Will Egypt’s new finance minister be open to discussion?
By Farah Halime, Rebel Economy
Is a public finance professor who specialises in Islamic finance really the CV that jumps out at you for Egypt’s critical post of finance minister?
But to President Mohamed Morsy, the unknown Cairo University professor Al-Morsy Al-Sayed Hegazy was the right choice to replace Momtaz El-Saeed, an advocate of the $4.8 billion International Monetary Fund loan. Saeed had been one of a few ministers to retain his position since his appointment to Kamal El-Ganzoury’s interim government in December 2011.
Hegazy, whose political experience appears to have only just started, may find it difficult to reconcile his Islamic finance specialisation with the modern economic framework needed to push Egypt out of its economic lull.
In his book: The Long Divergence: How Islamic Law Held Back the Middle East, Timur Kuran argues that the real cause of underdevelopment and economic stagnation in the Middle East is Shari’a, or Islamic law. The author argues that while other countries adapted their philosophies and approach to economy according to modern times, the Middle East was very late in adopting key institutions of modern economy.
The law has not evolved and adjusted to the new world of business and finance. It’s not an impassioned critique of Islamic law but more of a reflection of how Shari’a essentially lacks innovation and does not fit the 21st century.
However, there is a catch to the idea as Ziauddun Sardar, who reviewed the book, writes in The Independent:“It is based on the assumption that western financial institutions, and selfserving corporations, are the best possible model for development. Given the havoc that these institutions have caused in recent times, and the fact that injustice and obscene wealth is integral to their make-up, I think it is an assumption too far.”
He adds, though “Kuran’s thesis is contentious; it does provide us with an incentive to reformulate Islamic law. It is an excellent starting-point for a debate long overdue.”
The question(s) I have is: Will Mr Hegazy be open to debate or will his thought process be driven by his boss Morsy and the Muslim Brotherhood?
The Morsy administration’s biggest failing has been to lead the Islamists rather than the country. There is no space for such polarisation in a modern economic framework. Islamic finance is not going to save Egypt’s economy but can play a part in redefining the country’s aims – a focus on the middle and lower classes rather than the rich, and a method of relieving the millions who are suspicious of conventional banks and their high interest rates.
If Egypt’s new finance minister lasts long enough to make any critical decisions, let’s hope he can think past religion to the nation.
Farah is a business journalist and founder of Rebel Economy, a blog focused on how regional economies are rebuilding after the Arab Spring. www.rebeleconomy.com