22 - 28 February 2001
Issue No.522
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Al-Ahram Weekly On-line 22 - 28 February 2001 Issue No.522 |
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Seeking a place
By Aziza Sami
Assessing the impacts of globalisation has long since ceased to be an academic, theoretical exercise. And with the implementation of WTO directives within three years in banking, the commodities trade, and in medical and accounting practices, allowing foreign competitors to open shop within Egypt, our ability to cope with that competition will be the lodestone by which the health of the local economy is measured.
In a recent interview with Al-Ahram Weekly Minister of Industry Mustafa El-Rifai painted a depressing picture of the ability of local industry to cope in the face of competition. Apart from a few cosmetic moves, such as the opening of technological upgrading centres, few steps have been taken in the past decade to improve competitivity. The minister himself painted a bleak picture, suggesting that with liberalisation will come the closure of several industries that have hitherto retained a relatively secure position servicing a protected local market.
Several years have undoubtedly been wasted. Now, though, there is no question that we can continue to fail to take seriously the potentially devastating impact of GATT agreements on the domestic economy. Policy makers must now address the most pressing issues square in the face.
The procrastination that has also characterised policies dealing with financial sector reform, let alone privatisation, must be transformed into assertive action. And while our approach to globalisation has consistently been to play-up the potential strengths of the Egyptian economy, a strenuous task in itself, it must now take account of the inherent weaknesses.
Egypt is being head-lined, in the local press at least, as a major gas exporter. Yet despite the plethora of announced export plans, little, if anything, concrete has yet materialised. So politicised has the issue become that within the past five years no less than five impending gas export agreements have been announced, only to fade away into obscurity.
More recently it has been suggested that the domestic market is itself capable of consuming Egypt's natural gas reserves, an argument that began to be posited over a year ago and then retracted again, under the present minister, Sameh Fahmi.
So, is Egypt a natural gas exporter, or is it not? The answer, like the answers to many economic questions, depends on who you ask, and just what the political situation is at the time.
Western funding institutions and donors propagate the view that Egypt's economic strength lies in services: mainly tourism and the financial sector. What is our take on this?
We need, too, to ask whether in soliciting investments, both domestic and foreign, we have given sufficient priority to those capable of promoting economic growth or whether funds have instead been channelled into the endless development of malls and consumer chains that relay a suitably ersatz version of London and Paris but which can hardly be said to be of much assistance to the domestic economy's own floundering production structures?
And what is our view on the future of the Egyptian currency? At a time when central banks the world over are working towards isolating a clear formula on how to deal with exchange rate fluctuation in light of the international developments that come hand in hand with globalisation, what is the Egyptian take on the situation?
What have we done to encourage a strong private sector? Equally relevant, what have we done to open up our political structures in such a manner that they can encompass young people, the future generations on which our prosperity will depend?
Have we done anything other than to defend, procrastinate and feel an increasing sense of trepidation at the globalisation that has yet to come? If the answer to this is no, it is surely now time that we seek to integrate our economic outlook with international developments. It is late, though perhaps not too late. And failure to do so will mean a failure to hold our place in this world.
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