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A Legend Reborn

As we were all fixated on the clearing, cleaning and gentrification of our streets last week in preparation for the much anticipated arrival of Pope Francis, another more inconspicuous but no less miraculous event was taking place. A mystical story of rebirth. The return of a legend. Enter, stage right the man himself, the father of the modern Egyptian economy – Talaat Pasha Harb.

Like everyone else, when I first saw the posters with the tag line “Talaat Harb is coming back”, I was pleasantly surprised, but also slightly perplexed. What did it mean? Who’s behind this?

My first observation was – this is a truly brilliant advertising campaign. It left me intrigued, sparked many a conversation and inspired me to write this article. When I dug deeper and found the campaign's facebook page, I was still none the wiser. Fortunately, soon after, Banque Misr confirmed that they were behind the campaign as part of a rebranding of the bank, with a renewed focus on financial inclusion and the financing of small and medium businesses.

While I was reminiscing about the great man’s many achievements, I was unexpectedly struck by some degree of regret. Sure, Talaat Harb’s statue is one of the most iconic in Cairo and many streets across the country are named after him, but how many people really know his story?

Anybody who studied economics in school or university in Egypt would customarily be treated to a heavy diet of Adam Smith, Marx, Keynes and Friedman. But, as is so often the case when it comes to our own history, the level of information and interest about our own role models is severely lacking.

Talaat Harb was born in Cairo in 1867, shortly before the invasion of the British in 1882. As a result of the injustices of the occupation, from a young age, Talaat Harb developed a burning desire for independence and a strong animosity towards the British. The oppressive colonialist policies of the British was a catalyst for his and his contemporaries’ development of a revolutionary nationalist ideology.

His keen sense of fairness and equality inspired him to go to law school and after graduation he held a series of clerkship positions in the judiciary. In 1905, he shifted to a more entrepreneurial career path when he joined Kom Ombo Company, one of the largest real estate and land reclamation companies in Egypt at the time, as the managing director.

Under the mentorship of Felix Suares, the owner of Kom Ombo Company and a prominent Egyptian Jewish businessman, Talaat Harb learned a great deal about business and economics. Perhaps even more importantly, his relationship with the cosmopolitan Egyptian Jewish upper class helped him to understand the global linkages between the accumulation of capital, industrialization and how this translated into political power on an international stage. It became clear to him that true political independence for Egypt could never be achieved without economic independence.

At this stage, Talaat Harb the thinker and revolutionary came into his own. He published two equally critical books at this time, the first titled “Egypt and the Suez Canal”, a book that successfully lobbied against a proposal by the British to extend the Suez Canal concession (which was for a period of 99 years starting from 1869) by 50 years, while the second was titled “Egyptian Economic Reform and the National Bank Project”, which outlined his economic vision.

After participating in Egypt’s 1919 revolution, which shortly after resulted in Egypt’s quasi-independence, Talaat Harb quickly went to work on implementing his economic independence project by leading a group of Egyptian investors to establish Egypt’s first truly national bank. In 1920, Banque Misr was born. The bank was fully owned by Egyptians, staffed by Egyptian nationals and used Arabic in all communications with its customers. This was unprecedented at the time.

He didn’t stop there. Banque Misr became a vehicle for investment that founded the cornerstones of Egypt’s national economic identity. To name but a few, Banque Misr founded Egypt’s national airline, Egypt Air, as well as Studio Misr, the home of Egyptian cinema that produced many of the black and white movies we enjoy until this very day.

He succeeded in making his dream a reality and ushered in a belle époque of economic independence, prosperity and culture. He had ambitions to export Egyptian economic nationalism and Banque Misr opened branches all over the region, including Lebanon, Syria, Sudan, Yemen and Saudi Arabia.

After two decades of success after success, Banque Misr experienced a liquidity crisis in 1939 and needed government intervention. The British, who were increasingly frustrated by nationalist upstarts like Talaat Harb, leaped on the opportunity and exacted their revenge – they pressured the Egyptian government to only support the bail out on the condition that Talaat Harb submit his resignation.

Loyal to the end, he happily sacrificed himself for the sake of the bank. Satisfied that he had done his duty, he died peacefully two years later. But his glorious legacy lives on.

Talaat Harb’s economic philosophy rings as true today as it did when he started his journey over a century ago. While he would have undoubtedly been proud of the number of strong, well-capitalized Egyptian banks we have today, I suspect he would have a thing or two to say about their lack of risk taking.

The fact is, despite Egyptian banks reporting record profits for the last few years, these have been generated, for the most part, off the back of government lending, the safest bet you can make to any Egyptian borrower. Very little lending capacity has been made available to the private sector as a whole, let alone the aspiring entrepreneurs who want to build a small and medium business.

The central bank’s recent focus on financial inclusion policies and the importance of lending to small and medium businesses, as well as the change in policy to source more government debt through the international markets, are good signs that we are now moving in the right direction. The state owned banks, such as Banque Misr, are leading the charge, while other privately owned banks such as EG Bank are focusing on more niche areas such as startups, innovation and renewable energy. CIB and Barclays have also identified the need for enhanced innovation and have launched their own financial technology, or “fintech”, accelerator programs.

We can and we should be doing more. Alot more. We should be embracing and supporting fintech, innovation and technologies that will significantly reduce the level of the unbanked over the next decade. This is the right thing to do and the profitable thing to do. Our ambitions should not be restricted to Egypt either and expansion into emerging and frontier markets in Africa, where we have a competitive advantage due to our historical, cultural, religious and political ties, is a no brainer.

Will the next Talaat Harb please stand up?

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