Al-Ahram Weekly   Al-Ahram Weekly
23 - 29 December 1999
Issue No. 461
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Low-cost housing and leave-without-pay for all

By Gamal Essam El-Din

Prime Minister Atef Ebeid outlined to the People's Assembly on Saturday his three-month-old government's strategy for improving the nation's socio-economic performance.

Delivering his cabinet's first policy statement, Ebeid spoke of a 14-point social programme and a 16-point economic plan aimed at achieving two principal targets. The first, he said, was to improve social services to the impoverished social brackets by channelling greater subsidies. "We will not deduct one pound from these subsidies. Our social programme will earmark additional allocations to alleviate the poverty of limited-income classes," Ebeid said.

The economic programme, he added, is aimed at raising the annual growth rate to seven per cent during the next decade. "It is widely accepted now that free enterprise is the best economic system and that it results in speedy and sustainable development rates," Ebeid said. He affirmed, however, that the switch to a free-market economy would not mean an erosion of the state's role. "The government's economic programme will be primarily aimed at protecting the impoverished classes and redressing market imbalances as well as opposing dumping," he said.

Ebeid's policy statement was hailed by members of the ruling National Democratic Party (NDP), but was criticised by the opposition for its failure to address the issue of political reform.

Topping the list of Ebeid's new social services is a monthly LE50 pension for families who do not have a breadwinner. The prime minister expressed hope that this amount would later be raised to LE100.

A second social service is that junior government employees and public sector workers, except those employed in the fields of justice, police and education, will be allowed unlimited leave without pay, so that they may have the opportunity to take other jobs and improve their incomes, Ebeid said. Moreover, female employees wishing to stay home to take better care of their families will be allowed to have open holidays, while continuing to cash a half of their salaries. Seasonal workers in rural and urban areas will be offered soft-term loans in order to develop income-generating activities. Loans will also be offered to a number of NGOs to establish productive small-scale enterprises. The law regulating the performance of chambers of commerce will be revised to provide owners of small productive and public service projects with insurance against the perils of sickness and death, Ebeid said.

The prime minister also announced that there would be an unprecedented expansion of the health insurance umbrella to cover 80 per cent of the population.

He promised that the government would provide young people with as many as 100,000 low-cost housing units and said that action would be taken to relieve the capital of its garbage accumulation problem.

The prime minister also said that the government would assume the burden of paying LE1 billion to depositors with the so-called Money Investment Companies (MIC). In the 1980s, these companies received large amounts of personal deposits but later defaulted on paying back. Each depositor will be entitled to 10 per cent of his money, with the remainder to be paid back over five years. The first payment will be made in March, Ebeid said.

He also vowed that a LE200 million price-balancing fund would be established to cushion farmers against the perilous fluctuations of crop prices.

Ebeid emphasised that the government would take the utmost care to ensure that liberalisation policies were not at the expense of the underprivileged classes. "This is why the government is committed to subsidising basic food supplies, water and electricity services, public transport, low-cost housing and owners of small enterprises, as well as offering free education to those in limited-income brackets," Ebeid said. He also vowed that the government would strike with an iron fist against dumping, tax evasion and the smuggling of sub-standard goods into the country.

According to the prime minister, new policies will be introduced to reduce the volume of foreign and domestic debts. "The budget of the economic and public service sectors will be separate from the state budget in order to rationalise expenditure and bring domestic debts under control," Ebeid said.

He affirmed that the government was determined not to devalue the Egyptian pound. And a programme will be introduced to increase exports by 10 per cent annually in order to ensure a greater supply of foreign exchange, he added.

Ebeid then addressed one of the most debatable issues at present -- mega-development projects. He affirmed that work on these projects would continue because they would contribute significantly to raising the growth rate and modifying the country's population map. Building the infrastructure for the Toshka land-reclamation project in the southwestern desert will require LE5.7 billion, but it will attract investments estimated at LE6 billion in the first stage.

Another project, to reclaim 500,000 feddans in central Sinai, will cost LE6.2 billion, but will attract investments more than double this figure, he said. A third project, to reclaim 600,000 feddans along the northern coast, will attract investments worth LE5 billion, Ebeid added.

He concluded by affirming that the government would act to create 650,000 employment opportunities every year. "The financial resources of the Social Development Fund will be augmented to help defuse the unemployment crisis. Also, a new Unified Labour Law will be submitted to the Assembly to regulate, in a more balanced way, relations between employers and workers in a market economy," Ebeid said.

Reacting to the cabinet's policy statement, Yassin Serageddin, of the Wafd Party, said it had failed to address the issue of political reform. Ebeid's statement, Serageddin argued, did not specify what the government would do to ensure that the next parliamentary elections are marked by integrity. "It also failed to make clear whether a law aimed at curbing extravagant spending on election campaigns would be passed or not," Serageddin said.

Other MPs questioned the ability of Ebeid's government to honour the new package of social commitments. "Following Ebeid's appointment as prime minister in October, he faced strong criticism from opposition circles," Sameh Ashour, the sole parliamentary representative of the Nasserist Party, told Al-Ahram Weekly. "The new cabinet was accused of aiming to speed up privatisation at the expense of the underprivileged classes. Ebeid, mindful of this strong criticism, decided to go on the offensive by including costly social commitments in his policy statement. I doubt that his government will be able to raise the necessary financing for these commitments."

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