Egypt has steadily shed much of its non-Muslim communities

Cathedral in the Cairo district of Abbasiya

Cathedral in the Cairo district of Abbasiya

Washington has granted 4,121 requests for asylum from Egypt

Washington has granted 4,121 requests for asylum from Egypt

Islamists have killed at least five Copts since Mursi’s overthrow.
Coptic Pope Tawadros II backed the military, standing with liberal and non-Brotherhood Muslim leaders next to armed forces chief Abdel Fattah al-Sisi when he announced Mursi’s removal on July 3.

Communal tensions and attacks on Christians and churches rose sharply under Mursi, Egypt’s first freely-elected president. Many Copts remain in the country where their ancestors settled in the earliest years of Christianity – several centuries before the arrival of Islam. For centuries Egypt’s Christian population was just one element in a largely peaceful and prosperous cauldron of religions and ethnicities centered in Cairo and Alexandria. Since the creation of Israel six decades ago and the cycles of war and sectarian unrest that followed, however, Egypt has steadily shed much of its non-Muslim communities, including its Sephardic Jewish population and a large European diaspora of Greeks, Armenians, Italians and others. Only the Copts remain in significant numbers, but before the army’s intervention, anecdotal evidence suggested that they too were abandoning the country in response to what they regarded as an aggrandizing and intolerant Islamist movement.
Wasif Amin Wassef, a Coptic jeweler, says he is buying three times the amount of gold he did just two years ago as Christians sell precious family heirlooms to help pay for their departure. “Every week I learn of a dozen people who are leaving for Georgia,” Wassef says, referring to the Central Asian republic, which is issuing passports to anyone willing to invest up to $20,000 there. A bank executive in Cairo estimates that thousands of Copts have obtained U.S. passports over the past 18 months or are using other foreign passports to leave Egypt. “Three of my cousins have left already,” she says. According to a spokesman for the U.S. Department of Homeland Security, Washington has granted 4,121 requests for asylum from Egypt since Mubarak’s overthrow, more than ten times the number accepted the year before the revolution. The figures are not broken down by sectarian or ethnic identity, as these are not factored into the review process, the spokesman emphasizes.

Islamists are staging a vigil at a Cairo mosque and regular protests to demand Mursi’s reinstatement, and it is dawning on Christians that they could yet return to power when elections are held under a military plan to restore democracy.
“It’s an improvement that Mursi is gone but I am still not entirely relaxed,” said Roman Gouda, visiting with a friend the Egypt’s biggest Cathedral in the Cairo district of Abbasiya.Statistics vary, but Christians are estimated to account for between 5 and 10 percent of Egypt’s 85 million population, which is overwhelmingly Sunni Muslim. The Copts constitute one of the oldest Christian sects, and they are noteworthy for their deep assimilation. Cairo has no Coptic quarter, the capital’s leaders remark proudly, and Christians are well represented across the commercial spectrum, from the smelter slums of Zabbaleen to the Orascom group of companies, the global telecommunications, construction and hotel empire owned by the Sawiris family.

Even the powerful and internationally prominent Sawiris clan appears to be hedging its bets. In March the eldest of the four brothers who run the Orascom group declared from London, where he was traveling, that he had been forced to leave Egypt because his family was being “deliberately attacked” by the Morsi administration. Naguib Sawiris, an early and active supporter of the revolution and a critic of the Brotherhood’s mixing of religion and politics, told state-owned newspaper Al-Ahram that the government was “distorting the legal system in Egypt” at his family’s expense. He likened Egypt under the Ikhwan to Italy under Mussolini.

Earlier this year the government imposed a travel ban on Onsi Sawiris, the family patriarch, and Naguib’s younger brother Nassef for allegedly failing to pay taxes on the profit realized from the 2007 sale of a cement unit by Orascom Construction Industries, the group’s flagship company, to a French concern. The charge perplexed analysts, who pointed out that Egypt has no capital gains tax and that Orascom Construction took the cement company public two months before its sale precisely to leverage tax incentives offered to promote public listings.

In April the company agreed to pay 7 billion Egyptian pounds ($1 billion) to Cairo’s tax authority, prompting the removal of the travel restrictions on Nassef and his father, both of whom were abroad when the ban was announced. (In May, Naguib and his father returned to Egypt and were welcomed with flowers at Cairo’s airport by a Morsi envoy.) The construction giant is preparing a share swap with its Dutch unit, OCI, that would effectively shift trading in its stock to Amsterdam. The departure of Orascom Construction’s shares, which account for about 30 percent of the Egyptian stock market’s total capitalization, would be felt heavily in Cairo at a time when trading volume has been languishing.

Naguib Sawiris, meanwhile, has liquidated most of his assets in Egypt. In October 2010 he signed a $6.5 billion deal that merged Orascom Telecom Holding, which he launched in the late 1990s, into Russian–­owned and Amsterdam–based telecommunications company VimpelCom. He retains some minor Egyptian equity stakes via a holding company that was created as part of the merger with VimpelCom, but analysts say he is eager to exploit investment opportunities in the U.S.’s emerging shale gas industry. (Sawiris declined requests for an interview for this article.)

Before his brief exile Naguib swore that the Sawiris family would never abandon Egypt. Credibly, Orascom officials say the relisting of OCI shares in Europe is a natural next step in the company’s expanding global presence. But the specter of what appears to be an official shakedown of the world’s largest and most respected Coptic business group has done as much to chill investors’ faith in the Morsi administration as did the sectarian killings at El Khusus and Abbasiya. Though the Sawiris family members are generous benefactors to their co-religionists, analysts point out, their enterprises are also important sources of employment for Muslims. “We have local clients with a lot of money and who want to spend it, but they’re sidelined because they have no confidence in this leadership,” says Hany Genena, head of research at Cairo-based Pharos Securities Brokerage.

Beshay Steel, One of the oldest coordinates in Egypt’s constellation of Coptic enterprises, is similarly buffeted by the country’s rocky political transition. According to Rafik Beshay, the youngest of four brothers who have been managing the company since their father’s death in 2011, before the revolution the company employed roughly as many Christians as it did Muslims. Over the past two years, however, that ratio has shifted decisively in favor of the latter.

“We’ve tried to keep an even mix,” says the 28-year-old Beshay, who works as the company’s procurement director and spoke to Institutional Investor before the army ousted Morsi. “But the Christians are leaving, and that turnover effects us.”

Rafik’s grandfather established Beshay Steel in the late 1940s as a trading company that matched buyers and sellers of ferrous metals. In the early 1970s the company went upstream, buying a small rolling mill from Bethlehem Steel Corp. in Pennsylvania and rebuilding it in Egypt. Today, Beshay Steel sells $350 million worth of steel reinforcement bar and wire rods annually. It exports one third of its output.

In 2008 the company received a license from the government to build a more sophisticated mill capable of producing higher-margin products. Construction was suspended during the revolution because of frequent electrical blackouts and manpower shortages as nervous employees refused to travel to work. After Mubarak resigned and was replaced by a military-led government, Beshay Steel’s license was revoked. Though the reasons are obscure, Rafik Beshay blames overzealous investigators building a case against Ahmed Ezz, a well-connected investor and Mubarak ally who in March was sentenced to 34 years in prison for running various fraud schemes, at least one of which involved an equity stake in a state-owned steel company.

“We had nothing to do with Ezz professionally except as competitors,” Beshay says. “But we’re a strategic company, so we’re always under the microscope.”

The license was reinstated, but only after the Beshay brothers worked the Ministry of Industry and Foreign Trade at the highest levels. Construction on the new mill has resumed, but the completion date is uncertain. According to Rafik Beshay, the company’s budget planners are factoring in the prospect of another round of social unrest, which could once again sap man-hours and increase insurance premiums. With the peak summer months approaching, additional power cuts are likely. ( The Morsi government rationed energy supplies for residential areas, according to analysts, to avoid blackouts close to parliamentary elections scheduled for the fall.) An importer of raw materials, Beshay Steel is saddled by the weak pound, as well as by higher wages and the cost of enhanced working conditions, consequences of the postrevolution revival of organized labor.

Nonetheless, Rafik Beshay is optimistic about the future. As Egypt’s political order matures, he says, the government will have to address the country’s badly neglected infrastructure, and steelmakers will benefit hugely as a result. “The beauty of Egypt is its large market and domestic demand,” he says. “Once the situation stabilizes the economy can grow on its own.”


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