Businessmen and Authoritarianism in Egypt Safinaz El Tarouty A thesis submitted for the degree of Doctor of Philosophy to the University of East Anglia, School of Political, Social and International Studies. Norwich, May 2014 This copy of the thesis has been supplied on condition that anyone who consults it is understood to recognise that its copyright rests with the author and that use of any information derived there from must be in accordance with current UK Copyright Law. In addition, any quotation or extract must include full attribution. Abstract The main concern of this thesis is to examine how the Mubarak authoritarian regime survived for three decades, especially after the introduction of economic liberalization. I argue that the Mubarak regime created a new constituency of businessmen who benefited from economic reform and in return provided support to the regime. Based on interviews with Egyptian businessmen and political activists, this thesis examines the different institutional mechanisms used by the regime to co-opt businessmen and based on predation of public and private resources. Extending the literature on clientelism, I create a typology of regime-businessmen relations in terms of authoritarian clientelism, semi-clientelism, patron-broker client relationships, and mutual dependency. The thesis further examines how the regime dealt with an opposition that refused to enter into its clientelisitic chain. I demonstrate how the regime weakened this opposition by creating among them a divided political environment on different levels (i.e., among the legal and illegal opposition, inside the legal opposition, and among the illegal opposition). This thesis demonstrates that there are businessmen who are supportive of authoritarianism; however, they may also oppose authoritarian regimes, not for their own business interests but rather for their own political/ideological stance. This thesis concludes that the 25th of January Revolution showed the failure of Mubarak‘s political economy of authoritarianism based on predation and co-opting businessmen. Acknowledgements In the course of this study, I have benefited greatly from the help of many people. I am particularly indebted to Dr. Nicola Pratt, who supervised this dissertation and whose advice and suggestions have been invaluable. I am immensely grateful for her having given me so much time and effort in reading and discussing my work. Her encouragement and support have seen me through many difficult times. I would like to thank Professor John Greenaway and Professor Alan Finlayson for their useful feedback on my work during the writing stage. I am also thankful to Professor Ray Bush and Professor Lee Marsden for their thoughtful comments, which helped me revise my work and, hopefully, to improve it. The staff working in the Arts and Humanities Postgraduate Research Office at the University of East Anglia has provided me with help and advice throughout this journey. I am particularly thankful to Lyn Marsh, Colleen Clayton, and Sarah Pike. I would like to thank all my interviewees whom I met in Cairo and London during my fieldwork. Through their gracious support, generosity with their time, and candour in answering my questions I was able to see the light at the end of the tunnel. I have a fine collection of friends and colleagues to thank, throughout the UK and beyond. I was fortunate to be the colleague of Nick Wright, Salman Karim, Vanessa Buth, Sokratis Kioussis, and Paul Stott. Their friendship and care made me feel home during the periods of my stay in England. I would like to thank my close friend, Lisa Blaydes of Stanford University, who was always willing to give me suggestions and help. My dear friend Aida Yehia deserves special thanks for providing me with online articles whenever I asked her for help. A very special thanks to Professor Ali El Din Hillal whose unconditional care and support during this journey will make me forever grateful to him. My family is owed particular thanks. I would like to thank my father and my mother, who supported me financially and morally. My late brother Omar left us more than a decade ago, but his beautiful memory has always been a source of encouragement. A special thanks to my young brother Tarek for his care and concern about the progress of my work. My sister Shahinaz, my brother-in-law Tarek Zaki, my niece Faiza, and my nephew Mahmoud have visited me several times during the periods of my stay in England and provided me with a lot of encouragement. My deepest appreciation is expressed to my husband Ambassador Khalid Emara, whom I met in the middle of this journey during my fieldwork in Cairo. I would not have been able to finish this work without his love, support, and encouragement. My daughter Farida came into the world during the writing of the dissertation. Her presence in my life has been a source of joy and pleasure, which helped reduced the stress of working on the Ph.D. Contents Abstract Acknowledgements Introduction Research Questions 1 Why businessmen and Authoritarianism? Situating the Research Questions 2 Original Contribution 5 Methodology and the Process of Doing Field Work 6 Organization of the Thesis 10 Chapter 1: The Uprising, Authoritarianism and Political Transformation 1.1 Introduction 13 1.2 Authoritarianism and State-Society Relations in Egypt 16 1.3 The Political Economy Approach 21 1.4 The Institutional Approach 25 1.4.1 Definition of Co-option 26 1.4.2 The Different Institutional Mechanisms for Co-option 26 1.4.3 Gap in the Literature on Authoritarian Renewal 32 Regarding Different Forms of Co-option 1.4.4 Opposition Refuses Co-option 35 1.5 Research Questions Emerging from the Gap in the Literature Review 37 And the Framework for Analysis Chapter 2: Egyptian Businessmen in a Historical Perspective 2.1 Introduction 42 2.2 Businessmen under the Monarchy and the British Occupation 43 2.3 Businessmen under Nasser 45 2.4 Businessmen under Sadat and Mubarak 50 2.5 Conclusion 63 Chapter 3: Parliamentary Businessmen 3.1 Introduction 65 3.2 The Case of Ibrahim Kamel: A Business Tycoon Dismissed from the NDP 67 3.3 The Case of Parliamentary Steel Tycoon: Ahmed Ezz 72 3.4 The Case of Loan MPs (Nuwwab El Qurud) 82 3.5 A Cosmetic Opposition Businessman in Parliament: 88 The Case of Ramy Lakah 3.6 Anwar Esmat El Sadat: a Real Opposition Businessman in Parliament 91 3.7 The Case of Patron Broker Client Relationships 94 3.8 Conclusion 98 Chapter 4: The Social Networks of the Mubarak Family and the Businessmen 4.1 Introduction 101 4.2 A Businessman Affiliated with the Regime: Ahmed Bahgat 102 4.3 The Case of Mohamed Nosseir 110 4.4 The Case of Billionaire Naguib Sawiris and his Family 113 4.5 The Case of Monopoly in the Telecommunication Sector: 120 Naguib Sawiris and Mohamed Nosseir 4.6 The Case of Taba Land: Hussein Salem versus Wagih Siag 125 4.7 The Different Levels of the Chain of Beneficiaries: 132 Mubarak Family and Their Associates 4.8 Conclusion 135 Chapter 5: Businessmen in the Opposition 5.1 Introduction 137 5.2 Businessmen in Egypt‘s Political Opposition 138 5.3 Opposition Businessman: Moussa Moustafa Moussa and Al Ghad Party 139 5.4 Pharmaceutical Tycoon El Sayyid El Badawi, President of Al Wafd Party: 153 The Case of Al-Destour Newspaper 5.5 The MB Businessmen and the Case of Al Azhar Militia 157 5.6 The Case of Hani Enan: Sponsor of Kefaya Movement 168 5.7 Conclusion 171 Conclusion Introduction 172 Empirical Findings 172 Theoretical Contribution 174 The Failure of Mubarak‘s New Political Economy of Authoritarianism 177 Recommendation for Future Research 179 Bibliography 181 Introduction Over the last decade, there has emerged a body of literature that seeks to explain the longevity of authoritarianism in the Middle East (Maye Kassem 1999, Eberhard Kienle 2001, Eva Bellin 2002, Ellen-Lust Okar 2004, Jason Brownlee 2007, Lisa Blaydes 2011). This thesis seeks to contribute to the literature on authoritarian survival. It examines the survival of Mubarak‘s regime for over three decades (October 1981–February 2011) by focusing specifically on the role of businessmen in both supporting and opposing the regime. Since the 1990s, the visibility of businessmen in politics has grown. For instance, in the 2005 Parliament the number of businessmen was 22 percent, compared to 17 percent in 2000 and 12 percent in 1995. Moreover, four businessmen were appointed to the 2004 Nazif cabinet, and two years later their number rose to six. In 2002, the President‘s son, Gamal Mubarak, headed the Policies Secretariat in the National Democratic Party (NDP), and a large number of businessmen were appointed to the Secretariat. The existing literature on the role of businessmen is divided between the scholars who argue that businessmen are agents of democratization (Moore 1966; Moraze 1968; and Hobsbawm 1969) versus those who argue that businessmen may see the continuation of authoritarianism to be in their economic interests and, therefore, do not necessarily oppose it (Bellin 2002). In this thesis, I set out to explore the degree to which either of these arguments about businessmen in politics applies to the Egyptian case. Research Questions This thesis seeks to answer the following question: To what degree did businessmen contribute to the survival of authoritarianism over the three decades of Mubarak‘s rule (1981-2011)? 1 Other sub questions emerge from this question as below: (1) Why did businessmen get involved in politics under the authoritarian rule of former President Hosni Mubarak? (2) Why did the regime allow businessmen to become engaged in politics? (3) What was the relationship between the regime and those businessmen who did not engage in politics? 4) Did all businessmen support the regime? If not, how did the regime deal with businessmen opposing the regime? This research finds that businessmen‘s support for or opposition to authoritarianism is not contingent upon their economic interests.