How Mubarak got so rich

This is an article from yahoo finance (US News).  After reading it, you will understand the anger of Egpytian people. He is just a  person on government salary but he is now estimated to have 40 to 70 billions US dollars, richer than even Bill gates.

Many authoritarian dictators must be having wealth that is as much as this former strong man of Egypt :

How Mubarak got so Rich

Rick Newman, On Friday February 11, 2011, 5:28 pm EST

There are no Mubaraks on the Forbes list of the world’s richest people, but there sure ought to be.

The mounting pressure from 18 days of historic protests finally drove Egyptian President Hosni Mubarak from office, after three decades as his nation’s iron-fisted ruler. But over that time, Mubarak amassed a fortune that should finance a pretty comfortable retirement. The British Guardian newspaper cites Middle Eastern sources placing the wealth of Mubarak and his family at somewhere between $40 billion and $70 billion. That’s a pretty good pension for government work. The world’s richest man–Mexican business magnate Carlos Slim–is worth about $54 billion, by comparison. Bill Gates is close behind, with a net worth of about $53 billion.

 

Mubarak, of course, was a military man, not a businessman. But running a country with a suspended constitution for 30 years generates certain perks, and Mubarak was in a position to take a slice of virtually every significant business deal in the country, from development projects throughout the Nile basin to transit projects on the Suez Canal, which is a conduit for about 4 percent of the world’s oil shipments. “There was no accountability, no need for transparency,” says Prof. Amaney Jamal of Princeton University. “He was able to reach into the economic sphere and benefit from monopolies, bribery fees, red-tape fees, and nepotism. It was guaranteed profit.”

Had the typical Egyptian enjoyed a morsel of that, Mubarak might still be in power. But Egypt, despite a cadre of well-educated young people, has struggled as an economic backwater. The nation’s GDP per capita is just $6,200, according to the CIA–one-seventh what it is in the United States. That output ranks 136th in the world, even though Egypt ranks 16th in population. Mubarak had been working on a set of economic reforms, but they stalled during the global recession. The chronic lack of jobs and upward mobility was perhaps the biggest factor driving millions of enraged Egyptian youths into the streets, demanding change.

 

Estimates of Mubarak’s wealth will probably be hard to verify, if not impossible (one reason dictators tend not to make it onto Forbes’s annual list). His money is certainly not sitting in an Egyptian vault, waiting to be counted. And his delayed exit may have allowed Mubarak time to move money around and hide significant parts of his fortune. The Swiss government has said it is temporarily freezing any assets in Swiss banks that could be linked to Mubarak, an uncharacteristically aggressive move for the secretive banking nation. But that doesn’t mean the money will ever be returned to the Egyptian people, and it may even find its way to Mubarak eventually. Other Mubarak funds are reportedly sitting in British banks, and Mubarak was no doubt wily enough to squire away some cash in unlikely places. Plus, an eventual exile deal could allow Mubarak to retain some of his wealth, no questions asked, as long as he and his family leave Egypt and make no further bids for power.

Epic skimming is a common privilege of Middle Eastern despots, and Mubarak and his two sons, Gamal and Alaa, were a bit less conspicuous than some of the Saudi princes and other Middle Eastern royals seen partying from time to time on the French Riviera or other hotspots. The family does reportedly own posh estates in London, New York, and Beverly Hills, plus a number of properties around the Egyptian resort town of Sharm El Sheikh, where Mubarak reportedly went after resigning the presidency.

Mubarak also spread the wealth far and wide in Egyptian power circles–another Middle Eastern tradition–one reason he incurred the kind of loyalty that allowed him to rule for a remarkable three decades. Top Army officials were almost certainly on his payroll, which might help explain why the Army eased him out in the end–allowing a kind of in-country exile–instead of hounding him out of Egypt or imprisoning him once it was clear the tide had turned against him for good.

 

That money trail, in fact, will help determine whether Egypt becomes a more prosperous, democratic country, or continues to muddle along as an economic basket case. Even though he’s out of power, Mubarak may still be able to influence the Army officials running the country, through the financial connections that made them all wealthy. And if not Mubarak, the next leader may be poised to start lining his pockets the same way Mubarak did. For Egypt to have a more effective, transparent economy, all of that will have to be cleaned up. There are probably a lot of people in Cairo who have been checking their bank balances lately.

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14 Comments (+add yours?)

  1. klm
    Feb 13, 2011 @ 10:41:16

    How much is M worth? How much is the N&R couple worth? How much is Taib worth? These people have enough to be mentioned in Forbes but are not.

    There are more Malaysian owned money circulating in other countries than in Malaysia.

    Like

  2. Taikohtai
    Feb 14, 2011 @ 08:19:54

    Developed Western economies need to tighten up their own acts by denying the proceeds of the autocrats from parking their ill-gotten gains. Switzerland belatedly boasted that they will freeze Mubarak’s assets. Why accept them in the first place? But then the Swiss have always relied on blood money for their own welfare, as do many other European countries and even Australia. Thank goodness for Wikileaks, I say.

    Like

  3. Phua Kai Lit
    Feb 14, 2011 @ 09:26:21

    Dear Dr Hsu

    Egypt is also a major exporter of unemployed and underemployed doctors
    to other countries (such as the Gulf States).

    Like

  4. Phua Kai Lit
    Feb 14, 2011 @ 09:28:27

    Dear KLM

    For an idea of Sarawakian wealth “invested overseas”:

    See the blog “Hornbill Unleashed”

    Like

  5. petestop
    Feb 14, 2011 @ 09:34:57

    We have the same despot as in Sarawak.

    Unfortunately Sarawakians are still BeEnd “fixed deposit” despite their NCR land getting grabbed by politicians and Sarawak remains one of the poorest state in Malaysia despite their richness in resources.

    Meanwhile, many educated Sarawakians ended up having to find work in Peninsular, adding to the brain drain there.

    Perhaps just how the despot likes it.

    Like

  6. Dr Hsu
    Feb 14, 2011 @ 10:15:50

    I met up with a cousin of mine originally from sarawak and mnow staying in Adelaide just last week when he came to Kl for a short visit.

    He has given up and moved overseas. He said that the educated people in Sarawak dislike “Peh Mou” (literally ‘white hair’) but unfortunately, the indigenous people’s votes are still mainly for him.. These people are simple minded and easily contenetd , and thus it is easy for “Peh Mou” to buy their hearts with small gifts and some money..And once the heads are with him, the rest of the tribe will follow.. Thus it is really hard to penetrate this sort of mentality. Until and unless there is a big middle class arising from these indigenous people, it is hard to see them voting otherwise. Let us just wait and see how the state election goes, probably in a month or 2 .

    Like

  7. klm
    Feb 14, 2011 @ 11:48:45

    On the Egyptian Revolution
    ===================

    In a recent speech by Anwar Ibrahim, he described the Egyptian event as a revolution of dignity. He captured in a nutshell the essence of what happened in Egypt. After more than 200 years, the world is witnessing another ground breaking revolution. The last revolution which set the world on a new course was the French Revolution which was a revolution of food.

    The French Revolution was an uprising of the peasants. The Egyptian Revolution was an uprising of the young educated and powered by information technology. The leash of the totalitarian regime of Murbarak was broken by the democratisation of information. The Internet and social networks gave power to the people in a way never possible before. People’s power could be exercised with the help of technology. It was so inspiring to hear Egyptians said they were proud of what they had achieved and proud to be Egyptians. The dignity of the people had been restored.

    This is a warning to all totalitarian regimes. People cannot be oppressed and treated like dirt. People want dignity. People have power. They are not afraid to exercise this power.

    Like

  8. CYC
    Feb 14, 2011 @ 15:11:09

    Just hope that the real power would not fall into some fanatics hand. And how sure are we the military will return power to the people of Egypt ? The well being of Egyptians still hang on the air literally. Will the Americans place their bets on both end of the power equation ? I think the answer is definitely YES. So, there is still a long way to go for the Egyptians to realise their dream of true democracy but at least they have achieved the unthinkable.

    Like

  9. Dr Hsu
    Feb 14, 2011 @ 15:16:39

    it can either go the way of Iran where it becomes more fundamentalist or it can become another Turkey, a comparatively liberal country.

    Like

  10. CYC
    Feb 14, 2011 @ 15:35:42

    Dr Hsu, you are right but it all depends on whether USA still able to exerts its influence to determine the outcome it wanted. Time change and USA is slowly losing the grips to maintain its absolute master status.

    Like

  11. klm
    Feb 14, 2011 @ 15:53:54

    No matter what is the outcome in Egypt, the revolution has set the wheel in motion for change. It may get hijacked but the force of change is unleashed.
    The French Revolution was hijacked too. But look at the impact it created round the world. One thing is for sure. US is losing it grips on events around the world. Without the control on the tyrants and dictators, it will not be able to control events.

    Like

  12. foo
    Feb 15, 2011 @ 00:31:12

    The question is whether a revolution is needed to change the corrupted BN gomen?70% of our population are still living in pre-internet age with information from TV 3/4, RTM,Utusan Melayu,NST and all other pro-BN MSM.Can the semi-urban and rural areas be turn-over to think independently?Obviously the answer now is “NO”. BN and Najib just have to throw empty promises here and there and these country bumpkins get conned again and again. We may never get a responsible and trustworthy gomen in our lifetime. Many are resigned to this fact and just pack their bags and leave.

    Like

  13. klm
    Feb 15, 2011 @ 17:47:37

    Iran has exploded. Will the Ayatollahs be thrown out?

    Like

  14. Li Li Fa
    Feb 15, 2011 @ 20:09:02

    It is believed that the Military Ccouncil in Eqypt would need require at least 6 months of sitting in the power sit. Now that their parliament has been dissolved, the people will be subject to the rules of the military regime. How these military boys carry out their commitment, will unfold in weeks and months to come. I really hope that the wish of the Egyptian people will culminate soonest into a consolidation of power that the people really want.

    Already, the Egyptian revolution has sent shock-waves and socio-political-economic tremors throughout the world, especially in the Middle Eastern countries. Even our leaders are worried that the people will do an act ala the Egyptians. A local editor stressed that leaders who overstay in the power sit could cause such upheaval. There again even if we had a short-term incompetent leader, he too will be subject to the people’s scrutiny; what more if he had overstayed and run against the wishes of the people. Even if the US continues to assert its influence in Egypt, can they do it forever, even extending to the neighbouring Middle Eastern countries?

    In the local front, suddenly, we get news of oil been discovered off the shores of Sarawak- a really juicy lure prior to the state’s election.

    Like

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