The Davos harvest

Egypt did better than usual at this year's World Economic Forum meetings in Davos, reports Wael Gamal

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The reactions to Egypt's participation in the 33rd round of the World Economic Forum (WEF) in Davos seem to have already begun. Last Sunday, immediately following the meetings, a representative from the George Soros Financial Group came to Cairo to assess investment opportunities in the Egyptian market. The forum itself has decided to hold its May 2006 meetings in Cairo.

"This year's success," Investment Minister Mahmoud Mohieddin told Al-Ahram Weekly, "is due to the Egyptian delegation being very active both in the forum events and in one-on- one meetings with top business executives and officials. We were better organised and that produced [results]."

Mohieddin went to Davos with Prime Minister Ahmed Nazif and four other ministers with neo-liberal credentials, as well as Gamal Mubarak, who heads the National Democratic Party's Policies Committee.

While Nazif sat down with the CEOs of British Petroleum and other multi-nationals from China and the United States, other Egyptian delegates met various economic groups and company executives to promote foreign direct investments in Egypt.

The primary message in every case was that the new government had embarked on a series of rapid economic reform measures. "For us," Nazif said, "Davos had a lot to do with dialogue. Our message was that we are on the move. Change is really happening, and we chose to make it happen, and not to simply let it happen." That message, Nazif said, "was well received".

Now, government expectations are that all the talk will soon result in an influx of international investments. Mohieddin, for one, was confident that Egypt would be "attracting investments in many sectors including cement, fertilisers and petrochemicals," although he declined to provide more specifics.

The investment minister also said it was the particular nature of the Egyptian reform experience that attracted Davos, because "it touched the main concern of the forum: the social element." A Financial Times ( FT ) survey of Davos delegates revealed that global poverty was the forum's primary concern, followed by equitable globalisation and climate change. Spreading education, fixing the Middle East, and improving global governance were next, while the global economy came in at eighth place -- a fact the FT found odd given that 50 per cent of the delegates are businessmen.

It may have to do with the increasingly influential World Social Forum (WSF), launched five years ago as a challenge to Davos's WEF. More than 100,000 people belonging to more than 2,000 organisations attended this year's WSF -- which took place simultaneously in Porto Alegre, Brazil. As usual, participants called for a more equitable globalisation by discussing alternatives to neo-liberal thought and proposals for a more just world order. Amongst the 2,500 seminars, workshops and cultural activities, this year's themes varied from the dangers of intellectual property rights law to food label regulations. Activists from 22 Egyptian NGOs took part.

According to Mohieddin, "Egypt's reform philosophy and strategies have a built-in social element that doesn't aim at containing social unrest or dealing with this or that deficiency when it happens." Solving social problems "is an integral part of the reform package", he said. Examples include privatisation, with potential buyers negotiating long-term plans related not only to "existing workers, but also to future employment policies." These elements, he said, have "become even more important than negotiations over price".

Despite the optimism, however, the same forces generated by failing neo-liberal policies elsewhere seem to be working in Egypt as well. There has been a recent surge in the number of labour protests, including strikes and sit- ins against privatisation and low wages.

Mohieddin and his colleagues will have more of this to deal with, if a recent World Bank report titled A Poverty Reduction Strategy for Egypt is anything to go by. While the report referred to Egypt's subsidies system as critical for the Egyptian poor, it is a well-known fact that the neo-liberals want to minimise these kinds of state expenditures. Alleviating poverty, the World Bank said, requires growth, education and social safety nets. How well the government balances those three crucial pillars will be the test of whether the hype created in Davos will survive.