Geopolitics

In Egypt, One Presidential Candidate Counts On Quiet 'Nostalgia' For Old Regime

Ahmed Shafik's giant posters are all over Cairo as Egypt goes to the polls to pick a new president. Well-financed, this candidate was once a minister for deposed President Hosni Mubarak. He famously offered to pay Tahrir Square demonstrators in c

Posters for Egyptian presidential candidate Ahmed Shafik (Gigi Ibrahim)
Claire Talon

CAIRO - On the ninth floor of her apartment building in Cairo, Alia Mortada is furious. For weeks, she hasn't opened her shades in order to avoid seeing Ahmed Shafik's "Machiavellian" smile.

There he is: self-confident and smug in his legendary blue sweater, the former fighter pilot, Air Force commander and minister of civil aviation for Hosni Mubarak is taunting both Egyptian secular revolutionaries and Islamists. He looks down upon them from the countless giant billboards his wealthy businessman friend Tareq Nour bought up in Cairo in the last few months.

"It's so ironic," Mortada laments. "Ahmed Shafik did all he could to make the revolution fail, and now he is using the elections to run for the presidential office. He's all we see!"

There's no denying the man has a sense of humor. Nominated Prime Minister by Hosni Mubarak while the people of Tahrir Square were clamoring for his resignation, Shafik infuriated demonstrators by offering to pay them candy if they went home. Forced to step down in March 2011, he hasn't missed an opportunity to mock the "so-called revolution" that "pushes Egypt closer to chaos every day" since, insisting that the "martyrs' of the uprising are just a bunch of "dead people."

"I, Ahmed Shafik, fighter, Sufi and descendant of the Prophet…" proclaims this flamboyant embodiment of the counter-revolution. "Our target? The Couch Party," bluntly declares campaign director Mahmoud Ibrahim. "Most Egyptian families are afraid of the Tahrir Square demonstrations and only want one thing: stability and security."

Ahmed Shafik promises "acts, not words," with a hyper-presidential regime centered around a head of State who can nominate "commissaries' throughout Egypt to "collect the citizens' complaints and grievances."

Accusations of corruption

His credentials: shooting down two Israeli fighter jets during the 1973 war and transforming the old Cairo airport into a blazing new building with an additional terminal, thanks to a World Bank loan. Even his critics admit that he hoisted venerable national airline Egyptair to the ranks of the best international carriers.

But since his candidacy, hundreds of Egyptair employees have accused Shafik of corruption in the airport's unfinished construction site. "The only reason he wanted to build a luxurious airport was to line his pockets," accuses Mohammed Abderrahman, from the airline's financial department. "We didn't have enough money left to buy new parts for the planes, up to the point where Egyptair suppliers wanted to be paid upfront."

Since the revolution, over 24 complaints have been registered against him. He is accused of selling land parcels adjoining the airport to businessmen close to the regime for the ridiculously low price of one Egyptian pound, or 0.13 euros, per square meter.

But Ahmed Shafik is still popular with the defunct National Democratic Party (NPD), and with several businessmen, who enjoy his reputed efficiency and virility, spiced up with a notorious taste for dancing girls and alcohol. His advisors don't conceal the fact that these wealthy entrepreneurs are financing his impressive ad campaign.

The Parliament has voted a law barring former ministers and NPD members from running for office. But Ahmed Shafik appealed against his disqualification, accusing the law of being unconstitutional. He won the appeal thanks to the support of the High Electoral Commission, whose independence from the military authorities is questionable.

It's enough to wonder whether this improbable candidate wasn't pushed to run by the high-ranking members of the Supreme Council of the Armed Forces, especially its chief, Field Marshal Hussein Tantawi. Rumor has it the pair are indeed close friends.

Read the article in French in Le Monde.

Photo - Gigi Ibrahim

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Economy

Merkel's Legacy: The Rise And Stall Of The German Economy

How have 16 years of Chancellor Angela Merkel changed Germany? The Chancellor accompanied the country's rise to near economic superpower status — and then progress stalled. On technology and beyond, Germany needs real reforms under Merkel's successor.

Chancellor Angela Merkel looks at the presentation of the current 2 Euro commemorative coin ''Brandenburg''

Daniel Eckert

BERLIN — Germans are doing better than ever. By many standards, the economy broke records during the reign of outgoing Chancellor Angela Merkel: private households' financial assets have climbed to a peak; the number of jobs recorded a historic high before the pandemic hit at the beginning of 2020; the GDP — the sum of all goods and services produced in a period — also reached an all-time high.

And still, while the economic balance sheet of Merkel's 16 years is outstanding if taken at face value, on closer inspection one thing catches the eye: against the backdrop of globalization, Europe's largest economy no longer has the clout it had at the beginning of the century. Germany has fallen behind in key sectors that will shape the future of the world, and even the competitiveness of its manufacturing industries shows unmistakable signs of fatigue.

In 2004, a year before Merkel was first elected Chancellor, the British magazine The Economist branded Germany the "sick man of Europe." Ironically, the previous government, a coalition of center-left and green parties, had already laid the foundations for recovery with some reforms. Facing the threat of high unemployment, unions had held back on wage demands.

"Up until the Covid-19 crisis, Germany had achieved strong economic growth with both high and low unemployment," says Michael Holstein, chief economist at DZ Bank. However, it never made important decisions for its future.

Another economist, Jens Südekum of Heinrich Heine University in Düsseldorf, offers a different perspective: "Angela Merkel profited greatly from the preparatory work of her predecessor. This is particularly true regarding the extreme wage restraint practiced in Germany in the early 2000s."

Above all, Germany was helped in the first half of the Merkel era by global economic upheaval. Between the turn of the millennium and the 2011-2012 debt crisis, emerging countries, led by China, experienced unprecedented growth. With many German companies specializing in manufacturing industrial machines and systems, the rise of rapidly industrializing countries was a boon for the country's economy.

Germany dismissed Google as an over-hyped tech company.

Digital competitiveness, on the other hand, was not a big problem in 2005 when Merkel became chancellor. Google went public the year before, but was dismissed as an over-hyped tech company in Germany. Apple's iPhone was not due to hit the market until 2007, then quickly achieved cult status and ushered in a new phase of the global economy.

Germany struggled with the digital economy, partly because of the slow expansion of internet infrastructure in the country. Regulation, lengthy start-up processes and in some cases high taxation contributed to how the former economic wonderland became marginalized in some of the most innovative sectors of the 21st century.

Volkswagen's press plant in Zwickau, Germany — Photo: Jan Woitas/dpa/ZUMA

"When it comes to digitization today, Germany has a lot of catching up to do with the relevant infrastructure, such as the expansion of fiber optics, but also with digital administration," says Stefan Kooths, Director of the Economic and Growth Research Center at the Kiel Institute for the World Economy (IfW Kiel).

For a long time now, the country has made no adjustments to its pension system to ward off the imminent demographic problems caused by an increasingly aging population. "The social security system is not future-proof," says Kooths. The most recent changes have come at the expense of future generations and taxpayers, the economist says.

Low euro exchange rates favored German exports

Nevertheless, things seemed to go well for the German economy at the start of the Merkel era. In part, this can be explained by the economic downturn caused by the euro debt crisis of 2011-2012. Unlike in the previous decade, the low euro exchange rate favored German exports and made money flow into German coffers. And since then-European Central Bank president Mario Draghi's decision to save the euro "whatever it takes" in 2012, this money has become cheaper and cheaper.

In the long run, these factors inflated the prices of real estate and other sectors but failed to contribute to the future viability of the country. "With the financial crisis and the national debt crisis that followed, economic policy got into crisis mode, and it never emerged from it again," says DZ chief economist Holstein. Policy, he explains, was geared towards countering crises and maintaining the status quo. "The goal of remaining competitive fell to the background, as did issues concerning the future."

In the traditional field of manufacturing, the situation deteriorated significantly. The Institut der Deutschen Wirtschaft (IW), which regularly measures and compares the competitiveness of industries in different countries, recently concluded that German companies have lost many of the advantages they had gained. The high level of productivity, which used to be one of the country's strengths, faltered in the years before the pandemic.

Kooths, of IfW Kiel, points out that private investment in the German economy has declined in recent years, while the "government quota" in the economy, which describes the amount of government expenditure against the GDP, grew significantly during Merkel's tenure, from 43.5% in 2005 to 46.5% in 2019. Kooths concludes that: "Overall, the state's influence on economic activity has increased significantly."

Another very crucial aspect of competitiveness, at least from the point of view of skilled workers and companies, has been neglected by German politics for years: taxes and social contributions. The country has among the highest taxes on income in Europe, and corporate taxes are also hardly as high as in Germany anywhere in the industrialized world. "In the long run, high tax rates always come at the expense of economic dynamism and can even prevent new companies from being set up," warns Kooths.

Startups can renew an economy and lay the foundation for future prosperity. Between the year 2000 and the Covid-19 crisis, fewer and fewer new companies were created every year. Economists from left to right are unanimous: Angela Merkel is leaving behind a country with considerable need for reform.

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