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The chairman of the Central Auditing Agency painted a bleak picture of the Egyptian economy, taking the government to task for the proliferation of corruption and the plight of the poor, reports Gamal Essam El-Din
Government ministers clashed with Gawdat El-Malt, the chairman of the Central Auditing Agency (CAA), in the People's Assembly on Monday after El-Malt blamed the government of Prime Minister Ahmed Nazif for the increased number of Egyptians living beneath the poverty line as well as the proliferation of corruption. He went on to say that the government had not taken earlier CAA reports monitoring its economic and fiscal performance sufficiently seriously despite the CAA being empowered by the constitution to monitor the government's performance in all sectors.
Beginning a review of the state budget's balance sheet of 2008/2009 on Sunday, El-Malt also clashed with Ahmed Ezz, chairman of the People's Assembly Budget Committee, after he painted a bleak picture of the national economy and took the government's policies to task for widening the gap between the rich and the poor.
"The government has lost the confidence of the people largely because it is indifferent about the plight of the poor," said El-Malt, "while President Hosni Mubarak seriously cares about the poor and is keen to instill hope in the heart of millions of underprivileged citizens."
El-Malt accused the government of poor performance, alleging that "cabinet ministers live in isolation from one another". "Much worse," he argued," is that a number of serious crises that hit the public can be blamed on the incompetence of officials."
"Government administration in Egypt suffers from a host of chronic ailments. There is an urgent need for the government to develop strategies to forecast crises and take pre-emptive steps before people's lives are endangered," he said.
El-Malt urged "a separation between the ruling National Democratic Party [NDP] and the government".
"The current situation," he said, "spawns corruption and is anti-democratic. There should also be a clear division between the government and the state. Governments come and go but the state is here to stay."
El-Malt launched a scathing attack against businessmen who have strangled the economy with monopolistic practices, especially in the iron and steel market.
"These people have accumulated enormous wealth and profits while the number of the poor increases," he said. He cited a number of international reports in support of his arguments, including World Bank figures showing that the percentage of Egyptians living under the poverty live had climbed from 20 per cent in 2007 to 23 per cent in 2009 and that 77 per cent of the poor live in rural areas. He drew attention to the 2009 UN Human Development (UNDP) report which ranked Egypt 123 out of 182 countries, and on corruption cited Berlin-based Transparency International (TI), which ranks Egypt 111th on its Transparency and Integrity index.
In the face of El-Malt's statement Ezz, who is Egypt's largest steel manufacturer, joined two cabinet ministers in a verbal counter-attack. He lamented that, "CAA reports and some independent media habitually paint a very black picture of the national economy", before painting his own, much rosier version.
According to Ezz, Nazif's government has had remarkable success in improving economic conditions over the last two years.
"Thanks to the policies of this government," he insisted, "the economy showed great resilience in withstanding the global rise in prices of food crops in 2008 and the international financial meltdown of 2009." In 2008/09, he continued, the economy recovered very quickly, registering a growth rate of 4.7 per cent as opposed to the negative rates in developed economies like the US, Japan, France, the UK and Germany.
Ezz also argued that the rate of unemployment had dropped from 9.4 per cent in 2007/08 to 7.4 per cent in 2008/09.
"People should know that more than 350,000 young people were able to buy small passenger transport vehicles [tok-tok], securing an average income of LE50 per day. In addition, middle- class citizens bought 230,000 private cars in 2009. The majority of those who now own private cars do not come from rich governorates like Cairo or Alexandria but from Upper Egypt and Nile-Delta governorates," he said.
Minister of Finance Youssef Boutros Ghali said he had great respect for El-Malt but then advised him "not to compare Egypt with rich Western countries or the oil-rich Gulf states".
"I am the head of the Financial Committee of the International Monetary Fund [IMF]," Ghali said. "I know most of the figures cited by El-Malt are old, and refer to 2008 when the global food crisis was at its most severe."
Minister of State for Economic Development Othman Mohamed Othman also joined the fray, claiming El-Malt's figures on poverty in Egypt were baseless and citing a 2009 World Bank report on Egypt which stressed the country had registered a high economic growth rate during the period between 2005 and 2008 "that resulted in impressive poverty reduction".
"The World Bank report also emphasised that the rate of poverty in Egypt declined from 23.4 per cent in 2005 to 18.9 per cent in 2008," said Othman, adding that, "this means that more than 1.8 million citizens were pulled out of poverty."
El-Malt made it clear that his statement contained 30 criticisms of the six-year-old government's economic and fiscal performance as opposed to just eight positive points. He insisted on accusing the government of turning a blind eye to corruption and doing little to contain spiralling domestic debt and inflation.
El-Malt said his account of the government's performance and the national economy was corroborated with documents from the World Bank, UNDP, the IMF, and the Arab Monetary Fund.
"CAA officials have provided parliament with 180 reports containing more than 25,000 pages of detailed criticisms of government ministries and other organisations," he said.
CAA reports, he added, had registered the success of the government in securing steady rates of high economic growth, "but these reports also agree that the benefits of this growth have yet to be felt by the majority of poor Egyptians".
Opposition MPs joined with El-Malt, accusing Ghali of arrogance and of pursuing fiscal policies that had fomented protests, strikes and sit-ins.
On the day of the discussion of El-Malt's report, workers from three government sectors organised protests in front of the People's Assembly demanding pay rises.