Greater business leverage in Egyptian parliament

Marwa Hussein, Thursday 23 Dec 2010

The surprise announcement that fewer businessmen will head parliamentary economic committees is not a sign of their waning influence

Ahmed Ezz

During the last three sessions of parliament, the impact of businessmen on its decisions has become more apparent.

Despite the absence of a number of businessmen from the list of heads of economy related committees, their influence on the nature of debates and legislations passed is not expected to decline but may, according to some, increase.

“The NDP’s control of more than 95 per cent of seats in parliament will reduce opposition to businessmen,” said Omar Hasem Rabie from the Ahram Centre of Strategic Studies as explanation for the appointments announced today.

The most prominent example is that of Mahmoud Abu Zeid as chairman of the housing committee in place of Tariq Talaat Moustafa. Moustafa is chairman of the Talaat Moustafa Group, currently the subject of a lawsuit over the legality of its purchase of state owned land for its Madinaty project.

Moustafa has instead been appointed to chair the committee of Transport and Communication, taking over from Hamdy El-Tahan who was absent from the elections.

Said Radwan heads the Economic Committee after the departure from parliament of the previous economic minister, Moustafa Saeed. The committee had been expected to go to Mohammed Abu El-Enein, chairman of the Cleopatra Group, the first firm of its kind in the Middle East.

“The NDP is not afraid of any internal opposition within specific parliamentary committees,” added Rabie. “There is, therefore, less need for the heads of the committees to work in the same fields in which they usually work.”

At the same time, a number of businessmen have kept their positions. The steel magnate Ahmed Ezz continues, as expected, as chairman of the planning and budgetary committee, the most important economic one.

Similarly, El-Enein remains as chairman of the committee for industry and energy.

With so many economic committees being chaired, in the last parliament, by businessmen, their influence on the nature of debate and legislation passed has become noticeable.

The influx of tycoons in to parliament has increased the number of economic projects and legislation passed. Mahmoud Nafady, president of the Parliament`s Press Division, points out that since 2000 “the number of economic legislative projects has exceeded the number of political and social laws passed.”

Research by Amjad Khalil Gabas at the Centre of Arabic Research and Studies shows that during 2007 and 2008 parliament discussed 18 separate economic laws, representing 47 per cent of those it passed.

The next parliament is expected to discuss a string of economic legislative projects, the most important being that of health insurance. The law will provide insurance cover for more people and allow private sector to take part. Subscribers will contribute a part of the costs.  

Another priority for parliament’s attention is the public service law. Similarly, parliament will need to pass amendments to the sales tax law to change it into a value added tax.

Abu El-Enein sees the issue differently. “All over the world economic laws assume a prominence,” he says. “This is a natural development and proof of economic development which contributes to raising living standards as laws in the economic sector effect the political and social aspects.”

Businessmen are often accused of benefitting personally from their position as members of parliament. Ahmed Ezz, for example, is often accused of flouting anti-monopoly laws. Despite the lack of any official charges against him, his name is commonly associated with the concept of monopoly.

The perception of their interference even reaches legislation that affects the country as a whole. The change in tax laws in 2004 that reduced income tax from 40 per cent to 20 per cent has been attributed to the presence of businessmen in the legislative.

Abu El-Enein counters that “these amendments did not come in the interest of businessmen but on the contrary. In accordance with the previous law businesses were to get tax breaks for up to ten years, but now they are paying taxes from the first day."

Businessmen are part of society’s fabric, he adds, and can’t determine the laws as they might wish because of the spotlight they are under.

Another source of criticism is that they are rarely to be seen posing questions to the government. “There are always common interests between businessmen and ministers, so they usually don’t apply great pressure, even those in opposition,” says Nafady.

On this point, Gabas’ research provides some damning insight into the harm this does to democratic process; businessmen in parliament do not implement any initiatives.  

The number of businessmen in the current parliament is not known but since 1985 it has risen steadily from 37 to 68, out of 454 MPs, in 2005, with many joining as independents only to later join the NDP.

According to Rabie, the problem is not this trend but the political culture within which it is emerging.

“The role of businessmen has become more prominent with economic liberation so it is natural for them to be accompanied by such changes,” he says. “But in other countries there are economic, political and legislative values that prevent conflict of interests and limit corruption.” 

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