Al-Ahram Weekly 14 - 20 September 2000 Issue No. 499
Published in Cairo by AL-AHRAM established in 1875

	Egypt Region Interview International Economy Opinion Culture Travel Living Sports Profile People Time Out Chronicles Cartoons Letters

Long-term gains

By Adel Beshai

The much-anticipated National Conference on Social Development is scheduled to begin on 17 September. It is fitting that it will be inaugurated by the Egyptian president, considering that the topic is of pivotal importance. The closing remarks by Mrs Suzanne Mubarak will add to the initial impetus, and hopefully the follow-up to the conference will be continuous, serious and productive.

Why is the subject of social development important? We do not have to re-invent the wheel or brag that we are introducing new concepts. The classical economist John Stuart Mill, writing in 1848, said that the end of economic activity is the welfare of mankind.

What does this mean? It means that if the economy of a country is growing rapidly, that does not automatically translate itself into welfare across the board and social development. Indeed, one can get situations where as an economy grows, the rich get richer and the poor get children!

But health and education aside, the subject has profound ramifications. Indeed, it could be seen as a guidepost to the Egyptian policy-makers who need to make drastic changes. A few scattered examples may clarify this point.

First, 10 years ago, our primary concern with economic reform was under the rubric of stabilisation measures: exchange rates, inflation, reduction of the budget deficit, etc. These were achieved. Beyond that, we were unduly concerned with maintaining these "static" gains without regard to dynamic aspects, which may call for "desanctifying the sacred" -- for example, realising that it is not that necessary to maintain the budget deficit at one per cent of GDP.

Second, our preoccupation with privatisation led some to think that privatisation is an end in itself. The lesson is: privatisation is not enough. For one thing, there is a role for the state. For another, privatisation requires an appropriate infrastructure of legal reform, institutional reform, banking reform, etc. Otherwise, it will limp along.

Third, enough of macro studies. We need micro approaches. If we are interested in social development, let us conduct micro surveys. Let us take a village and study it as a system. One lesson we may learn is "small is beautiful." A scheme that helps small-scale industries in villages will have an impact.

Fourth, the three basic human needs we studied in primary school are: food, shelter and clothing. We have fared very well in agriculture. We are fine with clothing. But when it comes to shelter, what is our record? What are the policies? How is land or sand priced? What is the land tenure system in the desert like? These are questions that need to be answered, recalling that speculation will not generate development or social development.

Fifth, we come to the private sector. Some parts of that sector have made enormous gains, in part due to inefficiencies in the institutional structure. In a sense, the private sector in Egypt is still in the nascent stage. It will come to realise that it is worthwhile to look into long-term gains. Long-term gains need vision and sacrifice. The government had vision in the last 20 years, when it made tremendous development in infrastructure. This benefited social development. But will the private sector realise that there can be no social development if a society is based on greed and avarice? Will it realise that it is no good to mortgage long-term gains for the sake of short-term expediency ? Will it realise that if it spends a little bit more on its employees this is good investment that will generate future benefits?

Finally, in this country, which has slightly more than one third of the world's antiquities, social development also means preservation of our national heritage. Modernisation is not at variance with preservation. In modernising our schools, using computers, we can make that technology a vehicle -- a servant -- to preserve the sublime -- a heritage -- rather than just be fascinated with the charm of technology. It must begin at school. In the end we will nurture in our society the appreciation and love of art. An antique minaret will not be pulled down; and the frescos of a church that are 1,400 years old will not be plastered with cement!

The writer is professor of economics at the American University in Cairo.

	weeklyweb@ahram.org.eg