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How Hosni Mubarak Got Filthy Rich
By Rick Newman for US News Money
There are no Mubaraks on the Forbes list of the world’s richest people, but there sure ought to be.
The mounting pressure from 18 days of historic protests finally drove Egyptian President Hosni Mubarak from office, after three decades as his nation’s iron-fisted ruler. But over that time, Mubarak amassed a fortune that should finance a pretty comfortable retirement. The British Guardian newspaper cites Middle Eastern sources placing the wealth of Mubarak and his family at somewhere between $40 billion and $70 billion. That’s a pretty good pension for government work. The world’s richest man—Mexican business magnate Carlos Slim—is worth about $54 billion, by comparison. Bill Gates is close behind, with a net worth of about $53 billion.
Mubarak, of course, was a military man, not a businessman. But running a country with a suspended constitution for 30 years generates certain perks, and Mubarak was in a position to take a slice of virtually every significant business deal in the country, from development projects throughout the Nile basin to transit projects on the Suez Canal, which is a conduit for about 4 percent of the world’s oil shipments. “There was no accountability, no need for transparency,” says Prof. Amaney Jamal of Princeton University. “He was able to reach into the economic sphere and benefit from monopolies, bribery fees, red-tape fees, and nepotism. It was guaranteed profit.”
Had the typical Egyptian enjoyed a morsel of that, Mubarak might still be in power. But Egypt, despite a cadre of well-educated young people, has struggled as an economic backwater. The nation’s GDP per capita is just $6,200, according to the CIA—one-seventh what it is in the United States. That output ranks 136th in the world, even though Egypt ranks 16th in population. Mubarak had been working on a set of economic reforms, but they stalled during the global recession. The chronic lack of jobs and upward mobility was perhaps the biggest factor driving millions of enraged Egyptian youths into the streets, demanding change.
Estimates of Mubarak’s wealth will probably be hard to verify, if not impossible (one reason dictators tend not to make it onto Forbes’s annual list). His money is certainly not sitting in an Egyptian vault, waiting to be counted. And his delayed exit may have allowed Mubarak time to move money around and hide significant parts of his fortune. The Swiss government has said it is temporarily freezing any assets in Swiss banks that could be linked to Mubarak, an uncharacteristically aggressive move for the secretive banking nation. But that doesn’t mean the money will ever be returned to the Egyptian people, and it may even find its way to Mubarak eventually. Other Mubarak funds are reportedly sitting in British banks, and Mubarak was no doubt wily enough to squire away some cash in unlikely places. Plus, an eventual exile deal could allow Mubarak to retain some of his wealth, no questions asked, as long as he and his family leave Egypt and make no further bids for power.
Epic skimming is a common privilege of Middle Eastern despots, and Mubarak and his two sons, Gamal and Alaa, were a bit less conspicuous than some of the Saudi princes and other Middle Eastern royals seen partying from time to time on the French Riviera or other hotspots. The family does reportedly own posh estates in London, New York, and Beverly Hills, plus a number of properties around the Egyptian resort town of Sharm El Sheikh, where Mubarak reportedly went after resigning the presidency.
Mubarak also spread the wealth far and wide in Egyptian power circles—another Middle Eastern tradition—one reason he incurred the kind of loyalty that allowed him to rule for a remarkable three decades. Top Army officials were almost certainly on his payroll, which might help explain why the Army eased him out in the end—allowing a kind of in-country exile—instead of hounding him out of Egypt or imprisoning him once it was clear the tide had turned against him for good.
That money trail, in fact, will help determine whether Egypt becomes a more prosperous, democratic country, or continues to muddle along as an economic basket case. Even though he’s out of power, Mubarak may still be able to influence the Army officials running the country, through the financial connections that made them all wealthy. And if not Mubarak, the next leader may be poised to start lining his pockets the same way Mubarak did. For Egypt to have a more effective, transparent economy, all of that will have to be cleaned up. There are probably a lot of people in Cairo who have been checking their bank balances lately.
U.S. Pressure on Mubarak Opens a Rift With Arab Allies
Adam Entous, Julian E. Barnes, and Jay Solomon for The Wall Street Journal
President Barack Obama’s attempt to abruptly push aside Egyptian President Hosni Mubarak in favor of a transition government has sparked a rift with key Arab allies Saudi Arabia and United Arab Emirates, which fear the U.S. is opening the door for Islamist groups to gain influence and destabilize the region.
Vying to influence the outcome of events, Saudi Arabia and the U.A.E. have sent public and private messages of solidarity to Mr. Mubarak and his vice president, longtime intelligence chief Omar Suleiman, diplomats said. The messages amount to support for the president and Mr. Suleiman to oversee the transition and to ensure that Islamists can’t fill any possible power vacuum.
The support from Arab states has provided a measure of comfort to Mr. Mubarak, who announced he wouldn’t take part in September’s election. It may in part explain why the Egyptian president rebuffed Mr. Obama’s call for an immediate transition that includes the opposition.
The backlash shows how the turmoil in Egypt is rapidly reshaping U.S. policy in the region. In deciding to set itself against Mr. Mubarak, a U.S. ally for decades, the United States is now facing the disquiet of other friendly Arab governments, who have long provided support for American policy goals. Meanwhile, Islamists in the region, including Hamas and Hezbollah, believe they are on the ascent as U.S. allies falter.
Such a scenario was one that defenders of the Middle East’s status quo warned was possible, and shows how Mr. Obama’s options were all, in some sense, unpalatable. The president was criticized early in the unrest for not clearly favoring antigovernment protesters. Now, having done so, he might have alienated key regional U.S. partners in the fight against al Qaeda and Iran. People familiar with the situation said Israel, the United States’ closest ally, has privately echoed Arab concerns about a U.S. push to kick out Mr. Mubarak, and worries Washington underestimates domestic Egyptian support for the Muslim Brotherhood and other Islamist parties.
It is unclear how much sway the Saudis have with Mr. Mubarak’s regime in Cairo, given that the extent of its financial aid to Egypt isn’t known. The United States gives Cairo about $2 billion a year. Egypt and Saudi Arabia are major trading partners, and experts say Saudi and Egyptian intelligence services have especially close ties.
Saudi King Abdullah bin Abdulaziz al-Saud has harshly criticized Egyptian protesters in a statement carried by the Saudi state news agency, describing them as “infiltrators” bent on destabilizing Egypt and the region, accusing them of “malicious sedition.”
“You don’t need to read between the lines too much to see [the Saudis] are in favor of stability,” said Richard Fontaine, an analyst with the Center for New American Security and a former adviser to Republican Sen. John McCain of Arizona.
Senior officials from the U.A.E., another key regional ally, have said in recent days that the unraveling of Mr. Mubarak’s government threatens to provide breathing room for Islamic extremists and Tehran. Egyptian security forces have been among the most aggressive in seeking to combat Hamas and Hezbollah, Palestinian and Lebanese militant groups that receive their arms from Iran and Syria.
“What hurts men and women as well as the leadership in Egypt hurts us all, and our standing with Egypt is an urgent need,” U.A.E. Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan said on a visit to Iraq this week. “But our disapproval is of certain parties who might try to exploit the situation with an external agenda.”
Another Arab official from a government aligned with Washington said the Obama administration seems to be humiliating Mr. Mubarak, despite his close cooperation over the years. This could lessen the willingness of Arab states to cooperate with Washington in the future, said the official.
“[The Saudis] are at odds with the U.S. position, publicly pushing Mubarak out. And frankly so are we—this isn’t how you handle issues in region,” said the Arab official. “Egypt needs to be treated with respect.”
Mr. Obama took a calculated risk by aligning himself this week with the opposition, which includes the powerful Muslim Brotherhood, a group banned by Cairo and long shunned by Washington because of concerns about its ties to Islamist extremism.
U.S. officials acknowledge that Mr. Obama’s decision to turn on Mr. Mubarak has raised ire in Arab states, which fear the United States could turn up the pressure on them next.
The perception among key U.S. allies in the region is that the U.S. “threw Mubarak under the bus,” a senior U.S. official said. “It is fair to say there is definitely concern.”
Another U.S. official said the Obama administration understood Arab concerns that Islamists might try to take advantage of the Egyptian elections to win power, but said Arab states nonetheless needed to revamp their sclerotic political systems. Officials are reassessing the extent it could engage with Muslim Brotherhood.
White House spokesman Tommy Vietor said what really matters is the “voices of the Egyptian people.”
Anthony Cordesman, an influential defense analyst at the Center for Strategic and International Studies, played down the impact of outside influences on Mr. Mubarak, whether Saudi or U.S. Mr. Obama, he added, was “one voice among many” and argued that domestic considerations were the biggest factor for the regime in figuring out what to do next.
White House officials spent Thursday working on new language the U.S. president might use to make his demands on Mr. Mubarak more forceful, according to outside advisers. Much of the administration’s attention was on the treatment of journalists in Cairo. U.S. officials suspect regime element might have been behind the attacks.
Secretary of State Hillary Clinton urged Mr. Mubarak to “immediately” begin talks with opposition leaders on handing over power to a transitional government. “I urge the government and a broad and credible representation of Egypt’s opposition, civil society and political factions to begin immediately serious negotiations on a peaceful and orderly transition,” Mrs. Clinton said.
Middle East experts say the goal of creating a new transitional government is not yet in reach. The Egyptian military would have to become more assertive to “control the arena,” said Martin Indyk, a former U.S. ambassador to Israel.
“This will require the military to undergo an overnight conversion to democracy promoters. That’s more than a stretch in the current circumstances,” Mr. Indyk said.
Administration officials are anxiously awaiting events Friday, a traditional day of protest in the Muslim world. “Friday could be a ‘Tiananmen moment,’ ” said Mr. Indyk. “If that happens, there will be no orderly and peaceful transition, just a bloody and long confrontation.”
—Jonathan Weisman contributed to this article.
Third World Thugs and Dictators- A History of Self Serving Interests
By Manzer Munir, Pakistanis for Peace
What is it about power and its hold on a person? Not just the common man, but even the most noblest and patriotic of men have let its allure defy the loyalty to their county’s best interests. They say that absolute power corrupts absolutely. The recent events in Egypt have proven this axiom quite aptly as we are witnessing history in the making with the protests against the regime of Hosni Mubarak.
There is a popular, grassroots, and mostly peaceful uprising against the repressive and longtime authoritative administration of President Hosni Mubarak. Only the fourth president in the history of the modern day republic of Egypt, Mubarak was a soldier in the Yom Kippur War against Israel and served as the Commander of the Air Force as well as the Deputy Minister of Defense.
Having served nearly 30 years, he is the only leader most people in Egypt have ever known where more than half the population is under 25. Long seen by the outside world as a model of stability in the volatile neighborhood of the Middle East, Mubarak’s policies of continuing the peace treaty with Israel signed by his predecessor Anwar Sadat, belied the fact that at home in Egypt he had employed many heavy handed and authoritarian tactics to quell dissent at various times in his 30 year rule.
But what may have appeared as strengths to the outside world were weaknesses at a domestic level. Mubarak came to be seen by the average Egyptians as presiding over policies that increased unemployment and also raised the cost of living for many already struggling people. For many, the economic reforms had come to be equated with corruption, as many political leaders were mixing family business interests with their official roles, and corruption at the highest levels has fully become entrenched in all levels of Egyptian society, much like in many developing countries.
Another example of the measure of cronyism and despotic rule practiced in Mubarak’s Egypt that showed contempt for the democratic aspirations of the common man was his grooming of his son Gamal for eventual leadership of Egypt. It was no surprise in the international community that for the last 8 years Mubarak was exposing his son to more and more official state functions and visits, having most recently brought Gamal to Washington for the opening of Middle East peace talks in the fall of 2010.
Now in the last few weeks, after protests in another North African Arab country of Tunisia that saw the toppling of the 24 year reign of Zine El Abidine Ben Ali, Mubarak’s iron grip on power seems a lot less secure to Egyptians who have been bolstered by the ouster of Ali, another notoriously corrupt and dictatorial ruler of Mubarak’s ilk.
It has become common place to see time after time, in developing countries across the world, but especially in Africa and Asia, autocratic and corrupt rulers who either seize power in military coups or are initially elected in some democratic way, only to hold on to power any way they can. Whether the ruler be Robert Mugabe of Zimbabwe, who has held power of that country since 1980 and who despite having lost even the last few rigged elections, has remained defiantly in power. One could also point to another African leader, Laurent Gbagbo of the Ivory Coast who refuses to step down from power after having lost the elections of his country in November of 2010 to Alassane Ouattara. Despite losing the election he sits in the presidential palace in the capital Yamoussoukro, still refusing to listen to the world community and even personal pleas from President Obama to relinquish power to the victor of the Ivory Coast elections, Alassane Ouattara.
An Indonesian friend mentioned to me that what is happening in Egypt is exactly how the Indonesians got rid of Suharto, who had come to power and control over Indonesia 32 years prior in large part due to his service and rank in the military.
Examples of such greed for power, money and influence as well as the disregard for the health and well being of their nations are more commonplace in the developing world than in the industrialized nations. It is not to say that in European and western countries there have not been cases of greed and corruption. However, when the stability and very health of a country’s political system was severely tested, as in my homeland of the United States, a president like Richard Nixon resigned from power, however embarrassingly and went off quietly into history, rather than hold on to the last vestiges of power and control over a sinking country and its national spirit.
For Mubarak, the question should be asked how can this soldier of the uniform can look in the mirror the last few days knowing that every passing day that there are riots in the streets of Cairo, he is undermining the sovereignty, nationhood and the very peace of his motherland. A person like this obviously cares more about their place in history than the well being of their people, their institutions, and their country.
Sooner or later, the chants will get loud enough to be heard outside Mubarak’s residence in the presidential Heliopolis Palace and the people will undoubtedly ask: “Oh Mubarak can’t you see? Time to join Ben Ali.”
Manzer Munir is a proud Pakistani American and peace activist, who is a Sufi Muslim and is also the founder of Pakistanis for Peace and blogs at www.PakistanisforPeace.com and at other websites such as www.DigitalJournal.com, www.Allvoices.com, www.Examiner.com and www.open.salon.com as a freelance journalist and writer. He asks that you join the official Facebook Page of Pakistanis for Peace to be informed of the latest articles here: http://www.facebook.com/home.php#!/pages/Pakistanis-for-Peace/141071882613054
Egypt Restores Internet as Turmoil Escalates
By Cecilia Kang for The Washington Post
Egypt restored Internet access on Wednesday, after a one-week blackout for Web and cell phone users to try to stem civil unrest.
The nation was the second ever to completely shut its citizens off of the Internet. Burma made a similar move in 1997. As the turmoil accelerates, experts say, the move has failed to affect what began as a Web campaign but continued even after the government block.
As of about 11:29 a.m. Cairo time, all major Egyptian Internet service providers appeared to have reopened connection to their domestic customer networks in a global routing table, network expert Renesys Group said in a blog.
Web sites such as the Egyptian State Information Service have been restored. The Wall Street Journal reports that cell phone service MobiNil also is back up.
U.S. Web sites such as social network Facebook were available again to Egyptians.
“We’re pleased that Internet service has been restored and the five million people who use Facebook in Egypt can continue using our service to connect, learn, and share,” said Andrew Noyes, spokesman for Facebook.
The restoration comes as opposition groups and supporters of President Hosni Mubarak have clashed in street confrontations Wednesday. Mubarak said he would not seek reelection, but anti-government protesters have called for him to step down immediately.
“One of big questions is does it work for a government to shut off the network entirely? I think the answer is no,” said John Palfrey, a co-director of Harvard University’s Berkman Center for Internet & Society.
Alaa Abd El Fattah, an Egyptian activist and blogger in South Africa, said at first people organized on social media sites such as the Facebook page “We are Khaled Said.” The page documented the brutal death of a Egyptian blogger who exposed police corruption. There, opposition groups organized initial demonstrations. But predicting a clampdown on networks, Fattah said that anti-government activists, many of whom were young and politically engaged for the first time, switched to proxy technology that would allow them to access the Internet without being identified. They used low-end Nokia phones with Opera browser, which automatically serves as a proxy for users. And they passed along demonstration plans with pamphlets and by word of mouth.
“This movement started online but continued through many other avenues,” said Fattah.
Andrew McLaughlin, former White House deputy chief technology officer, said the shutdown shocked nations who had seen Egypt as a proponent of mobile and Internet technology. It serves as a key regional hub that operates several critical underwater fiber cable systems used for communications for many neighboring nations.
“The implications of shutting down the Internet are huge from an economic point of view,” McLaughlin said. “The idea that transportation grid ground to halt, you couldn’t access your bank or move money around and the entire communications systems was shut down is insane.”
Rejoicing at being given a digital voice again, Egyptians burst back onto the Internet. On Twitter, human rights activist Dalia Ziada wrote that she had over 500 e-mails in her e-mail.
Numerous accounts on Twitter also show that social the networking site and others may still be blocked in Egypt. When the government began to target communications services, they first hit Twitter and Facebook on Jan. 25. Two days later, the Egyptian government, with an Internet adoption rate of about 30 percent, entirely shut down access. Cell phone services were blocked intermittently throughout the last week.
Reports from Twitter indicate that 3G, mobile Web and BlackBerry services are online again for some people. Vodafone Egypt, which released a statement about restoring mobile phone service on Jan. 31, has not commented on its mobile Web service.
With the service restored, Egyptians began to give personal reports of clashes between Mubarak supporters and dissenters, which turned violent in Cairo’s Tahrir Square.
Egypt Unrest
As reported by the BBC
A massive demonstration is due to be held in Cairo as protesters step up their efforts to force President Hosni Mubarak from power. Organisers say they hope one million will come onto the streets in what is expected to be the biggest show yet. A rally is also planned in Alexandria. Egypt’s powerful army has vowed it will not used force against the protesters.
Meanwhile, new Vice President Omar Suleiman says he will hold cross-party talks on constitutional reform. Mr Mubarak reshuffled his cabinet on Monday to try to head off the protests, replacing the widely despised Interior Minister Habib al-Adly.
But correspondents say that the army’s statement has been a major blow for President Mubarak, and appears to have encouraged protesters.
The BBC’s Middle East editor Jeremy Bowen, in Cairo, says that the feeling that change is coming in Egypt is getting stronger. Too much has happened too quickly to go back to the way things were before, he says.
At least 100 people have been killed across the country since protests began a week ago following an internet campaign and partly inspired by the ousting of President Zine al-Abidine Ben Ali in Tunisia last month.
Egypt has since cut off internet in the country and text messaging services have been disrupted. Google announced late on Monday that it is operating a special service to allow people in Egypt to send Twitter messages by dialing a phone number and leaving a voicemail.
Some protesters defied the curfew and continued to camp out in Tahrir Square through the night, saying they will stay there until Mr Mubarak’s 30-year-long rule ends.
The protests in Egypt are posing a policy dilemma for President Obama’s administration, which has now despatched an envoy, former US ambassador Frank Wisner, to Cairo
One of them, Tarek Shalabi, told the BBC that groups were camped out in tents or sleeping out in the square, and described the atmosphere as “overwhelming”. “We’re here because we want to make a statement. We’re not going until Mubarak steps down,” he said.
He said a stage had been set up where people could go up and make speeches, read out poetry or sing or chant political slogans. “It has a festive feel to it,” he said. We all have one thing in common. We all hate the current regime,” he said.
Another demonstrator, 45-year-old lawyer Ahmed Helmi, said: “The only thing we will accept from him is that he gets on a plane and leaves”. On Monday, the Egyptian army said it respected the “legitimate rights of the people”.
In its statement, carried on Egyptian media, the military said: “To the great people of Egypt, your armed forces, acknowledging the legitimate rights of the people… have not and will not use force against the Egyptian people.”
Our correspondent says the announcement is absolutely critical because it takes away a huge measure of uncertainty from the mind of any potential demonstrator. Whatever happens next, this will change the Middle East, our correspondent adds. In his statement, Mr Suleiman said the president had ordered new government policy to be outlined “in the next few days”.
The review would include “clear and definite policies” to tackle unemployment, poverty, corruption and the cost of living, the statement said.
There would also be new elections in some districts where there was evidence of irregularities in last November’s parliamentary poll.
Meanwhile, the US state department has despatched a special envoy to Cairo, former ambassador to Egypt Frank Wisner.
Concerns have also grown about the economy, as global oil prices on Monday topped $100 (£62) a barrel amid fears of the ongoing unrest.
Israel Fears Unrest in Egypt Could Jeopardize Peace Treaty
By Robert Berger for The Voice of America
The unrest in Egypt is sending shock waves throughout the Middle East, including in neighboring Israel.
Israel is extremely concerned about the situation in Egypt because President Hosni Mubarak has preserved the peace treaty between the two countries for 30 years. Israel considers the treaty a strategic asset, and it fears that a regime change in Egypt could put the peace agreement in danger.
Israeli analyst Yoni Ben-Menachem says an Egyptian government led by opposition groups or the Muslim Brotherhood would take a harder line on Israel.
“It might be a hostile regime to Israel that will not respect the peace treaty with Israel and will cancel it, abolish this agreement, and we will go back to a situation of hostility between Israel and Egypt,” said Ben-Menachem.
That would complicate Israel’s situation strategically, because it already shares two borders with hostile elements: Hezbollah in Lebanon and Hamas in Gaza. And Ben-Menachem believes neighboring Jordan could be next.
“This can create the domino effect, and this fall of the regime in Egypt can also continue to Jordan, and also with Jordan we have another peace treaty,” added Ben-Menachem. “And if this will happen, if there will be a strategic change in the Middle East, that will not be for the benefit of the State of Israel.”
While the treaty between Egypt and Israel is often described as a “cold peace,” Ben-Menachem says Israel values its relationship with President Mubarak and sees him as a bridge between Israel and the Arab world.
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