Brotherhood businessman urges business to play role in development

One month after the regime of former President Hosni Mubarak fell, in March 2011, Hassan Malek was released from jail. He had spent four years and three months in prison, alongside 39 others, including Muslim Brotherhood leader and, until yesterday, presidential candidate Khairat al-Shater, on charges of illegally funding the Muslim Brotherhood, a group that was banned under Mubarak, and for alleged money laundering.

A year later, smartly-suited, the 54-year-old businessman walks into a sleek-looking office in Heliopolis, a middle-class neighborhood, with a boardroom that has the usual furnishings of men and women that mean business: ergonomic black leather chairs that tuck neatly into a long rectangular glass table. This is the base of the Egyptian Business Development Association that Malek launched this March.

In the corner of the room, a white board stands with blue marker sketches of the association’s governance structure, a recent subject of discussion by its 15-member board, which Malek heads and whose members include other prominent Muslim Brotherhood businessmen.

Malek wasted no time in getting back to business after his release from jail. In April of last year, in the midst of Egypt’s revolutionary fervor, when many of his nemeses found themselves behind bars and as his allies in the Islamist movement were gradually rising to power, he began making plans to set up Ebda (the acronym translates to the Arabic word for “start”). Its slogan is: “It’s never too late to start.”

“Truthfully, before I came out of prison and during the period that Gamal Mubarak was being prepared for inheriting the presidency, I decided not to take part in any business or trade in Egypt,” he tells Egypt Independent in an interview in his office. “Personally, I would not be able to operate in this environment, in which Gamal would be taking over, especially since this was the third time that I was brought before the courts and put in prison. I wasn’t prepared to put up with this again.”

After the 25 January uprising, Malek decided to work “hard and fast” to ride the wave of change. “I got involved with civil society work, especially as it related to businessmen, because in the previous period they did not play an appropriate role in society,” he says, in reference to the crony capitalists associated with the Mubarak regime.

Over the last year, Malek has been meeting with a large number of businessmen, not just from the Brotherhood, he emphasized, but a wide section of society, to encourage them to play a more developmental role in Egypt’s economy. It culminated in the creation of Ebda, which aims to act as a channel between investors and the government, encourage the development of small and medium-sized enterprises across Egypt, and conduct vocational training.

“Business should benefit the widest possible base of society, and not just a small tier, as was the case under Mubarak,” Malek says. By drawing upon his years of experience as a businessman and innovator, he plans to accomplish this through Ebda.

Between 1988 and 1995, Malek came up with the idea of helping small and medium-sized enterprises to manufacture, exhibit and sell their products through professional syndicates. This was a novel idea for syndicates at the time, Malek says. He used to act as a coordinator between these businesses and help them find the right market, as well as assist them in getting funding from banks. This was accompanied through social projects in health care.

“But every time I was successful, the government would hit me with a court case,” he adds.

Through Ebda, Malek wants to encourage Egyptian businesses in a similar fashion to expand their manufacturing capabilities in various sectors, so that the economy is based on production and exports, and not just trade.

Ebda takes its inspiration from Turkey’s 22-year-old Independent Industrialists and Businessmen’s Association (MUSIAD), with whom it has a cooperation agreement.

MUSIAD played a role in helping decentralize Turkey’s economic development, particularly in the development of small and medium-sized enterprises throughout the country. In doing so, the association also helped cement the power of Turkey’s Islamists, whose entrepreneurs set up the association.

Today, MUSIAD’s companies represent 15 percent of Turkey’s exports, and Malek thinks Ebda has an even better chance for success.

“MUSIAD started with only five members at its launch, while we have 150 members already and 700 applicants are on the waiting list. What MUSIAD did in 22 years, I hope to do in five,” he said.

Ebda also looks to similar associations in Malaysia, the US and Europe as models, and sees itself as a continuation of existing associations in Egypt rather than a replacement. It is also planning an annual conference for building relationships with external partners and encouraging business and investment, but the date has yet to be decided.

On a personal level, Malek says he is still feeling the effects of the financial hit he took when the Mubarak regime placed a ban on his assets. This was only lifted two months ago, meaning that from the time he was released from prison until earlier this year, Malek was not allowed to trade using his own wealth and businesses.

His business empire is consolidated under the Malek Group, which deals in furniture, clothing, yarn, industrial raw materials and electronics. A graduate with a degree in commerce from Alexandria University, Malek comes from a trading and industrial family that deals in textiles and ready-made clothes.

Malek says he plans to expand his own businesses, but it is too early to make any announcements given that “Egypt has yet to stabilize.”

In 2006, he began to build a large, 1,000-square-meter furniture factory, but it was shut down. He plans to revive it, though it is not clear when. “I don’t produce anything now, just trade,” he says.

Malek and Shater are former business partners, and still have some companies in common. In 1986, they launched the software company Salsabil, but it was also shut down by the government.

“In February 1992, after seven years of hard work making Salsabil one of the biggest computer companies in Egypt and the Middle East, they accused me along with my partner, engineer Khairat al-Shater, of belonging to, and attempting to revive, the Muslim Brotherhood group, attempting to hold a coup and threatening social peace, the same repeated and silly charges. Due to this, my company was closed and I remained in prison under provisional detention with no fair trial or any evidence to prove these charges. I was released after that to find my company closed and my business stalled,” Malek said in an interview with the Muslim Brotherhood’s English-language news portal Ikhwanweb in 2007, while serving another prison stint.

Keen to avoid talking about politics, Malek says he is not a leader in the Muslim Brotherhood, just an ordinary member. He also is not a key funder of the group, but pays his annual dues as other members do. “This ranges between 5, 7 and 10 percent of a person’s annual income,” he says.

Malek won’t reveal whether he supports Shater’s presidential candidacy, but says, “At the end of the day, I will support whatever the Muslim Brotherhood decides.”

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