21 - 27 February 2002
Issue No.574
|
Al-Ahram Weekly Online 21 - 27 February 2002 Issue No.574 |
||
| Published in Cairo by AL-AHRAM established in 1875 | Current issue | Previous issue | Site map | ||
Is a saviour needed?
As expected, the government's policy statement to the People's Assembly was met by a barrage of criticism from most opposition MPs. Gamal Essam El-Din gauges the reaction on the left
The People's Assembly began its annual marathon of parliamentary debates over the government's policy statement on 13 February -- a time-extensive run that has historically brought flocks of speakers to the floor. This year the participants are slightly more scarce, with just 202 majority and opposition deputies expected to take the floor -- the lowest number in many years. They will discuss an 180-page special committee report prepared in response to the policy statement delivered by Prime Minister Atef Ebeid on 8 January. The report focuses on what it calls "high-priority economic issues," ranging from the deficit in the balance of payments and the state budget, to the foreign exchange problems and market recession.
In preliminary debates over the statement, as many as 15 leftist-oriented MPs came up with a long list of objections. Their position goes in line with the three-year-old misgivings with which they greeted the appointment of Atef Ebeid as prime minister in October, 1999.
The majority of leftist MPs strongly believe that the poor and autocratic performance of Ebeid's government is mainly responsible for the aggravation of Egypt's economic problems -- which flared in the summer of 1998, emerging in the form of a foreign exchange squeeze and severe market recession.
"The economic performance of Ebeid's government is deteriorating all the time and we have two recent events that strongly testify to this fact," Abul-Ezz El-Hariri, a member of the leftist Tagammu Party, told Al- Ahram Weekly.
The first one, El-Hariri said, is the statement delivered by Prime Minister Atef Ebeid before a Consultative Group meeting in Sharm El-Sheikh on 5 February. "In this statement, we were strongly surprised by how Ebeid was pessimistic in assessing the negative impact of 11 September's terrorist attacks in the US on the economy," said El- Hariri. This, he added, was contrary to the optimistic note with which he presented his government's policy statement before the People's Assembly.
In the People's Assembly, El-Hariri argued, Ebeid's statement expected that the 11 September terrorist attacks would leave Egypt suffering a deficit of $2 billion in its balance of payments. "Even in an earlier statement delivered before parliament on 9 December, Ebeid seemed sure that the deficit will not exceed $1.8 billion," said El-Hariri. In these two statements, El-Hariri said, Ebeid was so optimistic that he insisted that "repercussions of the 11 September attacks are just a temporary problem and will never reach a crisis point."
"It is now clear to all," El-Hariri said, "That these repercussions have reached a crisis point and Ebeid's statement before the Sharm El-Sheikh meeting attests to this fact."
In his address, El-Hariri added, the prime minister expected the deficit in the balance of payments for the year 2001/2002 will be ranging from $3.2 billion to $6 billion -- a sizeable discrepancy.
"In their early assessment of 11 September attack on the economy," El-Hariri said, "leftist economists said the foreign exchange losses (or the deficit in the balance of payments) are expected to range between $5 billion and $7 billion. Ebeid adamantly refused to admit our figures and insisted on his optimistic and rosy approach. This is why we do not trust him and are going to object to his statement in the coming parliamentary debates."
The other issue bashed by leftist MPs as clearly showing the Ebeid government's failure to address Egypt's economic woes came during Ebeid's 29 January meeting with former Prime Minister Atef Sedqi. The meeting, hailed by the opposition and majority deputies alike, was taken by leftists as a clear indicator that Ebeid's government has become quite helpless in dealing with the country's economic problems. An opposition deputy took the floor to suggest that "Ebeid has better go away and bring Sedqi back in as the new prime minister." One leftist-oriented newspaper came out with the headline "the return of the saviour," to describe Sedqi's surprising meeting with Ebeid.
Abdel-Azim El-Maghrabi, a Nasserist- oriented MP, told Al-Ahram Weekly that Sedqi could be of great help to Ebeid's government. "During his term in office which lasted for nearly ten years," El-Maghrabi pointed out, "Sedqi carried out Egypt's historical fiscal and monetary reforms. Ebeid should draw on Sedqi's experience in these fields. Ebeid should also scrap his optimistic approach and stop delivering inflated figures about the economy."
According to parliamentary figures, by the time Sedqi had left office in January 1996, Egypt boasted a $1.9 billion surplus in its balance of payments. This surplus, the figures noted, had turned into a deficit of $3.025 billion by the time Ebeid's first year in office ended.
More significantly, parliament's figures show that by the time Sedqi left office, the budget deficit stood at a mere 2.7 per cent of Gross Domestic Product (GDP). This deficit, however, shot up in 1999/2000 (Ebeid's first year in office) to 4.7 per cent of GDP. The budget deficit of 2000/2001 is expected to be over 8 per cent.
Quoting some of the above figures, El- Maghrabi said the opposition, in particular the leftist-oriented faction, decided not to take Ebeid's statement at face value.
"Ebeid, for example, said the budget deficit is just 1.2 per cent of GDP. This is quite far from the truth and shows how this government is trying its best to manipulate the figures down to an optimistic picture about the economy and stay in power for a longer period," El-Maghrabi said.
The parliament's economic committee confirmed that the figures provided on the budget deficit are contradictory. That, however, is not the issue.
"Regardless of this contradiction, the committee is worried about the ballooning of the budget deficit and thinks that extraordinary measures should be adopted to cope with it," the report said. "These measures should include fighting tax evasion and smuggling through custom outlets." The report added that the government should adopt more aggressive measures for rectifying the financial losses of state economic authorities.
"Most of these economic authorities," the report said, "such as the railway authority - which represent the backbone of the national economy -- are incurring losses (estimated at about LE7 billion every year). There is a pressing need to find a solution to these losses so that these authorities will no longer be a drain on the state budget."
In the area of the deficits in the balance of payments and state budget, the report agreed with leftist MPs that drawing on Sedqi's experience could be of great help to the existing government.
To a portion of the MPs, the report is the blueprint for the future's agenda. To the leftist MPs, it is just another piece of paper -- one which they can only hope that the prime minister will take to heart.
© 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