Addressing the nation, particularly Egypt’s largest income earners, in his latest speech, Egyptian president Abdel Fattah Al-Sisi encouraged citizens to donate to the Tahya Masr (Long Live Egypt) fund, saying: “If every day, 10 million from the 90 million mobile holders sent a morning text to Egypt donating EGP 1, that will total EGP 10m [each day]”.
“That is EGP 300m per month and EGP 4bn per year,” he continued.
Though the demand appealed to many citizens’ nationalist sentiment and received support from a large segment, it nonetheless cast a shadow over the government’s ability to improve the dire state of the economy, prompting the question of whose responsibility it is to provide support: the Egyptian citizen or the government?
(Photo Public domain)
Support and backlash
As soon as the president made his plea, a debate erupted on social media, with some believing that they are already doing enough for the country, while others posted screenshots of the donation messages.
“The people donated to Tahya Masr fund for Egypt and then Egypt donated the money to the military and judges,” another tweet read.
“I donated to Egypt when I paid taxes on my car at twice its price,” another person tweeted.
Alia Mohamed, a 25-year-old employee at a telecommunication operator in Egypt, told Daily News Egypt that she is against the initiative. “I already pay a lot in taxes,” she said. “There is nothing for free anymore.”
“Everything that I purchase I pay taxes for, and services are not free,” she said, highlighting that she was not even taking into consideration the payments she makes “under the table”, referring to corruption in the form of bribes that need to be paid at government institutions to escape the Egyptian bureaucracy.
Mohamed said that rather than being asked to make donations, she can use this pound for trade.
“I am not convinced with the whole model,” she said. “To truly benefit the economy, I will buy and sell in my country with this pound.”
Salma Moharam, an HR executive at an international laundry, homecare, and cosmetics cooperation, she would have felt disloyal if she did not donate. “While some argue that people pay taxes and still do not receive adequate services from the country, I believe there is still a certain degree of corruption that allows companies, as well as individuals, to evade paying,” she said.
When asked whether she believes this corruption can reach the fund and prevent it from reaching its stated targets, Moharam stated she “is convinced that this money goes to the right place”.
On whether the continued corruption demonstrates the government’s incompetency in controlling the economy, Moharam said “eliminating corruption will take time, after it has been imbedded in society for the past 30 years”.
(Photo Public domain)
What the economists have to say
“The idea almost has no economic merits whatsoever, it is very simplistic and ignores the complexities of economic development, and if we’re being honest, can’t be taken seriously,” budget programme officer at the Egyptian Centre for Economic and Social Rights (ECESR) Omar Ghannam said.
Not only will this step not be enough to sustain economic development, it will also fail to leave the slightest positive impact on the economic landscape of Egypt, he said.
“The suggestion of 10 million Egyptians donating a pound daily will raise a little less than EGP 4bn per year, which is less than 1% of the actual deficit in the 2015-2016 budget,” he said. “So not only is the idea not economically viable; it is largely ineffective in remedying our long-standing economic ailments.”
Economics professor at the American University in Cairo (AUC) Ahmed Kamaly concurred with Ghannam’s statements and said “no country can achieve sustainable development based on donations”. He said this reduces the stature of the country in the eyes of its citizen.
“Why not address low taxes,” Kamaly said, adding that the rate of taxes applied in the country is “extremely low”. “We need to look into the real resources in the county.”
Meanwhile, Omnia Helmy, the acting executive director and director of research Egyptian Centre for Economic Studies, said that while the people are happy to donate to their country, this willingness is conditional. “People will donate at a time of need on the condition that the [government] should lead by example,” she said.
Sometimes people donate then find that there is a “certain degree of prodigality in government spending,” she said. Acceding with both Ghannam and Kamaly’s perspectives, Helmy said citizens’ donations should not be depended on as a source of income. “Real development is achieved through a real increase in production,” she said.
The three economists were unable to provide an example of a successful model based on citizens’ donations in any other country.
The history of “patriotic” donations
The demand for Egyptian citizens to stand by their country’s ailing economy came long before the Long Live Egypt fund.
Donating to the Egyptian army during its wars has become a long-known tradition. In 1930, when Egypt was still a monarchy, an initiative called the “Penny Project” was launched by Ahmed Hussein, a prominent politician at the time. The project aimed to support the dire economy after the price of cotton, the country’s main exported good, deteriorated.
Just like Long Live Egypt, the project’s motto was “cooperation and solidarity for the sake of economic independence”. It received wide support from politicians, businessmen, citizens, and the government itself.
The wave of patriotic donations was renewed with former president Gamal Abdel Nasser, who relied on high profile singers and poets to lead and support an initiative to donate for “The War Effort”.
The idea of supporting the country took a new form in former president Anwar Sadat’s era, who launched the “Egyptian Debt Fund”, which originally belonged to Egyptian singer Um Kulthum under a different name.
The fund hoped to receive the financial support of Egyptians, but failed to collect a notable figure. The wave of citizens’ patriotic donations disappeared during Mubarak’s presidency, but was revived after toppling Mubarak, initially with the efforts of Islamist preacher and TV show host Mohamed Hassan in 2012.
Hassan launched the “Egyptian Aid” initiative and asked Egyptians to help in ridding the country of the $1.3bn annual US aid. The initiative, which was later renamed “For the love of Egypt”, was supported by then-minister of planning and international cooperation Fayza Abu El-Naga – notorious for the 2012 crackdown on foreign NGOs – and Al-Azhar’s Grand Imam Ahmed Al-Tayeb.
After Egyptian businessmen and public companies affirmed their intentions to support the initiative, pledging millions of pounds, the initiative came to an abrupt halt after Al-Tayeb withdrew his previously announced intentions to supervise the fund.
After his election as president, Mohamed Morsi announced the “Egypt’s Renaissance” fund in late 2012. Unlike previous funds, donations to Morsi’s fund were set to be anonymous and confidential.
Due to its vague nature, the fund was attacked and ridiculed by many. A lawsuit was even filed against then-governor of the Central Bank of Egypt’s (CBE) Farouk El-Okda, deeming the account unconstitutional.
After the ouster of Morsi in July 2013 following the 30 June uprising demanding his resignation, TV show host Khairy Ramadan launched the “Support Egypt” account. By May 2014, the initiative had successfully collected EGP 1bn.
(Photo Public domain)
Tahya Masr
Shortly after his election, Al-Sisi launched the Tahya Masr fund and issued a decree to establish the fund, granting it legal status. The fund is held under the auspices of the president.
The president also merged the “Support Egypt” fund with the new presidential fund. In June 2014, the Egyptian armed forces contributed EGP 1bn to the fund.
Two months later, real estate businessman Mohamed Almorshedy donated 500 housing units, at a total value of EGP 50m, while businessman Alaa Arafa made an EGP 20m donation to the fund. Arafa provided a cheque of EGP 5m as an initial payment to then-prime minister Ibrahim Mehleb. The remaining the payments will be made over a two year period.
August also witnessed a string of donations from several companies, such the Arab Contactors Company, which collected a sum of EGP 6m from its workers. During the same month, Madinet Nasr Housing and Development (MNHD) announced the company’s Board of Directors approved a donation of EGP 25m; the company stated it plans to pay the amount over the next five years.
Also in August, the Egyptian Steel Group donated a sum of EGP 50m that was handed by group CEO Ahmed Abu Hashima to Mehleb as receipts for bank transfers.
In September, a sum of EGP 5m was provided by President of Al-Ragheb General Contracting Company Sedawi Ragheb Deif-Allah. During the same month, Chairman of Al-Araby Group Mahmoud El-Araby provided EGP 20m, while another EGP 100m was donated by Chairman of Abu Donkol for trade and manufacturing Salah Abu Donkol.
Chairman of Polyserve Fertilisers and Chemical Group Sherif El-Gabaly announced that the group will be donating EGP 160m, paid over five years. In October, the Ministry of Water Resources and Irrigation received approximately EGP 2m from its contracting companies to support the fund.
Two months later, the Tourism Investment Association of the Red Sea governorate donated EGP 30m.
Other donating companies included telecommunications company Etisalat, which gave away EGP 50m, Orascom Construction Industries (OCI) that donated EGP 2.5bn and GB Auto, which decided to provide the fund with EGP 100m.
Several Egyptian banks also donated to the fund. Former CBE governor Hisham Ramez announced that bank contributions to the fund registered EGP 400m. Companies in the oil sector and workers donated a total amount of EGP 36.85m to the fund, according to then-minister of petroleum and current Prime Minister Sherif Ismail.
By January 2015, however, the presidency announced that the money collected by the Tahya Masr fund had not exceeded EGP 5bn to EGP 6bn.
Despite the backlash that Al-Sisi’s demand received on social media since 24 February, many Egyptians have supported the campaign to donate by text messages. By 6 March, the fund successfully collected EGP 3.75m via text messages.
Throughout Egyptian history, the government and politicians have depended on its citizen to financially support the state as much as citizens have been reliant to the government for services. Through analysis of similar initiatives, Tahya Masr’s aim proves to be no different from previous fund and aids launched by the government.
“What is happening now [asking for citizens’ donations], happened before,” El-Kamaly said. “Citizens and public companies were pressured to donate and days passed by with no one knowing where the money [donations] went.”
