Daily News Egypt interviewed the prominent Egyptian businessperson Salah Diab, chairperson of the Project and Investment Consulting Company (PICO).
Diab reviewed the economic performance of Egypt during the last period, and the impact of economic measures on the Egyptian street, as well as his vision of political life in Egypt.
How do you see the recent economic reform measures?
The Egyptian economy’s recovery is on its way. The economic measures adopted by the government are like “surgery” which will develop the local economy from relying on illusive subsidies into a realistic economy.
Egypt will achieve balance in prices, imports, and exports, but it needs some time to adjust the economic conditions.
What are your expectations for the coming period?
Egyptian exports will increase sharply after the Central Bank of Egypt’s (CBE) decision to float the local exchange. For example, PICO’s agricultural exports have increased significantly, as the exports of strawberry seeds increased threefold.
(Photo by Asmaa Gamal)
What about the new investment law draft and its role in improving the investment atmosphere?
The investment law alone cannot improve the investment atmosphere and attract investors. We need to reassure investors who want to know how Egypt will deal with them.
The investors always want to achieve the highest return on investment. They prefer fixed taxes rather than tax exemption for a long period. For example, I suggest determining a fixed tax rate for 15 years, rather than the current eight-year exemption, so that the investor can calculate their profits over a long period.
The investor also cares about the stability of the country they wish to invest in. They want to make sure that this country will not attack them, prevent them from travelling, or force them to reconcile based on the government’s conditions.
The reconciliation measures in Egypt do not reassure neither local nor foreign investors.
Do you think that the state of emergency will affect foreign direct investments?
The three-month state of emergency imposed after recent terrorist attacks will not affect foreign direct investment flow. On the contrary, the state of emergency will achieve security in the country and reassure the safety of investments.
We have experienced a 30-year state of emergency under former president Hosni Mubarak; however, we achieved a growth rate of 7%. Actually, this decision shows that the state is moving seriously towards securing the citizen, foreign investors, and vital installations.
Do you think other businesspeople share the same view?
Businesspeople should be reformers, not permanent critics. They should be capable of proposing alternatives and solutions.
How do you see the state’s position of local businesspeople?
The state arrested me for no reason, and that delivers a negative image to foreign and local investors.
Have you considered moving your investments to outside Egypt?
No, all my service, commercial, and investment activities will continue operating in the Egyptian market, even if the state increased the taxes to 80%.
After the flotation of pound, some businesspeople cancelled their expansion plans due to the bad economic conditions.
What about your investments and activities?
I have a different investment vision than other businesspeople, as I always tend to expand my activities. We work effectively all the time, and everyone can see the expansions in La Poire and On the Run shops. Our expansion is not less than 20% in all activities annually.
Would you expand in media production in the coming period?
No, I just want to develop Al-Masry Al-Youm to keep up with modern journalism, and I have never thought of selling it, because I consider it as a reform project for the country, not a commercial activity. I never used Al-Masry Al-Youm to promote my commercial activities; on the contrary, I was affected negatively in the long run.
Have you considered launching a political party?
No, because the public action requires specific contributions and volunteer work without waiting for a return.
I had refused to join the National Democratic Party (NDP), which could have allowed me to work with decision-makers. However, I joined the Wafd Party, which has a liberal ideology because I believe voluntary works should not be used for achieving personal interests. Businesspeople should not establish political parties, and we have many parties now but without influence.
(Photo by Asmaa Gamal)
Do you think there is a security crackdown on political parties in Egypt?
I believe all the parties had to present clear and specific programmes to change the situation, rather than criticising the government to appear as an opposition party.
I have never heard about any Egyptian political party to offer a plan, or an alternative solution, of increasing the average income of Egyptians over certain years.
If there is any restriction to political parties, it will end when the regime has confidence in its agencies.
How do you see the renewal of religious discourse?
I reject the claims that Al-Azhar hampers the renewal of religious discourse. Salafist preachers, such as Al Heweny, who call for Muslims not to greet their Christian neighbours and congratulate them in their feasts, are the ones responsible for the crisis. The state is also responsible for the emergence of such figures about 15 years ago.
So I am optimistic about the supreme council to combat terrorism and extremism, which was called for by President Abdel Fattah Al-Sisi recently. This council would limit those elements from spreading sedition in society.
How do you see the performance of Egyptian parliament?
I am not impressed by the performance of parliament.
Do you agree on reconciliation with the Muslim Brotherhood?
Why reconcile with them? They are like a separate country inside our own, and they have their own manifestos and violent militias.
The Muslim Brotherhood does not have a religious vision that suits the future and technology and today’s requirements. They live in the past, and that is their favourite climate.
Is there any truth about your acquisition of 70% of American agencies in Egypt?
These are ignorant rumours. And if you can, name the agents I acquired. I do not own Ford, General Motors, Kentucky, and Hardee’s; I only compete with them.
The truth is that I have three agencies, and only one of them is American. They all work in the field of construction and construction equipment.
What do you think about the American Egyptian relations and the convergence between Al-Sisi and Trump?
Relations must reflect the interest of the two countries. Trump will work to stand against terrorism, and I think he will be supporting Egypt in its war against terrorism.
Do you think relations with America will be stronger compared to Obama’s era?
Most definitely.
How do you evaluate the performance of Sherif Ismail’s government?
I think he is the best thing that happened to Egypt in a long time. His government includes good elements; however, future governments must be better prepared.
What I mean is that the structure of the next government must be organised, including the number of ministerial portfolios and whether or not there will be a merging of ministries, in addition to the authority granted to ministers.
Who is supposed to handle these issues?
The presidency must assign some institution or a consulting firm. The cabinet could also have a working group to work on the upcoming government’s programmes.
Do you really expect this to happen?
If that did not happen, we will be surprised by the next government.
In the most recent cabinet reshuffle, how do you explain the cases of ministerial portfolios being dropped?
Ministers want reassurance, the same way investors do. How can we ask them to be reassured if they see the previous ministers in jail?
Have you not donated to the Tahya Misr Fund because you object to its idea?
Actually, I have given my donation directly to the president on portions, until I was able to pay it completely.
How much was the donated amount?
It is not right to disclose this information, and this applies for any kind of donations made by anyone to any charitable organisation.
And if you ask me, Mohamed El Ashmawy, the head of the fund, is one of the most competent men.
What about your relation with President Al-Sisi?
I have a very good relationship with him; I hope he continues with success.
Are you with the idea of a president having a party?
No, legally he should not have a party. At the same time, we cannot be a state without parties.
Do you think that the Egypt Support Coalition is the president’s party?
I do not know, and I refuse this. I believe the coalition is one of the elements that have led to the return of the Socialist Union Party and the National Democratic Party. I refuse that a group calls itself “Egypt Support”, because would that mean that we call others “Egypt Demolition” parties? It is just not right.
How do you assess the president’s performance over the upcoming period? Do you believe his popularity among Egyptians is diminishing after the recent economic reforms?
Quite the opposite. What Al-Sisi did is a lot. The last attempts to reform the economy were taken in 1977; however, since then, the economy has been diminishing.
How do you explain the state of anxiety and frustration Egyptians have as a result of these economic reforms?
This is all new to them. People are repulsed by any changes, positive or negative. We tend to want familiar things to last. So, of course, we will need some time.
Would you elect Al-Sisi for a new presidential term if he ran for presidency?
Yes, I would, unless, you personally, are able to suggest someone better or is able to represent us better.
Is the absence of an alternative or a competitor not a matter of concern?
It is important that there be competition. In the case of the absence of a known competitor, we raise the question of “What is your programme? How will you implement it?” I believe that in the upcoming elections, the president will have a programme.
Why have you elected the president even though he did not have a programme?
Because there was no alternative, and we were all panicking; however, during the upcoming elections, there must be a programme. Those who have the courage and confidence will compete against him. If I choose him, it will be for his programme, not for him as a person. This is a matter of competition of programmes against each other. Trump won against Clinton because he had a good programme.
Are you concerned about the military’s control over the economic sector?
No, I am not. The only case I would be concerned is if the army was given privileges. If it entered into civil activities, it must reveal its budget, profits, losses, tax, and customs. In the absence of these standards, I will definitely be concerned.
The army’s involvement in the economy with the reluctance of some investors is necessary. I believe it will pay more attention to heavy military industries, on which civilians do not show much demand.
How do you find the state’s strategy in the 1.5 million feddans project and its management of this specific file?
I do not have an idea about this project, and I do not know if there really is groundwater and whether it would last for 80 years. I know that Egypt’s main issue is in the ways of irrigation.
Irrigation ways in Egypt have been through flooding crops since the beginning of time, and this is a problem. Rationalised drip irrigation is much better.
What do you think about the Toshka project and Al Waleed bin Talal selling it?
The project is unfortunate, and I hope the situation improves.
What is the truth about the existence of a group of businesspeople working against the president?
This is not true. There will not be lobby groups unless there was an alternative to Al-Sisi. The only alternative is the brotherhood, so of course there is no lobby.
Are you optimistic?
Yes. Life is improving, and what is coming is better. We must, however, pay attention to education. It is the basis for any correct restructuring process.
