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Coronavirus in Egypt: How the country's richest are reacting to the economic crisis

Egypt's lockdown measures have triggered the ire of business owners concerned about an economic collapse
Egypt's President Abdel Fattah el-Sisi, right, during a visit to the Huckstep military base east of the capital Cairo on 7 April (AFP)
By in
Cairo

Egyptian business tycoons have stirred widespread criticism of their response to the coronavirus crisis since the country imposed a partial nationwide curfew on 25 March.

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While analysts predict a catastrophic outcome on the country’s economic indicators, workers are fearful of the loss of their jobs and the threat of the virus on their loved ones.

It has been more than three months since the first positive case of Covid-19 was detected in Egypt. As of Saturday, Egypt had 4,092 confirmed cases of coronavirus, including 294 deaths.

Since then, the state of the Egyptian economy has been marred by confusion. The government has taken a series of disjointed decisions, with seemingly no clear action plan.

The curfew has been renewed until at least the end of the Muslim holy month of Ramadan on 23 May.

The coronavirus lockdown has led scores of companies and factories to work in a limited capacity, resulting in heavy financial losses. 

But while many Egyptians fear the long-term impact of the pandemic on their livelihoods, comments made by the country’s richest have been slammed as insensitive - as some employees of their companies told Middle East Eye they feared that the measures taken were not enough to protect them from the virus.

Death easier than bankruptcy, business tycoons argue

Some of Egypt’s most prominent business owners have reacted publicly and negatively to the precautionary measures taken by the government to combat the pandemic. 

The first to react to the lockdown was telecommunications mogul Naguib Sawiris, the second richest man in the country after his brother Nassef. 

'The death of some people is [easier] than the whole country going bankrupt.'

- Hussein Sabbour, real estate magnate

In a telephone interview with Egyptian talk show hostess Lamis el-Hadidi broadcast on the Saudi Al-Hadath TV channel in late March, the business tycoon warned against the curfew, predicting it would bring about what he described as “economic bloodshed”. 

“I will commit suicide if the lockdown is renewed,” he jokingly told Hadidi.

Almost a week later, Sawiris stirred up public opinion once again when he told Saudi Al-Arabiya news broadcaster that he had come to an agreement with workers for his organisation to slash their salaries in half during the lockdown. 

However, Sawiris denied a day later that he had implemented any pay cuts, saying he had referred to the tourism sector - despite him not having any businesses in the industry. 

Before Sawiris’s comments sparked an uproar, automobile tycoon Raouf Ghabbour told private Egyptian channel Al-Qahera wal Nas that he ruled out financially lending a hand to help the country’s efforts to combat the pandemic. 

“I cannot donate any money knowing that my company may encounter a liquidity shortage in the upcoming period,” said the businessman. 

Real estate magnate Hussein Sabbour added fuel to the fire when he agreed with Ghabbour’s views, saying in an interview with Egyptian independent Youm7 newspaper that “the death of some people is [easier] than the whole country going bankrupt”.

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“If I have a surplus of a few million (Egyptian) pounds in the bank, I will donate money [to combat the pandemic],” he said. “If not, I will keep [my] money for salaries…I’m first responsible for my employees.”

Sabbour called on the state to bring back economic life to normal.

“We can’t afford to stay home…businesses should go on. Some people will get sick, others will die, but the country will live,” he told Youm7.

Sabbour compared the coronavirus deaths to those of the 1973 October War, saying that then-president Anwar Sadat entered the conflict with Israel without considering how many lives would be lost in the process. 

'Souls over profits'

An engineer working for a company owned by Sabbour told MEE that working conditions amid the pandemic made him and his colleagues feel unsafe.

“It is true some precautionary measures are taken at the workplace, but we still feel afraid for our lives,” he said on condition of anonymity.

'If it weren’t for us, those billionaires would have never made any profit'

- Employee at a company owned by  Hussein Sabbour

“A group of us goes to work from 9am to 4pm, three days a week instead of six, and another goes the other three days,” he said, describing the new work hours implemented by his company. “But what guarantees are there that we won’t contract the virus the days we go to work?”

An administrator at the same company echoed these concerns.

“There is a state of worry among the company’s staff. I’m afraid to go back home to my family with a deadly infection. It's true that our salaries haven’t been cut; but this money won’t do us any good if we get sick,” he told MEE.

“If it weren’t for us, those billionaires would have never made any profit.”

The stances of some of the country’s richest men have angered socialist and labour rights advocates on social media, who launched the hashtag “souls over profit” accusing businessmen of putting their interests before people’s lives. 

"The words of Hussein Sabbour made me suffocate, and before him were Sawiris and Ghabbour,” one Twitter user wrote. “You earned billions from the country and [yet] you are not ready to stand by it for two months!" 

Another reacted to Ghabbour’s refusal to donate money, writing: “Souls over profit…Raouf Ghabbour is the tenth richest man in Egypt with a fortune of $440 million in 2019.”

Business support for the lockdown

Not all Egyptian tycoons, however, have approached the country’s economic predicament with the same callousness. 

Shortly after Sabbour’s interview, real estate magnate Yasseen Mansour told Hadidi, the Al-Hadath journalist, that there should be a compromise, as he called those who demand for businesses to continue operating as normal “wrong”. 

“I agree with [partially] shutting down [businesses], but production cannot stop entirely...or else there will be a catastrophe,” he said. 

Mansour vowed not to lay off any breadwinners working at his company’s construction sites.

Since then, the Egyptian billionaire offered the government 200 hotel rooms in one of his company’s touristic projects to be used as a quarantine area for positive coronavirus cases and the medical staff treating them - in addition to donating some 5 million Egyptian pounds ($317,000) to the health ministry.  

Another businessman, parliamentarian Mohamed Mostafa el-Sallab, also condemned Sabbour’s views. 

“The welfare of one citizen is far more precious than all the money in the world,” Sallab said in an interview with Youm7. “The Egyptian economy is capable of getting back on its feet; but the Egyptian citizen at risk will not be compensated for.”

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“There is no problem if we endure [the situation] for a while…all businessmen should join forces so we can [overcome] the current situation,” he added.

The head of the union of industrial investors, Mohamed Guenedy, agreed. 

“With all due respect to Naguib and Raouf, we have earned a lot over the years and the state has never let us down,” he told private Egyptian channel TEN TV.

Guenedy added that businessmen should not let their employees down, even if the crisis ran on for a year.

“The issue of workers is one of national security,” he told talk show host Amr Abdel-Hameed.

A number of big business owners have since publicly announced measures to protect their employees.

The executive director of El-Araby group for electronics and appliances gave paid two-week leave to his workers and employees, assuring his employees that the company would not fire anyone in light of the current crisis.  

Egyptian President Abdel-Fattah el-Sisi seemed to implicitly respond to the businessmen’s statements as well, urging the private sector to pay wages in full and not to lay off any workers. 

Sisi further called for reducing the workforce attendance hours across the country, adding however that he was not in favour of a total lockdown.

The Egyptian president vowed on 7 April to offer 500 Egyptian pounds ($31) of monthly aid to poor wage workers paid on a daily or hourly basis - the segment of the population most affected by the lockdown. The minimum wage in Egypt is set at 2,000 EGP ($126).

Meanwhile, the Sawiris Foundation, an Egyptian charity organisation affiliated to businessmen Naguib, Sameeh and Nassef Sawiris, donated 100 million Egyptian pounds (about $6.3m) in support of the country’s efforts to fight the outbreak - prior to Naguib Sawiris’s controversial comments. 

Amid the uproar caused by the business magnates’ controversial comments, fears remains in Egypt that the country may not be able to survive an economic crisis.

“The impact of the lockdown is rather destructive. The discontinuation of operations of factories and exportation and the suspension of flights are factors leading the country’s gross domestic product to diminish,” said Hassan Heikal, an economic analyst.

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“The year 2020 may witness a catastrophe if sectors like tourism remain shut down due to the pandemic. This year requires new economic planning close to what economists call a ‘wartime economy’,” he added. 

According to Heikal, decision-makers need to accurately identify and distribute resources. 

“In such circumstances, we don’t have the luxury to use unnecessary goods or recreational ones,” he explained. “The state needs to list goods not to be traded during this phase at least for six months. It’s illogical that we lose hard currencies in products that have nothing to do with food, production requirements or medicine.”

But Heikal nonetheless saw a silver lining to the situation.

“It is a golden opportunity for manufacturers to start producing locally what we import from abroad and consuming what we produce,” he said.