CAIRO: Manufacturing, a trained labor force and enabling the private sector are the solution to Egypt’s economic slump, said Hasan Malek, one of the Muslim Brotherhood’s leading businessmen.
One of the main financiers and business strategists of the Brotherhood, Malek said the economic policies in force during Hosni Mubarak’s rule were on the right track, but were overshadowed by blatant corruption and a culture of favoritism.
"We avoided opening big factories and companies because it was easy for the regime to net us … and we could not grow our business then," Malek told Reuters. "That has changed."
With the Brotherhood expected to win a sizeable showing in the new parliament, investors wonder what economic policies the Islamist group’s Freedom and Justice Party might push for once it is elected.
"We want to turn Egypt from a consumer market into a manufacturing market," Malek said in an interview on Thursday.
"We are thinking of developmental investments that include proper professional training of the labor force to create manufacturing industries and reduce the reliance on imports," the 53-year-old businessman said.
Mubarak, toppled by a popular uprising on Feb. 11, staunchly fought the Islamist group’s business and political activities, jailing thousands and freezing the assets of its wealthy members, including Malek, who was jailed in 2006 and released weeks after the former president stepped down.
Out of prison, Malek consolidated a number of textile and furniture companies into Malek Group, with a furniture factory set to open after elections employing 1,000.
Investment growth
Egypt’s investment future rests on the private sector as well as a more efficient, skilled labor force, Malek said.
Foreign investors who have opened factories in Egypt have often complained of workers’ poor efficiency levels.
"You cannot sustain developmental investment without raising manufacturing standards," Malek said, adding his goal was to raise the number of workers with "professional training".
To this effect, he set up the Egyptian Business Developmental Association, a body of private investors to fund developmental projects, mainly in the textile and food sectors.
The Arab world’s most populous country relies mostly on imports for its food and textile needs.
Investors are wary of funding projects in Egypt, where the transitional period to a civilian government may take until 2013 and the country’s financial status continues to deteriorate. Moody’s on Thursday cut Egypt’s credit rating by one notch.
Malek said he supported decisions made by Rachid Mohamed Rachid, Mubarak’s former minister of trade and industries, whose mandate included liberalizing Egypt’s industrial sectors and attracting more foreign direct investment (FDI).
"We can benefit from previous economic decisions. There have been correct ones in the past. Rachid Mohamed Rachid understood very well how to attract foreign investment and his decisions in that area were correct."
Rooting out graft and ending a culture of favoritism must be the next government’s mandate to facilitate development and growth, Malek said.
The government expects growth of 3 to 3.5 percent in the year ending June 2011 but economists predict less.
The General Authority for Free Zones and Investment said this week it set up a fund to support small-and medium-sized enterprises to facilitate swift growth and development. –Additional reporting by Shaimaa Fayed