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Al-Ahram Weekly 16 - 22 March 2000 Issue No. 473 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 16 - 22 March 2000 Issue No. 473
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Special Focus Travel Living Sports Profile People Time Out Chronicles Required: skills for the aftermath
By Rushdi Said
However long and difficult the negotiating process between the Arabs and Israel, begun in the wake of the Gulf War, has been, it seems likely that it will ultimately culminate in some form of settlement. Whether or not we agree with the way this process is being conducted or with the validity of the substance of the eventual settlement, the agreements that are struck will have an enormous impact on the future of the Middle East. As the region is reshaped by the terms of the agreements and the byproducts of peace, Egypt must decide whether it is prepared to contend with the changes that will take place.
I will attempt to limit my focus here to the future, avoiding the events that have brought the Arabs to their current position. To bring up the past at this point is futile. Any assessment of how the Arabs and Israelis brought the region to its current juncture will alter none of the realities that exist on the ground. Not only is it impossible to turn the clock back; at this point, raking up the past will only give rise to problems for which I believe no one is prepared to accept responsibility, at least in the near future. It is my purpose, therefore, to concentrate on the challenges peace will bring to the Arabs in general, and the Egyptians in particular.
One soon realises, however, that invoking the past is necessary to any discussion of the present, if only because the Arab-Israeli conflict has cast its shadow over the region since the birth of the Zionist movement in the late 19th century. Since the creation of the state of Israel, it has been the Arabs' overriding concern, into which they poured enormous energy and untold resources. This conflict, moreover, has been the prime determinant of their systems of government and the form and substance of their media, as well as the foremost rationale by which they have justified every shortcoming and failure. Today, the conflict continues to be the Arabs' primary preoccupation: since the 1990s, they have devoted inordinate amounts of time to the so-called peace process, pursuing the various international and regional diplomatic activities essential to the process and related issues.
Clearly, many Arabs would like to see an end to the ordeal, and believe that such an end, regardless of the type of settlement that brings it about, will be for the best. With peace, they feel, they will be able to resolve their domestic problems and stake out a more appropriate place within the new world that is taking shape. The Israelis hold many of the keys to this new world: most importantly, close relations with the US, the uncontested master of the world, and access to a free trade zone from which Arabs are barred as penalty for their refusal to normalise relations with Israel.
A large segment of the Egyptian business and administrative community holds this view -- even if its members are not yet prepared to declare so openly. Still, there remain those who refuse any form of interaction with Israel. Indeed, within this body of opinion, which is made up of actors from across the political spectrum, some reject any opening up to the outside world for fear of the effects on national identity, morals and the Egyptian economy. A significant proportion of the bureaucracy shares this view and seeks to limit all external influences that might diminish its sway in the media, human rights advocacy, the judiciary, the banking system, labour legislation and other realms that must be bared to the scrutiny of supranational organisations as the government enters the new world order.
We should keep in mind that Israel, too, is in the grip of conflicting considerations. There are those who fear that, with the signing of peace agreements and the subsequent opening of borders, Israel's identity will be engulfed by its Arab environment. Another body of opinion holds that establishing a network of relations and common interests with Arab businessmen and intellectuals will stimulate the Israeli economy and create powerful bonds that will enhance Israel's ability to control the region.
At any rate, the preponderant view on both sides seems to favour a settlement. In Israel, hundreds of intellectuals, scientists and economists are envisaging the ways in which peaceful relations with the Arabs can benefit their country's economic and security interests. The Arabs, in contrast, after having invested so much time and effort in the peace process, have done very little by way of preparing for the post-settlement phase.
Peace with Israel, by definition, will lead to the full normalisation of relations. The Arabs will be entering regional organisations with Israel that will render the continued existence of the Arab League difficult, if not superfluous. We have already witnessed the Arab League's gradual marginalisation since the inception of the peace process, a process that could well be intentional, and designed to pave the way for its replacement by new regional organisations in which Israel can participate. The most important such organisations emanate from the MENA economic conferences, which first convened in 1994. The US, even more than Israel, has been keen to promote these conferences, the next of which is to be held in Cairo this spring, because of the prospects they offer for regulating the respective roles of the various parties within the new Middle Eastern economic order.
Clearly, Egypt's role within this framework will be determined largely by its economic capacity, which I fear is too weak to qualify it for the status we would aspire to. Although Egypt has a population 10 times greater than that of Israel, we have a GNP of less than $70 billion compared with Israel's GNP of $98.2 billion. The per capita share of GNP in Israel stood at $16,180 in 1997, over 10 times that of Egypt for the same period, while per capita purchasing power in Israel is six times greater than it is in Egypt. Another indicator of the weakness of the Egyptian economy relative to that of Israel is the rate of energy consumption, which is also one of the major indicators of standards of living and the nature of economic activity. In Israel, per capita consumption of electricity is seven times that in Egypt (according to 1997 figures, 5,678 kilowatts/hour in Israel in contrast to 700 kilowatts/hour in Egypt). Although per capita electricity consumption in both Egypt and Israel rose 1.8 times between 1980 and 1997, every additional kilowatt-hour in Israel cost less than three-quarters of its equivalent in Egypt. This disparity, I believe, is due on the one hand to poor management of electricity in Egypt and, on the other hand, to the types of plants we have: most of these are financed through foreign aid or facilitated loans, which limits our choices.
With regard to the use of energy for commercial purposes, the per capita rate of consumption in Israel is four times that in Egypt (2,843 kilowatts versus 638 kilowatts respectively in 1997). Between 1980 and 1997, this rate increased in Israel by 120 per cent and in Egypt by 160 per cent, but we should not forget to take into account the impact of our enormous population growth on this figure.
Another energy consumption indicator has important implications with regard to the gap in economic performance. While Israel earns $5.6 dollars for every kilowatt of energy it uses for commercial purposes, Egypt only earns $1.6, or 3.5 times less. This not only implies inefficiency, but also underscores the fact that, in Egypt, energy consumption for commercial purposes is concentrated in the production of primary materials with low added value, which is one of the characteristics of an underdeveloped economy.
On the other hand, despite Israel's enormous lead in energy use, 96 per cent of its natural gas consumption depends on imports, with a natural gas deficit expected to rise to 220 billion cubic feet by 2010. Egypt, whose natural gas consumption is considerably less than that of Israel, is seeking to export considerable amounts of the natural resource, which it possesses in abundance. Revenue from such imports in the long run is likely to be limited, however.
The volume of energy consumption in Egypt, its use and the export orientation of energy planners combine to portray a developing economy that views energy as a commodity rather than a resource to fuel an expanding industrialised economy. When entering an international or regional economic order, a nation with such an economy will inevitably find itself dependent upon decision-making processes beyond its borders. Nor can it hope to have an influence nearly as extensive as that of a nation with an economy that pours far more of its energy into advanced technology industries with a large added value.
Egypt has been so preoccupied with the questions of making war and peace that it has neglected to prepare itself for the challenges peace will bring. Slogans regarding the significance of our location and Egypt's pivotal role in the Middle East will be of little use unless they have a certain economic basis. This could be difficult to swallow for the gullible, who tend to believe unquestioningly the praise international politicians pour on Egypt. Their attitude is sadly reminiscent of the days when the first white man landed on the coasts of Africa bearing worthless trinkets and promises, only to walk away with gold, ivory and slaves. In our case, the trinkets are aid packages intended to keep our economy afloat, but forever incapable of vying with that of Israel.
If Egypt is ever to achieve an honourable economic status, we must greatly increase our efficiency in exploiting our natural resources. This applies above all to our human resources. Half of Egypt's population is illiterate, while the other half is not equipped for today's job market. A businessman told me that none of the university graduates who applied for jobs in his companies could perform even the most basic tasks, such as writing business letters, compiling reports or driving a car. Unfortunately, the bulk of our labour force, engaged in various types of semi-skilled work, was trained outside the school system, through apprenticeship. In short, Egypt's economy has yet to emerge from the Middle Ages.
