New soccer stadium seals marriage between Gulf capital and Egyptian crony capitalism

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By James M. Dorsey

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A one-time revolutionary Egyptian force, the storied Egyptian soccer club Al Ahly FC is today the latest Emirati trophy in regional competition between Saudi Arabia and the United Arab Emirates and a potential symbol of Egyptian crony capitalism.

Al Ahly's engagement with Saudi Arabia initially and more recently with the UAE is a far cry from its founding in the early 20th century as an anti-monarchical club whose supporters played an important part in the 1919 anti-British revolution that paved the way for Egyptian independence three years later.

More recently, militant Al Ahly fans played a key part in the 2011 popular revolt that toppled Egyptian President Hosni Mubarak.

Al Ahly ultras commemorate their dead. Credit: The New Arab

A recent announcement of a consortium to build a US$252 million stadium for the club suggests that Egyptian security feels confident it has definitively quashed Al Ahly’s revolutionary zeal.

Seventy-two Al Ahly fans died in 2012 in a politically loaded soccer brawl in Port Said’s stadium in an incident widely seen as an attempt by the security forces and the military that got out of control to teach Ultras Ahlawy, the club’s most militant fans, a lesson.

Al Ahly's alliance with the UAE was cemented in June with the announcement of a consortium backed by the Gulf state that is slated to build a 17-hectare Al Ahly sports city in Sheikh Zayed City, west of Cairo, named after UAE founding father Zayed bin Sultan Al Nahyan. The city will host a 60,000-seat stadium, museum, school, university, shopping mall, and Hilton hotel.

The consortium was announced almost two years after Al Ahly contracted global architectural and design firm Populous Holdings, Inc., famous for building Arsenal's Emirates Stadium and London's Wembley Stadium.

Turki al Sheikh’s troubled involvement in Egyptian soccer. Credit: Daily News Egypt

Emirati engagement with Al Ahly, historically Africa’s most successful club with an 80 million-strong national, regional, and global fan base, capitalised on 43-year-old former Saudi sports czar Turki al-Sheikh’s disastrous efforts to position Crown Prince Mohammed bin Salman’s kingdom as a global football power.

Mr. Al-Sheikh, whose tenure as head of the Saudi General Sports Authority amounted to a train wreckage, was appointed Al Ahly’s honorary chairman in late 2017 in exchange for promising to fund construction of the club’s new stadium, dubbed ‘the project of the century.’

Mr. Al-Sheikh’s tenure lasted all of five months. The Saudi official was booted out of Al Ahly after he moved three Al Ahly players to Saudi clubs, hijacked Argentinian coach Ramon Diaz as he was finalising his hiring by the Egyptian team, and agreed to finance a stadium for Al Ahly archrival Al Zamalek FC.

Picking up the pieces, all the UAE needed to do was shoot into an open goal. Al Ahly added a crown jewel to the Gulf state’s mounting influence in the Arab world’s most populous country.

It complemented the UAE’s inroads into Al Azhar, the 1,054-year-old Cairo-based citadel of Islamic learning, support for the 2013 coup that toppled Mohamed Morsi, Egypt’s first and only democratically elected president, and alliance with general-turned-president Abdel Fatah al-Sisi.

Credit: Daily News Egypt

Earlier this year, Egypt signed a US$35 billion deal with the UAE to develop a prime stretch of its Mediterranean coast that boosted the country's crisis-stricken economy and helped Egypt secure an expanded US8 billion International Monetary Fund (IMF) loan.

To be sure, the COVID-19 pandemic, rising commodity prices because of the Ukraine war, the fallout of Israel’s Gaza campaign, and spiraling tensions in the Red Sea have cost the Egyptian economy dearly.

Public debt accounts for 90 per cent of the country's gross domestic product (GDP). Capital is fleeing the country, and Egypt's currency lost 60 per cent of its value against the dollar in March after the Central Bank raised its main interest rate and allowed market forces to set the currency's exchange rate.

Egyptian military personnel display foods manufactured by the armed forces. Credit: Jadaliyya

Even so, Egypt’s core economic problem is government mismanagement.

For the past decade, Mr. Al-Sisi has bet on mega-projects, including the world's longest, US$23 billion driverless monorail, a US$50 billion New Administrative Capital near Cairo, and a US$8 billion expansion of the Suez Canal.

The projects have artificially driven economic growth.

Awarding mega projects to the Egyptian military's vast money-making business network has compounded Egypt's structural problems by disenfranchising the private sector, discouraging foreign investment, and making Egypt increasingly dependent on foreign credit.

"The reason why the pandemic and the Ukraine war have had such a big impact is because of the investment strategy led by Sissi for nine years: Massive spending on huge projects, some of which were totally unnecessary or poorly conceived (has) made Egyptian finances very vulnerable, without providing the economy with real gains,” said scholar Yezid Sayigh.

Model of new Al Ahly stadium. Credit: KingFut

The composition of the consortium expected to build the Al Ahly stadium suggests that Egypt's crony capitalism continues to thrive with the support of the UAE. The UAE's aid to Egypt increasingly focuses on investment in trophy assets that are often controlled by the Egyptian military.

The consortium's board, Red Castle Facilities Management Company, includes six former Egyptian ministers and two retired military officers.

Media reports said that Dalia Khorshid, a former investment minister and wife of a former Central Bank governor, who is believed to have ties to Egyptian intelligence, is also involved in the consortium.

The consortium, headed by Emirati construction company Al Qalaa Al Hamra Co, includes multiple UAE and Egyptian military-linked enterprises. UAE telecom giant Etisalat is one of Al Ahly’s sponsors.

Among the Egyptian members of the consortium are the Alexandria Medical Services Company, which works for the National Security Council and the Mediterranean city's security services; ACE Moharram Bakhoum, which executes military contracts; and ECG Consulting Engineers Group, which is tied to Egypt's National Authority for Military Production. 

Sons of Sinai build a buffer zone. Credit: Watan

Construction company Sons of Sinai may be the consortium's most mysterious member. Businessman Ibrahim Al-Arajani owns the company.

A fugitive of justice less than a decade ago, Mr. Al-Arajani became a tribal battalion leader, a partner in Egypt's war on militants, and currently one of the country's most influential businessmen who controls traffic in and of Gaza at the Rafah Crossing, when it’s open, and has close ties to the military.

Sons of Sinai reportedly was building a buffer zone on the Egyptian side of the border with Gaza should Israel’s Gaza war spark a Palestinian exodus. The company also warehouses aid shipments destined for Gaza.

Media reports suggested that Cairo-based Hala Consulting and Tourism, owned by the Arajani Group, charged Gazans before the Israeli takeover in May of the Rafah Crossing linking the Strip to Egypt for exit permits ranging from hundreds to thousands of US dollars per person. The business earned Mr. Al-Arajani the nickname, King of the Crossing.

Dubai-based sports critic Ahmed Saad charged that the new Al Ahly stadium crowned a decade of Egyptian security efforts to ensure that the club and its militant fans do not re-emerge as a virulent political force.

Arguing that the cash-strapped government’s concern had evolved into a desire to benefit financially, Mr. Saad asserted that “the process of selling Al-Ahly Club to the Emirates has been launched” with the construction of a new stadium.

Dr. James M. Dorsey is an Adjunct Senior Fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies, and the author of the syndicated column and podcast, The Turbulent World with James M. Dorsey.