29 March - 4 April 2001
Issue No.527
|
Al-Ahram Weekly On-line 29 March - 4 April 2001 Issue No.527 |
||
| Published in Cairo by AL-AHRAM established in 1875 | Current issue | Previous issue | Site map | ||
Squaring the strategy
Minister of Economy and External Trade Youssef Boutros Ghali has initiated a debate over appropriate strategies to promote Egyptian exports, inviting comments on the ministry's own plans to improve Egypt's export performance. The existing strategy, covering the next three years, pinpoints five competitive commodity exports as potential engines for growth -- textiles, agricultural products, foodstuffs, chemicals, construction materials and iron and steel.
The ministry's export plan concedes, clearly, that there has been a disastrous failure to effectively promote Egyptian exports over the past five decades. Tellingly, in 1952 the ratio of Egypt's exports to GDP was ten times its 1999 figure. Today the ratio of exports to GDP has stagnated at four per cent -- two per cent if you exclude oil exports -- compared to 98 per cent of GDP in the case of Malaysia and, much further down the scale, 21 per cent in the case of Morocco. The Ministry of Economy's report, surprisingly, surpasses, in the bleak picture it paints of current export performance, even the searing criticisms originating within the private sector.
This candid admittance by economic decision makers of the magnitude of the problem is a step towards much needed transparency. But it is also indicative of the dilemma faced by these decision makers -- the discrepancy between their knowledge of what must be done on the one hand and their limited capacity to do anything about it at all on the other, this latter a by-product of a sluggish economic environment that is far from conducive to dynamic action.
In addition to outlining export plans, which is a necessary step, a reform of government mentality is also in order. For while Ghali's export strategy pinpoints the infrastructural, fiscal, marketing and sectoral reforms needed to realise export targets, it remains to be seen how this can be effected within the suggested three year timetable when there is nothing to indicate that the government's modus operandi can accommodate the implementation of such radical changes. How can Minister Ghali's proposed reform of taxation and customs be effected when the Sales Tax Authority, as the report itself points out, insists on levying the sales tax on imported capital goods in contravention of a court verdict which has supposedly set a different precedent in this regard?
The government also needs to instil in our fledgling private sector the confidence that it is supporting and working in its interests. As part of the suggested export promotion strategy, nevertheless, modifications have been made to the "temporary admittance" system under which importers pay dues as a guarantee against which they are allowed to import inputs utilised in export operations. By virtue of these modifications a number of textiles companies have been absolved of these dues, based on their "seriousness and sound reputation." However well intentioned, this step obviously has negative implications for those companies not included in the exemptions. Are they supposed to be of unsound reputation? And if so, why are they operating in the first place. Positive interaction with the private sector must occur across the board, and initiatives be as all-embracing as possible if the proposed export strategy is to bear fruit.
Finally, if promoting exports falls within the domain of the ministry of economy then the issuing of public statements should be the prerogative of this one ministry. Over the past six months, however, statements attributed to the prime minister have indicated that Egypt's export performance has improved. This contradicts the official data issued on exports, which clearly indicates that the increase has been due to a rise in commodity prices and oil export revenues rather than improved commodity export performance or the securing of a larger share of global markets. Such politicisation of the exports issue can only undermine the efforts currently being exerted to look the problem squarely in the face.
© Copyright Al-Ahram Weekly. All rights reserved
 |
|
|||||||||||||||||
| ARCHIVES Letter from the Editor Editorial Board Subscription Advertise! |
WEEKLY ONLINE: www.ahram.org.eg/weekly Updated every Saturday at 11.00 GMT, 2pm local time weeklyweb@ahram.org.eg |
 Al-Ahram Organisation |
Recommend this page