10 - 16 January 2002
Issue No.568
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Al-Ahram Weekly Online 10 - 16 January 2002 Issue No.568 |
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Expanding slogans
For years, officials and businessmen have insisted that expanding exports is necessary to our very survival. On the other hand, the GATT stipulates that, by 2005 at the latest, the Egyptian market must accept imports without restriction. Egyptian products must therefore be able to compete on local and foreign markets.
To achieve this goal, certain measures have been taken over the years: legislation governing investment was modified, and businessmen received tax holidays, tariff advantages and other export incentives. As a result, wealth accumulated, millions of pounds were smuggled out of the country and various investment projects failed: factories shut down and public- sector companies were sold to the private sector. All the while, we were told that these reforms were enabling the necessary transition to a free market: they would allow us to receive aid, and would provide millions of unemployed graduates with jobs. Prosperity, everyone said, was at the door.
Ten years after these policies were first implemented -- and after a decade of their relentless promotion -- the result, to put it mildly, is disappointing. Most of the Egyptian products that flooded the markets (of varying quality, but reasonably priced on the whole) did not withstand the competition. Cheaper, better-quality and more attractive imports quickly replaced them. The most cursory look at clothes, dairy products and other consumer goods will reveal that only a stupid consumer would prefer a given Egyptian product to its counterpart from China, Saudi Arabia or Jordan, let alone the EU. Chinese products, which must cost a lot to transport, remain cheaper and better: even garlic and apples are now imported from China. Failing even in the agricultural arena, we are now content with slogans urging Egyptian consumers to support local production.
As for locally made industrial goods and appliances -- cars, refrigerators, electric ovens -- they invariably depend on components from abroad: almost nothing that goes into them is manufactured locally. Now that imported medicines are flooding the market, moreover, the pharmaceutical industry is likewise on the verge of extinction.
How did this happen? Sadly, there is no sensible answer to that question. Prime Minister Atef Ebeid a few days ago, told me that the dollar crisis is largely a result of a LE5.4 billion increase in imports in the past four years. This took place, naturally, without a corresponding increase in resources. An increase in resources does not happen by order of the government. Rather, it results from an increase in exports and other economic activities.
When I heard about the most recent decisions to free textile imports and allow clothes bought in Port Said to be brought into the rest of the country tax-free, it seemed to me that we had returned to the early 1980s, when such decisions were first made. In the last blissful years before crises in currency and tourism had beset us, the state encouraged consumerism in a way that remains inappropriate for a country with limited resources. Businessmen and the rich spent fortunes on accumulating real estate -- palatial villas and tourist "villages" on the Mediterranean coast -- instead of using that money to support production. It remains up to us, although we know little about economics, to decipher the mysteries of the Egyptian economy, leaving the slogans aside.
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