Law Amendment Granting Citizenship To Investors Sparks Controversy In Egypt

Introduction

Suffering from an ongoing economic crisis, Egypt has recently taken an unusual step to attract foreign investments: a law amendment authorizing the government to grant Egyptian citizenship to foreign investors. This comes in the wake of a similar amendment to the citizenship laws – Law No. 89 (1960) and Law No. 26 (1975) – that was ratified by Egyptian President 'Abd Al-Fattah Al-Sisi a year ago, in August 2018. The 2018 amendment enabled to grant citizenship to investors who deposited at least seven million Egyptian pounds ($392,000) in Egyptian banks within a five-year period.[1] The recent amendment, ratified by the president on July 31, 2019, authorizes the government to naturalize any foreigner who has purchased real estate owned by the Egyptian state, established an investment project in the country, or deposited money in Egypt's central bank (no minimum sum is specified). It stipulates further that applicants for citizenship are required to pay a fee of $10,000 and may request that their identity remain secret.[2]   

The 2018 amendment to the citizenship laws already sparked criticism from Egyptian politicians, MPs and journalists, who argued that it cheapened Egyptian citizenship and dishonored Egypt. The amendment approved this year, which provides even more avenues for obtaining citizenship, sparked renewed criticism, albeit less widespread and forceful. The critics argued that citizenship should not be sold for $10,000, or should be granted only to those demonstrating outstanding commitment to Egypt. Others expressed a concern that the amended law would enable naturalized foreigners to attain influential positions in the country, and would even allow the "Zionists" to take over Egypt and would compromise national security. The regime, for its part, repeatedly stressed that the objective of the amendments was to rehabilitate Egypt's economy and generate income, while rejecting the security concerns.

This report reviews the responses in Egypt to the 2018 and 2019 amendments to the citizenship laws.

Egyptian Officials: Granting Citizenship To Investors Will Boost Egypt's Economy

Egyptian officials presented the amendments to the citizenship laws as an important and positive move that would encourage investments and strengthen Egypt's economy, while rejecting the claims regarding a possible threat to national security. For example, Kamal 'Amer, head of the Security and Defense Parliamentary Committee, welcomed the recent amendment and promised it would improve, rather than harm, both the economy and national security.[3] Speaking on Egyptian TV, he denied "the lies being spread about granting  Egyptian citizenship in return for $10,000," and dismissed the fears regarding foreigners attaining senior positions, saying that the new citizens would be barred from exercising political rights for five years.[4]    

MP Sami Ramadan likewise said that the move would "greatly boost investments and economic growth," while clarifying that it would not jeopardize Egypt's security because the candidates for citizenship would be under close security surveillance. MP 'Abd Al-Hadi Al-Qasabi, head of the majority bloc in the Egyptian parliament, the Support Egypt coalition, noted that the law has checks in place to allow the authorities to revoke the citizenship of investors if there is a legal reason to do so.[5] Security and Defense Parliamentary Committee member Yahya Al-Kadwani told the BBC that "the law is intended to open up new horizons for foreigners wishing to invest in Egypt," and added that "there are five million foreigners living in Egypt who can certainly benefit from this law." As for the security angle, he stated that citizenship would only be granted to deserving candidates. He also stressed that the government committee that would consider applications would include representatives from several security bodies and would consider every application on its own merit. Furthermore, the Interior Minister, with the Prime Minister's approval, would be able to revoke the citizenship of anyone whose actions posed a threat to state security, he assured.[6]

Defending last year's amendment enabling investors to apply for citizenship, Egypt's Finance Minister Dr. Mohamed Maait said in a televised interview that it would "infuse money into the Egyptian economy," while emphasizing that financial investment was not the only criterion that would be considered. He added that granting Egyptian citizenship, like revoking it, was a sovereign prerogative of the state, and that several European countries have similar laws.[7] Security and Defense Parliamentary Committee head Kamal 'Amer addressed the security concerns on the Mobtada.com website, assuring the readers that individuals with dual citizenship would not be admitted into the security apparatuses and that the spouse and children of the new citizens would not be granted citizenship as well unless they lived in Egypt.[8] Parliament Speaker 'Abd Al-'Aal said that the media was to blame for the alarm over the law and that its opponents had not really read it, and urged his fellow MPs to clarify the truth about it to the public.[9]

President Al-Sisi himself addressed the issue last year, at the July 29, 2018 Sixth National Youth Conference in Cairo. Asked whether the amendment didn't jeopardize Egypt's national security, he replied that the granting of citizenship would be "based on clear regulations" and the matter would be examined from every angle to avoid risks.[10]

Last year's amendment was also praised in several articles in the press, which welcomed it and rebuffed the criticism against it. In an August 7, 2018 article, 'Abd Al-Mun'im Sa'id, board chairman of the Egyptian daily Al-Ahram, called it a reasonable measure that would increase state revenues and help foreigners who were already living in Egypt but were not citizens. He wrote: "The law granting citizenship to foreigners cannot be understood as anything but a component of another strategy for increasing state revenues and meeting the challenges [faced by the country]... What Egypt has done is nothing new, it is a measure that has been taken by many countries before us. Considering Egypt's [current] challenges and aspirations, [this] Egyptian measure is reasonable, and nothing about it suggests that the Egyptian state woke up one morning and started looking for ways to trade in the Egyptian citizenship and identity."[11] 

Politicians Opposed To The Amendments: They Will Enable Foreigners To Attain Political Positions; Only Those Who Have Given Their Lifeblood For Egypt Are Worthy Of Receiving Citizenship

The regime's attempts to justify the move apparently failed to convince everyone, and many spoke out against the law amendments, including members of the Egyptian parliament. MP Haytham Al-Hariri, who frequently criticizes the government, remarked sarcastically that foreign investors are unlikely to be attracted by Egyptian citizenship when Egyptian businessmen send their own children to study abroad.[12] Al-Hariri also voiced criticism following the approval of last year's amendment. In July 2018 he wrote: "I was ashamed when the parliament passed this amendment and turned Egyptian citizenship into a commodity to be bought and sold for cash..."[13]

MP Tal'at Khalil attacked the amendment, saying: "With the countries surrounding Egypt experiencing so many clashes and upheavals, it inappropriate for us to pass this law and open [the gates of] the country to people trying to launder money, for example, or to people who are politically suspect." He assessed that those wishing to invest in Egypt would do so even without the incentive of citizenship, and worried that the law would be exploited for political purposes and would constitute a security risk.  He also expressed a concern that the amendment was connected to the U.S. Middle East peace initiative known as the Deal of the Century, and was aimed at naturalizing Palestinians in Egypt: "More than anything I am afraid that the Palestinians of the diaspora will be naturalized. I am fully aware that we do not know all the details of the Deal [of the Century], but my concerns are nevertheless legitimate."[14]  

Another MP, Mustafa Bakri, said that Egypt "has many diverse sources of income," and that "only people who have given their blood for this country are worthy of the cherished [privilege of] Egyptian citizenship."[15]

It should be noted that MP Mustafa Kamal Al-Din proposed to exclude Israelis and Palestinians from the law, but his proposal was rejected.[16]

The head of the Reform and Development Party and former presidential candidate Muhammad Anwar Sadat, the nephew of the late Egyptian president Sadat, said that naturalizing foreigners in return for money was an "unacceptable notion," for "citizenship, due to its sensitive nature, is not bought for cash." He also assessed that the amendment would "have dangerous economic and social effects on the fabric and makeup of society," and added: "The economic situation, no matter how dire, does not mean that [the state] should hand out citizenship in return for money of dubious origins owned by questionable individuals. If we want to grant citizenship to investors in order to encourage them to invest in Egypt, we must set out precise and calculated criteria, or alternatively grant [investors only] long-term residency, in order to avoid obstacles and crises that we may have to deal with in the future. There are ways and means to generate income other than granting citizenship to foreigners." He also questioned the effectiveness of the incentive, asking, "Who would ask for [Egyptian] citizenship? Do American or French citizens, for instance, have any need for such a thing?" Like others, he warned about "the danger that naturalized [foreigners] would attain important positions in the country, for instance in parliament or other state institutions," stating that this danger outweighed the economic benefits of the move.[17]

Opposition to the amendments was also voiced by the Muslim Brotherhood. An article on the website of the Freedom and Justice Party, the political branch of the movement's old guard, claimed that the objective of the amendment was "to naturalize Jews, especially those who left Egypt, freely or under duress, after the occupation of Palestine and after their national homeland was established with Britain's recognition." The article quoted Egyptian oppositionist 'Amru 'Abd Al-Hadi as saying that Israelis would now be able to buy Egyptian citizenship for $10,000, "which is no surprise, considering that [President] Al-Sisi has Jewish roots."[18]

Journalists Opposed To The Amendments: Citizenship Is Not A Matter Of Money; This Is A Selling-Out Of Egypt

Criticism was heard from journalists as well, especially after the passing of the first amendment in 2018, which was harshly condemned by many writers, including in the government daily Al-Ahram.[19] The articles argued that offering citizenship for sale was a dishonor for Egypt and could harm its social fabric. Paradoxically, following the passing of the recent amendment, which made obtaining citizenship even easier, the criticism was milder and less widespread. This may be due to the Egyptian authorities gaining a tighter grip on the media and suppressing dissent.[20]

Responding to the amendment in a June 10, 2019 article on the independent news website ArabNN.net, Yusri 'Abd Al-'Aziz, an Egyptian writer and researcher based in Germany, called it an act of "selling out" Egypt and even suggested it may be a plot to drive Egyptians out of their country and replace them with others. He wrote: "Should we understand from this decision that there is an aspiration to replace the Egyptian people with some other people?! Is that the secret behind [the strategy of] increasing the burden on Egyptians by tightening the noose of poverty around their necks, alongside strict security controls, so as to cause them to emigrate... after any hope of a better future for them and their children has been denied them?!... Are we entitled to know what Egypt plans to sell next, and whether there will be an auction?! And who will receive the goods?! Who will bear the burden of the debts Egypt is drowning in and pay them, or at least pay the interest on them?! [These are] innocent questions by an Egyptian citizen who is anxious and afraid that he might lose his last hope to return to live in his homeland. [This will happen] when others deprive him of his right to Egyptian citizenship after buying it from those who are [now] selling it on the market to the highest bidder. Are we about to see advertisements such as have never been seen in the entire world, saying 'Citizenship (Egyptian) for Sale'? What next?!"[21]

Al-Shafi'i Muhammad Bashir, a researcher of international law at the University of Al-Mansoura, wrote in the Al-Wafd daily that nobody can put a price tag on Egyptian citizenship and that only those who fight for it are worthy of it. "Egyptian citizenship is far more valuable than real estate or a sum of money deposited with the Egyptian government, and only those who have struggled [to obtain] Egyptian citizenship realize this...[22] The value of Egyptian citizenship is realized only by those who have fought and died for Egypt, namely those who dedicated their lives to the homeland. [Citizenship] cannot be sold in return for real estate as stipulated by the new amendment to the citizenship law. We demand that parliament refuse to pass [this amendment], and also ask the president to oppose it, for our Egyptian homeland and citizenship are worth much more than a handful of Egyptian pounds."[23]

Among the critical responses in 2018, especially harsh was an article by MP Dalia Yousuf in the daily Al-Watan. It was later removed from the paper's website, presumably because of her statements against naturalizing citizens of neighboring countries, including Arab ones, which she said are on the brink of collapse. She wrote: "Why should an Egyptian [citizen] of Afghani origin be a member of parliament? Why should an Egyptian [citizen] of Yemeni origin be on one of the local councils?... And what about the extra burden on the Egyptian security apparatuses? They are responsible for verifying that anyone who applies for [Egyptian] citizenship is eligible to join our society, from the security perspective. Events around the world prove that no international cooperation exists that will enable us to close this loophole, which would allow entry to people who threaten our society. We really have no need for 'Egyptians of this or that origin' coming from a long list of countries on the brink of collapse, with all due respect and appreciation for those countries..."[24]

In a July 2018 column in Al-Masri Al-Yawm, journalist 'Amru Al-Shubaki likewise wrote in that citizenship should not be for sale and that Egypt must find other ways to attract foreign investors, for this amendment would only harm its image in their eyes. He wrote: "No country, rich or poor, northern or southern, Arab or Western, has dared to tie citizenship to a deposit of funds, but only to associate it with a series of difficult conditions for obtaining it... Naturalization is not a business transaction in which one hands over money and receives citizenship. Rather, it is a matter of belonging to the history, culture and linguistic [heritage] of an entire country. To whoever has decided that these factors are unimportant, [I say]:... Your 'understanding' cheapens you and therefore harms your image in the world... The law [granting] citizenship in return for a deposit is puzzling and harmful... because, with a little effort and a lot of wisdom, we can attract many investments without giving the impression that we are a country that sells its citizenship for cheap."[25]

* Y. Graff is a research fellow at MEMRI.