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Al-Ahram Weekly 31 August - 6 September 2000 Issue No. 497 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 31 August - 6 September 2000 Issue No. 497
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Travel Living Sports Profile People Time Out Chronicles Cartoons Letters Democracy for business
By Aziza Sami
With political tensions between the US and Egypt riding high the one question on the lips of administration officials in Washington tends to be a variant of "what possible use is Egypt to the US when it is not performing in the Middle East peace process to America's satisfaction?" Despite constant reiteration that it is committed to encouraging the private sector, the government continues to curtail the independence of associations representing industry and commerce. As a consequence these groups find themselves spending the bulk of their time and energy battling an oppressive administrative system.
Perhaps lessons might be learned from a country like Spain which, in less than a decade, was obliged to upgrade its economic performance to qualify for European Union (EU) membership. This required it to take a leap of faith from the guided, largely insulated regime of the Franco era to a dynamic economy where the main catalyst has become, as one Spanish businessman put it to this writer, mutual trust between the state and private enterprise.
The Spanish government has been able to give free reign to businesses and instill in them the confidence that their investments will bear fruit, for both them and for the system at large. It was not a sloganeering campaign to lure foreign investments, nor the constant soliciting of favourable international reports on the economy, that lay behind the Spanish success. What effected the transformation was the intangible, all-important element of mutual trust between the Spanish government and the private sector.
When Prime Minister Atef Ebeid met with business associations last week to discuss how they might contribute in efforts to "pull the market out of recession", it was a measure of last resort. The country's two largest national business federations, the Egyptian Federation of Industries and the Federation of Chambers of Commerce, suffer from government interference to the extent that they have become, in effect, subordinate to its ministries and incapable of effectively overseeing even their own organisation.
Control over these associations' operations has reached the stage where court rulings, issued at the beginning of the year, on the Federation of Chambers of Commerce elections, were being contested by the minister of internal trade and supply, effectively freezing the activities of the federation. Likewise the Federation of Industries is suffering -- despite the existence of one or two well-known businessmen at its helm -- because it remains in the end subordinate to the Ministry of Industry.
These veteran insititutions are not alone in being held hostage by the government. New business associations, which have proliferated like mushrooms in almost every governorate, have hardly become catalysts for investment and communication between entrepreneurs but rather one more expression of frustration.
The latest scuffle between an association and the government involved the 6th of October investors, who complain that their grievances over complicated banking procedures are being ignored. Also, that the banking sector is planning legal action against investors who have been slow in meeting credit repayment schedules, on the assumption that any businessman who does not repay his loans must be harbouring some criminal intent.
While local grassroot business associations collapse beneath the weight of government interference, business organisations with links to the outside world seem to be doing much better in terms of funding, in the capacity to network and in influencing government policy. Is it any coincidence that the American Chamber of Commerce is one of the most powerful business associations in Egypt and that, along with Egypt's International Economic Forum, it has escaped the restrictions that beset organisations which do not enjoy similar bilateral and multilateral links?
But just as globalisation has its influential advocates, Egypt's national industry and commerce must be able to organise bodies capable of representing specific interests. Democracy for business is in order, and the management of the economy must make far more room for pluralism than is currently the case. The government needs to end its control over business associations if national industry and commerce are to play any role in the economy at all, let alone help in redressing the ills that currently affect the market.
