World Bank minister accused of corruption in Egypt

A minister at the World Bank has been accused of corruption by the courts in Egypt. Mahmoud Mohieldin was an investment manager in Egypt until he was appointed to the World Bank in 2010. During his time in Egypt, he cooperated with Hosni Mubarak on some of the shady deals and corruption that helped to line the rulling pockets.

From the Inter Press Service, writer Emad Mekay gives us more details.

Mohieldin was one of a three-member team that led the country’s deeply unpopular economic polices that included an aggressive privatisation programme and drastic cuts to government expenditures on subsidies and the social sector.

The team included Foreign Trade and Industry Minister Rashid Muhammad Rashid and Economy Finance Minister Youssef Boutros-Ghali. Both are now on the run outside of Egypt after Egyptian courts found them guilty of corruption, misuse of public funds and profiteering.

Numerous allegations of business misconduct have been filed with the Egyptian General Prosecution Office against Mohieldin. He has also been the subject of dozens of local articles that question his role in ‘sweetheart deals’ involving the sale of public assets at below market rates. Seven other ministers who worked with Mohieldin are now serving prison terms for corruption while others are facing similar investigations.

Mohieldin, who travelled to Egypt several times from the start of his World Bank tenure until the revolution began on Jan. 25, hasn’t set foot in Egypt since the country started a series of probes into widespread corruption under Mubarak.

GAP said it was seeking Mohieldin’s financial disclosure records from the World Bank after it became clear that he is the subject of controversy in Egypt and at the international level.

GAP maintains that the bank’s response of publishing abbreviated forms of the documents will "not suffice to clarify the questions that now surround the alleged business conduct of Mr. Mohieldin as Egypt’s former Investment Minister."

Still seeking economic justice in Egypt

Protests and strikes are still a daily occurrence in Egypt. The revolution in the country was because of poverty. Even after Hosni Mubarak was forced out of leadership economic justice has not come fast enough. So employees for textile, public construction, medical and other industries organize and strike to demand working rights.

One strike caught the attention of Associated Press writer Ali Gomaa when it came with deadly results. From a story that we found at NPR, when frustrated textile workers took to the streets, a policeman urged a truck driver to clear the protesters out of the way.

After working at the factory for 24 years, Hawas earned about $1.40 a day, or $50 a month. It was hardly a living wage, although not unusual in a country where the World Bank estimates that more than 40 percent of the population lives near or under the poverty line of $2 a day.

Her husband, a school administrator who moonlights at a pharmacy, brought in about $190 a month. Their combined income, assuming Hawas actually got paid, was never enough to cover their expenses.
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Rent alone ate up a third of Hawas' family income. Almost all the rest went to the $165 a month they paid for private tutoring for their children, a standard for Egyptian households because of the shoddy education system. Then there was food and transportation — just getting to and from work cost Hawas 40 cents every day.

She was a quiet, devout woman who fasted from dawn to dusk four months out of the year instead of the traditional one month. But she came home depressed and angry most days, according to her husband, dragged down by the oppressive conditions at work.

As the years passed, management extended workers' hours to nearly 12 a day, they said. Overtime was calculated at 10 piasters, about a penny, an hour. Friday remained an official holiday, but workers said they were told they would be fired if they didn't show up. They were promised 35 cents for that day of work, but the extra money, like the basic salary, often went unpaid, along with all bonuses from 2007 through 2011.

Over the years, the minister of manpower intervened, as did the central bank governor. But in Mubarak's Egypt, assurances that were extended with one hand were brushed aside with the other.

June 7 began like almost every other day. Hawas woke before sunrise to offer a simple prayer: "We rely on God." Then she made breakfast for her family.

Hawas headed out of her apartment, her hair tucked under a headscarf, and hopped on a minibus for the short ride to the factory. She punched her time card and joined about 100 colleagues in a fleet of taxis and minibuses that shuttled them from Talkha to the United Bank in nearby Mansoura.

The mood on the short drive was subdued, the workers determined. They decided to draw as much attention as they could in front of the bank, and tried to close off one side of the street.

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But traffic was building up and horns — the soundtrack of Egypt's roads — began to blare.
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A truck driver climbed out to see what the commotion was about, and a frustrated policeman directing traffic goaded him on.

"Run them over. The blood money for each one is 50 pounds ($8)," the policeman said, according to several factory workers who witnessed the scene.

The driver climbed back into the cab of his truck. The engine revved, once, then a second time. On the third time, the truck lurched forward.
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Hawas turned to Eissa, who was standing near her, and said: "We'll get our rights."

Not long after that, the truck rammed into both of them.

Eissa was dragged under it for about 50 yards before the driver stopped. Her right ear was shorn off, and two fingers on her right hand were broken. The friction from the tarmac shredded the skin on her back and shoulders.

By the time Hawas reached the hospital, she was dead.

Harder times as food, gas prices spiral in Egypt

From IRIN, a story about some new struggles facing Egypt immediately after revolution.

Abdel Moneim Ahmed was finally able to buy 10 loaves of subsidized bread after queuing for one-and-a-half hours with 30 people outside a bakery in the Egyptian capital, Cairo. Another woman, known only as Zeinab, said she had waited two hours. "You can see the problem for yourself,” she told IRIN.

The scene playing out in this El Sayeda Zeinab neighbourhood symbolizes a much wider problem. For the past few weeks, Egypt, which imports half its food and subsidizes bread prices, has experienced severe shortages of this key staple.

Egyptians call it "aish", literally meaning life. The price is fixed at five piasters (less than one US cent per loaf), against 50 piasters per unsubsidized loaf. Economists say Egyptian families spend about 40 percent of their monthly income on food.

"The real reason for the current inflation is that governments, even the existing one, do not protect consumers from merchants’ abuse,” said Ahmed El-Naggar, head economist at Ahram Center for Political and Strategic Studies, and editor in chief of its annual publication, Strategic Economic Directions.

The Egyptian economy took a bashing from protests that swept across the country earlier this year, hurting tourism revenues and affecting trade. "This led to a six percent decrease in exports in January and February," said El-Naggar.

According to the Finance Ministry, urban consumer inflation rose to 11.5 percent in the 12 months to March, its highest level since April 2010, from 10.7 percent in February.

"We no longer buy beef and chicken," Samira Abuzaid, a 45-year-old housewife, said. "I tell my children that we need to adapt to a diet without these two items."

Gas scarce

Another vital commodity that has become scarce and more expensive is cooking gas.

"Gas cylinders have suddenly disappeared," Emad Abul A'as said as he waited to buy a cylinder in the southern industrial city of Helwan. "If I do not get the cylinder from this centre, I will have to pay a lot for a cylinder outside."

Abul A'as, a 37-year-old cement factory worker and father of two, would have to pay six times the price of a subsidized gas cylinder elsewhere.

The government blames the situation in Libya and Gaza. Recently, Social Solidarity Minister Gouda Abdel Khaliq cited smuggling to Libya and Gaza as a reason for cylinder scarcity in Egypt, which imports 60 percent of its solid gas from Saudi Arabia and Algeria.

"Smugglers benefit from the difference in the price of the cylinders in Egypt," said Hossam Arafat, chairman of the petroleum section at the Federation of Commerce Chambers. "What makes this possible is that the government subsidizes the cylinders to the tune of 90 percent here."

Prices of other commodities have also risen dramatically in recent weeks. The prices of tomatoes, onions, green peppers, lemons, eggplants, potatoes, zucchini and beans have trebled, while items such as lentils are out of the reach of many.

"The future might be worse," said Rashad Abdou, an economics professor from Cairo University. "The prices might increase even more."

Consumer protection?

On 14 April, the World Bank said global food prices were 36 percent above their levels a year ago and remained volatile, driven in part by higher fuel costs connected to events in the Middle East and North Africa.

Another 10 percent increase in global prices could drive an additional 10 million people below the $1.25 poverty line, it added.

“More poor people are suffering and more people could become poor because of high and volatile food prices,” said World Bank President Robert Zoellick. “We have to put food first and protect the poor and vulnerable who spend most of their money on food.”

The government says it will try to bring down prices, according to Prime Minister Essam Sharaf in an address last week.

The deputy director at the at Ahram Center for Political and Strategic Studies, Abdel Fatah Al-Gibali, called for consumer protection, saying the supply of certain commodities had been monopolized by a small number of merchants, which affected the dynamics of the market.

“During the last period, or specifically since the start of the [protests] that toppled Mubarak, the society was not producing at all and the supply was less than the demand, [hence] an increase in prices,” he added.

Investigating how Mubarak amassed his wealth

Image of Egypt's Tahir Square by Ramy Raoof, found at Flickr Creative Commons.

One of the reasons the people of Egypt demanded the ousting of President Hosni Mubarak was because of corruption. They say Mubarak, his family and his close circle of friends become richer and richer, while no one else could. With Mubarak gone, a team of lawyers have begun an investigation into the corruption and hope to recover the riches and return the money to Egypt.

We focus on corruption stories from time to time because it does affect the lives of the poor. Mubarak amassed billions in wealth through kickbacks and awarding government contracts to his friends. All of that money could have been used to further develop Egypt. The less corruption a country has the easier it is for the poor to move up the economic chain. The people who protested in Egypt found that it was impossible to do so.

From the Inter Press Service writer Cam McGrath tells us about the investigation into Mubarak's sources of wealth.

"Mubarak’s wealth is in the billions in a country where over 40 percent of the population live in poverty," says Ahmed Sakr Ashour, a professor of business administration at Alexandria University. "The huge contrast shows that the president abused the authority of his position to enrich himself."

Egypt’s interim government has launched the largest corruption probe in the nation’s history to identify, sequester and – it is hoped – recover Mubarak’s illicit fortune. Investigators are working with local corruption watchdogs to follow the money trail, while foreign governments have been asked to freeze the former ruling family’s overseas assets.

"You can’t imagine the number of people stepping forward with information," says Marghany, who recently joined the Egyptian Legal Group for Redemption of the People’s Wealth (ELGRPW), an ad hoc group of lawyers and jurists seeking restitution of Mubarak’s ill-gotten gains.

ELGRPW is appealing to whistleblowers and using its worldwide network of professional associates to help investigators untangle the complex web of shell companies, anonymous trusts and offshore bank accounts. The group claims to have renowned corruption investigators and "the high priests of corporate law" on its ticket.

Investigations have revealed that Mubarak, a former air force commander, sat at the top of a pyramid of corruption that extended all the way down to the lowest civil servant. But it was the privileged few – family and friends in the top tiers – who benefitted most from their proximity to the "Pharaoh," as he was often called.

"To operate any successful business in Egypt required taking on the Mubaraks or one of their proxies as a partner," a Cairo-based financial expert told IPS. "If you cooperated, you were given a virtual monopoly over your domain; if you refused you were run out of business, or worse."

While relatively little is known about how Mubarak accumulated his personal fortune, a clearer picture has emerged about the illicit dealings of his family.

"The real shock is not the wealth of Mubarak himself, but what his two sons have been able to accumulate over the last 25 years," says Ashour. "From the time they graduated they entered into shady business dealings and exceeded their father in terms of corruption."

Alaa Mubarak, 49, and his younger brother Gamal, 47, are currently being held for investigation in a high-security prison south of Cairo.

According to Ashour, Alaa was the first to wade into business, taking shares and kickbacks in high- profile transport, construction and real estate projects. But his "mafia-style" dealings were soon overshadowed by those of his more financially savvy brother, Gamal, who after working as an investment banker in London, returned to Egypt in the late 1990s to begin a meteoric rise up the political ranks.

In Feb. 2000, Mubarak appointed Gamal and a number of his business associates to the general secretariat of his ruling National Democratic Party (NDP). Gamal was later promoted to head the NDP’s powerful Policies Secretariat, fuelling assumptions that Mubarak was grooming his son as his successor – a charge the family has long denied.

Pro-democracy protests to begin in Swaziland

The pro-democracy uprisings that began in Tunisia and Egypt are starting to make their way into Sub-Saharan Africa. Protests are being organized in Swaziland for Tuesday, April 12th but any demonstrations have already been banned by the country's prime minister.

All Africa has a great analysis of the upcoming protests and what they mean for the nation's economy and government. This analysis includes statements from the groups planning to participate on what changes they want to see in Swaziland. For our snippet, we have the introduction to the piece.

Economic crisis coupled with the conspicuous luxury of an absolute monarchy committed to repression make the parallels obvious. Over 7,000 protesters marched in demonstrations three weeks ago to oppose salary cuts for civil servants. But the regime has banned Tuesday's demonstrations, organized by labor, student, and civic organizations as well as through social media.

Social media will likely make only a marginal contribution to the turnout, as only 7% of the Swazi population is estimated to have Internet access, with only about 16,000 Facebook users (1% of the population according to http://www.internetworldstats.com/).

The campaign does benefit from strong support from Swazi labor, student, and civic organizations as well as by a support campaign in South Africa organized by COSATU and other groups.

With public attention from South Africa, the Swazi regime may hesitate in using open force against the demonstrators. But King Mswati III, who has already ruled for 25 years, is the heir of a dynasty that dates back to 1921. His father, King Sobhuza II, suspended the constitution on April 12, 1973, five years after the country's independence. In addition to state repression and popular mobilization, the strength of traditional loyalty to the monarchy is one factor that will weigh heavily on the outcome.

Out of Libya into joblessness

From IRIN, a story on Egyptians fleeing Libya to find that there are no jobs back home.

When violent unrest erupted in Libya recently, Ahmed al-Agouz, 25, was doing casual work in the Libyan city of Sabha. Realizing he had to flee, he managed to reach the Tunisian border, where he eventually boarded a plane to Cairo. “Coming back to Egypt was a dream, given the horrific things I saw on the road,” he told IRIN. “I can only describe the experience as a sickening thriller.”

But returning to his home village in the Egyptian Nile Delta Governorate of Sharqia, north of Cairo, has made one thing abundantly clear to al-Agouz and tens of thousands of other returnees: There simply are no jobs back home.

According to Abdurrahman Kheir, an expert with the Egyptian Labour Union, the returnees will find it extremely difficult to get jobs. “This means they will descend into poverty and unemployment... The economy will fail to offer these people jobs, at least in the near future.”

Since the 18-day protest which forced President Hosni Mubarak out of office on 11 February, hundreds of thousands of workers, especially in the tourism and construction sectors, have yet to resume work.

The protests in Libya, which started on 14 February, and subsequent widespread violence and fighting, have led hundreds of thousands of migrant workers - including over 68,000 Egyptians, according to the UN Refugee Agency - to flee the country.

“I didn’t even manage to bring back all the clothes I had in the wardrobe with me,” he said. “I know it’s impossible to find a job here. My neighbours are all unemployed.”

A few days ago, 27-year-old carpenter Mohamed Abdel Khaliq committed suicide at his home in the Nile Delta Governorate of Monofiya, after thugs apparently robbed him of his belongings on his way back home.

Aliaa al-Mahdy, a leading economist at Cairo University, told IRIN the current Egyptian government needed to tackle the budget deficit and encourage job creation through small businesses. “The government can encourage these projects by just telling small investors they’ll have tax exemptions,” he said. “The government can offer many other incentives to lure investors back.”

Meanwhile, 28-year-old returnee Mohamed Ahmed Bassiouny, who worked as a house painter in Libya, hopes the government will do something. When he came back he discovered the construction sector had ground to a halt. Now he fears for the future of his wife and three children. “There are no new buildings, and few people are ready to spend the little money they have on getting their apartments painted,” Bassiouny said. “Where will I work then?”

Africa's lost billions and Mubarak's share

The international community made some moves today to seize the assets of former Egyptian President Hosni Mubarak. The Mubarak family fortune almost equals the amount of development aid Egypt received since 1981. This has many questioning how much aid money goes right into the pockets of politicians and how it can be avoided in the future.

From the Guardian, writer Jonathan Glennie asks some more questions on why so little development aid goes into development.

The current spotlight on north African despots points to one of these alternatives. Hosni Mubarak, Egypt's former president, has apparently managed to accumulate $70bn over the years. Libya's Muammar Gaddafi has something of that order as well, which makes Tunisia's Zine el-Abidine Ben Ali the region's presidential pauper with a feeble $3.5bn to his name.

Since Mubarak assumed the presidency in 1981, Egypt has received $53.6bn in official development aid (about $80bn in today's money), according to figures from the World Bank's world development indicators. In other words, for every dollar Egypt has received in aid, Mubarak has managed to acrue roughly a dollar for himself, give or take a luxury yacht or two.
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There are various ways to interpret this. You could say that, given the fungibility of money (ie the ease with which it can be moved within budget lines and bank accounts), donor countries have contributed indirectly to the Mubarak family's multi-billion dollar fortune. Alternatively, you might argue that the money would have been stifled anyway and that Egypt would therefore have been even worse off without foreign aid.

Of course, the primary purpose of aid to Egypt wasn't really for development, but to bolster a president playing what was seen as an important stabilising role in the region – so in that sense, aid worked and Mubarak's personal fortune was not a primary concern.

Whatever your take, the futility of seeing so much money siphoned out to offshore accounts (or onshore in the case of London and Switzerland) must give the development finance community pause for thought. We have so far only looked at one family's wealth; what about all the other officials in Egypt taking their piece of the pie?

Clearly, countries like Mali have vastly fewer resources than Egypt but on some estimates, African political elites hold between $700-800bn outside Africa (pdf). The fact that it is outside Africa is key. If they stole it and reinvested it in their own countries, while the impact on accountability and governance would still be severe, the economic consequences would be less so – it would still contribute to growth and capital formation.

http://www.guardian.co.uk/global-development/poverty-matters/2011/feb/28/aid-africa-capital-flows-corruption?intcmp=122

Video: Egypt's Copts hope for bright future

From Al Jazeera, a video on what is ahead for Muslims and Christians in Egypt. The two faiths found common ground and protested together in the ousting of Mubarak.

Video: Kin search for Egypt's missing

From Al Jazeera, a video on how some pro-democracy protesters in Egypt have turned up missing.

Video: Labor Unrest in Egypt, More Yemen Demos

From Associated Press, a video on the unrest in the Middle East.

Video: Eighteen Days That Shook the Middle East

From the Associated Press, a video that has a montage of the events in Egypt.

Video: Hosni Mubarak resigns

A few videos in this post on the resignation of Hosni Mubarak.

First, from the Associated Press, this video gives a first person account of the celebrations.



From Al Jazeera, one of their reporters gives a personal reflection on the celebrations in their homeland.



Finally, some raw video from the Associated Press on the celebrations in Cairo.

Video: Protesters Furious Over Mubarak Refusal to Quit

From the Associated Press, a video on Mubarak refusing to leave his post in Egypt.

Video: Egypt Army Steps In, Sign Mubarak Has Lost Power

From the Associated Press, a video on the signs that Mubarak is finally stepping down as Egypt's leader.

Video: US presses Egypt on reforms

From Al Jazeera, a video on the pressure that the US is applying to reforms in Egypt.

Video: Egypt Protests Scare Off Tourists

From the Associated Press, a video on how the Egypt protests has affected the country's tourism.

Egypt protesters contain a mix of Christian and Muslim

The protests in Egypt have crossed lines dividing religion as Christians and Muslims are protesting in Tahrir Square together. This reality runs counter to what a many in the U.S. press are saying.

From the Inter Press Service, writers Adam Morrow and Khaled Moussa Al-Omrani describe the protests that are unifying the two faiths.

The demonstrations were initially organized by online activist groups of no particular religious affiliation, such as the 6 April protest movement and the Youth Movement for Freedom and Justice. Nevertheless, some commentators have attempted to paint the uprising as a would-be "Iran-style" Islamic revolution.

In statements that would later be parroted by much of the western media, Israeli Prime Minister Benjamin Netanyahu said on Jan. 31: "Our real fear is of a situation that could develop and which has already developed in several countries including Iran itself - repressive regimes of radical Islam."

But according to protesters arrayed in Tahrir Square, which on Tuesday was home to hundreds of thousands of protesters, Muslim-Christian unity remains a central feature of the almost daily rallies.

"There's an overwhelming sense of solidarity here between Muslims and Christians," 32-year-old Muslim protester Ahmed al-Assy told IPS. "Practically all of the protesters' rallying cries, and all the sermons led by Muslim sheikhs, stress the importance of national unity."

Violent clashes between police and protesters that took place nationwide in the first week of the uprising were accompanied by particularly moving displays of interfaith camaraderie. On several occasions, Christian demonstrators shielded their Muslim compatriots - who had paused to pray in the midst of the conflict - from attacks by aggressive police.

"During the fiercest clashes on January 28, I found a guy about my age guarding my back, who I later found out was a Christian," Yahia Roumi, a 24- year-old protester from Cairo, told IPS. "Now we're best friends; we never go to the demonstrations without one another."
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Rami Kamel, a member of Egypt's Coptic Youth Movement, was quoted as saying in independent daily Al-Masry Al-Youm on February 4: "From the beginning, we've been participating in the demonstrations to call for the ouster of the ruling regime, which we blame for the country's economic and social decline."
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"The regime is responsible for the sectarian problems suffered by Copts," Kamel was quoted as saying. "Proof of this is that no church was attacked during the unprecedented absence of security (following the police withdrawal)."

Video: Protesters insist Mubarak must go

From Al Jazeera, a video on the latest in Egypt. The anti-Mubarak protesters have called for reinforcements while Mubarak has called for reform committees.

Video: Egypt: More Protests, Gov't Gives Out Pay Raise

From the Associated Press, a video that gives us an update on the events in Egypt.

Video: Protests continue in Tahrir Square

From Al Jazeera, a video on the beginning of week three of the Egypt protests.