On Egypt Protests And Our Arab Strategy

January 28, 2011 § Leave a comment

By: Catalin Braescu

Street protests in AlexandriaLet me introduce myself: I’m Catalin Braescu (you may call me “Cat”) co-founder of Silicon Nile. We aim to be an Internet conglomerate on the scope (and size) of Alibaba, Tencent and Baidu (all in one) aiming for #1 position on the Arab market.

Because of our special insight on the Arab market, I feel compelled to explain a bit what is going on these days in Egypt. I see a lot of uninformed comments – it just itches me to add my 2 cents.

First you may wanna read my latest post on our corporate blog: http://www.silicon-nile.com/about-the-current-events-in-egypt since it may explain a bit more about us and our goals.

The current narrative on CNN and most Western media is that Egypt is following on the path of the Jasmine revolution in Tunisia and the youth is demanding more democracy and personal freedom from an aging dictator. The Americans are not bold enough to push Egyptian government for more reforms. The Muslim Brotherhood planning to bring Sharia if they ever come to power. ElBaradei is the opposition figure to potentially take over.

In November 2010 I made a tour in Silicon Valley, making the case for the Arab market: 350 million Arabs (27% compared to China) and 1.6 trillion dollars GDP (38% compared to China). I kept explaining that the Arab Internet market is in a process of becoming MORE restricted and filtered than before, that the various Arab governments start realizing the strategic important of whom and how controls the Internet content and related activities. I kept saying the current situation is volatile, and each major spasm will trigger another tightening of control, especially if the spasm is directed at the governments / rulers themselves.

Except for our uber-smart attorney (the one and only Antone Johnson) and a few big brains (most of whom agreed to become our advisers), I felt like talking to myself.

The march of our societies, most of my discussion partners insisted, is towards less control and anyway, the Arabs can’t be sophisticated enough to really be able to control such a complex beast called the Internet.

In Silicon Valley the discussions went almost funny (if not dramatic) when I was talking about launching a 25-companies mega-group, powered by hundreds of $500/month Egyptian developers supervised by a core team of Russians. In the magic land heavily investing in… slides and other useless widgets, talking about making a new major search engine, a new jobs board, a new online payment system sounded like bad science-fiction.

Guys, wake up! The Arab world doesn’t give (as a whole) a damn about Western democracy and civil rights. We DESPERATELY need jobs here – here in Cairo, here in Amman, here in Tunis. We need easy ways to sell inside our national borders and abroad, we need friction-free access to jobs, we need easy ways to advertise. We need ways to let the poor break out of the vicious circle of poverty, where poor parents means the children will also stay poor. We need ways to care for the unbanked, even when the unbanked are also illiterate. That’s what Silicon Nile’s 25 companies have in mind when working hard: we have 370 million people to take care of. It’s back to basics because we’re making the building blocks of what in the more advanced Internet markets companies and consumers are taking for granted nowadays.

Now let’s explain a bit the media show:

Egypt is following on the path of the Jasmine revolution in Tunisia = true. The events in Tunisia acted like a catalyst for the protests in Egypt.

The current protests are “unparalleled” = false. Price raises brought millions of Egyptians on the streets during Sadat rule, and Egypt survived well that episode. Military unrest (over unpaid salaries) brought tanks on the streets in 1986, yet Egypt left that episode behind. Also, in 2008 the food shortages also brought clashes throughout the country. The Egyptians are not as passive as many claim, and the Egyptian government is not as unused to protests as many hope.

The youth is demanding more democracy and personal freedom = false. Most protesters demand lower prices for food and jobs. If anything, they demand MORE government involvement and supervision in the economy – hardly a recipe for democracy and personal freedom. And don’t believe everyone on the street are angels: there are lots of stores broken and devastated, not just political parties offices.

An aging dictator = (mostly) false. Hosni Mubarak, the current president of Egypt, is definitely aging, but hardly a dictator. I know what a dictator is – I spent my first 19 years of life under Nicolae Ceausescu. There are books making fun of president Mubarak openly sold in bookstores, tens of newspapers attack him and his policies daily, and opposition members of the parliament openly voice their rejection. Hosni Mubarak is the authoritarian president of an authoritarian regime but not a dictator.

The Americans are not bold enough to push Egyptian government for more reforms = false. Conspirationists throughout the Middle East claim most of the Arab governments are simple puppets for the master puppeteers in Washington. The last thing President Obama and Secretary of State Clinton would want is to confirm such suspicions by publicly pushing the Egyptian government into doing this or that.

The Muslim Brotherhood is planning to bring Sharia if they ever come to power = both true and false. This is true because Ikhwan, the Islamist opposition movement knows as the Muslim Brotherhood, truly wants Sharia being enforced in Egypt. This is false because Sharia is already enforced in Egypt since Sadat times (to be more precise, since 1980).

ElBaradei is the opposition figure to potentially take over = false. ElBaradei has no political movement backing him, which translates in a very shallow political figure. If, by any chance, the current protests will force Hosni Mubarak to leave power, ElBaradei will become the next Mehdi Bazargan: a transitional leader until the dark forces can take over for good.

The forces battling on the streets of Cairo (and Alex, and Suez, and many other Egyptian cities) are not government vs. democratic protesters. It’s more about a conflict between the modernizing elite, backed by the military, vs. the Islamist opposition, backed by the disaffected, “left behind” poor. I glossed more on this subject on Quora.

And now that I’ve brought some light on what’s going on in Egypt, I should say the last time I was in contact with any of my colleagues was yesterday (i.e., Thursday 27 Jan.) evening. There were demonstrations around Raml railway station but most of Alex was relatively quiet. The phone service was erratic and access to Facebook and Twitter blocked.

To quote from our corporate blog:

At the risk of being called a stooge of this or that Arab government, I must underscore Silicon Nile’s commitment to play a more utilitarian, less confrontational model. We are the “Champions of the Arab Internet“, not the champions of any political system or party. So far our positioning seems validated.

Our deployment model relies on serving the Arab markets from servers located outside them, thus isolating them from eventual local turmoil or technical disruptions. So far our deployment model seems validated, as you can easily see our search engine OKArabia.com (still in early beta) being alive and kicking.

Our business model is based on developing in parallel no less than 25 (yes, twenty five) companies, each of them covering the whole Arab market. With trouble shaking this or that Arab country, our business model of not placing all our eggs in one basket seems validated.

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