For the first few months following the revolution, I welcomed the calls for reconciliation with figures of the former era in a way that ensures a continuous flow of funds for projects and investments, and a preservation of the state’s right to the funds obtained in twisted ways. All of this would create a climate of confidence between local and foreign investors, attracting more investments and encouraging investors to return to the Egyptian market.
I still believe that reconciliation is the bitter medicine vital for all the crises Egypt’s economy is suffering from, especially with the worsening deficit of the public budget, the domestic debt, and the low exchange rate of the Egyptian pound against the US dollar.
Reconciliation is the best message of confidence to send to the business community, locally and internationally, which can encourage businessmen expand their projects rather than exit markets or take investments abroad.
The reconciliation will contribute to the return of investments and factories. It will make jobs available, leading to less unemployment. By reconciliation of course I don’t mean the businessmen convicted in criminal cases or those proved to be involved in corruption or the bloodshed of Egyptians.
The talk about reconciliation means the state’s quick reclamation of its rights outside the course of judiciary in order to avoid the high costs or these rights’ recovery. Legal action to recover these rights is very difficult and takes about 10 years. Moreover, it is very expensive, and will cost the state about 50% of the value of recovered assets. According to judicial sources, the fund reclamation committees, formed since 2011, have cost the state nearly $120m without achieving any success.
The state can recover the looted funds only after a final court ruling. This is a real obstacle, especially without the existence of material evidence before the court to issue positive verdicts for the benefit of the state.
If the state accepts reconciliation, it cannot seek to borrow or rely on grants and aid from Gulf countries while some businessmen own billions of smuggled US dollars abroad. It is not wise for the upcoming generations to deal with a burden of loans while there are billions of dollars abroad that are unlikely to be recovered easily.
I believe that it is time for the state to seriously seek to look into the possibility of reconciliation for the sake of the country’s higher interest now that it has been five years since the 25 January Revolution.
No one is benefiting from these businessmen staying abroad forever without the reclamation of the funds they have. In this context, I would like to note that the reconciliation made with the famous businessperson Hussein Salem are a good example of what the state should be repeating in similar cases with similar businesspersons. In light of the deal made with Salem, he and his family gave up 21 assets they owned to the state. They were worth $5.341bn, and represented 75% of their total properties inside and outside Egypt.
I hope the National Committee for the Reclamation of Smuggled Funds quickly looks into the requests made to it by former businesspersons and employees who were part of former president Hosni Mubarak’s regime, and who seek reconciliation in exchange for the repayment of their financial dues and dropping the lawsuits against them.
Let’s put the past aside and look positively to the future.
Hany Aboul Fotouh is a banking expert
