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Al-Ahram Weekly 20 - 26 January 2000 Issue No. 465 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 20 - 26 January 2000 Issue No. 465
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Profile Travel Living Sports People Time Out Chronicles Cartoons Letters The price paid by the poor
By Fatemah Farag
As far as the implementation of Economic Reform and Structural Adjustment Programmes (ERSAP) goes, Egypt's is a success story. Substantial policy reforms over the last decade have accelerated economic growth, reduced inflation, improved the balance of payments situation and engineered a substantial decline in the ratio of external debt to GDP. They have not succeeded, however, in halting ever increasing rates of unemployment and poverty.
The newly developed Qattamiya District provides a stark reminder of the uneven returns on development. Up on a hill is a lush golf course, the grass imported from Florida, complimented by a luxurious club house and an extensive complex of lavish villas -- witness to the wealth creation generated by current policy.
Five minutes drive away is a district of low-grade housing, built to house those whose homes were destroyed by the 1992 earthquake. Here Fakiha lives in two small rooms with her five children, husband and mother-in-law.
"Life is hard. We have very bad water and the houses are shoddily built. There is no convenient transport to the city, yet here work can only be found in the city centre."
The people who inhabit this part of Qattamiya can only look over the hill and dream of a better future.
ERSAPs inevitably impact negatively on the standard of living of the most vulnerable members of society. As privitisation takes hold, employment structures are radically changed at the same time as the government withdraws from its role as provider of basic services. And though the Egyptian government has been assiduous in adopting a cautious, gradual approach, the fact that a price must be paid cannot be ignored.
Most indices show an increase in poverty, more marked in rural districts, but increasingly felt in urban areas. A recent study by Heba Nassar, professor of economics at Cairo University, noted that "the former lower middle expenditure category moved to a status of long term or chronic poverty. The living conditions of this class, which depends mainly on employment as their source of income, were adversely affected by ERSAP due to the increase in the cost of living, removal of a significant share of food subsidies, changes in the employment policies, privatisation as well as the limitation in the delivery of free social services."
Among the worrying trends documented is the "feminisation of poverty", a result not only of inadequate incomes but also inequities in education, assets, food and property allocation. Tackling the problem gains added urgency given the increasing number of female-headed households in low-income brackets.
Some estimates place Egypt's unemploymet rate at 17 per cent. And among the unemployed a staggering 75 per cent are made up of young people.
Waiting for work: unemployed labourers stand in line
photo: Aref Saadeddin
A recent study by Ragui Assad indicated that the government remained the major employer and that the capital intensive nature of new investment has made the private sector a poor employer.
In a country where the bulk of low income families' expenditure is accounted for by food, subsidies decreased by 41 per cent between 1973 and 1989. And while food subsidies stood at LE3,786 million in 1984/85 they had shrunk to LE865 million by 1995.
In the field of health care provision cost recovery programmes in government facilities have increased not only the cost of basic services but of drugs as well. Expenditure on health care as a proportion of GDP declined from 1.2 per cent in 1970 to 0.6 per cent in 1995. The Ministry of Health has reported that the provision of beds within hospitals per 1,000 citizens declined from 14.4 in 1979 to 11.64 in 1995.
Aneamia is widespread among the poor. Respiratory diseases such as pneumonia and bronchitis have emerged as major causes of death while chronic infections and parasitic diseases such as bilharzia are widespread among the poorest members of the population. Cholera, hepatitis and tetanus are all on the increase. Expenditure on education as a proportion of total public expenditure declined from 15.3 per cent in 1966-67 to 10 per cent in 1994-96. There has also been an introduction of moderate fees in schools and free universities, ranging between LE20 to LE40 per year, i.e. five per cent of the basic annual salary of a low grade government employee.
The deteriorating situation has been compounded by an increase in class sizes and by the now ubiquitous offering of private lessons to pupils in public schools.
As poverty has become more widespread, luxurious housing complexes thrive next to the shanty housing of the poor; fancy cars drive side by side with dilapidated busses down over-crowded streets and new supermarkets stock French cheeses while children search the garbage for leftover food.
An extensive Social Insurance System (SIS), the Social Fund for Development, Family Development Fund Project (UNICEF), the income-generating projects of several NGOs, the Productive Family Programme (Ministry of Social Affairs), the Mubarak Social Security Scheme and the National Programme for Integrated Rural Development all purport to act as social safety nets. Old age pensions and sickness benefits remain the constitutional right of each citizen. It is estimated that in 1994-95, SIS covered 15,883,000 insured persons while there were 5,986,900 pension recipients.
Pensions, though, remain low -- many not exceeding LE35 per month. Increases in the consumer price index have further eroded the real value of pensions. The government is currently discussing the need to re-evaluate and update insurance as well as social and health insurance schemes.
The endlessly repeated mantra is that the negative effects of ERSAP on the poor, and the creation of a new class of the poor, are temporary and that outward looking market-oriented policy reforms in the long run contribute to poverty alleviation not only by stimulating investment, trade and growth but also by assuring that patterns of growth are not biased against the poor.
When asked whether she thought her children would some day play golf at the complex nearby Fakiha considers the question carefully before answering.
"I think maybe they might get some kind of job there which would be very good. Surely people so rich would pay well?".
