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Al-Ahram Weekly 14 - 20 October 1999 Issue No. 451 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 14 - 20 October 1999 Issue No. 451
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Books Features Profile Travel Living Sports People Time Out Chronicles Cartoons Letters Shifts of emphasis
By Gamal Essam El-DinAfter days of frenzied speculation and amid expectations of "change" the naming of Prime Minister Atef Ebeid's new cabinet on Sunday came as an anti-climax.
"The Shock," was how the daily Al-Wafd, mouthpiece of the Wafd Party, headlined a front page editorial the day after the announcement. "This is not the change we have been waiting for," wrote Said Abdel-Khaleq, the paper's co-editor-in-chief. "It is not the change the people were expecting."
President Hosni Mubarak acknowledged that "there are some who feel that the change that occurred in the cabinet reshuffle was insufficient." In comments to Al-Mussawar's Editor-in-Chief Makram Mohamed-Ahmed, published yesterday, Mubarak stressed, however, that "the change [that did take place] was reasonable, taking into consideration the need to maintain stability and sustainability."
Mubarak, who told Mohamed-Ahmed that he expected that the governors' reshuffle -- to be announced next Sunday -- will involve half of the country's 26 governors, hinted at further changes to come. Explaining the difficulties encountered in finding 'the right man for the job' -- "since many qualified people prefer to stay away from public life" -- Mubarak insisted that "nevertheless, we shall continue to be on the look out for new elements who might contribute to public action, for the process of change is on-going and will not come to a halt."
Nineteen ministers, including the key portfolios of defence, foreign affairs, the interior and information, maintained their posts in Ebeid's new cabinet. Thirteen new ministers were appointed while 10 lost their posts. Two new portfolios were created, while a new-comer filled Ebeid's public business sector portfolio.
On Monday morning Ebeid led his newly-formed cabinet to the swearing-in ceremony before President Mubarak. After the ministers took the oath of office, Mubarak presided over the first meeting of the new government, the 11th since he took office in 1981.
Mubarak's 11th cabinet may not look that different from its predecessors, but the change of prime minister as well as subtle shifts in the balance of power within the ministerial line-up (involving both new-comers and incumbents) seem to indicate, if not a new policy, a new determination to see that the government's commitment to economic liberalisation is put into effect swiftly and with considerably more vigour.
To the disappointment of the opposition, it is economic, rather than political liberalisation, that continues to top the administration's agenda. And all indications are that the privatisation drive, which got into a rut in the past year, will gain new momentum. The appointment of at least five economic liberalisation-minded personalities to key economic portfolios and expanding Youssef Boutros Ghali's powers to include foreign trade in addition to economy also indicate that the new cabinet intends to attract more foreign investments and make Egyptian exports more competitive.
The five new economic ministers are Ebeid's former adviser Moukhtar Khattab, now replacing Ebeid as minister of the public business sector; Hassan Khedr, minister of supply and internal trade; Medhat Hassanein, minister of finance; Ahmed El-Darsh, minister of planning and international cooperation and Ahmed Nazif, minister of communications and the information industry.
Many economic analysts believe that Ebeid's predecessor, Kamal El-Ganzouri, by centralising powers in his own hands, slowed down the privitisation process.
Ebeid's anticipated efforts to speed up privatisation are expected to face obstacles. The programme saw a peak of activity in 1996 and 1997, but in the first half of this year reached a point of near stagnation. At the year's beginning, the government announced it would divest its stakes in 34 companies before the end of July. However, only 12 firms have so far been privatised.
According to former economy minister Mustafa El-Said, the problems Ebeid faces are numerous. "The biggest problem is that most of what is left on the privatisation list are debt-ridden, loss-making companies," El-Said said.
To overcome this dilemma Ebeid is expected to seriously consider selling off vital sectors such as banking, insurance, telecoms, electricity as well as industry, tourism, construction and trade.
The appointment of Ahmed Nazif as minister of communications and the information industry and Ali El-Sa'idi as electricity minister is expected to help Ebeid to privatise sections of the telecommunications and energy industries.
Apart from privatisation, export promotion will be high on the government's list of economic priorities. Economic reports indicate that the deficit in the trade balance has grown from $7.5 billion in 1990/1991, to $11.7 billion in 1997/1998 to $12.5 billion in 1998/1999.
"One reason for this huge deficit is that El-Ganzouri's government embarked on various mega development projects simultaneously. This is why machinery and transport equipment dominated the imports bill (accounting for 26 per cent of the total) in 1998," said MP and businessman Mamdouh Thabet Mekki.
Closely related to export promotion is addressing the problem of foreign currency shortages. The liquidity squeeze and the shortage of dollars which hit the market this year were, many believe, the main reason for El-Ganzouri's dismissal.
"It seems again that Minister Ghali will be the main player in this area for the next period. El-Ganzouri's over-centralised system excluded him from playing any role in addressing the liquidity crisis when it hit the market eight months ago. Now Ghali will have to come forward with new ideas to deal with the banking sector," said El-Said.
Additional reporting by staff
