An Egyptian child empties a bag of maize after his house was raided by Egyptian security members in the small Sinai village of Sheikh Zuwied on 10 August 2012. (Photo: AFP - Mostafa Abulezz)
One symptom of the Egyptian state’s neglect of Sinai before the revolution was the way it was transformed into fiefdoms for the latter-day feudalists of the business class to compete in. Two tycoons, Hassan Rateb and Hussein Salem, wielded the most economic and political influence there.
Local people used to call Rateb “the president of the republic of Sinai.” He was a member of the ruling National Democratic Party (NDP)’s powerful policies committee, chairman of the North Sinai Investors Society, and owner of the pro-regime al-Mehwar satellite channel, which used to broadcast the NDP’s annual conferences.
Rateb had a virtual monopoly over investment in North Sinai and the exploitation of its wealth. He was the governorate’s de facto ruler. No governor would take an economic or sovereign decision without referring back to him.
Some of his practices were exposed in the corruption probes that followed the revolution. In March 2011, Sinai political activist Magdi Haddad submitted a dossier of documents to the public prosecutor relating to the activities of Rateb and the former governor of North Sinai, General Munir Shas.
These included papers showing that Rateb secured contracts for the supply of material to his Sinai Cement factory in central Sinai at an annual cost of just 5,000 Egyptian pounds (LE)($820), which was then sold on to another company for LE 42 million ($7 million). Locals recall that Rateb also used his influence to block their attempts to establish a cement business of their own that would compete with his. His factory also supplied Israel with cement for the construction of its Separation Wall in the West Bank.
There were also documents related to the Sama al-Arish holiday village owed by Rateb on the Mediterranean coast. The land it was built on was earmarked for low-cost housing for local people, but having acquired it on concessionary terms on that basis, Rateb turned it into a resort that earned him millions in profits.
Sinai University, the only university in Sinai, was a similar case. A large plot was provided at low cost for the construction of a university to provide affordable higher education to students in Sinai. Instead, a very costly elite institution was built, more like an educational resort, only three percent of whose students come from Sinai.
The people of Sinai have paid dearly for this kind of corruption. While Rateb used to publicly proclaim his love for Sinai, he used his influence to get hundreds of local people thrown off their lands adjacent to his industrial or tourism enterprises, or forced to give them up for meager compensation. These enterprises contributed next to nothing to Sinai’s development or employment – locals would rarely ever be hired except as guards. It was unsurprising that protests were held at Rateb’s ventures in the aftermath of the revolution by local people demanding compensation and investigations into corruption.
The other big Sinai tycoon, Hussein Salem, a personal friend of deposed president Hosni Mubarak and his family, is the subject of an ongoing corruption probe, and talks have been held about his possible extradition from Spain, where he fled after the revolution.
Salem is a former intelligence officer, and unlike the high-profile Rateb largely kept out of the media limelight. He was seen as the ruling family’s chief power-broker and business agent in Sinai. Salem’s main focus was the innumerable and lucrative tourist resorts that dot the southern coast of Sinai, notably in Sharm al-Sheikh, Dahab, Nuweiba and Taba. This includes the Movenpick hotel chain, which provided Mubarak with a home both before and after his ouster.
Salem is best known as architect of the notorious deal to sell cut-price Egyptian natural gas to Israel, while lining the pockets of hidden beneficiaries. Implementation of the 20-year agreement to supply Israel with an annual 1.7 billion cubic meters of gas was entrusted to Eastern Mediterranean Gas, a consortium formed in 2000 with Salem as chairman.
Salem’s case provides some insight into the interconnected world of security, intelligence and business in Sinai. In the statement he issued in April last year to defend himself against corruption and cronyism charges, Salem claimed he was directed to proceed with the gas deal with Israel “as a matter related to Egyptian national security,” and that the security agencies “supervised every detail” related to it.
Further insights were supplied by some of the State Security documents that were leaked in the aftermath of the revolution. They indicated that a political cell working for Gamal Mubarak within Habib al-Adly’s interior ministry had a hand in the 23 June 2005 Sinai bombings, in which dozens of people were killed. Documents suggested that the original aim was to target Salem’s Movenpick resorts to punish him for cutting the commission paid to the president’s son from the Israeli gas deal, but the extremist group concerned decided to strike elsewhere.
In economic terms, therefore, the state’s presence in Sinai seemed confined to promoting the business interests of the regime’s cronies, the most visible signs of which were the tourism developments which largely denied employment to local people.
This deepened a sense among Sinai residents of feeling like second class citizens, treated with suspicion and denied opportunities to improve their living conditions, investment that provides them with income or work, and often even the right to own and live off their land.
The state’s developmental absence was offset by an inflated and multi-faceted security presence. Sinai has been under the control of the Egyptian state since ancient times, except for during the first Israeli invasion in 1956 and the 1967-82 Israeli occupation. When Egypt recovered the peninsula in 1982, the Egyptian state was undergoing a transformation, turning into a laissez faire state in economic terms with a ferocious security grip. With the country’s modernization already held up by years of war and bad governance, nobody expected a state that was abandoning its developmental role in the country’s densely-populated heartlands to do much to develop peripheral Sinai.
That state increasingly became beholden to business elites that were ruthlessly fixated on quick profits and consumer-oriented investments. It was neither interested nor capable of empowering the bulk of citizens economically. In Sinai, neglect turned into rampant exploitation and impoverishment.
Said Aatiq, a member of the Sinai Revolutionary Youth Committee, remarks that since the end of the Israeli occupation, the only thing the people of Sinai have seen of the Egyptian state are the Ministry of the Interior and the state security apparatus.
It is against this backdrop that the eastern sector of Sinai, Area (C), became an arena for the activities of foreign intelligence agencies – reportedly including the CIA, Mossad and Iranian revolutionary guards – and rivalry entailing foreign political pay-outs, which in turn helped spawn the emergence of extremist groups.
For many people in this region facing poverty and oppression, crime became the main or even sole means of making a living – whether drug smuggling, people trafficking, or trading through the tunnels with the besieged Gaza Strip.
Local people used to call Rateb “the president of the republic of Sinai.” He was a member of the ruling National Democratic Party (NDP)’s powerful policies committee, chairman of the North Sinai Investors Society, and owner of the pro-regime al-Mehwar satellite channel, which used to broadcast the NDP’s annual conferences.
Rateb had a virtual monopoly over investment in North Sinai and the exploitation of its wealth. He was the governorate’s de facto ruler. No governor would take an economic or sovereign decision without referring back to him.
Some of his practices were exposed in the corruption probes that followed the revolution. In March 2011, Sinai political activist Magdi Haddad submitted a dossier of documents to the public prosecutor relating to the activities of Rateb and the former governor of North Sinai, General Munir Shas.
These included papers showing that Rateb secured contracts for the supply of material to his Sinai Cement factory in central Sinai at an annual cost of just 5,000 Egyptian pounds (LE)($820), which was then sold on to another company for LE 42 million ($7 million). Locals recall that Rateb also used his influence to block their attempts to establish a cement business of their own that would compete with his. His factory also supplied Israel with cement for the construction of its Separation Wall in the West Bank.
There were also documents related to the Sama al-Arish holiday village owed by Rateb on the Mediterranean coast. The land it was built on was earmarked for low-cost housing for local people, but having acquired it on concessionary terms on that basis, Rateb turned it into a resort that earned him millions in profits.
Sinai University, the only university in Sinai, was a similar case. A large plot was provided at low cost for the construction of a university to provide affordable higher education to students in Sinai. Instead, a very costly elite institution was built, more like an educational resort, only three percent of whose students come from Sinai.
The people of Sinai have paid dearly for this kind of corruption. While Rateb used to publicly proclaim his love for Sinai, he used his influence to get hundreds of local people thrown off their lands adjacent to his industrial or tourism enterprises, or forced to give them up for meager compensation. These enterprises contributed next to nothing to Sinai’s development or employment – locals would rarely ever be hired except as guards. It was unsurprising that protests were held at Rateb’s ventures in the aftermath of the revolution by local people demanding compensation and investigations into corruption.
The other big Sinai tycoon, Hussein Salem, a personal friend of deposed president Hosni Mubarak and his family, is the subject of an ongoing corruption probe, and talks have been held about his possible extradition from Spain, where he fled after the revolution.Salem is a former intelligence officer, and unlike the high-profile Rateb largely kept out of the media limelight. He was seen as the ruling family’s chief power-broker and business agent in Sinai. Salem’s main focus was the innumerable and lucrative tourist resorts that dot the southern coast of Sinai, notably in Sharm al-Sheikh, Dahab, Nuweiba and Taba. This includes the Movenpick hotel chain, which provided Mubarak with a home both before and after his ouster.
Salem is best known as architect of the notorious deal to sell cut-price Egyptian natural gas to Israel, while lining the pockets of hidden beneficiaries. Implementation of the 20-year agreement to supply Israel with an annual 1.7 billion cubic meters of gas was entrusted to Eastern Mediterranean Gas, a consortium formed in 2000 with Salem as chairman.
Salem’s case provides some insight into the interconnected world of security, intelligence and business in Sinai. In the statement he issued in April last year to defend himself against corruption and cronyism charges, Salem claimed he was directed to proceed with the gas deal with Israel “as a matter related to Egyptian national security,” and that the security agencies “supervised every detail” related to it.
Further insights were supplied by some of the State Security documents that were leaked in the aftermath of the revolution. They indicated that a political cell working for Gamal Mubarak within Habib al-Adly’s interior ministry had a hand in the 23 June 2005 Sinai bombings, in which dozens of people were killed. Documents suggested that the original aim was to target Salem’s Movenpick resorts to punish him for cutting the commission paid to the president’s son from the Israeli gas deal, but the extremist group concerned decided to strike elsewhere.In economic terms, therefore, the state’s presence in Sinai seemed confined to promoting the business interests of the regime’s cronies, the most visible signs of which were the tourism developments which largely denied employment to local people.
This deepened a sense among Sinai residents of feeling like second class citizens, treated with suspicion and denied opportunities to improve their living conditions, investment that provides them with income or work, and often even the right to own and live off their land.
The state’s developmental absence was offset by an inflated and multi-faceted security presence. Sinai has been under the control of the Egyptian state since ancient times, except for during the first Israeli invasion in 1956 and the 1967-82 Israeli occupation. When Egypt recovered the peninsula in 1982, the Egyptian state was undergoing a transformation, turning into a laissez faire state in economic terms with a ferocious security grip. With the country’s modernization already held up by years of war and bad governance, nobody expected a state that was abandoning its developmental role in the country’s densely-populated heartlands to do much to develop peripheral Sinai.
That state increasingly became beholden to business elites that were ruthlessly fixated on quick profits and consumer-oriented investments. It was neither interested nor capable of empowering the bulk of citizens economically. In Sinai, neglect turned into rampant exploitation and impoverishment.
Said Aatiq, a member of the Sinai Revolutionary Youth Committee, remarks that since the end of the Israeli occupation, the only thing the people of Sinai have seen of the Egyptian state are the Ministry of the Interior and the state security apparatus.
It is against this backdrop that the eastern sector of Sinai, Area (C), became an arena for the activities of foreign intelligence agencies – reportedly including the CIA, Mossad and Iranian revolutionary guards – and rivalry entailing foreign political pay-outs, which in turn helped spawn the emergence of extremist groups.
For many people in this region facing poverty and oppression, crime became the main or even sole means of making a living – whether drug smuggling, people trafficking, or trading through the tunnels with the besieged Gaza Strip.
Uprooted Palestinian 
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