Egyptian entrepreneurs

Last Wednesday, the Middle East Institute held its 3^rd  annual Egypt conference, entitled “Reducing Risks, Unlocking Potential,” with three expert panels. Here I focus on the final panel, ‘Economic Development and Entrepreneurial Innovation’, which explored the promise of the Egyptian economy and its human resources, as well as the significant challenges facing it before it can achieve real, wide-reaching development. Moderator Mona Mowafi (co-founder and president of RISE Egypt) anchored the discussion with an introductory question: ‘What kind of society does Egypt want to become?’ Starting from the understanding that Egypt has an underdeveloped economy, with low job creation and miles of bureaucratic red tape, the panelists described a dynamic country with great economic potential, and emphasized that social and political advances are necessarily tied to a more developed, innovative, and democratized economy.

Egypt does not lack either natural or human resources. It has a dynamic ecosystem for economic innovation, a view that perhaps reflects the panelists’ backgrounds. Seif Abou Zaid, CEO of Tahrir Academy, is an entrepreneur focused on education and governance, as well as how to connect the two. Mohamed Zaazoue, a neurosurgeon, founded Healthy Egyptians, with which he hopes to raise basic health education levels for all Egyptians. Their co-panelists are economists: Amr Adly is a consultant at the Carnegie Middle East Center, and Heba Elgazzar is a senior economist in Social Protection and Labor Global Practice at the World Bank. They used their practical experiences of navigating Egypt’s entrepreneurial environment to analyze the country’s potential.

Both Adly and Elgazzar highlighted the informal or personalized nature of several industries in Egypt, where jobs and professional relationships are based on personal ties and social networks. This can be both an asset and a drawback. It encourages practices such as ‘wasta’ – or cronyism (though this has political causes as well). Many people are left doing part-time or casual jobs, rather than full-time employment. But there are many locally-based small industries that thrive in their communities and are ‘entrepreneurial’ in their own sense – low-tech, but creative, as Adly pointed out.

Zaazoue insisted that Egypt’s youthful population and its human resources generally are the country’s biggest resource, which needs to be cultivated and invested in for the future. Elgazzar agreed that the resources are there, and that Egypt’s particularly urban character provides a clustering of skills, knowledge, and information, creating an excellent environment for economic innovation.

Abou Zaid why there hasn’t there been a transformative moment yet. Why aren’t these skills and knowledge being exploited? There are governmental and non-governmental barriers. One of the latter is access to finance. Adly also highlighted that though Egypt’s private sector is quite large, it does not operate within a framework that can transform annual growth into structural development of the economy as a whole.

Both Abou Zaid and Zaazoue are interested in policy-making and want to have an effect on Egyptian society at large, rather than just running successful businesses. But there is a bureaucratic ‘bottleneck’ which makes it difficult to get projects implemented through government ministries. There is also heightened hostility to non-profit organizations under Sisi’s government. So starting new businesses and trying to tie change to the market has been a way for both to pursue their goals.

Zaazoue first tried to speak with ministers about adding health education to school curricula, but when he got nowhere, decided to create games and cartoons about health which could be marketed for kids. Abou Zaid’s school was originally non-profit, but it was shut down under new laws governing funding for such organizations. He has had to explore setting up fee-paying accommodation in order to become a profit-making institution.

Elgazzar thought the government needs to pick one or two priorities and focus on them for the next several years. In her view, these should be education and job creation. Zaazoue would like to see foreign capital directed into education and health systems, instead of military and security budgets. High-quality education, better schools, and more democratized education, will have an effect on growth potential, bring more women into the work force, and serve to change people’s attitudes about seeking out new work.