Tycoons control industrial entities

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by Ahmed El-Mahdi


After the corruption case against the minister of agriculture and reports about the involvement of other officials, as well as and the acceptance of President Abdel-Fattah El-Sisi of the resignation of the government of Prime Minister Ibrahim Mahlab, The Middle East Observer is shedding light on the business community, which calls for specifications for every minister in the next cabinet. The economic community has stressed the need of business entities to assist the government in industrial and investment development, which is the locomotive of the Egyptian economy during the next phase.

The atmosphere is witnessing an increase in the establishment of these entities without a reason, especially those that defend the various industrial sectors, namely small and medium industries, which the state stressed should be given attention in order to enhance the industrial situation in general. Its founders form a bridge of communication with decision-makers. However, Egyptian exports continue to deteriorate without a real attempt to confront the causes and halt the industrial bleeding, which casts a shadow over the economic situation.

Former head of the Export Council for Garments Magdi Tolba said no country has such a large number of entities that are looking for a solution to every economic crisis in a way that maintains their own interests. This has created a state of chaos and randomness that has taken control over the sector.

He said that the state of fragmentation and dispersion drives the sector to further deterioration, adding that nearly eight bodies are speaking about the textile sector, including the two chambers of textile and garment industries as they are two complementary industries, in addition to three export councils and the Union of Investors and the Businessmen Association. This has led to a large number of proposed solutions for the government that has suffered a state of uncertainty and continued suffering without reaching any solutions, he added.

He attributed the large number of small private entities to the keenness of their founders to build a communication bridge with the political decision-makers in various sectors to ensure their own interests, which come first. They exert the utmost effort to iron out all obstacles as well as solve the problems of their friends, he said, ignoring the aches of industrialists that do not have close relations with them.

He added that that these economic entities are weak and are considered advisory bodies to the government, whether the Federation of Egyptian Industries or the export councils which have not made any change in settling industrial crises. The reason is that the selection is not based on solid grounds and no selected official has a plan of which he is held accountable after the end of his term in office, he added.

Tolba also noted that the heads of economic entities do not object to government decisions to maintain their posts, pointing out that in the meantime, strong leadership is needed to lead the industry to development, as with nations such as Germany, Brazil and others, which have strong unions that have the upper hand in the Ministry of Industry.

He explained that there will be no strong industry except through screening and filtering of leaders in the business community so that there would be industrial figures that work for the public interest, which includes personal interests as an industrial case and not vice versa, which contributed to the deterioration of the current situation. A strong stance is required from an industrial entity, he said.

Tolba also said that when there is a strong federation of industries there will be no influence by other entities, which are increasing in number day after day. This will make them step back and there will be only the strong and effective entities on the industrial and economic arenas after some time.

Meanwhile, Dr Hassan Odeh, an economist and professor of accounting at the German University in Cairo, called for the need to have a large entity with a key strategy from which small strategies emerge for each sector separately. Everyone works for one goal and under one umbrella, he said.

He added that the Egyptian atmosphere is witnessing a multiplicity of institutions which have not borne fruit to industry and investment so far. This requires making use of world models that unite behind a strong entity and operate in an orderly fashion that reflects on the economic situation, he said.

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