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Al-Ahram Weekly 18 - 24 May 2000 Issue No. 482 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 18 - 24 May 2000 Issue No. 482
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Focus Features Heritage Travel Living Sports Profile People Time Out Chronicles Cartoons Letters A culture of blame
By Aziza Sami
The flurry of decrees issued over the past two weeks in an attempt to alleviate the on-going recession and liquidity crisis betrays a long-standing practice of first issuing , then revoking decrees, a practice which has reached a level constituting a crisis in decision making.
The government's recent announcement that there would be no new mega-projects is typical of the pattern. "The lesson we have learnt is that markets should be scouted before expenditure is allocated. There should be a certainty that markets exist, as a prerequisite for these projects to be feasible," said the prime minister Atef Ebeid in an interview with the weekly magazine Al-Musawwar.
The implication, of course, is that projects were launched without sufficient preparation. The prime minister said his government would work to "raise the feasibility" of the three standing mega-projects which have already cost LE10 billion.
Two weeks ago, the government also decided to take action to help the beleaguered construction industry, and on 30 April announced the abrogation of "all decrees [based on martial law 106] issued by El-Ganzouri's government regulating construction, demolition and Nile protection." The cancellation of 13 decrees issued from 1996-99 was aimed, the government said, at lifting restrictions on the industry in an attempt to activate the sector. Directives were compiled instructing officials to facilitate the issuing of building permits. And the result? Confusion reigned in the governorates' engineering divisions which are responsible for issuing building permits, while in a single week eight villas were demolished in Cairo and Alexandria. Then on 8 May, in response to the public outcry provoked by the cancellation, the government undertook a startling U-turn, announcing that "the martial law is ongoing, and that there will be no demolishing of old villas."
The prime minister initially defended the cancellation of construction and demolition decrees by arguing that the construction sector needs to comply with regular housing regulations rather than martial laws, which seems to indicate a belief that the construction sector is adequately regulated, something that has always been less than apparent on the ground.
In a bid to further engineer a revival in construction, the government announced its intention to push through a draft mortgage law during parliament's closing session. Yet the draft -- which until late last month was, the ministry of economy conceded, "under review by experts" -- has met with a mixed response from the banking sector because it purports to establish new lending institutions rather than support the banking sector with additional credit mechanisms. This also raises questions over how fast the mortgage draft law can be implemented, however urgent the need for it, when its articles are still in need of fine tuning.
Most of the key figures in the present government worked under the previous administration. Indeed, the prime minister started out with an agenda which, apart from the emphasis on accelerated privatisaton, remains in broad terms almost identical to that of his predecessor. Yet in the seven months since it came to power, the cabinet has continually pronounced the decisions of the last administration as mistaken, a U-turn most obvious in the attitude to the flag-ship mega projects. Once hailed as the key to the future, these are now tacitly, sometimes overtly, viewed as having been pushed forward too quickly.
Ebeid's statements imply that due consultatative processes inside the cabinet may well be lacking and that policies are still not divorced from the person of the prime minister. "Whoever undertakes a task imagines that what he is doing is right, that his priorities are right," Ebeid told Al-Musawwar in response to a question on the mega projects. Carried over to the economy, the effects of such an autocratic management style cannot be overestimated. And their impact on the market is unlikely to be set right by endless political statements.
