Tahia Masr Fund: A little bit of transparency and a lot of exemptions

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Its name has been associated with controversy and lack of transparency; it is the fund that has received the most exclusive and unprecedented benefits, which were not available to other funds in the country’s history of funds.

The Tahia Masr Fund (Long Live Egypt) dates back to June 2014, when Abdel Fattah al-Sisi announced that he had waived half of his EGP 42,000 ($2,660) salary, he said, and half of the wealth he owned in favour of Egypt. After that, al-Sisi called on businesspeople to pump their money and donations, which was equivalent (at the time) to more than $14 billion and said that he aimed to raise at least EGP 100 billion ($1,574 million). Since that time, there has been no operating company in the country, or businessman, artist, athlete, or even state institutions such as the judiciary with its branches, unless they made donations over and over again. The last of these donations was what the Emaar Misr company made with an amount of EGP 90 million ($1,417), as well as the Supreme Council of Administrative Prosecution, which donated EGP 3 million ($47,000).

In July 2015, the official gazette published that the fund has a legal personality and enjoys financial and administrative independence. A committee made up of civilians and former and current military leaders manage the fund. From time to time, and over the course of more than four years, an announcement is made for a request for donations from the Egyptians in favour of the fund, and some of these invitations came from Sisi personally, such as his controversial call “Sobh on Egypt with a pound.” His call to obtain change from banks and institutions for the fund’s benefit also sparked controversy.

According to the presidential decree approved by the Egyptian parliament, financial control over the fund was implicitly cancelled and removed from the state’s general budget, amid an atmosphere of secrecy imposed on the accounts and budget of the fund. In February 2016, al-Sisi revealed, for the first time and in his own words, that the funds received by the fund amounted to EGP 4.7 billion (about $300 million). In March 2017, al-Watan newspaper published an interview with the Fund’s Executive Director, Mohamed Ashmawy, under the title “The President is upset about the fund’s financial situation,” announcing that the volume of donations amounted to only EGP 7.5 billion ($500 million), most of them from the middle class.

In January 2018, Ashmawy returned to say that the donations received by the fund amounted to EGP 10 billion ($630 million), a statement over which he resigned a few days later, without details of the reasons for his resignation. Weeks later, specifically in February of the same year, the Executive Committee of the fund held a meeting, which it said was to review the total donations of the fund, which reached EGP 7.5 billion, and the status of the fund’s investments in several companies (whose names have not been announced).

The huge discrepancy in the figures announced by officials of the fund raises doubts about the true size of its budget, the means of spending it, and the nature of the investments in which the fund participates. The fund’s current Executive Director Ibrahim Karam, was reluctant to talk about the fund’s resources, saying that it was a “sovereign fund.” This ambiguity prompted Hamdi Rizk, a journalist close to the authority, to question in his article in an Egyptian newspaper in 2016, “Is it not the right of the donors to the Long Live Egypt Fund to have the complete documented information about the financial behaviour of their donations?”

The ambiguity surrounding the Long Live Egypt budget is added to the locally circulating reports of forcing celebrities and extorting opponents to support the fund. According to the fund’s former executive director, Muhammad Ashmawi, the fund will present an account statement for the service projects that it implements every three months at least. Still, he did not mention anything about the account statement of its resources, expenses, and salaries of its employees.

Although the calls to donate for the benefit of corona patients sparked a new controversy, months ago, the House of Representatives’ announcement of a discussion of a bill that exempted the proceeds and grants of the fund from all taxes, fees, and customs, raised a broader debate. This is not the first time the fund has been exempted from fees and taxes. In July 2015, a decision was issued that the fund would enjoy financial and administrative independence, which abolished its financial control.

The economist Mohamed Rezk criticised the imposition of secrecy on al-Saduq’s accounts, saying: “The fund is a container in which state property and the proceeds of donations are placed away from the control of the state agencies entrusted to monitor and control public money.” He considered that the recent decisions regarding exempting this fund from all fees and taxes “are just a measure to legitimise this entity.”

Rizk described the fund as “an opaque, bastard entity and no one knows the outcome of the money that enters or exits it,” in addition to its source, which is a great hotbed for corruption and a receptacle in which state property can be hidden. He did not rule out the exploitation of Long Live Egypt as a tool to sell state property or to surrender it to others, away from the laws and oversight of state agencies entrusted with controlling aspects of spending public money in collusion with businessmen and private sector companies.

The economist Mohamed Kamal Okdeh also described the new Long Live Egypt exemptions as a “catastrophic approval,” and complimented a long series of fortifications and exemptions, and considered them “suspicious decisions.” And he warned that such decisions support the absence of transparency and open the doors of corruption in the absence of any transparency.