Egypt Courts Foreigners With A View To Big Money & Economic Liberalization
Cairo to allow foreigners with deep pockets to purchase citizenship
Egypt’s parliament passed a bill to allow foreigners to purchase citizenship. Those interested must deposit at least 7 million Egyptian pounds, the equivalent of $392,000, into a local bank account and agree to forfeit the amount over to the public treasury in exchange for a passport after five years living in the country.
Cairo’s move comes amid ongoing economic hardships that intensified in the wake of the 2011 Arab Spring, leaving nearly a third of Egypt’s 100 million-strong population under the poverty line.
There are numerous other countries that allow foreigners to purchase citizenship, mainly smaller island nations such as Malta and Grenada, but also European Union countries like Austria (for a whopping $23 million in direct investment) and Cyprus. One can also purchase Turkish citizenship for a cool $1 million.
Reasons individuals purchase citizenship range from a desire to escape political and security instability to lessening tax burdens, particularly as regards capital gains.
For governments such as Egypt the motivation is clear: namely, to encourage the inflow of much-needed cash into stagnating and often overly-regulated economies.
“After accepting support from the International Monetary Fund [to the tune of a $12 billion loan], Egyptian President Abdel al-Fattah al-Sisi is continuing liberalization efforts in the economic and political arenas,” Zvi Mazel, a Middle East expert at the Jerusalem Center for Public Affairs and former Israeli ambassador to Egypt, explained to The Media Line.
“In the past, even four years ago, it was foreigners were not even permitted to purchase land in Egypt,” he noted while expressing surprise at Cairo’s latest initiative. “But this goes in line with al-Sisi addressing the Egyptian public about the need for more progressive changes in the country.”
Nevertheless, Mazel stressed that the Egyptian leader will need to walk a fine line between maintaining support from independent parliamentarians and preventing public protests targeting government measures to open up the largely conservative nation.
Ashraf Naguib, CEO of Global Trade Matters, a company that connects regional investors with non-oil-related Egyptian businesses, believes the new law will attract well-off individuals from nearby countries engulfed in turmoil. “There is a great number of people coming to Egypt from the Gulf states, the Palestinian territories, Syria and North African nations such as Libya and Sudan,” he told The Media Line. “Egyptians don’t call these people refugees as we welcome them to come and work, have an education and share the benefits of public services like normal citizens of the country.”
Naguib conceded, however, that these individuals often have greatly disparate spending powers, even when hailing from the same state. “There are affluent Syrians who come and don’t want to return to Syria, and there are Syrians who I see in my neighborhood cutting hair or selling fruits.” He thus postulated that the citizenship bill is intended for the former, wealthier foreigners who are liable to have a greater impact on Egypt’s economy.
There are other historical factors at play as well, according to Naguib. “Some of the rich Gulf countries have only been around for about 40 years; so, before that, Egypt was the Arab pride in the Middle East and this connection understanding and connection will always be there. Likewise, Egypt has always been the melting pot of the region as the center of culture, production and business,” he added.
In this respect, Naguib even referred to some foreigners as more “Egyptian” than himself, before highlighting a running joke among his peers.
“People want to pay that much to come to Egypt when all we want is to leave!”
(David Lee is a Student Intern in The Media Line’s Press and Policy Student Program)
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