14 - 20 February 2002
Issue No.573
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Al-Ahram Weekly Online 14 - 20 February 2002 Issue No.573 |
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Extending the safety net
The Social Fund for Development won the lion's share of donor pledges at Sharm El-Sheikh. But it still got far less than it wanted
When the Consultative Group for Egypt met in Sharm El-Sheikh on 5 and 6 February, the Egyptian government requested $2.5 billion to cover its balance of payments deficit. Out of this $2.5 billion, $1.5 was requested by the Social Fund for Development (SFD) to finance projects that focus on job creation and rural development. In the end, however, the SFD received somewhat less ($500 million for this year's projects), Soha Abdelaty reports.
photo: Salah Ibrahim
"The total amount that has been discussed and approved in principle is about 30 per cent of what we requested," said Hussein El-Gammal, secretary-general of the SFD. But this does not necessarily mean the SFD has been shortchanged: "The rest will be negotiated as the five years proceed and we will continue discussions during the course of this year," El-Gammal said. Various Arab funds will contribute $350 million over the next three years. Other donors include Japan, Canada, the Islamic Development Bank, the African Development Bank and the European Bank for Development, as well as members of the European Union, who will contribute 375 million euros over the next three years.
The gap between what was asked for and what was finally received, according to El- Gammal, lies in the fact that the Fund has come up with a five-year plan, which is why it wanted such substantial funds. On the other hand, most of the donors that attended the meeting had only devised annual or biennial budgets. "Each donor has a strategy for pledging, either annually or every two years," explained El-Gammal. "Few will commit themselves to five years of funding," he added. "But the idea is to present a comprehensive five-year plan, with estimated funding phased on a yearly basis. Then we will see how things will go."
The 2003-2007 plan for the SFD intends to define a clear strategy in consultation with donors, civil society and business and to target resources for three interrelated areas: poverty reduction, job creation and enterprise development.
One of the five sessions at the conference was dedicated to the SFD, and discussion of its management, purposes and accomplishments to date. Even before the meetings began, European Commission representatives who talked to Al- Ahram Weekly were sceptical about the amount of help the SFD wanted, adding that they had reservations about the work of the Fund that they wanted to discuss and hinting that reforms might be due. One change that several donors would like to see is for the SFD to take on a permanent and independent status, instead of being a "safety net" for government economic reform policies.
Furthermore, donors feel that, despite initial successes, the SFD will face several challenges in the years ahead. "In particular, the Social Fund's mission must be clarified to ensure management integrity and autonomy, to decentralise and target the poor more effectively and, finally, to strengthen management systems," said the final communiqué at the conference.
In addition, donors requested several assurances from the government regarding the SFD's work, including "further financial support, concentration on core activities, completion of arrangements for the Small Enterprise Development Organisation (SEDO) and clarity on the role of the Social Fund vis-à-vis ministries," added the communiqué. El-Gammal denied rumours that there was a lack of coordination between the SFD and relevant ministries. "We all work with each governorate through steering committees, which designate the nature of the projects that the governorate wants. Furthermore, these governorates take their strategy from the central government," El- Gammal said.
The donors also seem to prefer projects suggested by the SFD. Some also had specific preferences, smiling on projects related to women and health, for example, or on those relating to small and medium enterprises.
Nevertheless, despite these differences in attitude, the overall tone among donors was supportive, stressing the important role that SFD can play in alleviating poverty. The Japanese delegation, for example, decided this year to contribute to the Fund for the first time, pledging $32 million to the SEDO. Other donors felt that they wanted specifically to back the SFD. The German delegation told listeners that for every "Egyptian pound that the government contributes to the Fund, it will be met with one dollar of support from Germany for small and medium enterprises."
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