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02.16.11

Shafik Gabr: What Egypt's Top Tycoon Fears Most

The well-connected Cairo industrialist warns Lloyd Grove that Hamas, Hezbollah, and Iran are trying to destabilize Egypt and the country could descend into anarchy.

The well-connected Cairo industrialist Shafik Gabr warns Lloyd Grove that Hamas, Hezbollah, and Iran are trying to destabilize Egypt and the country could descend into anarchy.

Egyptian industrialist Shafik Gabr was in Davos, Switzerland, when the revolution began. It was January 26, the second day of protests in Tahrir Square, and from 1,600 miles away at the World Economic Forum—teeming with financiers, celebrities, and heads of state in the crisp, Alpine air—it didn’t look much like a revolution.

But by the time Gabr arrived in Cairo on Friday the 28th—having cut short his schmoozing to rush home on his Gulfstream 200—the planet’s most populous Arab country had changed forever.

And not necessarily for the better.

“The stock market is closed, the banks are closed, transfers are delayed. The economy is in paralysis,” Gabr told me this week from Cairo, where he is chairman and managing director of the ARTOC Group, a real estate-engineering-consumer products-media conglomerate that employs 3,500 Egyptians. “I am a person who has always believed in the importance of orderly transition with law and order, because the minute you lose law and order is the minute you enter into a dark tunnel, a vicious circle…. If we do not have law and order—which as of yet we do not—then Egypt will become a very complex, dangerous, fluid place.”

The 58-year-old Gabr—who speaks idiomatic American and has degrees in business and economics from Cairo’s American University and the University of London—is a suave and gregarious world traveler. He is supremely well-connected, not only on the Egyptian power grid but also in Washington, where he boasts contacts in the White House, Congress, the Pentagon, and the State Department.

Except when it comes to making money, Gabr is a committed incrementalist. He has become a near-billionaire while walking a fine line—making friends and influencing people in the regime of deposed President Hosni Mubarak while insistently pushing democratic reforms and economic empowerment for ordinary Egyptians.

Now gradualism had given way to anarchy. The peril was apparent as soon as Gabr landed.

“Coming from the airport, I saw people in the street throwing stones, carrying weapons,” he said. “When I came back, my daughter was at home with her grandmother, and for six and a half hours I basically walked the entire neighborhood of Mokattam”—where his family lives in a fabulous hillside mansion overlooking the city—“just to make people appreciate how dangerous things were.”

Gabr went on: “People were starting to pack things to run out of their houses. So we started civil patrols, like Neighborhood Watch, with teams of neighbors walking through the neighborhood at all hours. We had machine guns fired at us. My speculation is that the criminals broke out of jail and some of them took weapons out of police stations.”

It was obvious to Gabr that there was method to the madness.

“If we do not have law and order—which as of yet we do not—then Egypt will become a very complex, dangerous, fluid place.”

“There was a serious plan to scare the populace, no question about it,” he said. “There was a huge number of police stations that were torched all at the same time, all in the same manner. I cannot attribute it to any party. I can say very honestly that there were factors playing a major role beyond the youths in Tahrir Square, to torch, attack, break cells in the prisons for prisoners to be released, to steal police uniforms, to steal armaments, in the very same exact manner across Egypt, not just Cairo. And that requires planning. It’s almost like one of those movies where you have sleeper cells.”

Among other possibilities, Gabr suspects the culprits might have been foreign agents: “Is it the Muslim Brotherhood? I do not know. Is it other vested interests?... I do not know. But it was definitely violent people,” he said. “Among the innocent, legitimate people who were demonstrating, there were definitely others who had their own agenda. Just ask yourself the question: Who’s interested in destabilizing Egypt? You tell me. It’s people right down here in our neighborhood. Hezbollah. Hamas. Iran. They publicly spoke in favor of the fall of Egypt.”

For the past three weeks, as Egypt’s military took control of the 85 million-person country with a promise to oversee the transition to a new constitution and democratic elections, Gabr has been working tirelessly to position himself on the right side of history.

“I have been all over Cairo. I have been walking the streets,” he told me, adding that he’s been urging young demonstrators to form a party of their own in order to make their presence felt in the Egyptian body politic. “I have always been frustrated by the slow pace of reform.”

Gabr said he, too, has been a victim of government corruption. "I personally suffered in the last six or seven years from people who denied our companies permits and denied our companies even the ability to build roads to our projects, and some of our property was confiscated," he told me. "So I saw that there was a lot of favoritism by government officials who had their own agenda. I don’t know if they wanted bribes, but that’s something we’ve never done in the 40 years of our being in business. And it’s something we will never do.” ARTOC, which was founded by Gabr's father, turns 40 in November.

In the early 2000s, Gabr helped start the Arab Business Council, a multinational group of capitalists that attempted to sell economic reform and greater freedom to the region’s traditionally autocratic regimes. “Across the Arab world some people listened politely and did nothing,” he said. “Some people worked on some of the issues, including Egypt, which worked on economic reform… but not quickly enough, and not across the board.”

Not everybody was receptive. “I was told by the prime minister of an Arab country that I will not mention, ‘Do not talk about this publicly. You will be condemned in our country. You will not be able to do business or even sit without us keeping an eye on who you’re talking to.’ ”

In the end the effort fizzled and the group disbanded. “Some of them had more interest in keeping their governments the same way because they benefited from it,” Gabr said. “Others were pushing for change and found themselves being pushed back in ways that were sometimes personal and sometimes generic.”

A decade later, the change agents had moved from the boardroom to the street, and the calcified Mubarak regime found itself woefully behind the curve. “There was mismanagement of the event,” Gabr told me. “If the Egyptian leadership had provided the proper response to the demands of the 25th of January, the rest would not have happened. From the 25th of January to the day Mubarak stepped down, they were always one step too late. After that, vested interests from inside Egypt and from outside Egypt decided that the regime had to go. There were parties that worked to undermine the regime locally and countries such as United States and the European Union that kept zigzagging about where the next step was.”

President Obama—whom Gabr still praises for his June 2009 Cairo speech to the Muslim world urging tolerance, diversity and free expression—wasn’t much help either.

“I believe, quite frankly and sadly, that the U.S. administration sometimes has the best of intentions, but in terms of its implementation it zigzags wildly,” Gabr told me. “My concern as an Egyptian is that we must have peaceful, periodical and legitimate transfers of power through the ballot box. Unfortunately, with the United States saying ‘Muburak has to step down,’ “he needs to stay,’ all that zigzagging truly took that specific goal off the table. By saying ‘Mubarak needs to leave right now,’ ‘No, Mubarak needs to stay,’ the focus became Mubarak when it should have been Egypt.”

The result was a de facto military coup; transition to a civilian democracy is not a sure thing.

“Today we’re under military rule,” Gabr said. “You have no constitution. You have military laws.”

What—and who—is next? How about Shafik Gabr?

“I have never been interested and am not interested now in having a political role,” he insisted in the Egyptian equivalent of a Sherman-like statement. “My focus remains on my work and on my staff—which is, as I call them, my constituency.”

He predicted that the Muslim Brotherhood—which has been variously described in the Western media as reasonable moderates open to compromise or else Islamic radicals bent on imposing Sharia law—will likely enjoy a major role in the new Egypt.

“I believe political parties should be based on secular programs and not religion,” Gabr said. “The Muslim Brotherhood should form a political party or align with an existing one. In terms of support, I forecast that they would secure a minority position. However, they are exceedingly well organized while everybody else isn’t. Their minority position can be much more if it’s cleverly leveraged by them.”

He was dismissive of Mohamed ElBaradei, the Nobel Peace Prize winner and would-be opposition leader who has been living in Switzerland. “Some people who have been living outside Egypt have tried to position themselves—ElBaradei and others whose biggest track record is visiting Egypt,” he said. “What I really hope is that people will start getting serious and put programs on the table, not just sound bites.”

For the moment, Gabr remains “realistically optimistic,” he told me. “And by ‘realistic’ I mean there are a lot of challenges around, more than what meets the eye, that need to be dealt with. Right now we remain in this vicious circle. We’re in the twilight zone right now.”

He added: “What I’m seeing today is lack of order and lack of law. People have taken law in their own hands. People have thrown order out of the window. No society on earth has improved itself without having law and order that applies to everyone…. The worst would be if the autocracy of the regime is replaced by the autocracy of the street. Then we really have a problem.”

Lloyd Grove is editor at large for The Daily Beast. He is also a frequent contributor to New York magazine and was a contributing editor for Condé Nast Portfolio. He wrote a gossip column for the New York Daily News from 2003 to 2006. Prior to that, he wrote the Reliable Source column for the Washington Post, where he spent 23 years covering politics, the media, and other subjects.