning to be grasped. If
sewing machines were so popular, it implies that dress
habits were changing in favour of clothing styles that
re q u i red more stitching than the traditional Arab
dress, otherwise there was little need to switch from
traditional hand-stitching methods. This was typically
the ‘western’ style fitted jacket. If customers were
availing themselves of the Singer hire-purchase facili-
ty, it implies that there were very significant changes in
credit behaviour among the population at large, with
a move to contractual ties rather than the longstanding informal obligations. And the Singer sales method,
with its emphasis on advertising and, in particular,
upon direct selling to women in their homes, implies a
very significant change in patterns of behaviour
among Middle Eastern society at large in the wake of
the humble sewing machine. The outlines of a very
important research agenda are therefore in place in
this one topic within the rapidly growing field of business history in the Middle East.
END NOTES:
1. See, for example, Geoffrey Jones, Banking and Empire in
Iran (Cambridge, 1986); idem, Banking and Oil (Cambridge,
1987); J. H. Bamberg, The History of the British Petroleum
Company: Volume 2, The Anglo-Iranian Years 1928-1954
(History of British Petroleum) (Cambridge, 1994).
2. See, P. Mansfield, A History of the Middle East (Lon don,
2003) for a traditional view.
3. S. Ozmucur and S. Pamuk, ‘Real Wages and Standards of
Living in the Ottoman Empire, 1489-1914’, Journal of
Economic History, 62, 2002, 293-321.
4. ‘The Middle Eastern Path to Development: A
Conversation with Business history and Regional Studies’,
Centre for International Business History, University of
Reading Business School, June 10th-11th, 2005.
5. The Singer Archives are held in the State Historical Society
of Wisconsin, Madison, Wisconsin. Unless otherwise indicated, all subsequent references to archival material are to the
Singer Archives.
6. A. Godley, ‘Singer in Britain: The Diffusion of Sewing
Machine Technology and its Impact on the Clothing Industry
in the UK, 1860-1905’, Textile History 27 (1996), annualised
estimates for 1881 listed in Table 5, p. 72.
7. A. Godley, ‘Selling the Sewing Machine around the World:
Singer’s International Marketing Strategies, 1850-1920’,
Enterprise and Society, (2006) forthcoming.
8. Factory Cost inferred from ‘Sales at Cost Value’ divided by
‘Machines Sold’ entries in ‘New York Department, London.
Abstract of Business... 1882’, (Box 94/6), and ‘New York
Department, London. Abstract of Business… 1883’ (Box
95/1).
9. There were no other branches in Egypt. ‘New York
Department, London. Abstract of Business… 1883’ (Box
95/1), lists Cairo with zero sub-offices.
10. U. Kupferschmidt, ‘The Social History of the Sewing
Machine in the Middle East’, in Die Welt des Islams 44 (2004),
p. 200.
11. See ‘Statement of Fire Risks under Hamburg Offices… 1st
Jan 1895/96’, (Box 85/8), and Godley, ‘Selling the Sewing
Machine’, Appendix 2.
12. ‘List of Offices… as of June 1902’, (Box 88/5).
18
HISTORY
IN THE
MAKING
Egyptian Workers
OBJECT!
OBJECT!
Resurgent Workers’ Protests
Make Headline News
Dina Khalifa Hussein, Project Officer, EBHRC.
I
n the backyard of the current Nazif government,
which raises banners of reform and promises an
influx of investments, images arise of workers’
protests that struggle to appear on the front
pages of newspapers. According to a report
issued by the Land Center for Human Rights (LCHR) in
February 2005, workers’ protests have noticeably
increased in the second half of 2004, reaching 265
protests. These occurred in both private and public
companies as well as in various government entities.
The protests took the form of demonstrations, strikes, sitins and rallies. Denial of their financial earnings, exposure to arbitrary dismissal and arbitrary transference
are some of the grounds of the protests (1). These
protests, however, do not merely manifest workers’
objections to their immediate working conditions. The
deterioration of the status of workers in a developing
country such as Egypt has been attributed to wider
global phenomenon such as privatization, globalization and the world capitalist system at large; the current condition of the workers is merely a facet of the
burden of these trends upon different locals in the
developing world.
The LCHR report addresses breaches of labour rights
due to policies of privatization, where 450,000 workers,
for instance, went into early retirement in 2002 (2). Since
the implementation of the privatization policies, 193
companies and factories have been sold, and the
report anticipates a total of 41 companies to be sold in
the coming period, all of which fall under Law
203/1991(3). Issues related to the drastic status of unemployment in Egypt and even the high rates of child
labour with 3.5 million children working in various sectors highlight the problem (4).
Historically, textile workers always made up the greatest share of the labour force and consequently stood
19
“Trade unions
are
perceived as
representatives for the
GOVERNMENT rather than
representatives of
the workers...”
out in the media. In 2005, the Esco textile workers were
highlighted in the news, protesting the privatization of
their factory. Around 400 textile workers protested in
the Esco plant in Qalyoub, which is a small town 15 kilometres north of Cairo, ending their protest after 4
months with a hunger strike and eventually cutting a
deal with the officials (5). The workers began their strike
in February 2004 after the holding company sold the
mill. The new owner refused to pay the bonuses and
benefits, which the workers claimed., That is why the
workers protested the new status and went on strike,
demanding the return to the public sector that granted them social security and pension benefits(6).
According to Al-Masri Al-Yum newspaper, the ministry
of manpower and migration failed to bridge the gap
between the employer and the workers in the Esco
plant and the government had to eventually respond
to their pleas and refusal to work under the privatized
factory. An early retirement scheme was then organized for them(7). The official stance towards the workers’ protest triggered debates on the status of trade
unions and the setbacks of the laws.
HISTORY
In an interview with one of Esco’s striking workers in
al-Ahali newspaper, he mentioned that during their
strike to gain their wages and periodic bonuses as
well as opposition to the sale of the factory, they
were surprised by the deputy head of the general
union for spinning and weaving, who is also a member of the parliament, threatening them by detention if they did not end the strike(8). Alarmingly,
Law2/1977 gives legal leeway for sentencing those
who go on strike or protest, to life imprisonment(9).
The reasoning for this being that any organization
that is against “ the system” is constitutionally
banned. How such a harsh law was reached unveils
a complex historical path for the Egyptian labour
movement.
In the 1940s, a democratic independent labour
union emerged; the Democratic Movement for
National Liberation (DMNL), which organized militant workers’ strikes and anti-occupation marches,
the most significant of which was on 21 February
1946(10). Attia El Serafi was a Cairo transport worker
and president of the Zeifta and Meit Ghamr bus
workers’ union, being a trade unionist since the
1940s. According to Serafi, on 21 February 1946,
100,000 workers and students protested against
British imperialism and demanded better wages and
working conditions (11). He adds how during the
monarchy, trade unions were independent – independence that was sometimes won in prisons and
under conditions of torture. At that time, workers
were radicalized by communist thought; “instilling
the belief that social equality would only be realized
through class struggle”(12). After 1952, however, the
trade unions lost their independence. In 1957, the
trade unions were dismantled and they were clustered under the grip of the state controlled Egyptian
Trade Union Federation (ETUF)(13). Workers’ strikes
and protests were consequently outlawed. Serafi
explains how “ the revolution’s legacy to the workers
was the government controlled General Federation
of Trade Unions, [officially referred to as the ETUF],
which is still oppressing [workers]”(14). “Nasser gave
the workers bread, but took away their freedom,”
he said (15). With no freedom, the workers still protested for bread in Sadat’s era. They are still protesting
today with no freedom, no bread and no credible
trade unions.
The LCHR report emphasizes how the weakness of
trade unions, due to their lack of independence
from the government, helped to promote the escalating number of violations against the workers.
Problems of government interference with the membership of the unions have shaped the perception
of the workers towards the unions. Trade unions are
perceived as representatives for the government
rather than representatives of the workers(16). By
virtue of the laws and the structure of trade unions,
they are prohibited from organizing protests and
IN THE
MAKING
strikes (17). Unified Labour Law 12/2003, Trade Union
Acts 35/1976 and 12/1995 govern trade unions’
rights, including the right to strike(18). For any union to
be established it must join its respective general
union (23 in total) under the ETUF. Each general
union has the right to approve (by a 2/3 majority
vote of the general union council), or deny, any of
the constituent unions the right to strike (19). It is
believed that until today, no general union has
organized a single strike since their establishment in
1957.
Despite the laws and the failure of the trade unions
and the government to guarantee workers their
rights, the recent protests were numerous. Arbitrary
dismissal was top on the list of protests. The ministry of
manpower and labour abandoned 53 workers at
Nissan Egypt after the employer petitioned for their
dismissal due to incurring huge losses. In the mean
time, the company was sold to International Nissan
Motors, which required the company to be delivered with no labor attached to it (20). The lack of support led 2454 workers from Al Nasr Steel Pipes into a
strike and a sit-in at the company’s headquarters
because of the decrease in their earnings after the
privatization of the company(21). In some cases, reasons for the protests went beyond financial earnings
and arbitrary dismissal. Ura-Misr workers protested for
their lives.
"...MASSES march in the streets
protesting
against the
lack
of democracy,
chanting
KIFAYA,
and workers sit-in
factories calling for
labour
RIGHTS...”
20
HISTORY
IN THE
MAKING
Workers’ protests at the asbestos company, Ura-Misr,
were the most vociferous in the Egyptian press in 2005.
A sit-in at the Cairo headquarters of the ETUF, and
hunger strikes at a protest camp near the closed UraMisr plant in the 10th of Ramadan city, limned the
workers plea for compensation after years of exposure to the deadly mineral asbestos (22). According to
al-Ahram Weekly, on 11 September 2004, the ministry
of industry and foreign trade issued Decree No. 336
that prohibited the use of asbestos(23). Companies
continued to operate until the stocks of the mineral
ran out. The owner of the company, Ahmed Lokma
cited financial losses as the main reason behind closing the company without offering any compensation
to the workers (24). The ministry of manpower failed to
provide the workers with any compensation and the
decree did not grant the workers the right to compensation, health care or early retirement packages
(25). The case of Ura-Misr does not only manifest the
problems of the laws and trade unions in advocating
the workers’ rights, but it also, unveils the corruption
which exists in the government and business community.
Cases of death, and lung and abdominal cancer
resulting from exposure to asbestos have been reported(26). Workers argued that the negative effects from
exposure could have been minimized if the safety
precautions set by the ministries of health and environment were followed(27). One of the workers argued
that the workers were left to hold the minerals by
hand and not even given gloves, exposing themselves and their families to drastic health dangers (28).
It has been argued that, eventually, Pre s i d e n t
Mubarak resolved the issue, by granting the workers
compensation, due to both international and domestic pressure and more importantly as a propaganda
tool for the presidential elections.
The workers and the poor unfortunately, reap the
costs of globalization and subsequent income
inequalities given the blind race for profit maximization. Amid the Egyptian economic predicament,
things are even worse. Yet, Egyptians are finally
objecting. Masses march in the streets protesting
against the lack of democracy, chanting Kifaya, and
workers sit-in factories calling for labour rights. And
both have no credible political parties or trade unions
on which to lean.
END NOTES:
1. Land Center for Human Rights: Report on workers’
protests in the second half of 2004. February 2005
2. Ibid.
3. Ibid Law 203/1991 is considered the first legislation to
legally permit privatization. This law has sometimes been
blamed for the abandonment and deterioration of the
public sector in pursuit of a favoured policy of privatization.
4. Ibid. According to the figures of the ministry of planning,
the unemployment rate increased in the period from
21
1981/82 to 1998/99 to reach 1.4 million, compared to
570,000 in the beginning of the period. However, the report
argues that there exist huge discrepancies between the
official and real rates of unemployment due to the big
share of labour in the informal sector that is not accounted
for in the official figures. Thus, the report estimates unemployment rates to be minimally around 10% of the total
labour force, that is over 20 million persons.
5. Rady, Faiza. “ A Partial Victory,” al-Ahram Weekly. 19 - 25
May, 2005.
6. Rady, Faiza. “Esco Ordeal Ends.” al-Ahram Weekly. 2-8
June, 2005. p 4.
7. Azuz, Mohamed. “Wizarat El-Amawi..al-Afkar al-Qadima
La Tasluh fi al-Malafat al-Sakhina.” Al-Masri al-Yum. July 17,
2005. p.11
8. Abdel Ghani. Mansour. “al-Huquq wa al-Ugur wa alHawafiz..fi Mahab al-Rih.” Al-Ahali. October 27, 2004. p.8
9. Land Center for Human Rights: Report on workers’
protests in the second half of 2004. February 2005
10. Rady, Faiza. “The Right to Life.” Al-Ahram Weekly. July
28-August 3, 2005. p.25
11. Ibid.
12. Ibid. It is beyond the scope of this piece to discuss the
understanding of trade unions in relation to communist ideology. However it was sometimes argued that the DMNL disfigured the class struggle by mixing it with the national struggle. (see: Aboud, Saleh. “Harakat al-Tabaqa al-Misriya bayn
al-Waqi’ wa al-‘imkan.” Al-Busla. June 2005. p.29. Also see:
Joel Benin and Zachary Lockman, Workers on the Nile:
Nationalism, Communism, Islam and the Egyptian Working
Class, 1882-1954(Princeton 1988)
Nevertheless, Serafi’s understanding of communism was the
struggle for the right to life.
13. Ibid. See also: Aboud, Saleh. “Harakat al-Tabaqa alMisriya bayn al-Waqi’ wa al-‘imkan.” Al-Busla. June 2005.
p.29
14. Ibid
15. Ibid.
16. Land Center for Human Rights: Report on workers’
protests in the second half of 2004. February 2005
17. Aboud, Saleh. “Harakat al-Tabaqa al-Misriya bayn alWaqi’ wa al-‘imkan.” Al-Busla. June 2005. p.29
18. Charbel, Jano. “Trade unions & professional syndicates
of contemporary Egypt [manuscript] : regulations, rights &
violations.” The American University in Cairo (2003)
Charbel argues that many of the provisions of these laws
violate the object and purpose of ILO convention No. 87
and No.89 and of human rights instruments such as Article 8
of the International Convention on Economic, Social and
Cultural Rights as well as Article 22 of the International
Convention on Civil and Political Rights; taking into consideration that Egypt ratified these conventions.
19. Ibid. Article 192-201 of Unified Labour Code 12/2003
20. Azuz, Mohamed. “Wizarat El-Amawi..al-Afkar al-Qadima
La Tasluh fi al-Malafat al-Sakhina.” Al-Masri al-Yum. July 17,
2005. p.11
Ibid.
21. Abu Barkr, Sarah. “Asbestos Protest Continues” al-Ahram
Weekly. 21-28 July, 2005.
22. Ibid.
23. Ibid
24. Ibid
26. Ibid
26. Ibid
27. Ibid
28. Ibid
HISTORY
IN THE
MAKING
BUSINESS
POLITICS
&
SIAMESE TWINS
of POWER
Wael Ismail, Project Officer, EBHRC
T
he fields of politics and business have
always been intertwined in a tangled web
of complex relationships, whether in the
abstract or practical form. On the theoretical plane, the role of the government as a
market player has long been debated, its pros and
cons scrutinized and has been continually evaluated.
On the other hand, the impact of businesses and
especially large conglomerates on the political apparatus has not been given the same attention; although
it had been tackled by western political scientists like
Lindblom, Dahl and Vogel(1).
The study of this relationship falls, in most cases, under
the category of interest groups and their influence on
democratic states. However, to explore the boundaries of such a topic in the Middle East specifically,
and in most other countries of the underdeveloped
world is an entirely different endeavour. Western political scientists are debating the extent to which the
business community exerts power on the government.
Some argue that it is just another lobby/interest group
and others indicate that it enjoys a privileged position
undermining the democratic nature of any state(2).
What both sides are studying are already existent polities with established institutions. The volatility of most
underdeveloped countries is what makes studying this
relationship a troublesome affair.
Attention was drawn to the subject on the 24th of June
of this year in a news item in al-Hayat newspaper
announcing that a Chinese company (Cnook) offered
to buy the eighth largest American oil company
(Unocal). Also bidding for the same company is another American firm (Chevron). The Chinese bid, as
expected, was the subject of heated debate in
American and international circles. The bid was the
first of its kind, in that it represented the movement of
capital from an underdeveloped country to a developed one. On the 14th of July, ASharq al-Awsat printed a report stating that the deal puts the western and
especially the American philosophy of free trade and
markets to the test. It is a simple business transaction
that would clearly highlight the authenticity of
America’s words to the world as well as unveil the relationship between business and politics in such an open
society. This incident that slowly unfolded in front of the
world would ultimately inform us of the true importance words like, “it is just business, nothing is personal.” On the 21st of July under the heading of “the US
tries to protect its oil markets from Chinese companies,” al-Hayat stated that Chevron won the bid,
albeit presenting a much lower offer with a difference
of almost US$1.5 billion. The decision was a sounding
horn, indicating that "it is always personal" and that "it
is never just business". It would be absurd to state that
business and politics should not intersect. Business is
used as a carrot at times and a stick at others to
achieve political gains and vice versa. However, this
relationship only becomes a threat to the society at
large, when interests of certain cliques dominate and
dictate the terms of policy making.
The linkage between politics and business in societies
with institutional strength are often scrutinized and put
under the spotlight due to a system of checks, balances and varied degrees of transparency. This of
course does not mean that there are no exceptions.
These exceptions give way to fear especially when it
becomes related to life and death decisions. The suspicion surrounding the War on Iraq in 2003 projected
such fear especially after rumours surfaced concerning the size of profit that American firms would make
after this conquest (3).
22
HISTORY
IN THE
MAKING
This fear becomes a reality of everyday life in countries
where a system based on accountability does not
exist. Under such a regime, businesses find more leeway to manoeuvre and gain influence. In these societies where boundaries are not set and where the
entire social structure is still in a state of fluidity and formation, the relationship between businesses and the
political regime enter into grey and murky areas. An
exploration of these areas in such societies is what we
aim to do in this article through pursuing a number of
events that were noticed in the Egyptian press over
the past months. This is an attempt to witness how the
fate of businessmen and the political system is interwoven.
The rise of “the business man” in the society has
become the Egyptian counterpart of “the American
Dream”. For the layman to be a businessman often
means to be able to control and exert power.
However, this perception is also synonymous with corruption. This view has definitely hindered the more honest businessmen operating in the market, since it is a
perception that has dominated the Egyptian society
since the open door policy. Over the years businessmen have gained more ground and legitimacy. A
recently published book by Samer Soliman has
received attention from both independent and opposition newspapers (4), Soliman’s book entitled, “Strong
System, Weak State” addressed the question of how
the Egyptian Government under the President
Mubarak was able to weather both financial crises
and political change. One of the author’s important
arguments is that past years we have witnessed an
increase in the businessman’s “political purchasing
power.” Moreover, this close relationship between
businessmen, the government and particularly the ruling party (NDP), has given birth to a new breed of businessmen tied to the government by a symbiotic relationship. The Egyptian bureaucracy has been transformed from managers of the country’s economic
and natural resources to its owners (5).
This trinity formed by the government, the party and
certain business cliques has led most observers to
question every policy and decision taken by the government, especially in certain fields where the responsible ministers are either businessmen or “known
reformers” (6). The new tax law launched by the Ministry
of Finance was accompanied by a gigantic media
campaign, labelled as “a revolution by the rich
against the poor”(7). It seems that the law fulfils the criteria of creating a more hospitable environment for
investments; however, the law’s treatment of different
income and profit categories almost equates a multimillion conglomerate with a small family business. It
taxes those who make LE 4,000 a month at the same
rate as those who make millions (8). However, since the
end of last year, it was the signing of the Qualified
Industrial Zones Protocols (QIZ), which really ignited
and polarized public opinion in Egypt. The signing of
this agreement between Egypt, the US and Israel has
23
numerous implications and connotations on both the
local and international level.
The QIZ will open up the American market for Egyptian
textile manufacturers in 3 zones, on the condition that
they use 11.7 percent Israeli components in the final
product. A student of economic history, like others,
may be surprised like others to find that al-Mahala
which is the heart of Egypt’s textile industry is not
among the approved 3 zones, although arguably it
may be left for a later period. This has led some commentators to argue that the zones included are home
to a number of influential businessmen who played a
role in steering the negotiations. What is more alarming is that currently the textile industry is facing problems almost every step of the way, not to mention that
the once powerful public sector companies are now
being sold to local and foreign investors. According to
Ahmed El Naggar (9), “this makes QIZ a divisive phenomenon, acting in the interests of a small elite group
of businessmen from the large private and traditional
capitalist sectors, and a model for injustice within the
business community itself”(10). The thorny issue of the
QIZ protocol paves the way for a trend that transcends
the national level, to the global scene at large. The QIZ
protocol and its kinship of similar trade agreements are
now being conducted under the banner of free trade
and as steps towards a more integrated global economy. A much closer look, however, will clearly show
that these agreements are being used as gateways to
the large markets of the developed world for a selected few from the under-developed countries. It is
argued that the main aim behind the QIZ protocol is to
protect Egyptian products from competition coming
from the East in the form of Indian and Chinese products. Possibly, this is another form of subsidy that the
Egyptian government and people are receiving,
albeit one paid for in the form of formal economic normalization with the state of Israel. This seems rather
incon-sistent with other demands from the West and
local Egyptian “reformers” who are calling for the cancellation of government subsidies. El Amrousi echoed
these words in al-Ahram Weekly stating,
“This state of ORGANIZED
chaos
, which is
legitimized by certain POWER
relations, only manages to hurt
those
interested in true
HARD WORK a w a y
from the
corridors of power...”
HISTORY
“I find it ironic that QIZ supporters are the same people
who have long lectured us on how protectionism distorts Egyptian industry and how we need to be
exposed to international competition to improve our
performance”(11). He further adds that, “…QIZ can
help us keep our exports in certain garments to the US,
but perpetuates a status quo that is not conductive for
industrial growth. We should increase the quality of our
products rather than to shop for preferential treatment”(12).
Opponents of the deal have termed the signing of the
agreement as “the second Camp David”; an agreement that ushers a more integrated Middle East, one
demarcated by bi-lateral trade agreements. The QIZ,
whether its supporters admit it or not, has a political
side that is too big to hide under any statement or banner. And even though, “Egypt appears to be getting a
free ride in that it does not need to reciprocate economically in order to benefit from the duty free entry to
the US, the real price of the QIZ will be Egypt’s greater
normalization of relations and the subsequent increase
in Israeli exports”(13).
Businessmen, the representatives of their own interests
in the end, become pillars of the society and community. Their line of work makes them a source of support
for governments suffering from low rates of investments, unemployment and lack in popular support.
These individuals, who are by nature seekers of wealth,
begin slowly eroding the thin line between larger political and national interests and those of their own
respective constituencies. Under the new wave of
reform, globalization and free market forces, these
characters have found refuge in a regime willing to
accommodate and protect their interests. It is rather
incredible how a revolution changes sides in 50 years,
from protectors of the under-privileged and the workers to their oppressors (14). It also starts becoming rather
painful to see these individuals apply their micro and
macro economic lessons that they have learnt or
heard from the West, while stepping over larger national issues.
A number of businessmen are now bragging that they
have no problem in dealing with Israeli businessmen,
and a lot more are already dealing with them underground. Some go the extra-mile by saying that economic normalization is in the best interest of Egypt,
which might be the case in terms of more business,
more work and more jobs. But then things slightly get
out of hand when they start translating years of
unsolved problems and struggles into simple business
transactions. This is done by claiming that the one and
true way to pressure Israel for the benefit of the
Palestinians and the Arabs is through economic and
business means, as if we are talking about a simple difference in opinion between two neighbouring countries. To adopt a purely business sense in dealing with
larger problems is a dangerous path to trod. Simply,
some gains and losses cannot be measured or incor-
IN THE
MAKING
porated into a balance sheet. “ I will deal with the
Devil for the sake of my country”(15) one businessman
stated. There is nothing patriotic in dealing with the
devil, and if Adam Smith or Ricardo have taught us
anything, it is that markets are open and confining
your trade with the devil only might not be the wisest
thing to do. However, the devil will become your saviour if you have nothing of value to export or if you can
not export what you have unless you have been able
to enter into a number of intricate trade agreements,
while giving up huge political concessions on the way.
Egyptian history is filled with cases of politicized business tycoons like Talat Harb and Ahmed Abuud Pasha.
It is not a rare occasion for business ventures to acquire
a political aspect. However, it becomes a slippery
slope when a government with all its power is aligned
to a specific segment in the society working to fulfil its
needs and protect its interests regardless of the impact
on the general public. This fluidity between business
and political interests does not in the end serve the
entire business community. This state of organized
chaos, which is legitimized by certain power relations,
only manages to hurt those interested in true hard work
away from the corridors of power. The presence of
such an unholy relationship will only result in damaging
the society, where the masses and other more “a political” members of the business community are exploited. The former have their taxes, resources and lives
manipulated so that a powerful clique can make profit. The latter are tarred for life by association to the new
class of mighty business bureaucrats.
END NOTES:
1. Refer to, “Political Science and the study of Corporate Power: A
Dissent from the New Conventional Wisdom.” By David Vogel in the
British Journal of Political Science, Vol. 17, No. 4 (Oct., 1987), 385-408.
2. Ibid. p. 386-88
3. The quintessential example is the case of Halliburton, an American
firm that has landed a number of lucrative contracts in Iraq with
close connection to the Bush Administration.
4. Two commentaries on the book appeared in the following articles.:
Abdel Fattah, Wael, “Kaif Naja Nizam Mubarak Min Ghadab il-Sha’b
hata al-a’an?!.”al-Fagr 20th of August, 2005.
Zaki, Nabil, “al-qowa al- shira’iya al-siyasiya..l-rigal al-a’mal.”alWafd. 13th of September, 2005.
5. Ibid
6. For a more detailed account of this relationship refer to Mohamed
Menza’s article in the same issue of The Chronicles.
7. El Amrousi, Salah. “Revolution By the Rich.” al-Ahram Weekly; 4-10
August, 2005.
8. Ibid
9. Ahmed El Naggar is the editor of the annual Economic Strategic
Trends Report published by al-Ahram Centre for Political and
Strategic Studies.
10. El Naggar, Ahmed. “Conflicting Interests?” al-Ahram Weekly; 1622 December, 2004.
11. El Amrousi, Salah. “QIZ Mythology” al- Ahram Weekly; 19-25 May,
2005
12. Ibid
13. Wahish, Nevien. “Enter QIZ.” al-Ahram Weekly; 16-22 December,
2004;
14. Refer to “Egyptian Workers Object” in the same issue of The
Chronicles concerning the current status of workers and their relationship with the government.
15. Al-Qarmouti, Jaber. "'a'ta'awan ma'a al-shaytan li maslahit bila di." al-Hayat; 9th of July, 2005
24
HISTORY
IN THE
MAKING
Poor Man’s COUNTRY…
RICH Man’s Industry
The Export of Pollution to the LEDCs
Karim El Sayed, Project Officer, EBHRC
E
ven though it was written 14 years ago,
Lawrence Summers’ secret internal memorandum, regarding the export of polluting
industries to the less-economically developed countries (LEDCs), still resonates in the
minds of many.
Lawrence Summers, president of Harvard since 2001
and its youngest ever-tenured professor, is a worldrenowned economist and a United States government
official. His first top-level government assignment
came when he served on the President’s Council of
Economic Advisors during the Reagan administration.
He also held executive positions in the Tre a s u r y
Department during the Clinton administration first as
the Under Secretary for International Affairs, then as
Deputy Secretary under Robert Rubin whom he succeeded in 1999. As Chief Economist of the World Bank,
he wrote an internal memo on December 12, 1991,
that began with: “Dirty Industries: Just between you
and me, shouldn’t the World Bank be encouraging
MORE migration of the dirty industries to the LEDCs?”
Mr. Summers presented three reasons as part of his
argument. Firstly, “the measurement of the costs of
health-impairing pollution depends on the foregone
earnings from increased morbidity and mortality” and
therefore “a given amount of health-impairing pollution should be done in the country with the lowest cost
… the country with the lowest wages”. Secondly, “the
costs of pollution are likely to be non-linear as the initial
increments of pollution probably have very low cost …
only the lamentable facts that so much pollution is
generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of
solid waste are so high prevent world welfare enhancing trade in air pollution and waste”, and finally that
“the demand for a clean environment for aesthetic
and health reasons is likely to have very high income
elasticity”.
25
“No one accuses foreign
capital of
forcing the
GOVERNMENTS of the
LEDCs
not to ABIDE by international
environmental regulations.
But as they face
pressure
unrelenting
from ENVIRONMENTAL
ORGANIZATIONS in the
developed
world, the
industrialists must feel the
PINCH of expenses they
must incur to meet the
ever-increasing
environment regulations
HISTORY
“Dirty Industries:
Just between you and me,
shouldn’t the WORLD BANK
be encouraging
MORE migration of the
dirty industries to the LEDCs?”
Sadly, none of the basic conditions that make those
reasons “logical” has changed. The LEDCs are still the
countries with the lowest income and wages. A
recent series of World Bank Briefing Papers explained
“some pollutants such as acid emissions or particulate
matter are empirically observed to have an 'inverted U
curve' relation with income: pollution first rises as countries advance from low to middle level incomes,
before falling again as countries attain high incomes”.
The World Bank, and much of the developed world, still
promotes economic reform packages that embrace
the reasoning of the market, and investors still respect
the rules of the market especially with regards to cost
and profit.
It was not, therefore, without good reason that news
about inflow of foreign investment to Egypt’s heavy,
and dirty, industries came as a source of alarm. The
financial and economic news for the entire month of
March was monopolized by coverage of the takeover of Suez Cement by the world’s fifth larg e s t
cement pro d u c e r, the Italian group: Italicimenti,
through its subsidiary, Ciment Français. The French subsidiary forged a consortium with Egyptian and Arab
investors through which Italicimenti managed to
acquire majority shares in the Egyptian company “as
part of its strategy to increase production capacity
through investments in developing economies”, as the
March 24 issue of the daily al-Hayat explained. Analysis
and debates related to the deal revolved around
concerns about foreign investors monopolizing critical
national industries. This state of panic was heightened
with news in July that a group of Arab investors were
considering investments into the Egyptian fertilizer
industry, but more importantly, news that Italicimenti is
planning to increase its share in the Egyptian cement
market to 31% by acquiring ASEC Cement company.
These developments were the source of much debate
and analysis in the specialized newspapers and magazines. Most analysts were already warning that local
cement prices were increasing, and advised against
allowing foreign investors to control the fertilizer industry. These fears were supported by the virtual monopoly that foreign companies have over the Egyptian
cement market, controlling an almost 80% share of the
Egyptian cement industry. An equal space was given
to industry experts who argued that cement companies in Egypt are amending export contracts to satisfy
IN THE
MAKING
local demand and denied any monopolistic practices.
As most of the discourse revolved around the comparison of local prices to export prices, the positive effect
of increased global demand on cement company
stocks and the negative consequences of a foreign
monopoly over critical heavy industries, very little
attention was given to the harmful consequences of
maintaining those heavy and dirty industries, or to the
reasons behind the inflow of foreign capital to those
industries in the first place. The current surge in construction around the developing world, and the reconstruction efforts in Iraq as well as the huge real-estate
boom in the UAE might explain the increased demand
for cement, as well as for other building material, and
would surely explain the increased profitability for the
local cement industry given that Egypt is quickly
becoming a pioneering exporter to the countries in
the region.
An independent environmental think tank, World
Watch Institute, produced a report that emphasizes
the risks “as investors search the world for the highest
return, [because] they are often drawn to countries
with bountiful re s o u rces and weak environmental
laws”. They further report that most of the inflow of
capital into developing countries “is underwriting projects that are potentially damaging to the environment” and that “hazardous industries, such as battery
manufacturers, chemical companies, and computer
manufacturing and assembly facilities, are becoming
i n c reasingly concentrated in developing countries
where safety practices and environmental enforcement and monitoring are basic at best”. The World
Bank series of Briefing Papers, however, argues that
“there is no evidence that the cost of environmental
protection has ever been the determining factor in foreign investment decisions. Factors such as labor and
raw material costs, transparent regulation and protection of property rights are likely to be much more
important, even for polluting industries”.
A feature in the July 20 issue of the daily al-Masry alYum reported on a scientific study that surveyed factories and plants in the city of il-Mahalla al-Kubra. The
study uncovered excessive violations by 27 plants in
the city, collectively responsible for dumping 35 thousand banned chemicals into waterways and agricultural drainage systems, which eventually find their way
to underground water sources. Those substances were
found to threaten public health and be the cause of
severe diseases, cancer being one of them. No one
accuses foreign capital of forcing the governments of
the LEDCs not to abide by international environmental
regulations. But as they face unrelenting pressure from
environmental organizations in the developed world,
the industrialists must feel the pinch of expenses they
must incur to meet the ever-increasing environment
regulations, and at that time, expanding their operations in developing countries would be their rescue.
26
HISTORY
IN THE
MAKING
Current Affairs
and
The Body
of History
Introducing
HISTORY IN THE MAKING
A Seminar Series...
Mostafa Hefny, Project Officer, EBHRC.
Conception
One narrative of 20th century Egypt has the bourgeoisie coalesce into a governing coalition that
gradually but steadily asserts control over economic
resources: The thirty years that preceded 1952, often
described as a liberal era, is a scene of local capitalists veining the Egyptian political system under the
banner of economic nationalism. In a straightforward
mating ritual, modernizing capitalists seek state protection and subsidies for their enterprise and provide
positions and salaries to influential officials. Of this
relationship the revolution, with its predilection to
industrialize, is born. 1952 then becomes the evolution
of a bourgeois assertiveness not an abrupt proletarian reaction to that movement. It is a moment of birth.
The conception and gestation had passed.
This dirigiste process, described by the author Murad
Wahba as “etatism”(1) is a rarity amongst written histories. Historians are partial to demarcating lines, preferring a “before and after” clarity of revolution
undertaken by figures whose actions are later the
subject of hagiography and repulsion. Evolution, with
its dismissal of individual action, and thence personal
responsibility, is a more mediocre affair. At its nadir it
is a tabulation of historical forces where great events
are shorn of human agency and ascribed to an
assembled list of measurements that reduces Gamal
AbdelNasser, Talat Harb and Mohamad Ali to pawns
in battle that had already been decided by objec
27
tive factors much greater than themselves. Most of
the written history of Egypt is written in revolt against
this denial of theatre.
History as continuum however need not be dreary. If
individuals are never great enough to create opportunities, it is individuals who still must exploit opportunities should they arise. The method of exploitation, if
the study of society is to be more than a virtual laboratory experiment, must effect the course of what follows. If we acknowledge this limitation on individual
action and its complex, often secondary role in making history, then we may keep our heroes and villains.
Gestation
Consider the Policies Committee(2) of the ruling
National Democratic Party, the bête noire of the
Egyptian opposition. Gamal Mubarak, the elder son
of the Egyptian president and an increasingly central
figure on the political scene, heads the committee.
According to a wonderfully but necessarily vague
“prevailing wisdom”, this largely unaccountable and
secretive apparatus now dictates government policy. Several of its members, namely Rasheed
Mohamed Rasheed, Yousef Boutrous Ghali, Mahmud
Mohie-eldinand Ahmed Maghrabi(3) had been
assigned key ministries in the outgoing government of
HISTORY
prime minister Ahmed Nazif and are widely expected to hold on to their posts or rise further when a new
government is appointed in November. All, save
Ghali, are products of a business world that is the
composite droppings of the regime’s entanglements with international underwriters – amicable
countries and international agencies.
The rentier customs of this world were strongly in evidence last month when the urban landscape
became awash with obsequious and rather large
placards endorsing the incumbent in the presidential elections. Businessmen who placed their name
and their likeness next to Mubarak’s paid for the
placards -which also included a slogan or verse serenading the president. The unsubtle ingratiation
may reap ample rewards when the National
Democratic Party nominates some of the loyal businessmen as its candidates for the parliament. Aided
by their demonstrated and verified financial
prowess, and an accommodating electoral oversight by the state, they are likely to capture seats in
the parliament, which, among other benefits, will
provide them with immunity from prosecution.
The assembly of business interests at the base of the
party is not new, but its expansion reflects changes
at the top where businessmen are assuming positions previously occupied by bureaucrats or engineers – who had always been assigned to lead the
state’s industrializing apparatus, the Ministry of
Industry. The background of the aforementioned
ministers, specifically the businessmen among them,
suggests a supranational inclination to this group
and its embrace of international capital flows.
Others who were not necessarily businessmen are
linked to Western countries and the Arabian Gulf on
a more personal level; one of the features of this
government is the element of double nationality in
its makeup. The ministers have not denied their citizenry in countries other than the one they now govern (4).
The process has been described as the takeover of
the bureaucracy by capitalists(5). Mark Cooper may
have been sculpting semantics when he described
the Nasserist regime as an example of “state capitalism”(6)but his portrayal of state-centred interest
group that attempts to dominate society through
bureaucratic means seems all the more relevant
now inasmuch as the state seems to be staging a
transfer of power to a group within itself. The state’s
absorption of the business world now means that the
privatization program the regime is committed to
implementing will be characterized by a change in
the relationship with international capital, a change
in the relationship between management and
labour but will not effect a change in regime’s control of economic resources of the nation.
IN THE
MAKING
Birth
The transformation currently underway at the hands
of the group above described is the latest chapter
in the political economy of 20th century Egypt. That
this process is the work of identifiable individuals and
groups does not negate the hypothesis that it is also
the probable outcome given what has come
before. This duality necessitates that an academic
study of history be corded to a contemporary survey
of current affairs. If we can devise a schematic
framework in which the makeup and actions of the
Egyptian government are placed unto the body of
history, and can simultaneously identify the groups
responsible for those actions, does it not follow that
in subsections of Egyptian political economy such
transformations could also be identified (and linked
to the larger picture)? Perhaps before the final decisions are made and the cast of characters narrowed? This coupling of current affairs with a historical frame of reference is the inspiration for EBHRC’s
History in the Making seminar series, scheduled to
run throughout the academic year 2005-2006 on the
campus of the American University in Cairo.
The aim is to identify salient contemporary issues that
are likely to be of long-term significance once the
current simmer settles onto the narrative of history.
Following through on our experience with Al-Dalil(7),
a digest of economic and business news from Egypt
and the region, we sought to investigate sectors that
are in a state of flux. There’s a palpable sense of
actual or impending change in sectors such as pharmaceuticals, banking and journalism and it is such
sectors that will represent the core of the series. The
behavioural patterns of such firms as the Egyptian
multinational Orascom and the Emirates construction behemoth I’mar may warrant closer scrutiny in
lieu of the fundamental changes in regional enterprise those evolving groups represent. The enterprises will be the subject of sessions independent of
those devoted to the sectors in which they operate.
“The
process has been
DESCRIBED as the
TA K E O V E R
of the
by
bureaucracy
capitalists...”
28
HISTORY
IN THE
MAKING
“a business world that is
the composite droppings of
the REGIME’S
ENTANGLEMENTS with
international underwriters
– amicable countries
and INTERNATIONAL
agencies...”
The seminars will group experts representing different, sometimes opposing interests, vying to affect
the shape and size of that impending change. The
uniting factor is that these are sectors that have
been shaped by decades of economic and political change and are about to be birthed anew in a
ceremony of legal manoeuvrings and official pronouncements. The first seminar was entitled Egyptian
Pharmaceuticals & TRIPs, in which the fate of the
Egypt’s local manufacturers and the availability of
medicine to Egyptians. This was considered in light of
the new restrictions placed on state policy brought
on by TRIPs -the WTO Agreement on Trade-Related
Aspects of Intellectual Property Rights, which came
into effect in Egypt on the first of January of this year.
The issue is a thorny one for all concerned as Egypt,
the second largest pharmaceutical market in the
region after Turkey(8) in terms of aggregate demand
is nevertheless amongst the last in the region when it
comes to per-capita demand(9). This suggests that
medicines are comparatively out of reach of most
Egyptians; a situation likely to be aggravated by the
upward pressure on prices wrought by TRIPs and
other patent peddling agreements(10). Egypt is an
enticing prospect for international firms even as its
population struggles to furnish its basic pharmaceutical needs.
The next issue of The Chronicles will include a
detailed report of the lively debate between the
participants. A representative of the multinational
Pfizer voiced its discourse on the necessity of patent
rights, including the highly controversial “data exclusivity” not present in TRIPs. The other speakers, representing a rights organization and an oversight body,
were extremely critical of the discourse propounded
by the multinationals.
The report on the seminar, and others scheduled in
the interim, will be part of a larger project of working
29
papers that EBHRC intends to produce on the series.
The papers will serve as documents that will morph
as the issues in question settle. The working papers
will follow this transition up until officials start making
declarations about crossroads and bottlenecks and
other disembodied homilies. That will be the delivery.
The conception and gestation are ongoing.
END NOTES:
1 Wahba, Mourad Magdi. The Role of the State in the Egyptian
Economy: 1945-1981.Lebanon: Ithaca Press 1994, p.1-23.
2 Officially the “High Council for Policies”. It is, officially, an advisory body.
3 Rasheed is minister of Foreign Trade & Industry, Ghali, the
Minister of Finance, Mohie-eldin, the Minister of Investment, Fiki,
the Minister of
Information and Ahmad Maghrabi heads the
Ministry of Tourism.
4 Rasheed and Maghrabi are Saudi, Mohie-eldin is British, Ghali is
American and Prime Minister Nazif is a Canadian citizen.
5 Zaki, Nabil. “al-quwa al-shira’ya al-siyasiya..li rigal al-a’mal.”: AlWafd, 13/9/05.
6 Cooper, Mark N. The Transformation of Egypt (1982).
7 See the previous issue of The Chronicles for a sample of Al-Dalil
and our rationale behind its production. The publication of Al-Dalil
is now suspended in lieu of further resources becoming available.
8 Egyptians spend $2 Billion of pharmaceutical products last year
according to the American Chamber of Commerce. See ElBakry, Rehab. Business Monthly: Cover Story. April 2005:
http://www.amcham.org.eg
9 Ibid
10 The participants talked about the so-called TRIPs Plus and the
Free Trade Agreement currently sought by the governments of
Egypt and the United States as far more pervasive in their protection of patent rights. Hossam Bahgat of the Egyptian Initiative for
Personal Rights (EIPR) contented that the TRIPs agreement signed
by Egypt provides the government a great deal of leeway to provide drugs to the population should it deem it necessary to violate
patents in times of need. The reasons why the Egyptian government has not sought to utilize this latitude, which provides for
compulsory licensing to local manufacturers for patented drugs
and the importation of generic drugs from third countries not subject to TRIPs, are political. The added pressure on the Egyptian
government by the US administration and American multinationals to commit to “TRIPs Plus” and a Free Trade Agreement is evidence that American pharmaceutical giants find this leeway
unacceptable.
Egyptian Pharmaceuticals & TRIPS
Monday the 19th of September
_Dr. Ahmed El-Hakim, Regional External
Affairs and Policy Director, Pfizer.
_Mr. Hossam Bahgat, Director of the Egyptian
Initiative for Personal Rights.
_ Dr. Mohamed Raouf Hamed, Professor of
Pharmacology, National Organization for
Drug Control and Research
ALTERNATIVE HISTORIES
PEASANTS’ NARRATIVES:
EGYPT’S
ECONOMIC TALE
Zeinab Abul-Magd, PhD candidate,
History Department, Georgetown University
T
wo centuries ago, Muhammad ‘Ali and his ers’ stories in order to tell the story of the economic hissuccessors transformed Egyptian agriculture tory of Egypt.
f rom subsistence to commercial and introduced large private property in farms. This ‘Abd al-Rah_im ‘Abd al-Rah_man ‘Abd al-Rah_im
resulted not only in shifting the entire eco- published a manuscript titled Hazz al-Quhuf which is a
nomic history of Egypt, but also in changing the daily poem written in rural colloquial Egyptian by a farmer
life of its peasants. Ever since, the study of nineteenth- called Abu Shaduf who lived under the Ottoman rule.
century economic history of Egypt became impossible This poem is a great oral and socio-economic history
source, as it depicts the
without elaborating on what
state of peasants in a cerhappened in the countryside
tain village, how they work,
and how those peasants
what they eat, the types of
e n d u red change. Today, agri, the
taxes they pay, and their
cultural policy in Egypt is experelationship with local and
riencing new “great transforcentral authorities. Judith
in
mations” marked with ecoTucker’s pioneering use of
nomic liberalization programs.
court re c o rds in writing a
What is happening in the
exercised
socio-economic history of
countryside now is but a mirror
Egypt perfectly fits here .
reflecting facets of Egyptian
Peasant women’s stories
market-oriented reforms. Thus, for
of
were told in courtrooms in
studying the undergoing transnineteenth-century Egypt,
formations in the Egyptian
.
and that is what Tucker used
economy cannot be done
in Women in Nineteenthwithout resorting to the agriculcentury Egypt to document
tural sector and documenting
what happened when
the peasants’ narratives themEgyptian agriculture and
selves, those who have to re geconomy were integrated
ularly confront the everinto European-led world
changing political economy.
economy.
In
addition,
Hence, the oral history of peasTimothy
Mitchell’s
article,
ants is central to the study of
“The
Market’s
Place”
Egypt’s agricultural sector and
recounted the experience
economy as a whole.
of an Upper Egyptian peasThe idea of using peasants’ narratives to write the eco- ant woman facing a market economy, in order to crinomic history of Egypt is not new, especially to the tique the dominant economic discourse on the unifields of socio-economic history and political econo- versality of the concept of market itself. Ray Bush’s
my. Empirical studies and surveys conducted by edited volume Counter-Revolution in Egypt’s
social scientists in several re s e a rch centres over the last Countryside collected various farmers’ accounts on
few decades do relate to peasants and collect infor- the impact of the neo-liberal policy in rural Egypt after
mation from them, but they rarely allow their voices to the 1992 law. Similarly, some studies in Mustafa Kamel
be heard or their accounts to be narrated; their voic- Al-Sayyid’s and Karam Khamis’ edited volume, Madha
es are usually lost amidst myriad statistical results and jara fi al-rif al-misri?, collected farmers’ stories to
dry economic or political/legal analysis. However, detect the impact of the application of the same polsome studies have paid attention to recounting farm- icy and law.
“After 1997
SECURITY
villages
VIOLENCE
FORCES
mass eviction tenants
from their plots
Leases were
TERMINATED
without any
due
compensation”
30
ALTERNATIVE HISTORIES
The history of land tenure law in Egypt has experi- tion, types of cultivated crops, availability of infraenced radical changes over the last two centuries. structure and public services, etc. In addition,
Accumulated large landownership expanded in reports include numerous case studies that address
Egypt after the 1858 Sa‘id land law that allowed pri- issues of individual male and female farmers or cervate property. The viceroy basically distributed the tain villages and their confrontations with the govsmallholdings of the peasant taxpayers, the khara- ernment. Moreover, the Center has compiled spejiyya land, to his military, administrative, technocrat- cial reports on peasant women and all types of state
ic, and religious elite. Nassir’s first Land Reform Law and security apparatus violence committed against
of 1952 returned these large land properties of the them with changing economic policy.
elite to small peasants; it gave small-sized farms to
the landless and placed a ceiling on rents. The sec- Among the most important sources the LCHR
ond Land Reform Law of 1961 not only reduced fur- obtains are legal cases. The basic activity of the
ther the ceiling of family holdings, but also extended Center is to file lawsuits for peasant litigants harmed
the system by which the government cre a t e d by the new land law, or any other type of peasants’
monopolies for itself over all agricultural inputs and legal complaints. There are around 10,000 lawsuits
markets of all major crops. President Sadat’s open that could be very important sources, which if
door policy reversed some of the small and medium explored would reveal a clear vision about the relafarmers’ socialist gains. Nonetheless, the major tionship between the state and its peasants. This is
reverse took place in 1992 with Law No. 96 under done by revealing the way the state, through adjuPresident Mubarak’s structural
dication and courts, applies the
adjustment and economic
reform policy and
have paid agricultural
reform program that required
how petitioners resist.
changing private pro p e r t y
ATTENTION to RECOUNTING The LCHR publications depict a
codes. The new law, applied
de facto in 1997, has entailed
lively picture of the relationship
that peasants return their small
between the state and its rural
farms to their pre-1952 land- in order to tell the story of the subjects. They describe the conlords and liberalized rents. After
f rontations between the state
economic history
1997, the security forces in vilsecurity apparatus and the
lages exercised violence for
farmers who had to evacuate
mass eviction of tenants from
their small-sized lands after the
their plots. Leases were termiapplication of the Law No. 96 of
nated without any due compensation. Liberalizing 1992, and how violence was used against male and
agriculture also includes eliminating subsidies and female farmers alike. They also show how peasants
liberalizing seeds, fertilizers, and crops prices.
tend to directly deal with the market economy and
Amidst this highly charged economic cli- globalization; liberalizing agriculture and eliminating
mate, the Land Center for Human Rights (LCHR) was subsidies mean that small farmers have to
established in Cairo in 1996 to document peasants’ encounter the WTO rules, the multinational corporadaily confrontations with the state and landlords, tions producing seeds, and imported American agriand to file their legal complaints. The LCHR publica- cultural produce. They also depict class structures
tions are indeed one of the undiscovered sources of and conflicts in villages and how they affect the propeasants’ oral history spanning the last ten years. ductivity and efficiency of small- medium- and
The Center collects farmers’ narratives and puts large-sized farms. Monopolies and corruption in the
them together in various Arabic series of publica- countryside are built on class distinction and power
tions, which include titles such as Land and networks among local and central authorities and
Peasants, Social and Economic Rights, Rural Civil rural elites.
Society, and Abu Fulan and Human Rights. In addition, they publish annual reports about the state of Furthermore, they show the peasants’ standards of
peasants in Egypt throughout the year, occasional life as opposed to urban standards, and how
publications to cover certain current issues or inci- modernity and technology affect life in villages and
dents, and dozens of short media reports issued on change their mode of consumption. We can also
daily basis and faxed to governmental bodies and study oral labour history through agricultural labour
interested advocacy groups. Furthermore, the migration to the city due to land losses, and how this
reports of workshops, symposiums, and training ses- affects both rural and urban socio-economic strucsions could be considered supplementary sources in tures. Specific reports on children are a great source
this regard.
for studying child labour in rural Egypt. In addition,
women’s voices are heard in almost every report
These publications, whose main editor is Lawyer drawing a picture of how women of various social
Karam Sabir, usually document information about classes run households, face the state’s laws and
the villages being studied in terms of history, popula- officials, and face global markets.
some studies
farmers’ stories
of Egypt...
31
ALTERNATIVE HISTORIES
Among dozens of cases studied about certain villages, a report titled “Land and Crops: the Policy of
Impoverishing Peasants and Little Income,” 2003, surveys seven villages in Upper and Lower Egypt. This
report collects the stories of the farmers of these villages to study how the new law impacted their decisions on what to cultivate in order to survive, versus
the landlords’ pre s s u re for raising rents and the state
guiding policy to allocate certain zones for certain
c rops. The “file of the village” (malaff al-qarya) collected on each of the seven villages lists the pro m inent families owning medium- and large-size farms,
the percentage of poor tenants and landless daily
l a b o u rers or journeymen (tarahil), the total size of the
cultivated land, types of cultivated crops, the drastic
increase in rents from 1992 until 2003, the village’s
c rop and the animal market, etc.
refused to deliver the land, so the ‘umda (the village’s mayor) humiliated him and his family by
detaining them at the local police station; their
planted crops were uprooted. Cutting stones has
become the only way for male and female kids of
the poorest families of this village to survive. The owners of stone quarries provide no health insurance or
fair wages to these children. As for the youth, they
have to travel to work in nearby towns or even countries, such as Libya, as labourers in construction and
other similar occupations.
One of the reports on peasant women was published
in 2004, titled “Women and Violence in the Egyptian
Countryside,” taking the village of Saft al-‘Urafa in
Upper Egypt as a case study. Women of diff e re n t
social classes were interviewed. While the marg i n a l
One of the villages studied in this
minority of upper to middle
“The
of using
report is Gizzaya, in Giza. Eight
class women holding land
big families own most of the vilwere satisfied by the law, the
lage’s land; each owns between
vast majority of women lost
30 to 100 feddans (1 fedland and had no way to surto write the
dan=1.038 acres). After re g a i nvive except by working as
ing land tenure, landowners
tarhila in nearby villages at
HISTORY very low wages or doing suborinsisted on taking away their
property from their usual tenants
dinate services at the houseand renting them out to farmers
, holds of the village. Ms. Mona
f rom outside Gizzaya in order to
Muhammad Hasan owns 370
e n f o rce property rights. Thus,
to the fields of feddans in this village, plus the
after non-violent land evacuaentire land of ‘Izbit Mahmud, a
tion, the farmers of Gizzaya
neighboring
ranch.
She
found themselves either forced
regained this large farm, inherto look for land for rent at any
ited from her father and husprice in nearby villages or to go
band, with the force of the
landless; some of them simply
new law, and 200 families
t u rned to work as daily laboure r s .
working on her farms had to
One of the peasants of Gizzaya is
face either terminated leases
‘Amm Farrag, a 61-year old widor increased rents on an annuowed father. Like most farmers,
al basis. Living in Cairo, she acts
he lived with his large family by
as an absentee landlord
renting 3 feddans. He had to pay the rent in addition through proxies. Meanwhile, Saniyya, a 47-year-old
to the debt service he owes to the Bank of widow and breadwinner for six kids, suff e red from the
Agricultural Development and Credit (BADC). After abrupt termination of the lease of her two feddans
the new law, he lost his small piece of land, yet he with the advent of the new law, just like numerous
had to continue paying the same debt service—the other female small landholders in Saft al-‘Urafa. She
state made no effort to adjust the BADC debt re g u- owns now about half a feddan and rents another
lations with the new situation. He searched for land half. Also just like other small holders, Saniyya lives on
to rent and the only place he could go is another vil- cultivating wheat, potatoes, etc. only for subsislage 120 kilometres away from Gizzaya, both to work tence. There are no markets involved here, which is
and to hide from the police that is chasing him to bad news for the agricultural liberalization program.
pay off his loans. The annual income of this already
poor family declined by half.
These stories are a few examples illustrating the richness of the oral history of rural Egypt and the imporAnother village is Ghayyada in Beni Soueif, whose tance of the LCHR archives that need to be tapped
kids must work in stone quarries due to land losses. in this re g a rd. Peasants’ stories in liberalized agriculSome farmers of this village faced violent actions ture are but a mirror reflecting the great transform af rom the police in order to force them to evacuate tions happening in rural Egypt and the Egyptian
their rented lands, which led others to show no re s i s t- economy as a whole with a new phase of integraance in evacuation. For example, ‘Amm Abu Isma‘il tion into the world economy.
idea
PEASANTS’ NARRATIVES
economic
of Egypt is not new
especially
SOCIO-ECONOMIC
history and
POLITICAL
ECONOMY...”
32
IN
THE
PIPELINE
GAMAL MUBARAK
Egypt’s Neo- Business
&
Community
A Venue for Development
or a Mode of Patrons & Clients?*
Mohamed I. Fahmy Menza, Dialogue Coordinator, AUC.
T
he story of Egypt’s "Neo-NDP" can be initiated with Gamal Mubarak’s National
Democratic Party (NDP) inauguration in
the late 1990’s. The roots of the Neo-NDP
were imbedded in an organization that
was prospectively spearheaded by Gamal himself in
order for it to evolve into a political party in its own
right. To outline the instrumental role played by
patronage politics in the scheme of NDP, it is important to pinpoint the correlation that Gamal Mubarak
has had with the business community.
In the summer of 1999 speculations rose that an alternative political party would be constituted to serve
as a hub for Gamal and friends. This party, initially
suggested to be called Hizb Al Mostakbal or “Party of
The Future” was in fact: “a new channel of governmental patronage, this new party, it was said, might
provide sufficient political muscle…to ensure the
intra-family succession. The new party was, among
other things, presented as a possible formal forum for
the politically voiceless "business community".
However, the regime's interpretation of this community came to be represented by its capitalist cronies
who have bestowed support on their patrons in
return for ‘clientelistic’ rents and state support”(1).
In essence, the party-to-be was an aborted attempt
towards the alliance between the younger Mubarak
and the business community. “Among the key figures
of the new party, that in some ways represented an
important segment of the so-called business community, was Mohamed Abu al-Inin, owner of
Ceramica Cleopatra group, who was appointed by
Mubarak to parliament (1995-2000) and an elected
NDP member since November 2000”(2). In any case,
the idea of the party eventually was relegated into
33
an NGO, the Future Generation Foundation (FGF),
still headed by Gamal Mubarak yet targeting pro mising Egyptian youths and providing them with a
training and skills workshop in foreign languages,
computers, and a variety of other fields.
With an entrenched arm in the business community,
Gamal was stretching towards a very critical sample
of the Egyptian population; the youth. Evidently, the
outcome was for the benefit of Gamal Mubarak who
utilized FGF for a set of social policies, yet kept his
political schemes for his NDP inauguration, resulting in
a reformed ruling party. The attempts towards an
alliance with the local business community ultimately borne fruit when the idea to amalgamate this constituency with the already existing party, the NDP,
seemed more viable. If there is a party already, then
why create another?
Enter The Business
Community
The elevation of the business community into the
higher echelons of the Egyptian polity, post-1952,
was in effect a reflection of a set of social and economic changes that the country went through in the
aftermath of the open door policy that was adopted
by President Sadat in the mid-1970’s. “About one
decade after economic liberalization, the first echelon of businessmen started to appear in politics during the mid-1980’s. One decade later, with the
beginning of privatization, they increasingly interf e red in formal politics. Generally speaking, they substituted those personalities in parliament that came
f rom the public sector”(3).
IN
THE
PIPELINE
In the wake of the 1990’s, the NDP/business community alliance was only logical. With the Egyptian
regime categorically assertive with respect to an
open-market economy and privatization schemes,
the role of mega-businessmen was more crucial than
ever. Taking a glimpse at the Egyptian parliament in
1999, even prior to Gamal Mubarak’s peaceful coup
within the NDP, one finds that almost all of the businessmen in the legislature were NDP members, formulating an estimated 30 % ratio of all parliamentari a ns(4). In that phase a sense of mutual dependency
was evident in the parliament. The businessmen
ensured the promotion of legislation that encouraged and supported private businesses and, concurrently, the government benefited from such a
tendency, for this inclination towards the promotion
of privatization went in accordance with the government’s approach.
Subsequently, business tycoons like Dr. Hossam
Badrawy, owner and manager of Nile Badrawy, one
of Cairo's biggest and best equipped private hospitals, and Mohamed Abu Al Inin, an Egyptian/Italian
who owns and operates one of the country's biggest
private firms for manufacturing Ceramic, Ceramica
Cleopatra, were granted membership to NDP as well
as other businessmen(8).
Hence, in the late 1990's, the NDP's tendency
t o w a rds allying with the business community was a
reality. By that time it was obvious that the old
alliances that President Mubarak’s regime has established with segments of intellectuals and public-sector bureaucrats(5) are no longer relevant for the survival of his rule. A process of renewal of alliances or,
put diff e rently, patron-client networks, was mandatory. Eventually what Ozlem Kavli refers to as a newly
rising politically relevant elite (PRE), was then the
focus of attention of the long hand of the regime; the
NDP. “PRE changing is happening as transfer of
power from one group to another within one circle
and between the circles”(6). And, in essence, this
alteration of attention was nothing new, for Egypt
has witnessed a variety of PRE shifts throughout the
post-1952 era; the most noticeable of which is the
shift from the elitist paradigm of army officers to the
set of educated technocrats, which somehow coincided with the demise of Nasser in 1970.
“bigger
“Now venturing into the features of this newly
ascending PRE allows one to grasp the mechanisms
of the clientele networks that connect it with the
regime with Mubarak at the apex:
The first elite circle is first of all connected to the
presidency and to the NDP. Since the president of
the party is at the same time state pre s i d e n t … t h e re
is a clear congruency between the party and the
state elite. If a prominent businessman (like e.g.
Ahmed Ezz) rises to the higher ranks of the NDP, he
also moves closer to the centre of power at the
same time. In this sense the NDP general secre t a r i a t
is a mirror reflecting elite composition and elite
movement, here: the increasing importance of businessmen in Egyptian politics”(7).
Hence the admission into the elitist clique guaranteed more access to re s o u rces due to the closer
p roximity to the patron that logically accompanies
the elevation into such an elite structure .
This has signalled the newly established inclination of
the regime to co-opt this new business elite within its
own circles. Needless to say, Gamal Mubarak had
the major role to play concerning this inclination. It
was his constituency now coming into being and, in
short, Gamal's ascendance into the apex of NDP
came with a reformulation of the old organization
into a new entity(9).
businesses mean
more resources,
and the scope of
ENDOWMENTS bestowed
upon the clients from the
regime will be
comparatively immense
when compared,
for instance,
to a clientele of
ARMY OFFICERS
or PUBLIC OFFICIALS,
as was the
case
during
the
Nasser era...”
34
IN THE PIPELINE
Benevolent & Malevolent
P a t ronage: Ezz vs. Lakah
If one wants to narrate the story of the Neo-NDP
and patronage politics then the tale to come serves
this purpose perfectly. Ahmed Ezz, the very same figu re cited by Kavli as an example of a neo-elitist,
poses a practical case for the utilization of patro nage re s o u rces by a businessman that chose to associate himself to the core of the NDP. Ezz, who owns
and operates Egypt’s most enhanced steel firm ,
Hadid Ezz while simultaneously heading the
Parliamentary Committee for Budgetary Affairs, have
been reportedly withdrawing sizeable lump sum
loans from Egyptian banks in the past few years.
These loans mounted to a total sum of 447 million
pounds over the year 2004 and were requested
under the name of a newly established company
that was in reality frozen and non-operational yet(10).
It is probable that a businessman like Ahmed
Ezz will possibly recover his debts that have been
accumulating over the past four years, but when
comparing the diff e rential treatment and facilities
that Ezz received, both as a regime client and a businessman, to the hardships that another one like
Ramy Lakah was subjected to, simply on the basis of
not being co-opted within the clientele of the NDP, a
multitude of question-marks re g a rding the actual
powers of the NDP as a clientele factory should be
raised.
The Story of Lakah: Not
Enough NDP Friendliness?
Although initially viewed as an NDP friendly
businessman that would join forces with the party in
the businessman swap that somehow overtook it in
the mid-1990’s, Lakah’s friendship with Ayman Noor,
a prominent opponent to the regime and an exWafdist and, consequently, his refusal to join the NDP
after winning a parliamentary seat in the 2000 elections, brought about his own downfall (11).
“While Lakah won his seat, re g a rdless of the debt
distractions, his new role as parliamentarian was
short lived. The deputy speaker of the assembly,
invoking the rights as accorded in article 99 of the
constitution, used the 2001 summer recess to revoke
Lakah’s parliamentary immunity. Fathi Soro r, a senior
NDP official and speaker of the assembly stated that
he came to this decision after he received thre e
requests from Lakah’s creditors for permission to sue
to recover debts. At the same time, The Higher
Administrative Court upheld a previous Court of
Cessation ruling that dual-nationality citizens are
ineligible for membership in the assembly”(12).
35
The story was then finished and Lakah had to leave
the country within a few months. Was it merely a sum
of coincidences that led to Lakah’s delicate strait?
This is most probably not the case. At least with the
o c c u r rences of a similar set of circumstances, for
instance, to a businessman that is affiliated with the
NDP, the re p e rcussions and the antagonistic media
attention by which the case was received at the
time wouldn’t have been the same (13).
This goes to show that patronage could go both
ways. Whereas a scope of what we can call benevolent patronage was the reward for those businessmen that adhered to the NDP, a malevolent scheme
of patronage that utilized the already existing networks established within the state-structure was influential in combating potential threats. In the case of
Lakah and Ezz, it was clear that the regime moved its
ties with the judiciary and the banking sector against
Lakah when he displayed waywardness and refused
to conform to the NDP. On the other hand, the exact
same authorities seem to be turning a blind eye on
Ahmed Ezz, because of his stratum within the NDP.
Within the Neo-NDP…The
Patronage Machine
The dependence of the party upon patron-client
policies seems to be intensifying with the alliance in
the making with Egypt’s emerging business community. The dilemma in the case of the evolution of a
patronage network that is mainly reliant on businesscommunity clientele resides in the fact that such a
“Businessmen are
playing a MEANINGFUL
role in EGYPT’S
NEO-NDP;
a role that is
only expected to
increase
in the
upcoming years...”
IN THE PIPELINE
community offers, by nature, an extremely vivid playg round for the exploitation of re s o u rces. By definition,
bigger businesses mean more re s o u rces, and the
scope of endowments bestowed upon the clients
f rom the regime will be comparatively immense
when compared, for instance, to a clientele of arm y
o fficers or public officials, as was the case during the
Nasser era. This simply means that such an alliance
between the regime and the business community
opens the door for a scheme of patronage that has
p robably never been witnessed on the Egyptian
scene since 1952.
Businessmen are playing a meaningful role in Egypt’s
Neo-NDP; a role that is only expected to increase in
the upcoming years. However, despite its increasing
relevance, Egypt’s business community has a way to
go in order to be the Egyptian polity’s chief keyplayer:
“The business lobby is still not consolidated to a
degree which would allow it to heavily influence
politics…Part of them, namely those merchants
associated with international corporations, have a
say in determining politics. Therefore they are part
of the first PRE circle. Businessmen and small entrepreneurs together doubled their seats in the 2000
elections. The other parts of the private sector are
those entrepreneurs who own small factories or
workshops and who offer services mainly in the
informal sector”(14).
Thus, slowly but surely, Egypt’s business community
seems to be ascending into the ranks of Egypt’s most
viable constituency in the wake of the 21st century.
Of course, the notion of expansion of a business
community in itself could be a favorable economic
sign and, respectively, political trend if nurtured in the
p roper manner. In an institutionalized environment
that allows for transparency and fair competition,
instead of favouritism and co-option of those businessmen that choose to ally themselves with the
regime, the development of a viable business community could definitely be beneficial. However, in the
case of the Neo-NDP, it seems that the prime concern of the party is not to attain a prosperous business environment that advocates economic and
business growth, but rather to consolidate its own
power via acquiring the support of certain segments
of the business community. Overall, a summation
comes from a young Egyptian businessman who
utters, reflecting upon the newly arising NDP/business
community alliance, “The concentration of greater
power in the hands of a few businessmen raises
doubts about the efforts to democratize the NDP's
i n t e rnal structure and attract more businessmen to
the party”(15).
END NOTES:
*This Article re p resents a modified segment of a study conducted
by the aforementioned researcher, in partial fulfillment of an M.A.
in Comparative Politics, entitled “Patrons & Clients in Mubarak’s
Egypt [Manuscript]: The Military, The NDP, & The 21st Century”. The
American University in Cairo, 2005.
1. Abdul Aziz, Muhammad and Hussein, Youssef (2002) The
P resident, the Son, and the Military: The Question of Succession in
Egypt. Arab Studies Journal, Fall 2001/Spring 2002 (Vol.9, No.2).
P.75.
2. Ibid.
3. Kavli, Ozlem Tur (2003) On the Notion of Reform: Public
Discourses and Reform Programs in a changing World. Center For
The Study of Developing Countries, Cairo,p.6
4. As cited in Minissy, Ahmed (1999) “Rijal Al A’mal wa Al
Parliament: Okzoubat Rijal Al A’mall”. Ahwal Massriya. C a i ro, Al
Ahram Center for Political and Strategic Studies. (Issue 6, Vol.2), out
of the 37 major businessmen within the parliament in 1998, 33 were
NDP members. The rest of the estimated 150 members (30 % of all
parliamentarians) were small businessmen that were mostly associated with the NDP as well. In fact this is more of a natural occurrence as we note that the Parliament is predominantly subord inated by the NDP. However, tracing the alliance between these
two entities, it would be essential to assert that with this pre v i o u s l y
mentioned mutual-beneficiary, the business clique is expected to
develop as the biggest sub-grouping within the parliament.
5. Kavli, Ozlem Tur (2003) On the Notion of Reform: Public
Discourses and Reform Programs in a changing World. Center For
The Study of Developing Countries, Cairo, p.5
6. I b i d, p.3
7. Ibid, p.4
8. Badrawi has been appointed chairman of the NDP's public business secretariat. “Additionally, he is chairman of parliament's education committee, and has also been a vocal advocate of opening up the medical sector to private investment”. The list of business cronies incorporated within the higher echelons of NDP also
includes figures such as Ahmed Ezz, appointed chairman of the
NDP's newly formed secretariat for membership issues.
Additionally, Ezz is chairman of parliament's budget and planning
committee. Ezz is a strong advocate of privatizing public services
and phasing out state subsidies. However, he has faced attacks
f rom opposition figures in the past on grounds of his deep involvement in monopolistic practices. One more figure is Hossam Awad,
appointed chairman of the NDP's youth secretariat. He is also
chairman of parliament's youth committee and, as an accountant, is involved in a plethora of commercial activities, ranging fro m
exporting and importing to stock brokerage. Cited in Essam El Din,
Gamal (2002) NDP Looks to The Market. Al Ahram Weekly (26 Sep2 Oct 2002) (Issue 605).
9. few of the minsitersadmitted into the 2004 cabinet had re p o r ted business ties with Gamal Mubarak. The list includes Rashid
Mohammed Rashid, a board member of Unilever who received
the industry and foreign trade portfolio, and Ahmed al-Maghrabi,
an executive of French tourism giant Accor who became Minister
of Tourism.
10. Interview with a middle-rank NDP member, The Ahmed Ezz story
was described as an “exaggeration” . The Ezz case has been also
reported with documentation in the weekly newspaper Al
Maidan, Vol 5, May 5th, 2005.
11. Kassem, Maye (2004) Egyptian politics: The Dynamics of
Authoritarian rule. Boulder: Lynne Rienner Publishers. P.34
12. I b i d.
13. Several incidents of corruption and embezzlement of resources
involving NDP parliamentarians have occurred over the past
years. Most infamously, there was the case known as Nowab Al
Koroud or Loan Parliamentarians. In this case, Tawfik Ismail, Head
of the Parliamentary Budget Committee and CEO of Al Daqahlia
Bank was condemned of public fund embezzlement and facilitation of over 200 million pounds in loans without collaterals to other
fellow NDP Parliamentarians/Businessmen Yassin Aglan and
Mahmoud Azzam. (Cited in Al Daidamouny, Shereen (1999) Al
Business wa Al Nofouz wa Al Fassad. Ahwal Massriya. Ahram
Center for Political and Strategic Studies. (Issue 6, Vol.2) p.134).
14. Ibid, p.7
15. Essam El Din, Gamal (2002) NDP Looks to The Market. Al Ahram
Weekly (26 Sep-2 Oct 2002) (Issue 605).
36
HISTORICAL PERSPECTIVES
In
A N T I C I PAT I O N
of Another
‘Harb’
Prof. Abdel Aziz Ezzelarab, The American University in Cairo.
I
n Egyptian economic folklore, so to speak, the
c reation of Bank Misr in 1920 stands out as a
landmark in national economic assertion. Bank
Misr owes this status to two main factors: that it
was created by purely Egyptian capital through
public subscription closed to Egyptian nationals and
that its proclaimed agenda aimed at economic
transformation through the promotion of industrial
investments. In that narrative, the creation of the bank
is credited to the efforts and insight of a singular man,
Tal‘at Harb, who has emerged as the unrivalled
champion of Egyptian economic nationalism. As is
the general case with the position of founding fathers,
this status is accorded to Harb by enthusiasts of both
f ree enterprise and a state-controlled economy.
Within this discourse, Harb and Bank Misr emerge in
the Egyptian public conscience as the collective epitome of national economic assertion and the example
f rom which Egyptians seek inspiration up to the present day.
We can approach this subject diff e rently. Taken on its
own, the establishment of the Bank was undoubtedly
a historic move. However, rather than viewing this
event as an exceptional historic event, an altern a t i v e
reading is to look for its origins and place it within a
l a rger historical continuum of strides by Egypt’s elites
t o w a rds economic self assertion (1). Essential to this
reading would be to establish that the vision for creating a national bank was not a product of a single
visionary in the second decade of the twentieth century, that the idea had been latent for a considerable
period of time, and that some more general factors
can explain its re c u r rent expression by diff e rent factions of Egypt’s elites at diff e rent points of time. A
product of this reading would be a revision of the
existing public wisdom re g a rding the exceptional role
37
of Harb and a reassessment of his specific entrepreneurial genius.
One way to relate to the social and economic history
of Egypt in modern times is to view it as a series of
attempts by various contenders to negotiate better
conditions for integration into the world economy
since the early decades of the nineteenth century
and to secure a larger share of the domestic market.
B roadly speaking, we can think of this attempt as having occurred at times under state leadership through
d i rect control over the economy (Muhammad ‘Ali
and Nasir) and at times within the context of a freeenterprise economy dominated by Egypt’s economic
elites (particularly during the ‘first liberal era’ after the
g reat war and until the early years following the 1952
movement).
Within this framework, the idea that Egypt’s economic ills would best be treated by the establishment of a
‘national bank’—viz. a joint-stock bank whose capital
is raised by public subscription among Egyptians—
was sounded in public discourse at least forty years
prior to the creation of Bank Misr. Further, statements
and communiqués were then issued carrying specific
calls on the public to subscribe to the foundation of
such a bank. We can detect at least three long-term
factors that gave rise to the earliest detectible such
call, issued in 1879. First, various groups in Egypt must
have been accumulating private capital through diff e rent aspects of the cotton trade since 1840 when
the state monopoly was abolished. Second, the
country had become exposed to the joint-stock structure as a means for capitalizing business since the mid
1850s with the establishment of various corporations
for the exclusive purpose of operating in Egypt. Third,
g roups of economic and political elites had gained
HISTORICAL PERSPECTIVES
increasing political power since at least the late
1860s with steps like the creation of a ‘Majlis
Nuwwab’ (The Council of Delegates) and through
arrangements in the 1870s by which the state borrowed funds from landholders in exchange for various tax and ownership privileges as a means for dealing with the mounting public debt crisis at that time.
T h e re was an opportune moment in April of 1879
when these three long-term factors—accumulation
of private capital, awareness of new forms for mobilizing that capital within business structures, and
increased political power relative to the state—
found expression in calls for establishing an Egyptian
national bank by public subscription. The immediate
context was the tentative success of a group of political and economic elites to take over the political
administration of Egypt from a cabinet whose key
positions were held by European ministers and that
was generally dominated by European bodies that
had increasingly come to control the country’s financial affairs as representatives of its creditors. During
the brief tenure of Sharif Pasha’s cabinet at that time,
a public call was issued under the title “Inma’ al-Mal”
(“The Nurturing of Wealth”) by an unidentified number of landholders, merchants, and intellectuals. The
call aimed at impressing upon the public the latent
power of joint-stock companies given the large
amounts of capital that they are able to mobilize,
emphasized the notion that countries acquired global power through the economic control that their
corporations enabled them to achieve, and gave
special mention to the power of banks drawing from
the country’s debt crisis at that time.
The call for establishing the national bank did not
materialize at that time, however. The reasons for this
failure are yet to be researched. One possible interpretation that could be accepted tentatively is the
political defeat of the 1879 movement and the British
occupation three years later. Both of these factors
must have deflated the sense of euphoria that seems
to be necessary for carrying out such attempts to
wrestle and to challenge. Instead of having a national bank, several more banks that were capitalized
l a rgely by European capital took increasing shares of
the market until the close of the century. Most
notable among these was the Crédit Foncier Égyptien (1880) and the National Bank of Egypt (1898),
respectively a real estate and a commercial bank
capitalized mostly by French capital in the former
case and British in the latter.
When the call for establishing a national bank re s u rfaced in the twentieth century, it was at least nine
years before Bank Misr was established. We have
re c o rds of this call in 1911 during the First Egyptian
National Conference. Two elements in the immediate context correspond to the situation in 1879. First,
the conference convened amidst a political crisis following the assassination of Prime Minister Butrus Ghali
to which part of the Coptic community reacted by
holding the Coptic Convention at Asyut. The
Egyptian National Conference came as a plea for
national unity and addressed the social, political,
and economic ills of Egypt with a view to calling for
c o m p rehensive reform. Second, the country had
recently been exposed to a collapse in real estate
and stock markets in 1907 that was triggered by
waves in European financial markets. Similar to the
b a c k g round of the public debt crisis in 1879, this context gave ammunition to the idea of the national
bank as a perceived means for financial independence or de-linking.
Apart from this correspondence in the immediate
context, we can also find continuity in the three longterm factors that had contributed to the evolution of
the call in 1879, with a couple of important qualifications. The community of capital owners—viz. economic elites—that identified with the cause of ‘economic independence’ had expanded to include
elements from minorities who had settled and operated in the domestic market for a considerable period of time. Thus, we find a Lebanese maronite, Yusuf
Nahhas, reported to be the first to make the call for
a national bank at the National Confere n c e .
Another important development is that the continued exposure to the operations of foreign banks in
Egypt must have resulted not only in awareness of
new methods for business organization, but also in
the direct training of Egyptian calibers in these institutions. The thre e - p ronged set of long-term factors
that shaped the movement of economic elites was
thus still relevant here (capital or material power,
a w a reness or know-how, and increased political
power).
“The call for
ESTABLISHING the
national bank
did not m a t e r i a l i z e
at that time, however.
The REASONS for this
failure a re yet to be
researched...”
38
HISTORICAL PERSPECTIVES
“Harb
goes a
long way toward
ESTABLISHING HIMSELF
as a
visionary,
to ensure the building
and preservation
of an
intellectual
heritage,
and to FOSTER
his role
reference
of enduring
as a
I N S P I R AT I O N A L
POWER...”
The public involvement of Harb in the promotion of
Bank Misr seems to have started during and after the
National Conference when he was delegated with a
number of other economic and financial experts to
look into the national bank project. There was another hiatus in mobilization after 1911—albeit brief in
comparison to the one apparent after 1879. During
this hiatus, however, Harb publishes his treatise titled
‘Ilaj Misr al-Iqtisadi aw Mashru‘ Bank al-Umma (The
Economic Remedy of Egypt or the Project for a
39
Nation’s Bank) in which he elaborates on the economic needs for such a bank. Very interestingly, Harb
attempts to give historical depth for the idea by quoting the entire text of ‘Inma’ al-Mal’ which he credits
a p p ropriately to its issuers. Here, we lay our hands on
one of at least two important elements in Harb’s
entrepreneurial genius: his apparent keenness to
a c q u i re historical memory and to articulate this
through public discourse. By doing so, Harb goes a
long way toward establishing himself as a visionary, to
ensure the building and preservation of an intellectual heritage, and to foster his role as a reference of
enduring inspirational power. This was not the first time
Harb appears in public space in that role. Earlier, he
had already published treatises taking positions
against extending the concession of the Suez Canal
Company, expressing views on the socialization of
Muslim women in the face of the liberal call of Qasim
Amin, and publishing a work on the history of the Arab
and Muslim people—all within the preceding
decade. Surely Harb was not only an entre p reneur
with a viable business proposal but a man with a
complex projection. He was an economic nationalist
with a keen sense of history, a proud adherence to
tradition, and an ability to articulate a position. All of
this accords him a unique role and status in the business world of Egypt and possibly makes of him a rarity elsewhere .
When Bank Misr is finally established in 1920, it is in a
situation of high political fluidity and euphoria within
the 1919 national movement. Harb’s ability to capitalize on the opportune moment and to move swiftly
at that point of time—rather than merely observe—is
another attribute of entrepreneurial distinction that
s e c u red for his name the other element of enduring
validity: that he became the historical founder of the
national bank when it was finally established. In those
two elements, Harb stands out clearly as the force
that gave ultimate fulfillment for a project that
Egypt’s economic elites had envisioned a long time
before.
Bank Misr was the creation largely of Harb while the
national bank project was one of an entire elite
g roup. This was part of their movement to negotiate
better terms of presence in the domestic and global
political economy, a movement that remains ongoing to the present day.
END NOTES:
1. The above analysis is based on part of re s e a rch published in
EzzelArab, European Control and Egypt’s Traditional Elite-A Case
Study in Elite Economic Nationalism (Edwin Mellen, 2002). In the re levant sections of that re s e a rch, I made particular use of the works
of Bob Tignor and ‘Abd al-‘Azim Ramadan. See particularly Robert
L. Tignor, “The introduction of modern banking into Egypt, 18551920,” Asian and African Studies 15(1981): 103-122 and ‘Abd al‘Azim Ramadan, “Nisf qarn min kifah al-burjuwaziyya al-misriyya liinsha’ bank misr” (“Half a century of the Egyptian Bourgeoisie’s
endeavours to establish Bank Misr”), al-Katib 11(April 1971): 170-184.
HISTORICAL PERSPECTIVES
The Arab Bank
A Palestinian National Bank of Jordan
Amr Ismail Adly, Economic Researcher, The Ministry of International Cooperation.
aving had the chance to work at the Arab
Bank for seven months I was driven to two
d i ff e rent conclusions. First, banking is not a
carrier to pursue, at least for me. Second,
the Arab Bank’s story is an interesting one
to ponder. The Bank has a special character as an
overseas financial institution: it is owned by a
Palestinian family, the Shumans, who are very powerful
in Jordan, and well respected amongst their fellow
Palestinians at the same time. The Bank has branches
in the Middle East aligning the Palestinian presence in
J o rdan, Lebanon, Saudi Arabia, Cyprus, Greece, and
Australia, in addition to Palestine proper since mid
1990’s. Its special political dimensions are evinced by
the lawsuits filed against the Bank in New York by a
number of Israeli families who accused the bank of
financing terrorist activities and drawing attention to its
special relations with most of the Palestinian factions.
H
fer of the British rule to the Hebrew state control in 19471948. However, there were manifestations of capital
accumulation on familial basis coping with other nominally Arab nationalist movements in the 1930’s and
1940’s. A well developed bourgeoisie without a complete state project generated a prolonged process of
identity building devoid of state institutional dimensions, - unlike many Arab states where the identity
question was answered while the state institutions:
army, bureaucracy, etc. were established. The
Palestinian case was distinct in the sense that the identity of the people kept evolving especially after 1967 as
an independent identity in the quest for a state. The
national identity evolved around non-state org a n i z ations such as the PLO (established in 1958) as a political
representative and other civil institutions that played a
double role of a business as well as a socio-political unit
a round which the identity was to be formulated.
The Arab Bank was established n Jerusalem in 1930 as
an early manifestation of the Palestinian bourgeois
capital accumulation beyond the dominant presence
of British and Jewish financial institutions. From the very
beginning the development of the Bank was entangled with the political changes in this critical part of the
world. In 1967, the Israeli forces captured the West
Bank and Gaza. The Arab Bank shifted its headquarters
to Jordan where it resumed its financial expansion with
the lines of the Palestinian Diaspora across the Arab
world as well as the whole world in general.
The Arab Bank is similar to the aforementioned institutions. It has been closely linked to the PLO where its
funds were deposited. Similarly, the Palestinian communities that came to be scattered along the Arab
world starting to depend on the Arab Bank as a banking network linking families from Jordan, Lebanon,
Libya, Egypt, the USA, Australia; which implies that the
bank branches took the lines of the Palestinian
Diaspora on the one the hand, and constituted a business institution around which a Palestinian identity has
been represented. Similar cases could be traced in the
Armenian, Kurdish and Jewish Diasporas where civil
associations, banks, and agencies played the role of
centers around which the national identity of peoples
has been construed.
Since then The Arab Bank has become engaged in a
two track development process: first; the development
of a Palestinian identity in the absence of a pro s p e ctive state, and secondly; the process of state building
in the Jordanian Hashimite Kingdom which undertook
considerable phases of evolution parallel to those of
the Palestinian cause, especially with the presence of
l a rge numbers of Palestinian refugees and displaced
people in the years of 1948 and 1967. This group now
constitutes about 70% of the Jordanian nationals and
important segments of the urban population.
On the one hand, the Arab Bank constituted a clear
f e a t u reof a mature Palestinian bourgeoisie that developed since early 1920’s under the British mandate and
did not have the historical chance to undergo the
p rocess of state building due to the exceptional trans-
However, the Arab Bank has gone through another
special experience in the country to which it shifted its
center after the 1967 occupation of the West Bank:
J o rdan. The bank became one of the most important
financial institutions in Jordan, and it has played a
national role since the 1960’s in the state building
p rocess of the Hashimite Kingdom. This in turn has created special ties between the Shuman family and the
royal house. The dual role played by the Bank, which
continues in the present, is a business around which the
Palestinian identity was formed, and an institution contributing to the process of nation-state building in
J o rdan.
40
BUSINESS
In
NOT AS
USUAL
PURSUIT of
LIVELIHOOD:
Palestinian Refugees
in
*
Lebanon
Hoda Baraka, M.A. candidate, London School of Economics and Political Science.
T
hough insecurity is an outstanding feature of
Palestinian life in their various Diasporas,
their situation in Lebanon remains unique in
the degree of exclusion at the political, economic and social levels. Following the exodus in 1948 Palestinians predominantly worked to fill
crevices in the Arab world’s service sectors in undeveloped areas such as finance, administration and
English-language teaching. Because they lost their
land, education became the principal avenue open
for Palestinians aspiring for social mobility. Inevitably,
they produced a relatively a larg e
number of intellectuals and university graduates, and gradually
acquired considerable political
expertise.
could attempt to achieve a modicum of prosperity.
Palestinians residing in the camps of Lebanon confront
numerous economic and social difficulties and press u res. As time went by after uprooting and dispersal,
their needs have increasingly become more acute.
The situation of the Palestinians in Lebanon-- 373,440 of
whom were registered with UNRWA by the end of
1999(1) -- is the most tragic amongst all the Palestinian
communities because they do not enjoy civil and
social rights. Since 1948 Palestinians residing in that
country, alongside their off s p r i n g ,
have been barred from most
occupational categories without
an official work permit. However,
attainment of these permits is
practically impossible. This is
in Lebanon is severely attested by the fact that the total
Even in the refugee camps, which
of work permits issued to
w e re mainly inhabited by form e r
U N D E R M I N E D , number
Palestinian
refugees since 1948
villagers, education became the
has not exceeded 2,500 perm i ts (2).
main ticket out, thanks in part to
At first there was not much of an
the United Nations Refugees and
attempt to seek work, for in a way
Works Agency (UNRWA) that was
that would have been construed
established by the same United
as accepting that exile was final.
Nations that partitioned Palestine. Palestinians could
But
in
all
cases,
the
only employment available for
acquire citizenship only in a few countries, such as
uneducated
Palestinians
in the first years following the
Jordan which was, in any case, a composite of the
Palestinian West Bank and Tr a n s j o rdan. But some of the Nakba was seasonal agriculture and unskilled coneducated and well-to-do elite also were able to gain struction labour. These remain the predominant areas
citizenship in some Arab countries. Others sought in which Palestinians partake in the Lebanese inform a l
opportunities elsewhere outside the Arab world, or economy. The progressive deterioration in the socioeconomic conditions of Palestinian refugees is an outremained in tenuous position in Arab states.
come of varying causes.
Lebanon serves as the most tragic example for highlighting the way in which Palestinians are engulfed in a Recent hardships have resulted from, among other
fierce battle to enhance their livelihood. Not only do factors, reduction of UNRWA services, coupled with a
they face there economic misfortunes, often the lot of diminishment of the role of PLO institutions, to the point
many Arab citizens, they are also restricted by w h e re they are no longer able to meet the needs of
Lebanese legislation from landing good jobs that the camp population. Moreover, the end of the civil
might aff o rd them humane standard of living. The war in Lebanon saw the withdrawal of most of the
informal economy, therefore, has become with the international organizations in the belief that most hardpassage of the time the only venue in which one ships were ameliorated. A recent study conducted by
Palestinian
HUMAN CAPITAL
thereby daunting
future aspirations...
41
BUSINESS
the Norwegian re s e a rch institute, FAFO, illustrates the
living conditions of Palestinians in Lebanon. Its conclusions highlight the fact that they are currently better
than what the first generation of refugees experienced,
but in comparison with the experience of Palestinian
refugees in other countries development is faltering.
We could safely say that living conditions have stagnated and, in many respects, deteriorated.
Also, the exclusion of the refugees from the Lebanese
labour market through a number of mechanisms puts
them in a uniquely disadvantaged position. An outcome is that Palestinian human capital in Lebanon is
severely undermined, thereby daunting future aspirations. This trend is crystallized in long-term unemployment having become increasingly characteristic of the
refugees in Lebanon. It is important to stress that this is
specially true amongst those with higher education.
“For half of the unemployed, the unemployment period has lasted for two to six months, while for 20 percent
it has lasted for seven to twelve months. Ten percent of
unemployed refugees have not been economically
active during the past two years. The longest unemployment periods are observed among those with relatively high educational levels. Undere m p l o y m e n t ,
defined as working fewer hours than one wants to and
is able to, is substantial at 22 percent for men and
about 30 percent for women”(3).
It is sad to note that this generation has had far better
opportunities for education and training than their
grandparents - the Nakba generation- yet it is older
men who managed to work and save money in order
to secure education for their children. One of the reasons reported by refugees for their joblessness is the lack
of work opportunities. Regarding this obstacle, it is the
author’s belief that although the labour market situation in Lebanon is not in its strongest form, it should not
be viewed as the main impediment before Palestinians
who try find jobs. This hypothesis could be corroborated
by the presence of thousands (the exact number is not
known and is not released by the government for political reasons) of foreign labourers from various nationalities, including Syrians, Egyptians and Sri-Lankans.
A more precise account of the most effective obstacle
in Lebanon facing Palestinian labour would consider
the legislative constraint, which bars them from public
sector jobs, as well as from an extensive list of occupations and professions spanning most industries. By law all
Palestinians with regular jobs have to possess work permits. But the bureaucratic complications they must go
through make the informal economy ever more attractive. The required procedures to obtain a work permit
include getting a written agreement from the employer, and payment of fee, and providing a medical certificate from a legal doctor. The worker thus must sacrifice at least one day without pay in order to ready the
paperwork for the Ministry of Labour. Even after a
Palestinian worker is granted a work permit he remains
ineligible for social security benefits, although part of his
NOT AS
USUAL
wages is deducted as a contribution to them. In case
of dismissal Palestinians receive no compensation, and
it is widely observed that Palestinians are paid less than
the Lebanese for the same job.
Any attempt at tackling the hideous conditions of the
Palestinians in Lebanon should be meticulously
addressed so as not to create further friction and complications. The Palestinian Authority is now expected by
many to further its contacts with the Lebanese authorities in order to reopen the PLO office in the country. The
aim is to secure diplomatic presence in Lebanon that
would liaise with the government and circumvent the
Palestinians from becoming embroiled once more in
any potential internal Lebanese struggle. The establishment of official relations between both parties should
also provide the opportunity for improving the status of
Palestinian refugees, by ending their exclusion from
m a i n s t ream Lebanese life and ensuring that they
receive hospitable treatment until the issue of
Palestinian refugees is finally settled.
Recently the Lebanese labour minister, Tarad
Hamadeh, exempted Lebanon-born Palestinians who
are registered refugees from a more than two-decade
old ban on non-Lebanese practising some 50 trades in
the private sector. But unfortunately a ban on
Palestinians seeking professional employment remains.
Still, some take this to be a first step in granting
Palestinians their civil and social rights.
It must also be pointed out that the problems with legislative complications and irregularities go beyond the
domestic level. Prohibiting Palestinians refugees in
Lebanon from the right to work is in direct violation of
international law. Article 6 of the International
Convention on Economic, Social and Cultural Rights
(1966) aff i rms the right of Palestinian refugees to work as
f o reigners residing in the country on non-temporary
basis. Furtherm o re, by denying them this right, Lebanon
also violates Article 26 of the International Covenant on
Civil and Political Rights, which aims at preventing discrimination. Moreover, the Universal Declaration of
Human Rights (ironically, drafted by Lebanese
Philosopher Charles Malik) also grants the right to work
to non-citizens(4). At this stage not only the Palestinian
and Lebanese officials are required to take action to
i m p rove the situation of the Palestinian refugees; the
i n t e rnational community, too, must respond promptly
to this cause.
END NOTES:
* This article is part of a re s e a rch conducted by the author in Shatilla
refugee camp in Lebanon in August 2005.
1. Aasheim, Petter. “The Palestinian Refugees and the Right to Work
in Lebanon-A minor field study.” Graduate Thesis. International
Human Rights Law. Faculty of Law-University of Lund, Spring 2000.
2.“Palestinian Camps in Lebanon: Existing Conditions and Needs.”
PLO Department of Refugee Affairs in cooperation with Friedrich
Ebert Foundation. June 1998.
3. FAFO Report. Age A. Tiltnes. “Falling Behind: A Brief in the Living
Conditions of Palestinian Refugees in Lebanon.
4. Sayigh, Rosemary. “Palestinian Refugees in Lebanon: No Work, No
Space, No Future.” Middle East International. 656. August 2001
42
BUSINESS
NOT AS
USUAL
ART Bottle:
The Business
of
On A
Art Making
Lina Atallah, Journalist, The Daily Star.
“A
ll department stores will
become museums and
all museums will become
department stores”
– Andy Warhol
The value of Obelisk-branded Egyptian local wine
bottles might have just risen due to their new set of
novel paintings used for their packaging. For one,
they are more esthetically pleasing now, but also offer
a window of exposure to an art that is otherwise limited to conventional venues like galleries and cultural
spaces.
On one of the red wine Obeslisk bottles, produced by
Gianaclis Vineyards for Beverages, a subsidiary of Al
Ahram Beverages Company, oil on canvas painting
by Sara Adel gives a swaying picture of oriental
female dancers against a rural background. Another
painting by Mohamed Youssef, using oil on MDF, gives
a progressive representation of a female Bedouin on
a rose wine bottle. In both cases, shimmering colors
present a more visually appealing product.
The idea is simple. According to Obelisk’s marketing
team, “wine from making to tasting is an art by itself.
The history of art witnessed many artists who have
been inspired by wine to create timeless poetry,
paintings and photography.” The statement goes on,
“At Obelisk, we have a passion for art, and we want
to share it with you. Like a gallery, the labels of our red,
rose and white variants will consistently change, featuring the creation of known or yet to be discovered
Egyptian artists who have been chosen to represent
the spirit of our wine. We hope to contribute to the
growth of Egyptian modern art by bringing Egypt
modern vine arts collection right to your table.” The
statement is well pointed to address consumers, while
not being void from substance. The selection of art
work is highly visual and has been a venue for emerging artists to show their work.
43
Wine bottles are not the sole venue for this new trend,
where contemporary art has been used out of its traditional context for a variety of reasons. Locations’
interiors such as restaurants and bookshops are
another point in case, where contemporary artists
have been commissioned to bring their creations to
restaurants diners and bookshops’ goers. While this
partnership between business and art has brought
mutual gains for both worlds, points of intersection
between the two realms are still far away.
One of the Four Seasons Hotel’s restaurants opted to
invest in a rather rich artistic scene in making for its interior, instead of resorting to conventional modern
designs that are usually replicas of pre-made models
with little authenticity. Designs include paintings and
glass based installations, that work largely on pro m o ting the principle of conceptual art and not simply
superficial decorative art that stays on the sidelines. In
explaining the idea, the hotel focuses on the
‘Egyptianity’ of the art in use, and its contemporariness. “We built a very contemporary hotel, which is a
little bit of a departure from the Four Seasons. It is usually classical. So we wanted it to be very Egyptian, but
everybody has the notion that Egyptian art is
Pharaonic art. So we have a collection which is about
$ 2 million in the hotel and it is 100 percent contemporary Egyptian art,” says Olivier Masson, general manager of the Four Seasons.
“The history
of ART
witnessed many artists
who have been
INSPIRED by wine to create
timeless poetry,
PAINTINGS and photography..”.
BUSINESS
Masson recounts how the idea is
being well received by the hotel’s
visitors and is triggering questions,
which are well adopted by the
hotel’s management. “[Response
f rom guests was] fabulous. They
wanted to know why and how, so
we decided to publish a book. It is
a coffee table book, a large book
that represents every piece of art
in the hotel and we will have this
book in our shop in the hotel as
well as the VIP suites,” he says.
NOT AS
USUAL
Wine bottles are not
usually produce mediocrity.
Moataz Nasr, one of some 10
established local contemporary
THE SOLE VENUE
artists, describes it as miserable.
“The [govern m e n t - a ffiliated] culfor this NEW
,
tural institution is basically made
of employees, civil servants who
have little knowledge,” he says.
According to him, artistic conout
sciousness has faded away,
meanings of curating, dealing
of its
with space, working with conceptual art (as opposed to decorafor a variety
tive art) have gone missing.
These alternative venues present
“Teaching in local art schools has
a valuable addition for the few local contemporary stopped at Picasso,” he says, with an exclamatory
artists, who are hindered by the lack of marketing and tone.
sale options through the traditional field, especially for
those who go beyond the confines of modern art. Nevertheless, the private sector has not always
Unlike modern art, contemporary art does not nor- o ff e red the best resort to contemporary artists, who,
mally give sellable artifacts, and contemporary artists one might say, between the government’s neglineed to wait for a museum for example to express gence and the private sector’s agenda setting, are
interest in buying their work, an absent option in Egypt. sometimes lost. While there is a genuine bid by the private sector to promote art and contemporary artists,
D i rect financial benefit is one thing, however this new t h e reis a parallel and inevitable bid for material gains.
partnership with the business sector is also widening This parallelism is not always neutral. Nasr describes
the audience base for these artists by bringing their art the example of Obelisk’s vine-art project, for which he
to a whole new domain and especially to those will was an advisor. “I was really supporting the project at
not go specifically to galleries to watch art works. In its early stages until they started doing it on their own,”
fact, some contemporary art galleries have under- he says. “Now they are engaged in using what they
gone a process of re-defining themselves in order to think will please more. They are keen to use works that
attract more visitors by revisiting the functionality of satisfies how the West wants to see us.” After all, a high
their space; they offer reading corners and are set percentage of alcohol consumption in Egypt is by forbeside coffee shops in vibrant areas of the city.
eigners. Nasr uses the words “folkloric” and
“Orientalist” to describe his disheartenment from the
The Townhouse Gallery for Contemporary Art, a pri- development of the vine-art project, and its recent
vate cultural entity that prides itself for being an agen- choices of contemporary art, which mandate among
da-free platform for artists of all tendencies, has in fact many others, is to break cultural typecasting into more
pioneered eying the private sector’s support for its genuine and individualistic re p resentations.
artistic endeavors. “We went through all funding
basics, looking at sponsorship interests and potential Similarly, Wells who was one of the first supporters of
activities,” says William Wells, founder and director of the project and the one who urged Al Ahram
the Townhouse. “This way of making money is a gen- Beverages to run a bar art competition in 1999, pulled
uine way, a work of opportunity. For the first time, I saw out recently. His reasons are “insensitivity towards
the Townhouse, with its specific activities, to be sus- artists and disrespect for the art.” “When we pulled
tainable.” The Townhouse had to bear the stigma of out, it was a statement,” he says.
seek funding from outside sources by housing a wave
of criticism of being an agent, to reverse the tradition- The experience of linking some arts to business is a
al art gallery dealings that depend on simply selling art worthwhile one that brings about benefits for both the
works. “Not everything is conspiracy,” is what Wells has artist and the businessman, while also serving the
been trying to promote.
community and eventually raising its productivity
through environmental psychology. Yet, it is not an
This type of access is particularly relevant to local experience that proves the supremacy of the private
artists who, one might say as the tradition entails, do sector and its capacity to fix loopholes left by a less
not enjoy the perfect relationship with the govern- e fficient public sector leaving many artists at cro s sment and hence are deprived from an important roads as to what choices they should make. Moving
source of support. Most artists think of this dissociation away from traditional venues and into more un-orthoas a conceptual gap between them and the govern- dox channels has its benefits but not without its pro bment and its affiliated cultural institutions. To them ven- lems. The commercialization of the artistic talent and
ues that mix art with bureaucracy and power politics, its subservience to pure financial factors is only one.
trend
where contemporary art
has been used
traditional context
of reasons
44
OUR ARCHIVES
T
he following are samples of the documents contributed to EBHRC
to be part of its archival depository. Donors of documents vary
from individuals to institutions. In addition documents received
vary from original to copy forms and some old documents were purchased from a collector of old papers and artifacts in downtown
Cairo. Donor name followed by a description of the documents will
be found below:
Aziz Sidqi:
Ministry of Industry Publications:
1.“al-Thawra al-Sina’iya fi ‘ahad ‘ashar
‘aman 1952-1963.” ( Eleven Years of
Industrial Revolution).
2. “Dalil al- Sina’a fi Misr fi thalathin sana
1952-1982” ( Guide to Industry in Egypt in
30 years).
Banque Misr Publications
1. Sixtieth Anniversary 1920-1980.
2.Diamond Jubilee 1920-1995.
3.Golden Jubilee 1920-1970.
4. Part 3 of Talaat Harb’s collection of
speeches 1939.
Café Riche Documents,
Official Douments:
1. Maslahit il-Dara’ib il-‘Aqariyya records
1905
2. Official copy of Maslahit il-Dara’ib il‘Aqariyya records 1907.
3. Récépissé de déclaration pour un établissement public: 16 October 1914.
4. Formal Declaration to the Office of the
Assistant to the Chief of Police: 9 May
1916.
5. Déclaration pour l’ouverture d’un établissement public: 9 May 1916.
6. Inspection Report: 16 May 1916: Chief
of Abdin Police Precinct.
7. Internal Note: Cairo City Police:
For/Commandant C.C.P.: 8 July 1919.
8. Internal Note: Confidential:
Commandant C.C.P.: For/Acting
Commandant C.C.P.: 20 July 1919.
9. Contract: 14 July 1921, Déclaration
pour l’ouverture d’un établissement public: 4 November 1942.
10. Petition submitted by Mr. Abdel Malak
Mikhail Salib: 22 May 1962, which cites the
transaction contract with Avayianos, registered in 1962.
11. Letter from Russell Bey to Camp
Commandant of the British Officers, Head
Quarters: 26 February 1918.
Mohammad AbdelAziz Zayed
Papers/Reports:
1. Muzakira bi-Sha’n ’usus al-Tijarah alDakhiliyya wa al-Kharijiyya fi al-Mujtama‘
al ’Ishtiraki al-Dimukrati al-Ta‘awuni
(Memo Re: Foundations of Internal and
External Trade in the Socialist Democratic
45
Cooperative Society 1959).
2. Bahth ‘an Wasa’il Tanmiyyat al-Tijara alDakhiliyya wa Mada al-Nuhud Biha
(Paper on the means for Developing
Internal Trade and The Extent of
Promoting It) 1961.
3. Taqrir ’an Rihlat Mohammad AbdelAziz
Zayed Ra’is Majlis al-’idara lil-kharij ’an
al’Mudda min al-’usbu’ al-’akhir min
’uktubar hatta al-’usbu’ al-Thalith min
December Sanat 1965 (Report on
Mohammad AbdelAziz Zayed’s
[Chairman of The Alexandria Commercial
Company] Trip Abroad [Duration: Last
Week of October 1965 – Third Week of
September 1965]).
4. Taqrir ’an Rihlat Mohammad AbdelAziz
Zayed Ra’is Majlis al-’idara ila al-Yaban
wa al-Wilayat al-Mutahida wa al-Miksik
(Report on Mohammad AbdelAziz
Zayed’s [Chairman of The Alexandria
Commercial Company] Trip to Japan, The
United States and Mexico [Duration:
October/November 1966]).
5. Taqrir ’an Rihlat Mohammad AbdelAziz
Zayed Ra’is Majlis al-’idara lil-’aswaq alQutniyya fi ’urupa al-Gharbiyya (REPORT
Mohammad AbdelAziz Zayed’s
[Chairman of The Alexandria Commercial
Company]Trip to The Cotton Markets in
Western Europe [Duration: June 1968]).
6. Taqrir ‘an Ma‘rad Suq Bari b-Italya
(REPORT The Bari Exhibition, Italy
[September 1970]).
7. MINESTERIAL ORDER: The order is the
permission granted to Zayed to attend
the Bari Exhibition as Deputy Governor of
the Central Bank. Dalil al-Wukala’ alTijariyyin bil-Iqlim al-Misri, 1960 (Directory:
Trade Agents in the Egyptian Province,
1960.) The directory is published by “The
General Union of Chambers of
Commerce”
Purchased Documents:
1. Land Contracts: Three land contract
registered in the court of Alexandria in
1889, 1890 and 1893 under the Khedives’
government.
2. Stock Certificates: Credit Foncier
Egyptien 1951, Societe de Biere “Les
Pyramides” 1956, Egyptian Federation for
Agricultural Products 1943. Receipts: Three
receipts from the Piastre Project for the
Revival of Egyptian Industries (mashru’ il
qirsh).
3. Letter from Michel Politis to Assistant to
the Chief of Police: 9 May 1916.
ORAL HISTORY
RECORDS:
B
elow is a list of EBHRC’s oral
history interviewees. The list
excludes the interviewees of
theYoung Scholars projects.
INDUSTRY
Eng. M. Abdel Wahab
Eng. Fouad Abu Zeghla
Mr. Louis Bishara
Mr. Mounir Ezz El Din
Dr. Adel Gazarin
Eng. Abdel Moneim Khalifa
Mr. Ziyad Nashif
Mr. Bahaa Raafat
Mr. Hasan Ragab
Dr. Rouchdy Said
Eng. Ibrahim S. Mohamedein
Dr. Aziz Sidqi
PLANNING
Dr. Ismail Sabri Abdullah
EGYPTIAN
ENTERPREUNERS
Mr. Mansour Hasan
Mr. Mohamed Taymour
BANKING
AND FINANCE
Mr. Hasan Abbas Zaki
Mr. Mahmoud Abdullah
Dr. Salwa El Antari
Mr. Ali Dabbous
Mr. Mohamed El Barbari
Mr. Ali Shahin
Mr. Fouad Sultan
INSURANCE
Mr. Hasan Hafez
ACADEMIC , RESEARCH,
AND CONSULTANCY
Dr. Heba Handoussa
SMALL BUSINESSES
MAISON PAPAZIAN
Mr. Ashod Papazian
L’AMPHETRION
Mr. Adel To’ma
Mr. Henry Francis
ANNOUNCEMENTS
FOR
EBHRC CALL FOR PAPERS
THE YOUNG SCHOLARS’ CONFERENCE,
FEBRUARY 2006
T
he Young Scholars Conference will be
held on an annual basis in February.
Original research by young scholars and
associated graduate students will be the
fulcrum around which the conference’s
events will be organized. The will accept
proposals for papers to be presented no
later than the 15th of November.
The facilitation and support of independent
research by young scholars interested in the
economic and business history of the
Middle East, has become one of the principal components of EBHRC’s raison d’etre.
Young scholars are a considerable asset to
the center as a resource for ideas and initiative. A significant portion of this pool will
likely embark on careers in research, academic or otherwise. Their involvement with
the center at this stage makes available the
unique opportunity of launching an inquiry
that they may well choose to revisit many
years from now by building a long term relationship with the center.
EBHRC had always planned to make available its oral history records to researchers
from around the world. The center has thus
far conducted sessions with tens of people
in government, industry and enterprise. Said
records represent a historical source material never before made available to any
re s e a rcher re g a rdle ss of their stature or
experience. The re c o rds can be made
available to young scholars should they
choose to use them.
The scope of the material is not limited to
that derived from the center’s own collections. As precedent by February’s three-day
event, there’s great potential in linking
apparently sociological, cultural and political topics to the region’s economic and
business history. Feel free to submit a written
proposal for the paper you wish to present
at the conference. It would be fruitful to
submit your material before the deadline so
that constructive feedback may be provided.
Your work will be discussed and witnessed
by large group of dedicated scholars from
AUC and other universities. Presenting your
work in this forum may also serve as a dry
run for international conferences and publication. This was the case with last conference whereby three of the papers presented are now being prepared for presentation at the prestigious Middle East Studies
Association
(MESA)
Conference
in
Washington DC next November. Their
authors were encouraged to submit their
work to MESA only after they presented it
first last February in the Young Scholars’
Conference.
It may be the case that you are interested
in taking part but still feel in need of a tangible entry point for your research. Should
this be the case then perhaps the following
list of broadly demarcated subjects that
EBHRC is currently working on for Egypt and
the Middle East may prove to be fertile
ground for your efforts:
1- Enterprise History (eg. El- Nasr Motor
company)
2- Institutional History: (e.g. Egyptian
Federation of Industries).
3- Biographical projects on policymakers,
businessmen and entrepreneurs.
4- Histories of Business Families.
5- History of a small business or businesses
6- Sectoral Topics: (e.g. a history of the textile industry in Egypt).
7- Labor History
Think about the above as potential topics
for consideration rather than strict guidelines.
... We look forward to your queries and
ideas.
EBHRC Crew
46
ATTEND OUR PANEL
IN MESA 05!
" Egyptian Business History:
New Sources, New Methods
and New Directions in
Research"
Date: Sunday, November 20.
Time: 2:00-4:00 pm.
Chair: Prof. Roger Owen, Harvard University.
Discussant: Prof. AbdelAziz EzzelArab, EBHRC,
AUC.
PAPERS BY:
1. Prof. Robert J. Vitalis, University of
Pennsylvania: "Captive Narratives: On the
History of Firms and States in the Middle East
(and Beyond)"
2. Karim El Sayed and Dina Waked, EBHRC,
AUC: "Café Riche: In Pursuit of a NonQuantitative Business Model: Implications of
Macro Changes for Small Eateries in
Downtown Cairo"
3. Lina Atallah and Dina Khalifa, EBHRC, AUC
" A Brave New City! Heliopolis: Place, Business
and People"
4. Mostafa Hefny, EBHRC, AUC: " The Business
History Voyager: Revisiting Western Methods in
the Light of Oral History Accounts of Egypt's
Industrial Experience"
Third
AUC Forum on
Economic and
Business History
of Egypt
and the
Middle East:
CALL FOR
PARTICIPANTS
T
he Third AUC Forum
on Economic and
Business History of
Egypt and the
Middle East is due to
convene in May 2006.
At the present time, we
seek research or discussion papers from
scholars, researchers,
and
other interested parties
for sessions on: 1)
Experiences of business
history research centres
and/or 2)
Approachesto Middle
Eastern
business history.
Abstracts up to 400
words are welcome by
December
15, 2005.
For further information
please e-mail:
[email protected]
Offices: Rooms 307, 313 A, 314, 315, Old Falaki
Telephone: 797 5603 / 5602
Email: [email protected]
Copyrights © EBHRC All Rights Reserved