Fighting Corruption as an Economic Panacea?

Hazem Farouk is sitting in his tiny dental surgery in the Cairo district of Shobra. The surgery is sparsely furnished and contains little more than an old dentist's chair from Germany. He has in front of him a pile of little scraps of paper on which he has jotted down a few thoughts on the Egyptian economy from the point of view of Islam. Farouk is not only a dentist, he is also a member of parliament.

Is Islam the answer to Egypt's economic questions?

Farouk was elected to parliament along with 87 other members of the Muslim Brotherhood in last autumn's general elections. This means that he will have a say in what becomes law in Egypt and how the country shapes its economy. "We have to develop our own ideas: from our environment, from our community," says Farouk.

Shobra and the areas to the north of it were once the heart of the Egyptian textile industry. Today, the industrial infrastructure is ramshackle and the rate of unemployment high.

The elections sent out a clear signal: the Muslim Brotherhood is the most popular political force in Egypt. Ever since the poll, international investors and both foreign and Egyptian entrepreneurs have been asking themselves what would happen if the Brethren were to end up in power one day either forming a government on their own or as part of a coalition.

No sign of an economic programme

The Brotherhood now has a sort of parliamentary party. Nevertheless, apart from giving a few pointers that are based on their own moral principles, there are no signs of them coming up with a clear-cut economic programme. The Muslim Brethren emphasise the value of work, work ethics, and the scrupulous use of public money, and speak out against monopolies and unfair competition.

As far back as the 1980s, years before the Egyptian government actually implemented a programme of privatisation that was forced on them by the international community, the Muslim Brotherhood demanded a less marked public sector and more support for small companies. The organisation champions the free market economy.

As a result of their moral standpoint, two points in particular are at the heart of their economic theories. It must be said that these two points are indeed the key weaknesses of the Egyptian economy: high unemployment and corruption. According to the OECD, unemployment in Egypt currently stands at over 17 per cent.

"For the Muslim Brotherhood, unemployment is more a political than an economic problem," says Diaa Rashwan, a leading analyst at the Al-Ahram Centre for Strategic and Political Studies in Cairo. The Brotherhood is convinced that above all, unemployment threatens social cohesion.

Corruption as the root of all evil

But Rashwan doesn't believe that the organisation has a convincing solution at the ready. However, the same could be said for every other political force in the country. According to the Muslim Brotherhood, Egypt's widespread corruption is the root of all evil.

"We have to fight all types of corruption by strengthening the faith in the people's hearts and scrupulously applying existing legislation," says Hazem Farouk. But this fight against corruption is quickly described as a panacea. The logic goes something like this: how can we stimulate economic growth? By fighting corruption. How can we create jobs? By fighting corruption.

The Muslim Brotherhood upholds a tradition of giving loans to small entrepreneurs in order to ensure their political support. Throughout their history as a tolerated, yet banned underground organisation, the Muslim Brotherhoods' survival has been ensured by their grassroots work in many social projects.

This is why they see the promotion of small and medium-sized industries as the key to the fight against unemployment. But how does such a microcredit programme work? "If we fight corruption, then everything else will fall into place," is Farouk’s succinct answer to this question.

Unanswered questions about the banking sector

According to the Muslim Brethren, western investors are still welcome. Their biggest worry, however, is the banking sector. After all, interest has no place in the Islamic economic model. Islamic banks lend money, but the profits or losses on the investment are then shared between the lender and the borrower according to the principle of solidarity.

So what would the Brotherhood do with the banking sector, which has only recently been opened wide for foreign investors? On this point, El Ghazaly and other leading members of the Muslim Brotherhood remain vague.

"Whatever we do, our principle will be to proceed one step at a time." In saying this, El Ghazaly is trying to allay fears of unpredictable changes. It is more than likely that the Brotherhood would increase the share of Islamic banks. However, it is questionable whether non-Islamic banks would still be permitted to do business.

One thing is certain: the Muslim Brethren want to make the Islamic alms tax (zakaat), which amounts to 2.5 per cent of a Muslim's annual income, obligatory in order to reduce the massive gap between the rich and the poor in Egyptian society. There is virtually no redistribution of wealth under the current system of taxes and subsidies in place in Egypt.

Frederik Richter

© Qantara.de 2006

Translated from the German by Aingeal Flanagan

Qantara.de

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