Fawaz Gerges: Islamists Are the Arab World’s New Capitalists

“Islamists know they can’t apply the Turkish model but they can use it as an example. There are two aspects that come out of this. Islam is good for business and Islam and capitalism are reinforcing one another. Also, Turkey has applied democratic principles and capitalism in an Islamic country. They would like to imitate the Turkish example as opposed to the Turkish model. What they mean by that is they want to apply free-market capitalism and encourage a free-market economy.”

Read the full interview with Fawaz Gerges, founding director of the Middle East Centre of the London School of Economics and Political Science.

Regimes Will Not Control Egypt Again: Journalist Randa Fouad

An entire generation of Egyptians grew up under strongman Hosni Mubarak, and few could ever see an alternative to his rule, often quietly joking he was the ‘pharaoh for life.’ Journalist Randa Fouad says she was among the skeptics when protestors first gathered at Tahrir Square.

But the swift end to Mubarak’s military regime, she says, emboldened her countrymen to rethink Egypt’s future. Despite the country’s ongoing political and social turmoil, Fouad is optimistic, telling Arabic Knowledge@Wharton that whatever develops, “Egypt belongs to the Egyptians now. It does not belong to any regime.”

Read the full interview here: http://t.co/kusukHKz

A Year Later, Egypt’s Wael Ghonim Talks About ‘Revolution 2.0’

Wael Ghonim almost sounds apologetic about his central role in helping plot Egypt’s future. But a year after helping topple the government of President Hosni Mubarak his words continue to resonate beyond the Tahrir Square protests.

Ghonim, 31, was the moderator of the Facebook page, Kullena Khaled Said (“We Are All Khaled Said”), which some credit for providing the spark for the Egyptian revolution. Ghonim was imprisoned and became the revolution’s public face after his release. He might be better suited to help inspire a budding entrepreneur community throughout Egypt, but circumstances have thrust him into the political forefront where messaging and branding can carry the day. In some ways he’s an Egyptian Forest Gump, an accidental leader who never aspired to command such attention.

But it’s clear Ghonim is an important figure domestically and internationally as Egyptians navigate the maze of democracy. The former Google marketing executive has utilized his enterprising spirit in the political realm to bring factions together for a common cause.

“The revolution is a process and not an event,” he said at Stanford University on the first anniversary of his release from jail for his role in sparking the protests. “I personally (took) to the streets not to replace a dictator with another one. I took to the streets because I believe Egyptians have been denied the right to choose whoever governs them.”

Ghonim realized during the celebrations after Mubarak’s departure that Egypt was at the beginning of a long struggle. A majority of the Egyptians know nothing other than dictatorship and military rule, leading to confusion and chaos during the embryonic stages of democracy. “The fact is we kind of opened a can of worms,” he said. “It’s not going to happen in a few months.”

Ghonim regrets the lack of foresight in those intoxicating days after Mubarak abandoned power Feb. 11 last year and the Supreme Council of the Armed Forces filled the void as the interim government. But it seems as if the self-criticism is too harsh. Egyptians such as Ghonim now have a sense of urgency about creating a new democratically elected government to benefit everyone.

Egypt, after all, has reached a tipping point: Its citizens must quickly figure out how to move away from military rule that controlled society for the past 60 years. “We need to have one goal, as we had for the 18 days,” Ghonim said of the protests that began Jan 25, 2011. “At the current stage we don’t discuss anything but the transition of power. This is our only priority.”

Ghonim recently visited the United States on a whirlwind book tour that included a panel discussion at Stanford sponsored by the Muslim Student Awareness Network and Islamic Society of Stanford University, and TechWadi, a Silicon Valley non-profit that promotes entrepreneurship and cross-border partnerships with the Arab world.

The tour was highlighted by an interview with Terry Gross, host of WHYY’s popular show “Fresh Air.”  The bulk of the radio interview focused on Ghonim’s memoir Revolution 2.0: The Power of the People Is Greater Than the People in Power. Proceeds from the book will go to a technology-based NGO the author is starting in Egypt to fight poverty and provide education.

At Stanford, Ghonim focused mostly on Egypt’s future instead of his 11 days of incarceration during the battles in Tahrir Square. (TechWadi chairman Ossama Hassanein, a prominent Silicon Valley venture capitalist, and Joel Beinin, a Stanford professor of Middle East history, joined Ghonim as featured speakers).

“It’s not a Facebook Revolution,” Ghonim said. “It was the people’s revolution.”

He continued: “If this revolution did anything it brought dignity back to the Egyptians. It’s very hard to think that in a few months people are going to go back home and accept the dictatorship again. It’s not going to work.”

Ghonim described himself and his colleagues as politically naïve but he showed incredible prescience when explaining how citizens emerged from the shadows to protest because they thought change would help solve their problems. “The more they are feeling that it is creating additional problems the more they will be reluctant to continue to support it,” Ghonim said.

It’s a lesson almost all politicians understand. The citizenry becomes anxious during times of economic downturns. In Egypt, the economy is stagnating at the worst possible moment but there’s little Egyptians can do about it until creating a civilian government.

“Any elected government that comes into power and starts solving problems other than this problem will be solving the wrong problems and people will go after them,” Ghonim said. “It is very critical at the moment to bring trust back into the country. There are lots of opportunities ahead of us. The challenge now is how can we make sure the next few months Egypt is going to survive its economical problems?”

Egyptians such as Ghonim are struggling to strike a balance between getting the political situation right while stopping the economy from collapsing.

“Yet is very hard to assume the economy is going to rise during the transitional period because most of the foreign investments are not going to come in a country where people don’t know what is going to happen in the next few months.” he said. “We want to see the new Egypt, which is going through a transition that probably will last for years. We’re not going to see democracy tomorrow. It’s going to take time. It’s going to be hard. We have to be patient.”

The difficulties were underscored during Ghonim’s visit when 74 Egyptians died in soccer riots in Port Said. Some in the West also fear a government dominated by the Muslim Brotherhood, which is a possibility. Ghonim said he would respect whomever Egyptians decide should lead them. “Now everyone is in the field, everyone is included,” he added. “It is time to solve the real problems of this country and stop the idealistic views.”

Ghonim said Egyptians can no longer sit on the sideline and complain about corruption and economic woes without participating in solutions. The country cannot expect a singular leader to rise from the rubble to save it. “We’re not in need of another Abdel Nasser and we don’t need any more faces,” Ghonim said. “People have managed to collaborate and work together without having a single leader or group of leaders who would say what should happen now. I call on every Egyptian to do something, to think of something.”

An Arab Spring Boost for the Islamic Finance Industry?

With Islamist parties dominating recent elections in Arab Spring countries, the Islamic finance industry will likely find opportunities to capture large volumes of new customers and emerging infrastructure projects, according to a report by global law firm Simmons & Simmons.
 
Intent on maintaining a secular financial system, regimes in Egypt, Tunisia and Libya were not supporters of Islamic finance, notes Tariq Hameed, a Dubai-based managing associate with the firm, and author of the report, ‘Blue Print for Islamic Finance following the Arab Spring.’
 
But in elections that have seen Islamist parties come to power, such as the Muslim Brotherhood in Egypt, Shariah-compliant banking has been endorsed as part of a larger social and financial reform campaign. “All of the parties have gone on record saying they support Islamic finance,” Hameed says. “It reflects their beliefs.”
 
Hameed says at the consumer product level, there is huge potential for growth. Partly because many people in these countries do not have bank accounts — approximately 25% of Moroccans and 33% of Tunisians with bank accounts, and only 10% of Egyptians, according to his findings. “There was a lack of offerings,” he says. “Many didn’t engage with the conventional banking system.”
 
While expected customer growth would be in volume, Hameed notes that the majority of such accounts would likely be low-income savers. Compared to Arab Gulf countries, GDP per capita among the Arab Spring countries is low: Libya is the wealthiest, but GDP per capita is estimated at just $14,000.
 
In addition to creating savings products, one opportunity could come from the further development in Islamic microfinance offerings, Hameed notes. Currently there is very little being offered to grassroots Muslims, he says, but institutions will have to serve demand from rural communities and micro-enterprises. The state can act as sponsor of such an initiative, he suggests.
 
Separately, Islamic finance will become an option for these governments as they seek foreign investment. According to Reuters, a number of Islamic financial institutions are opening branches in Libya, for instance, as it explores the industry. Successful Islamic financing of infrastructure projects already exist in Bahrain, Saudi Arabia and Bangladesh, Hameed says, so there are models states can study for implementation.
 
There remain challenges for the Islamic finance industry before they can reap the potential of these markets, Hameed adds. There are several issues that need to be addressed to ensure growth, his report notes, including the strengthening of consumer protection laws, clarifying governance, and establishing central Shariah boards for finance. 
 
For Western financial firms and businesses seeking to be in the region, they will have to have a capability to engage in Islamic finance, Hameed notes. “If the customer wants Islamic finance, competitors will provide it if they don’t,” he says.