Home The Washington Diplomat June 2014 For Egyptian Entrepreneur, Stability Comes Before Democracy

For Egyptian Entrepreneur, Stability Comes Before Democracy

For Egyptian Entrepreneur, Stability Comes Before Democracy

In the year since Mohamed Morsi was unseated as Egypt’s democratically elected but increasingly unpopular president, the linchpin Arab nation of nearly 90 million sitting on Africa’s northeastern coast has been roiled by political turmoil.

As a military-backed government has tried to re-establish a sense of normalcy while moving toward a nominally democratic system, supporters of Morsi and his Islamist Muslim Brotherhood have been ostracized or persecuted, with an estimated 1,000 supporters killed and thousands more thrown behind bars, including Morsi himself.

All the while, Field Marshal Abdel Fattah el-Sisi, the leader of the country’s powerful military and its newest president, is seen as a beacon of stability and secularism by some Egyptians, and a reincarnation of the autocratic government of Hosni Mubarak to others, including many of the young, liberal activists who overthrew the longtime dictator in 2011. The recent election that ushered el-Sisi into power was widely seen as a disappointment because of low voter turnout, a reflection of how deeply divided the nation remains.


Photo: Meridian International Center
Shafik Gabr, chairman and managing director of the ARTOC Group, an investment and holding company headquartered in Cairo, speaks at Egypt’s International Economic Forum.

But for Shafik Gabr, the apparent narrowing of democratic space in his homeland isn’t something he’s worried about — rather, he says, it’s part and parcel of a slow political evolution in Egypt. “The fact is, the first thing has to be stability and security. Without stability and security you can’t have anything,” he said, holding forth in the living room of his elegant mansion — his home away from home — located between Embassy Row and Woodley Park in Northwest Washington.

Gabr is one of Egypt’s richest industrialists, with an estimated net worth of $450 million. He’s chairman and managing director of the ARTOC Group, an investment and holding company headquartered in Cairo that works in areas ranging from aerospace, real estate and infrastructure to media, steel fabrication and logistical services for oil and gas companies.

He speaks about his country in a manner befitting his education, which included stints at the American University of Cairo and University of London. His accent is almost undetectable, and he sounds calm, collected and confident when asked about the fate of a country that has been riven by uncertainty since the start of the Arab Spring.

That uncertainty has hurt Gabr’s business, according to Forbes, with revenues declining 20 percent in 2012. Nevertheless, he’s adamant that Egypt will overcome what he calls a “period of transition” and that its future lies in engaging with the West. To that end, he’s established the Shafik Gabr Foundation to improve East-West relations and promote education and entrepreneurship. Last year, he launched a fellowship program for young Egyptian and American professionals, and this June, he’ll be honored by the Meridian International Center at its Global Leadership Awards ceremony at the Four Seasons, alongside Sean O’Keefe, former head of EADS North America.

An avid collector of Orientalist art, Gabr may be exactly what cash-strapped Egypt needs right now — a practical businessman, not an idealistic politician. (On the other hand, to some jobless Egyptians, Gabr also represents the entrenched interests that flourished under the old guard and its shadowy system of crony capitalism.)

Regardless, the country is in desperate need of investment and innovation. Three years of upheaval have pummeled Egypt’s sclerotic economy, whose stagnation drove millions of protesters to Tahrir Square in the first place. Nearly half of all Egyptians live on less than $2 a day. Inflation, public debt and unemployment are high, while tourism revenue and remittances have been slashed.

“Despite some positive trends and heavy cash infusions from the Gulf states, Egypt’s economic outlook remains bleak,” wrote Eric Trager and Gilad Wenig in the Foreign Affairs article “Sisi the Invincible,” which predicts that Sisi’s strong military backing makes another coup less likely, although continued economic woes could erode that support.

“The International Monetary Fund projects a growth rate of 2.8 percent in 2014, which is short of the five percent needed to cut rampant youth unemployment. The interim government’s stimulus policy, as well as the lack of revenue from tourism, will further drain Egypt’s cash reserves … and further dips over time could complicate the government’s ability to buy the fuel that it sells to the public at heavily subsidized rates.”

That, the authors warn, could spark another revolution. “The long gas lines and constant electricity cuts that occurred under Morsi could return under Sisi, enraging the public and broadening support for protests.”

But unlike many other businessmen, Gabr doesn’t fret over that possibility. The self-described “optimistic realist” says the ongoing political and social convulsions in his country are steps — albeit small ones — toward a system that is stable and open.

“Any change goes through either one of two ways. Either it goes through evolutionary change where the impact is usually measured and consistent and you have a change that is totally positive. But when it’s a revolutionary change, there are many unpredictable factors that therefore have a cost. And you go through labor pains … and you find yourself always fixing and coming back on a trial-and-error basis,” he argues. “This is what we’ve been going through.”

A8.egypt.gabr.story.defensesec.storyPhoto: Department of Defense / Erin A. Kirk-Cuomo

Secretary of Defense Chuck Hagel, left, participates in an April 2013 arrival honors ceremony with Egyptian Minister of Defense Abdel Fattah el-Sisi, who recently took over as Egypt’s president following the ouster of Mohamed Morsi last year.

For many human rights activists, those “labor pains” have included the arrest and prosecution of journalists on flimsy charges, a crackdown on the Muslim Brotherhood that has left it further outside the political system than it was under Mubarak, and a new anti-terrorism law that Amnesty International called “deeply flawed” for its vague provisions that could turn legitimate political activity into prohibited crimes against the state.

Gabr does not seem to be concerned by those steps, and he says that most Egyptians — tired of perpetual chaos — aren’t either.

“When you talk to the average Egyptian today, one of his key criticisms is that the government is not hard enough against those that are doing this [terrorism] to Egypt. They want to have the stability and security and build on the economic prosperity and the political transformation. The good news is that Egypt will never go back to an autocratic rule. But at the very same time, you cannot build a democratic rule on instability and insecurity. That doesn’t work,” he says.

The tension between stability and democracy isn’t new to Egypt, nor is Gabr the first to take a side in that debate. The way he tells it, Sisi and the military are the only actors that can create the space needed for democracy to flourish. Without them, he argues, democracy will continue to be a battle of ideas and visions — albeit one without rules and institutions to moderate them and protect the rights of minority groups.

Dictatorship is relatively easy, Gabr says. Democracy is hard and takes time. “I do not believe democracy is instant coffee. It does not turn like that,” he said, loudly snapping his fingers for emphasis. “Democracy is institutions, democracy is knowledge by the people of the responsibilities, obligations and their rights. It’s not just their rights. Some people, when I used to go talk to people in our factories in small provincial towns, their thinking is, ‘Democracy is freedom, I can do whatever I want.’ That’s not what it really is.”

Gabr’s assessment echoes the views of Sisi, according to Cairo-based journalist Gregg Carlstrom, who in an article for Politico Magazine argued that “Egypt’s new dictator” revealed some of his thoughts about democracy while training with the American military at the U.S. Army War College.

“[He] was very cynical about the whole push for democracy and did not like a lot of the oversimplified comments of classmates,” Sherifa Zuhur, el-Sisi’s former professor, told Carlstrom. “He thought that poverty and poor education are impediments to democracy, and so was the long-standing winner-take-all mentality in regional politics.”

While many experts agree that democracy is a long process and not a magic bullet for endemic social problems, they also argue that military leaders have a poor track record of establishing democracy and letting it take hold. Seen as saviors and protectors, these leaders rarely know when to give up power.

“If the Middle East is ever to emerge from the dark ages of dictatorship, there must be a transition — a first step away from the kings, ayatollahs, emirs and presidents-for-life that have tyrannized hundreds of millions of Arabs and Persians,” argued Danielle Pletka, a scholar at the American Enterprise Institute, in a New York Times op-ed published in January.

Gabr largely rejects this criticism, because he sees el-Sisi and the current government — as well as the Egyptian people — as being different.

“My deep conviction is that Egyptians will not allow military rule. In the entire cabinet, there is only one minister who is from the military, and that’s the minister of defense. It’s not like the old days of [Gamal Abdel] Nasr where the cabinet was ex-military officials. I don’t see that happening or coming,” he insists.

Gabr is particularly critical of Western media, which he says misunderstands what the Egyptian people want. But instead of simply hoping his criticisms find an audience, he launched an exchange program that he says allows U.S.-based artists, lawyers, scientists, entrepreneurs and journalists to see the situation for themselves.

“My program comes from the fact that in today’s world we’re all connected. We have a great technological revolution, which gets us connected 24/7. But do we really know what’s going on?” he said, speaking of the program, “East-West: The Art of Dialogue,” which he started last year as part of his charitable foundation.

In 2013, the program took 12 young Americans to Egypt, where they met with politicians, artists and business owners. After that trip, 10 Egyptians visited the United States on a five-city tour. Gabr says he hopes that dialogue and direct experiences will broaden the understanding of his country, and the debate over what’s happening in it.

“They key element in this whole program is that their perceptions should not just be the media or the sound bites, but rather a true experience of the other. It’s amazing when you talk to these young people before this experience and after this experience,” he said.

Another group of Americans will travel to Egypt in June, and the Egyptians will come to the United States in October. Though the groups are small and the program is young, Gabr says such exchanges are vital to increase the kind of cross-cultural understanding that can head off conflict.

“In this very fast-paced world, you’re not going to understand each other just by reports and communicating in our technological world,” he argues. “We have to invest time sitting together, having food, traveling, exchanging concerns, and having an open dialogue, face to face. That will always make a difference.”

About the Author

Martin Austermuhle is a contributing writer for The Washington Diplomat.