Written by Laurence Brahm - Published by South China Morning Post on 12/07/2006

Egypt sees China more as a brother than as an ordinary, friendly nation,” declared Egyptian President Hosni Mubarak, in Beijing this month. He was attending a summit on co-operation between China and Africa, followed by a state visit in the mainland. This was Mr Mubarak’s ninth China trip, which makes you wonder: is there more on his agenda than trade and investment?

“China will be the major economic partner of Egypt in the next eight to 10 years,” said Nawal El Safty, professor of media and journalism at Cairo’s Misr University for Science and Technology. Last year, total trade between China and Egypt reached just over US$1 billion. Mr Mubarak seems intent on pushing that up to US$5 billion in bilateral trade in the decade ahead.

Chinese imports flood Cairo’s markets. Every plastic pyramid or sphinx sold to tourists seems to be made in China. “Buy one, you Chinese are all rich,” I heard one Egyptian hawker shout at lines of passing Chinese tourists in Cairo recently.

Egypt plans to lure Chinese investment using methods similar to those the mainland adopted in the 1980s: comprehensive, low bureaucracy industrial zones and exhibition centres. Clearly, Egypt is eyeing China’s economic success, seeking a strategy to repeat it.

“Why China?” asked Farouq Abou Zaid, dean of the mass communications faculty at Misr University. “China progressed, but why not Egypt?” Answering his own question, he pointed to the policies imposed by the International Monetary Fund – including privatisation and the elimination of subsidies – that benefited only a rich social elite. They gained capitalist monopolies, at the expense of the broader population – whom the economy had once served well. “In the end, when these programmes [from the IMF and World Bank] are finished, who runs the country: local people or foreigners?” Dr Zaid asks.

During the 1960s, Egypt successfully adopted policies to reduce imports – by encouraging the development of domestic industries – and promote exports, similar to the approach used by Japan, South Korea, Taiwan and Singapore.

Then the IMF stepped in, demanding president Anwar Sadat lift subsidies and privatise the public sector. That sparked rioting in January 1977. In the eyes of many, IMF policies derailed the country’s economy – leaving Egyptians angry and hopeless. Many turned inwards for consolation, turning towards the mosque.

“Ten years ago this place was like Istanbul or Beirut,” explained one foreign diplomat. “Egyptian women wore tight jeans, fashionable clothes and jewellery. Now you see this increasingly less. More are behind the veil, and even wearing outright black. During Ramadan, people not only fast strictly but debate whether or not they can even use eye drops.”

Economic stagnation brought social frustration, fuelling the rise of a more fundamentalist brand of Islam. New social pressures arose. The population surged, and now stands at 78 million. Cairo is home to 17 million, making it bigger, denser and more congested than even Beijing. Former leader Gamal Abdel Nasser guaranteed government jobs for university graduates. But, like China, Egypt finds itself with a stifling government bureaucracy. It cannot function due to the oversupply of officials and undersupply of things for them to do.

Lethargy breeds incompetence and petty corruption. This, too, pushes an alienated society to seek more legitimate forms of authority, and many in Egypt fear rising religious extremism. If there were a truly free election in Egypt tomorrow – not the kind endorsed by US Secretary of State Condoleezza Rice – most votes would go to the Islamic Brotherhood, Egypt’s largest Islamic party.

Many are concerned that Egypt’s economic decline is fuelling insularity and religious fundamentalism. This doesn’t surprise Dr Zaid, who asks: “How can you be an active member of society when you cannot even make ends meet?”

Laurence Brahm is a global activist, international mediator, political columnist and author. He is the leading advocate of a fresh development paradigm - The Himalayan Consensus - an innovative approach to development.

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