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The great danger threatening Egypt

January 28, 2014 at 1:22 am

At a time when internal problems preoccupy most Egyptians, there is an external problem that no one pays attention to; one that could leave Egyptians sleepless and put the country in a perilous economic and international position. This danger comes in the form of the law suits (arbitrations) filed against Egypt by the Israeli Electric Company, the East Mediterranean Gas Company and some of its shareholders, the Israeli Mirhav Company, the Israeli Impal Company, Thai BBT Company, Jewish American businessman Sam Zail and Hussein Salem.

They are asking for compensations worth tens of billions of dollars, and there is no doubt that Israel is the one in the background pushing the cases forward, along with other external parties that are meddling with Egypt and its security and do not want it to be stable. Among those accused of the greatest culpability in getting Egypt into this fix; those who did business with this dubious company allowing Hussein Salam to claim billions of dollars, are members of the ousted Hosni Mubarak regime – ex-intelligence chief, Omar Suleiman, and Petroleum minister, Sameh Fehmi, who now safely lives at his home.

The agreement signed between the Egyptian government in 2005 and the East Mediterranean Company, controlled by Hussein Salem with Omar Suleiman as the government mediator, stipulated that Egypt would export 1.7 million cubic meters of Gas to Israel yearly at a price of between 70 cents to 1.5 for twenty years. This is almost the same as the cost price and is no more than a quarter of the international price. Moreover, the deal also exempted the company from paying taxes for three years which has lost Egypt tens, or perhaps even hundreds of billions of dollars that went into the pockets of various Israelis, Hussein Salem and Omar Suleiman. The latter, it has been claimed by a number of sources, has a bank account in one of emirates with seven billion dollars in it.

Now, Hussein Salem has put forward an offer of reconciliation to the Egyptian government, which if not taken up, he has threatened to resort to arbitration – something his partners have already done. Unfortunately, many contracts that have been signed – whether within the context of this agreement or others – have always rendered Egypt as the weaker partner and expose it to extreme blackmail making it the first and last loser. This is what is going on right now. The main problem is that resorting to arbitration is the possibility that Egypt could lose quite significantly, which would mean that all its assets abroad would be subject to seizure in the event it is unable to pay.

For instance, according to the terms of this arbitration, Egypt Air airplanes could be seized if they land in an airport outside of Egypt. Also, all Egyptian government property and money, except for embassies, could be seized. As such, all agreements which signed during Mubarak’s era must be looked into very carefully. Moreover, there is a need for some decent law men to study these cases and decide if this can be solved with money, since these corrupt men did not commit any criminal offenses but rather made a lot of money. This money which was looted by Hussein Salem and others, or as much of it as is possible, could be gotten back and it could be demanded that arbitration is taken off the table to avoid the associated risk to Egypt. Or do we want to continue on the road to a losing end? We need the opinion of honest law men; otherwise Egypt will be on its way to a great danger.

The author is an Egyptian writer and presenter at Al Jazeera TV. This article is a translation of the Arabic which appeared in Al Shorouk Newspaper, 15 May 2013

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.