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By Fareed Zakaria
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As Egyptian minister of trade and industry, former businessman Rachid Mohamed Rachid has his work cut out for him. Many Middle East experts believe the entire project of democratizing the region boils down to Egypt, which has historically been the leader of the Arab world. The process entails opening up not just the political system, in which opposition candidates may now supposedly run for president, but the economy as well. NEWSWEEK's Fareed Zakaria spoke to Rachid about his goals for his country and the region as a whole. Excerpts:
ZAKARIA: Why did you decide to plunge into the maelstrom of Egyptian politics?
RACHID: Well, the brief answer--I did it for my granddaughter. I have a 1-year-old granddaughter, and I truly believe that it is a time for Egypt and the region to embark on very serious change and reform. We have an opportunity, an environment and an acceptance from the public to [do so].
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Have you had success so far?
We are for a positive integration in the global economy, we are for a free-market economy and we have demonstrated that by taking action: slashing our tax system by 50 percent; the simplification of the whole system to ensure that we are opening our economy for competition; [launching] a major banking-reform program, which will deal with all the problems we had for many, many years in terms of non-performing loans, [and starting] a huge privatization program which is actually putting everything that the government [owns]--whether fully or partially--on the lot to be sold.
In countries like Egypt, big business has grown within the complex of tariffs and regulations, and the last thing it wants is the abolition of these tariffs because that will produce competition. Are you finding that industry is an obstacle?
It is, because, as you said, we had the history of protection over the last 40 years. But you have to create the [political] platform, and you have also to engage the winners of reform, because [the opposition is] a minority, at the end of the day. Unfortunately they have loud voices, and I think part of successful change and reform is first of all to identify who are going to be the winners. In our case it's the population, whether by having more investment, more jobs [or] more choices of goods and services. You [also] have to engage the people. Forty years of protection for industry in Egypt resulted only in 4 percent of our production for export, which is a [failure], and we have to explicitly articulate this to the people and tell them what the outcome of that is and what the impact on the normal citizen is.
You have one very interesting program, an agreement with the United States that products made jointly by Egypt and Israel will have a tariff-exempt status if exported to the United States. Did this produce controversy in Egypt?
Well, this was a huge thing because, like all our reform problems, it's all in the mind-set. We've had a peace treaty with Israel since the late '70s, [but] we did not have any significant cooperation with the Israelis. What happened in this agreement of the qualified industrial zone was that, for the first time in 25 years, there was something that the man in the street could relate to as a benefit of this peace agreement.
So people supported it?
They supported it. People expected riots in the streets against the agreement, but we had riots in the street for the agreement. They went in the street and said, "We want to be part of this agreement between Egypt, the United States and Israel."
President Hosni Mubarak has talked about amending the Constitution to allow for multiparty elections. Will this really happen this year?
Yes. We have now established a national human-rights council, which is nongovernmental and separate. We have put in place laws for election and party formation, which are totally in line with the most advanced in the world. [And] we have started the process of changing the Constitution in Egypt by addressing one of the most controversial points.
Which is the contesting of the presidential election?
Exactly.
So if somebody like Saad Eddin Ibrahim or Ayman Nour wanted to run for president, they would have no problem?
The president [has] said very clearly, because of the timing this year, the tendency will be to waive most of the restrictions to allow real candidates to be part of that election campaign. We are talking about widening the space of democracy in Egypt, and we want to make sure that this move is going to be a positive one because at the end of the day we have seen so many moves in the region which turned very sour. And one of the things that we have to value in our region is stability.
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