Housing Co-operatives: The Future of Mubarak-Era Corruption in Morsi’s Government


When the first of the 2.3 million stone blocks were lugged into place around 4,500 years ago, the great Pharaoh Khufu probably hoped his tomb would stand in glorious isolation for eternity. But four and a half millennia later, the Pyramids of Giza have almost been eaten up by the urban sprawl which over the past half century has steadily engulfed the nearby desert. One of the most spectacular examples of the encroaching city is the Pyramid Gardens estate, a walled compound just over half a mile west of the Giza plateau.

If one needed any convincing about its uncomfortable proximity to the greatest wonders of the ancient world, a quick glance at Google Earth should suffice; the only thing stopping Khufu’s legacy from being entirely surrounded is a strip of desert on its southern flank.

Pyramid Gardens was a product of Nasser-era socialism, established as a housing ‘co-operative’ under a law originally intended to help cash-strapped Egyptians purchase cheap land for affordable homes. But like many of the co-operate projects throughout Egypt, a nasty bout of ideological rot soon set in.

Householders in the compound are currently spearheading a campaign to target corruption within the estate’s management committee, an organization chaired by a former MP in Hosni Mubarak’s ruling National Democratic Party (NDP).

Campaigners say that the committee is tangled up in a corrupt relationship with the estate’s landowners, permitting them to by build illegal additions to apartment blocks, flouting UNESCO regulations established to protect the Pyramids.

“Since 2002, most of the building here has been illegal,” said Mahmoud Sayed, a lawyer who has been leading the campaign to highlight planning abuses on the estate. “It is happening because of the old regime.”

The issue of Mubarak-era corruption in local government is one that many politicians and activists believe goes to the very heart of Egypt’s uprising.

Lower tiers of local administration remain packed with former generals, army officers and ex-members of the NDP – a salient example, say opposition figures, of how Egypt’s revolution has barely got out of the starting gate.

The housing co-operative system is a case in point. Under the original Housing Co-Operative Law, any group of Egyptians who banded together and registered with the Ministry of Housing could be entitled to a 25 per cent reduction on the price of state land along with generous subsidies on steel and cement.

But the plan did not run smoothly. A convoluted registration process turned-off many poorer Egyptians, while following Anwar Sadat’s privatization drive under his infitah initiatives, the authorities realized that much of the cheap construction material was ending up on the black market.

The number of ‘co-operative’ resorts which subsequently began to flourish on the North Sea coast signaled just how corrupted Nasser’s 1960s idealism had become.

Perhaps most significantly, and as an inevitable consequence of despotic political inbreeding, the movements ended up in the control of figures closely trammeled to the regime.

According to David Sims, author of the book Understanding Cairo, such a development was a necessity for the co-operatives. “The members of the co-ops had to be influential types in order to push things through,” he said.

“It’s an exercise in how certain groups, especially people with influence, can play the system and make a lot of money out of it.”

Referring to Pyramid Gardens land holding, which was acquired in the 1970s but was not developed until much later, he said: “If you are saying that using the system to get state land for nothing is corruption, then I don’t know. I don’t know if that’s corruption or exploiting the system, but it’s definitely going against the spirit of the system.”

The housing co-operative movement is just one example of the political atrophy which Egypt’s new rulers will have to address if they want to uproot the corruption of the past three decades.

Last month, after weeks of violence and political unrest, the country’s new constitution was approved by Egyptian voters. The national charter includes a number of clauses dealing directly with local government – a sphere of politics which some analysts say is crucial to the ultimate success of the 2011 uprising.

Previously cities and municipalities have operated on a twin-track system, with president-appointed governors wielding executive power and popular councils, elected by the people, exercising theoretical duties of oversight.

The top-down system was used from the highest levels of local government such as the cities and governorates, right down to the hayy neighborhood jurisdictions and village mayors.

Yet critics say the structure was fraught with problems; widespread election fraud ensured the councils were stuffed with regime loyalists; executive authority – effectively resting with the president through his appointees – was brittle and unresponsive, while local administrations had no powers to raise their own taxes or devise local budgets.

Even the heads of the local education, health and police directorates – essentially part of each governor or local mayor’s cabinet – were ultimately answerable to the president, being selected through a process which began with Hosni Mubarak and his appointment of the respective ministers of state for each field.

“In reality, the president appointed everybody,” said Ahmed Abou Hussein from the Egyptian Decentralization Initiative. “The transfer of power came from the mandate of the president.”

But under the new constitution approved last month, it is not clear how much the system has changed. Unlike the previous national charter, local councils appear to have been given the power to levy their own taxes – a key demand from those advocating greater decentralization.

Yet other important clauses relating to local government are very vague, with many undefined and subject to later clarification by the next parliament.

It is not clear, for example, whether governors will be selected by the President – as in the past – or elected by the people, as was being called for by some reformers. The drafting assembly also included a clause granting the President the power to delegate authority to his governors, further muddying the waters about how much decentralization will actually take place.

To cap it off, right at the bottom of the new constitution is an article stating that the “existing local administration system will remain in place” following the adoption of the charter, and that the new system will be applied over a period of 10 years.

The Muslim Brotherhood, whose members formed the single largest bloc on the drafting body, says that the changes deliver exactly what Egypt needs after decades of overbearing autocracy. Amr Darrag, a Brotherhood member who was also Secretary General of the constituent assembly, said that the proposals offer a “gradual decentralization approach” which is long overdue.

However many opponents of the Muslim Brotherhood are fearful. “Leaders of the liberal parties totally disagreed with these articles,” said Ahmed Abou Hussein. “It is not a clear system, and they think the Islamists are just deferring key decisions for the next parliament.”

One accusation, voiced by the Brotherhood’s opponents at least, is that Morsi and his colleagues are trying to stealthily cement their political power through the corridors of municipal councils.

How they will do this is unclear. There is no guarantee that the Brotherhood will win at the next parliamentary elections anything like the landslide they did last year. Indeed, there are indicators that Egyptian voters will punish them at the ballot box after a year of piecemeal change and last month’s political turmoil.

There is also the military to consider. Under Hosni Mubarak, the appointment of governors was often used as a way to placate or confer patronage on retiring officers. Some analysts point to Morsi’s first act as president – his dismissal of the Minister of Defense and Chief of Staff – as being a swipe against the military. But others argue it is unlikely that this decision was taken without the support of key figures within the officer corps, and suggest the move was actually an indication of Morsi’s willingness to maintain the status quo in Egypt.

Many politicians have also criticized the new constitution for the significant powers which have been granted to the military. One analyst told Egypt Source that the vague provisions on local government under the new charter could be seen as evidence of a deal between the army and the Brotherhood to prolong the Mubarak-er networks of patronage. The substantial privileges granted to the nation’s generals under the constitution would appear to support such claims.

But according to Mr Darrag, liberal opponents are simply sounding off in a ‘political playground’.

“Some political powers, for some reason, see the constitution as a product of the Muslim Brotherhood,” he said. “They think that if the production of a new constitution is a success, it will be a success for the Brotherhood.

“The whole issue is being politicized and I don’t think it is related to the constitution itself.”

Alastair Beach is the Independent’s stringer in Cairo. He has also written for The Times, Daily Telegraph and Daily Beast.

Photo: H.K. Tang

Image: Pyramids.jpg