With Egyptian democracy — uncertainty and hope
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BOB MOON: Even as some formerly stable countries in the Middle East fall into civil unrest and chaos, others have come over the hump of revolution and are now trying to rebuild their legal institutions and economies.
That’s the case in Egypt, where Mitchell Hartman has been reporting from the Entrepreneurship desk as part of Marketplace’s Middle East coverage. He filed this report from Cairo.
Hisham Kassem: It took me a long time to get the specs right, acoustic studies to lighting —
Mitchell Hartman: Veteran newspaper publisher Hisham Kassem is showing me around a gutted warehouse where he’s building his newest media venture. He had to raise $5 million for the startup.
Kassem: A lot of people were saying, ‘Well, Hisham has a good track record. But we’re going to be in trouble with Mubarak if we invest with him.’
That’s because Kassem’s previous papers had an irritating habit of irritating the authorities. Now those authorities are out, and the investors are in on the ground floor of a more promising business.
Kassem: They’re saying, ‘We invested with you when it was high-risk, and now we’re just going to get so many people buying shares.’
Revolution often breeds instability. But Hisham Kassem and other entrepreneurs here believe that with political reform and financial transparency, their country will eventually be a better place to make an honest Egyptian pound.
Medhat Khalil: Well, I can tell you in a good environment, I can grow at 30 percent or maybe 40 percent year over year.
That’s Medhat Khalil, a very successful telecom entrepreneur. His company has grown to 3,000 employees and $400 million in revenue by selling cell phones and Internet to Egypt’s growing middle class. The company could have grown faster. But Khalil says he routinely turned down government contracts when asked to pay bribes.
Khalil: I think the future will be much better for Egypt. However, I think the coming eight months will be a very, very difficult time.
Khalil thinks it’ll take the military at least that long to hold elections, placate workers demanding higher pay, and get banking and the stock market going again.
In the meantime, foreign investors might see all the ‘uncertainty’ and hold back. And multinationals could put expansion plans on hold, says Hisham Fahmy of the American Chamber of Commerce in Egypt.
Hisham Fahmy: That’s the price of democracy. We’ve tried the stable dictatorship. Now we’re trying a little unstable democracy. I think it is in everybody’s interest for this experiment-revolution to succeed in Egypt.
The economic future of the Arab world’s largest country — with 80 million people — hangs in the balance.
I’m Mitchell Hartman for Marketplace.
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