Tycoon Sawiris to invest in Egypt, fears economic collapse

Michael Georgy and Yasmine Saleh
(Blank Headline Received)
Egyptian tycoon Naguib Sawiris speaks during an interview with Reuters at his office in Cairo November 14, 2013. REUTERS/Mohamed Abd El-Ghany

By Michael Georgy and Yasmine Saleh

CAIRO (Reuters) - Egyptian tycoon Naguib Sawiris, whose family controls the Orascom corporate empire, said he would invest $1 billion in Egypt in 2014 and warned that urgent measures were needed to save the economy from collapse.

Nearly three years of turmoil following the ouster of autocrat Hosni Mubarak in 2011 have decimated investment and tourism in the most populous Arab state.

Finances are in a precarious state, with a massive deficit. But the army-backed government, armed with a $12 billion aid package from the Gulf, has turned down the conventional wisdom of IMF-prescribed austerity measures.

Sawiris said Egypt could not go on burning $1.5 billion per month in subsiding bread and fuel and other products without generating revenue.

"This country for three years has been driven into the ground and is on the verge of collapse. We are bankrupt," he told Reuters in an interview. "My concern is that basically if we don't help very fast, move the economy upwards the country will go bust...It's that bad."

But the businessman, a member of the Christian minority that makes up about 10 percent of Egypt's population, still sees opportunities despite Egypt's latest political crisis, triggered by the army overthrow of elected Islamist President Mohamed Mursi in July.

"I would say in 2014 I have a budget of $1 billion that I am going to invest in Egypt in various sectors - industrial, agriculture, financial, telecommunications and Internet," he said in his luxurious Cairo office overlooking the Nile.

Sawiris said investors could capitalise on a lack of low-income housing and that they stood to gain in the energy and agriculture sectors.

"Real estate is cheap and there are a lot of good opportunities to buy factories," he said.

His Orascom group of companies is one of the biggest private sector employers in Egypt - providing more than 100,000 Egyptians with jobs according to Sawiris, who now runs a new investment firm Orascom Telecom, Media and Technology,

The eldest of three billionaire businessmen brothers also founded ONTV, a popular private television channel, and is a partner in Al-Masry Al-Youm daily newspaper.

Sawiris is an outspoken critic of Mursi, who hit his family with exceptional taxes.

Sawiris said he, like many secularist businessmen, backed calls for army chief Abdel Fattah al-Sisi to run for president: "He is seen as a saviour," he said.

Sawiris expressed concerns over Egypt's financial dependence on Gulf Arab states, who opposed the Brotherhood and have firmly stood behind the army-backed government.

"Every year you will go to Saudi Arabia and Kuwait and beg? Is this how we will feel proud about our country?" said Sawiris.

The Sawiris brothers built on their father Onsi's Orascom enterprise, at one time nationalised by President Gamal Abdel Nasser in the 1960s.


Sawiris also dabbled in politics, founding The Free Egyptian Party shortly after an uprising toppled Mubarak in 2011.

He said his party was ready to contest elections expected early next year under a political roadmap announced by the army when Mursi was removed.

But Sawiris seems preoccupied by the economy.

"My worst nightmare, the economy does not grow. You will have all these poor people, who are fifty percent of the population, have another uprising and not against anybody but against everything," he said.

He said the authorities should ban all protests for a year to get the economy back on track.

Sawiris, who built an emerging markets telecoms empire that once stretched from North Korea to Algeria, reflected on some of his mistakes overseas.

In October, the Canadian government blocked his bid to buy Manitoba Telecom Services Inc's Allstream fibre optic network, citing unspecified national security concerns.

He used an expletive to dismiss the decision as nonsense.

"I defy the Canadians to disclose what is their security concerns. A Christian, pro-Western, pro-American guy like me? What security concern? It was a mistake to attempt a second investment in Canada. It's just a waste of time," said Sawiris.

"That's why Canada is so (backward) compared to America. It's a closed economy. They like friends and family. They like to distribute the businesses between five and ten families and five and ten politicians and this is how it works in Canada. They can eat it."

Sawiris was cautious about North Korea, where Orascom Telecom Media and Technology Holding had acquired licenses.

He said he would not invest more in the one-party state until dividends are retrieved. "We made them an offer to invest any dividends back into the country," he said.

Sawiris said investment at home would grow when a new government is elected and all political sides give reconciliation a chance.

Although he had taken part in the 2011 revolt against Mubarak, Sawiris said he would like to see Mubarak freed.

Sawiris believes the Brotherhood has no chance of returning to power.

"They (the Brotherhood) told the people they are God's people and it turned out they had no relationship with God," said Sawiris. "They told them there would be prosperity, there was no prosperity. They told them they were democratic, they were anti-democracy and dictators."