* Billionaire says says not ready to invest in Egypt
* Message not good news for hopes of economic recovery
* Says iron fist policy toward opposition deters investment
* Legal changes also needed to protect investors -Sawiris
By Mirette Magdy
CAIRO, June 30 Egyptian billionaire construction
tycoon Samih Sawiris said he has no plans for new investments in
his country while political oppression and legal failings
continue to obstruct economic revival.
The largest Arab state is in urgent need of major stakes
from magnates like Sawiris, who could invest millions of his own
fortune and in so doing mobilise much from foreign investors.
It will be hard for Egypt to recover otherwise, since aid
from Gulf Arab allies will eventually dry up and growth
forecasts of about 3 percent are far below the level needed to
create enough jobs to keep up with rapid population growth.
New President Abdel Fattah al-Sisi has made security and the
economy his top priorities, pledging to pursue a crackdown on
the outlawed Muslim Brotherhood and seeking local and foreign
investments to supplement billions in Gulf aid.
More than three years of political turmoil since the ouster
of veteran autocrat Hosni Mubarak in 2011 has scared off
investment and tourism in the most populous Arab country.
Sisi, who toppled elected President Mohamed Mursi last July
and as army chief launched a campaign against his Brotherhood
supporters, must act quickly to address economic grievances
which helped bring down two presidents in the past three years.
Sawiris, a member of the Christian minority that comprises
about 10 percent of Egypt's population and largely backed
Mursi's removal, said he was hopeful about Sisi but called for
an end to the state's use of force and intimidation.
"If the oppression of innocents ... does not stop, the
government will not take bold decisions to revive the economy
and investment," he told Aswat Masriya, a news website sponsored
by the Thomson Reuters Foundation.
Leaders from Mursi's year in office have been rounded up and
prosecuted, sometimes in mass trials, with many sentenced to
death. Courts this month sentenced three Al Jazeera journalists
to seven years on charges including supporting the Brotherhood,
stirring an international furore.
Several Mubarak-era ministers have also been jailed on
corruption charges, including former finance minister Youssef
Boutros Ghali and former trade minister Rachid Mohamed Rachid.
The primary barrier to investment in Egypt now is the fear
generated by such tactics that prevent officials from taking
bold decisions that might later land them in jail, Sawiris said
in an interview earlier in June.
"I do not plan to invest in Egypt until there are changes to
the legal system to support and protect investors," he said.
"Investments will not come to Egypt unless the legal system
which governs executive action is revised."
The government approved a law in April preventing third
parties from challenging contracts between the government and an
investor, a tactic used by anti-corruption activists.
The new law was seen as a positive step for attracting
investment, but Sawiris said other legal gaps mean officials
remain afraid to take decisions, discouraging new investments.
Sawiris hails from a prominent family which controls the
sprawling Orascom corporate empire. He runs Swiss-based Orascom
Development Holding, which operates tourist resorts and
real estate projects in Egypt and Europe.
His brothers, Nassef and Naguib, hold top managerial
positions in Orascom Construction Industries and
Orascom Telecom, respectively.
Naguib, who backed the opposition to Mursi, told Reuters
days after the Islamist president's overthrow that he and his
brothers would be "investing in Egypt like never before". Nassef
set up an investment firm this month that announced two projects
worth about $300 million.
For now, Samih seems to be breaking stride with his
brothers, preferring to resolve a long-standing dispute with the
government over land allocation before entering new projects.
Underlying his tempered approach is unease about the fate of
Egypt's already dwindling middle class.
He said planned cuts to Egypt's bloated energy subsidies
would hit this segment of the population the hardest.
"The coming period will be a massacre for the middle class
..., which will witness a new period of deterioration in its
standard of living," said Sawiris.
(Writing by Stephen Kalin; Editing by Mark Heinrich)