A recent story illustrates the political power of the bourgeoisie in contemporary Egypt: At the beginning of 1985, the Egyptian minister of economy, Mustafa al-Sa‘id, unveiled a set of new trade and banking laws. They aimed, among other things, at imposing a greater degree of Central Bank control over the foreign exchange operations of private banks. Such controls were urgently needed by the state, which is facing acute shortages of foreign exchange and mounting financial pressures.

In the months that followed, important segments of the Egyptian business community effectively campaigned against the January decrees. The Egyptian Banker’s Association emerged as a key group in the fight to overturn the laws. Its position on the issue reflected the strength of the transnational banks within the finance sector.

The opposition press took a great interest in the affair, treating it as a clear-cut conflict between the state and the private sector. The Wafd Party paper repeatedly attacked the legislation and Mustafa al-Sa‘id as twin omens of a return to the hated system of Nasserist socialism. Al-Ahali, the weekly paper of the left opposition Tagammu‘ party, championed the minister and his “reforms” as an attempt to reimpose state control over the “parasitical bourgeoisie.”

The daily press noted the frequent meetings between government officials and representatives of Egyptian business associations. Government and ruling National Democratic Party leaders, including the prime minister who had originally come out strongly for the new legislation, gradually withdrew their support. By early April, al-Sa‘id had tendered his resignation and the government announced that it was rescinding the measures.

At least one important member of the “parasitical bourgeoisie,” it seems, did support the January decrees — namely al-Sa‘id himself. In the course of the campaign, it came to light that he controlled a private company with a lucrative monopoly on the import of computer supplies. But he was unable to win many others of his class over to his point of view. Even business associates deserted him. His company apparently had dealings with a currency trader who was brought to trial by the government. This trader joined the chorus of those who openly called for al-Sa‘id’s dismissal.

The individuals and families sketched below represent a few of the prominent names associated with the infitah era in Egypt.

Profiles

Osman Ahmad Osman, the most notorious capitalist of the post-1973 period, began as a small contractor in the Isma‘iliyya region, though he exaggerates (along with much else) the obstacles in his path to success. His elder brother helped found the Egyptian Engineers Syndicate, a group with fairly influential political and economic ties from its inception. With capital accrued from lucrative work in Saudi Arabia, he founded an Egyptian company in 1955, later renaming it the Arab Contractors Company. Arab Contractors is a public-sector construction firm (nationalized between 1961-1964) with some eight members of Osman’s extended family on the board of directors. Osman himself is honorary chairman. Despite its public-sector status, the company serves as the core of a private sector empire which, according to Osman, consists of 200 companies and 26 banks. Other studies estimate the number of subsidiaries (as of 1983) at between 39 and 60. The Osman group’s interests include food processing, agro-industry, banking (Suez Canal Bank), insurance, real estate, building materials, middleman operations for foreign manufacturers (for instance, through its Industrial Engineering Company subsidiary) and, of course, numerous construction and engineering offshoots. Osman has a number of private operations in various Arab states, apart from foreign branches of Arab Contractors. At present, his influence extends to the Egyptian parliament (he has packed the housing committee with his clients); the ruling National Democratic Party; and the Engineering Syndicate, which he has turned into an economic force tied to the Arab Contractors.

The ‘Allam family interests revolve around the al-Nasr Company for Contracts, started by Hasan Muhammad ‘Allam (d. 1976) and nationalized over time by the Nasser regime. The company continues to be managed by the founder’s sons, Fahmi and Samir. It was one of a handful of state companies to start working in Libya and other Arab states in the 1960s, when concessions were made to management in return for the hard currency they would bring into Egypt. Since the 1970s, the ‘Allam group has been involved in numerous joint ventures with foreign partners.

The Ayyoub family began one of the first Egyptian contracting firms to specialize in reinforced concrete work, in the late 1930s. At present, Ayyoub and Sons engage in housing and other construction projects, often with foreign partners. They have been favored in many of the recent building projects sponsored by the army.

The Durra family, active in the period since the 1952 revolution, are engaged with different foreign firms in a variety of infrastructural projects. Muhammad Hasan Durra, the head of the family, sits on the governing council of the Socialist Labor Party. Osman and other interests among the old contracting families are trying to create a new Contractor’s Association, outside of the framework of the corporatist Federation of Industries, both as a way of dominating the large local contracting sectors and as a counterweight to the numerous foreign firms now operating in the Egyptian market.

The banker Fu’ad Sultan (currently minister of tourism) was the long-time chairman of the board of the Misr-Iran Development Bank, the core of the Misr-Iran group. The bank is one of the early Law 43 companies, heavily backed by Iranian capital; present ownership is somewhat unclear. The interests of the Misr-Iran group include agribusiness (Golden Farms, Roma Macaroni Factory), real estate (the Abu al-Fida building, the Nile Tower), industry (Misr-Iran Air Conditioning Company, numerous textile and other manufacturing ventures), tourism (Gezira Sheraton, through its subsidiary the Misr-Iran Hotel Company) and building materials (including Acrow Misr). Misr-Iran has also participated in ventures with the Osman group. Sultan played an important role in the creation of the new Egyptian Bankers Association and the US-Egyptian Business Council.

Niyazi Mustafa, an engineer with a degree from MIT, is active as a consultant and company director. Mustafa joined the board of directors of the newly formed Societe Misr pour les Autos, an auto dealership, in 1944, along with such ancien regime stalwarts as the al-Lawzi family and Ladislas Pathy, who were among the first local capitalists to serve as middlemen in business deals with US multinationals. According to US Embassy documents from the mid-1950s, he set up an early joint venture with an American construction firm, United Contractors, intending to take advantage of possible US economic aid to the country for the Aswan high dam and other projects. By 1954-1955, Niyazi was also serving on the board of directors of the Wadi Kom Ombo company (one of the oldest agricultural estate companies), along with rising Egyptian business figures Mustafa and Sayyid Mar‘i. As of 1956, he was listed in the roster of the Chamber of Public Works contractors (associated with the Egyptian Federation of Industries) as head of the engineering contracting company, Nimos Engineering. In 1973, he served as a member of the board of directors of the chamber. His son, Hatim, now manages the firm, which is engaged in agricultural and other engineering projects. Niyazi co-chaired one of the first business associations of the infitah era, the US-Egyptian Business Council, which in turn paved the way for the creation of the American Chamber of Commerce in Egypt. Hatim Mustafa sits on the Chamber’s board of directors.

Isma‘il Sabri (Baligh) worked for the ‘Abboud group, one of the most powerful private enterprise groups in the pre-1961 period. He remained on the board of ‘Abboud’s sugar company following its nationalization in late 1955. He is the brother of ‘Ali Sabri, a member of the innermost Egyptian ruling circle until arrested by Sadat following a power struggle in May 1971. Data from 1983-1984 show Isma‘il as chairman of the board of the Delta Sugar Company and a member of the board of the National Bank for Development (a project that had Sadat’s backing — Osman sits on the board as well). Sabri is at the same time involved in private agro-industrial projects. He also co-chairs the Egyptian-French Businessmen’s Council.

How to cite this article:

Robert Vitalis "Egypt’s Infitah Bourgeoisie," Middle East Report 142 (September/October 1986).

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