July 15, 2024

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Solidarity in Success

Egypt And Global Business: Doing The Long Term

5 min read

Radu Magdin is CEO of Smartlink Communications. Global analyst, consultant, passionate about leadership, communications and competition.

If one may pardon Egyptian businesspeople anything in particular, it is what one may call a significant time horizon. It makes historical sense to keep your eyes on the ball. Egypt hosted one of the world’s first contiguous civilizations, early philosophical developments that Europe received as Platonism, Aristotle’s erstwhile pupil otherwise known as Alexander the Great, Mark Anthony’s middling years, Napoleon’s autobiographical higher aspirations (paywall), the Suez Crisis that put to rest the notion of the British Empire and the maritime cargo ships that marked the Third Wave of Globalization. As the Nile kept flowing and millennia of historical developments flickered by, Egypt continued unabated.

So did Egyptian business, many representatives of which I had the honour to listen to, understand and advise. With that above in mind, it might merit looking at how that temporal perspective impacts business as well what Western business can perhaps glean from it.

The Public Is Private

I find one of the genuinely precious mythologies of Western Capitalism in the past 50 or so years to be that the state is a secondary actor in economic growth, tasked with setting the rules of the game, dusting off the furniture and otherwise keeping to itself in all matters. However, in Egyptian business, many see themselves as part of a much older tradition of the Mediterranean commercial class that opened up what was already an ancient civilization by any standard to bring their country trade, connections and wealth.

That wasn’t—and isn’t—a secondary concern but very much part of their self-conception as playing a particular role in the greater social hierarchy. In turn, that self-conception lends itself to the public-private partnerships that are common in the region. For example, Egypt’s Education 2.0, part of Egypt 2030 plan, focuses on private-public partnerships as part of a greater wave of liberalization—notably, today about 43% of STEM students in Egypt are female. Furthermore, starting in 2021 when the minister for International Cooperation, Rania A. Al-Mashat, pushed for liberalizing laws in areas such as infrastructure development, a new crop of partnerships came about, including with the World Bank.

Making Development Happen

In my experience, I’ve found that there’s a method to this in business. Western businesspeople may take for granted that decent infrastructure, a productive and well-educated workforce, and open doors to trade will be in place. Developing world businesspeople cannot assume all of the above and, ultimately, there is nothing more entrepreneurial than seeing a need for something and meeting it. But it would be close to an insurmountable financial burden to do so in isolation. That can happen, however, through public-private partnerships whereby the government secures part of the funding for business, sets guidelines and, at least in part, lets business make development happen.

Self-evidently, it could be seens as a recipe for large-scale corruption and shoddy work, passing blame from electable governments to poorly accountable private individuals and, ultimately, might feel like a spur to the sort of non-productive entrepreneurship that seemingly every development research paper warns about and every book about politics sees as the road to state capture.

That said, the example many of the aforementioned books and papers point to, the United States, actually proceeded in the same manner at one point with, implicitly, quite a degree of success. The American railroads were a public-private partnership: the Pacific Railway Act stipulated that railway companies could issue their own government-backed bonds and gave public land to them. It worked. According to the Library of Congress, the 45,000 miles of railway that were to be found in America in 1871 expanded by over 170,000 by 1900. In fact, America itself started as a public-private partnership of sorts, at least until the private part decided to cross the Delaware. Quite simply, public-private partnerships are, historically, as American as Johnny Appleseed and apple pie.

Furthermore, there are advantages to public-private partnerships that often mitigate any issues of accountability, according to McKinsey. There is a clear delegation of responsibility towards the private actor; there is long-term contract in place that will likely stretch beyond the electoral cycle and an incremental methodology need not be the case, at least significantly less so than with direct government action.

The Egyptian Case

Consequently, there’s little surprise that Egypt might very well focus on a system that worked so well for no other than America.

Moreover, while American partnerships were focused on American companies, contemporary applications need not be: Ms. Mashat explicitly outlined USD$3.2 billion worth of international partnerships for Egyptian business to harness the full power of international business and international partnerships to bring forward the vision of Egypt 2030. With that in mind, I’d advise Western business leaders to take an honest look at what is rapidly becoming the Egyptian case study in public-private partnerships and reconsider the long term.

In my experience, I found it close to crucial to choose the right framework for the project in order to ensure the right balance between ongoing feedback and a clear set of demands. Projects that focus on clear-cut deliverables such as infrastructure are best laid out at the start and a waterfall project management system adopted: clear demands, clear documentation, clear deadlines. However, projects in areas such as schooling or medical services often require both business and government to communicate and adapt to changing technological and social contexts, which in turn requires a greater degree of feedback and flexibility.

This is key to making certain that the problems which will invariably show up along the way are properly dealt with: ultimately, both business and government want clear-cut documentation for a bridge and most issues will be resolved by sticking to a well-laid-out initial plan. Meanwhile, both business and government need a framework to communicate and reach consensus on the best features an e-learning system might have.

Now, having millennia of history around probably helps with perspective but greater undertaking and working with the state to create long-lasting change shouldn’t necessarily be left to Elon Musk—at least Egyptian businesses seems to think so.


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