Wednesday,15 August, 2018
Current issue | Issue 1238, (19 - 25 March 2015)
Wednesday,15 August, 2018
Issue 1238, (19 - 25 March 2015)

Ahram Weekly

After the Sharm El-Sheikh conference

Egypt’s bureaucratic strata is finally grasping what investment really means, writes Abdel-Moneim Said

Al-Ahram Weekly

We can look at the Sharm El-Sheikh economic conference in several ways. We can see it as marking Sharm El-Sheikh’s return as a forum for international conferences, with the difference that whereas before the subject was peace, now the subject is Egypt’s future.

We can also consider it an opportunity to proclaim and promote the “new Egypt” that was brought into the world by two revolutions, a new Egypt that has the determination and resolve to really be different.

In other words, Sharm El-Sheikh stands as a kind of pledge to open a new page. If sceptics chalked it down to propaganda, for the truly earnest and determined it marks a starting point.

 The conference could be taken, thirdly, as a kind of spring market to which flock entrepreneurs from all corners of the world and in which Egyptians, with generous Arab support, display their many projects and in which prospective investors count on both wisdom and luck: wisdom because they are investing in a promising market and luck because the competition is stiff.

Fourth, Sharm El-Sheikh can be seen as a celebration of the legitimacy of an Egypt that is fighting terrorism while at the same time building itself. When the Americans, Russians, Chinese, Europeans, Arabs and all the economic and financial organisations converge on Sharm El-Sheikh, there must be something taking place in our country worth celebrating. Clearly, parties that rarely see eye to eye on anything see eye to eye on the fact that Egypt’s importance is such that all should help it.

 Lastly, Sharm El-Sheikh was a defiant stance against terrorism, which made no secret of its determination to prevent the holding of the conference and to turn it into a hell if it did convene. There were, indeed, many threats and explosions warning of the nature of the hell that the terrorists had in mind.

But the conference went ahead and the guests arrived, in spite of the terrorists. Ultimately, the Sharm El-Sheikh conference illustrated Egypt’s unshakable resolve to never let terrorists cause our country to waver in its determined course.

To me, the conference combined elements of all the foregoing, whether or not that was its intent. Nevertheless, I still view it differently. I see it is a part of a steadily rising trajectory that began on 30 June 2013.

Setting aside for the moment the political dimension, and the outpouring that constituted the mandate to breakup the Rabaa and Nahda sit-ins, the restoration of the capital city to its people marked the first step in this trajectory.

The second step had a clear political aspect, but also an economic one. While the latter was not as distinct, it was probably more significant. The decision to hold presidential elections before parliamentary elections generated a guarantee that the country would make the transition from its interim phase to a condition of permanent legitimacy an essential prerequisite for economic recovery.

In all events, the trajectory soon began to assume clear economic dimensions. Some were expressed orally, as occurred in Abdel-Fattah Al-Sisi’s presidential campaign platform. It underscored the need for work, investment, development, rule of law and a reshaping of the Egyptian geography. Others were expressed concretely, in the form of a cumulative series of actions and legislation.

The actions started with the creation of a “Long Live Egypt” fund built from contributions from the people. This was immediately followed by the drive to invest in the new Suez Canal project, the huge success of which marked a victory for the prevalence of the “laws of realism” over the “laws of emotion.”

It was here that work and patriotic zeal were linked with economic returns. And it was precisely at this point that the time was right for instituting measures that had been put off for far too long, measures that were needed in order to remedy such crucial questions as energy subsidies and the regulation of food and bread subsidies.

Such measures were signs that new outlooks were coalescing in practical terms on the ground. As a result, the trajectory continued its climb, leading to rising economic growth rates in 2013-2014 and higher projections for 2014-2015.

The economic conference brought a sharper rise in the trajectory, despite of all difficulties and obstacles, not least of which is the terrorism that is preying on Egypt. Whatever gains accrue from the conference, they will help preserve the current impetus of the Egyptian economy. These gains will propel it forward within the framework of a whole programme, one that we can conceive of as a relay race in which runners carry a baton to the next stage of progress.

The baton, in this case, is not the volume of investments generated by the conference, but rather the extent to which Egyptians and, specifically, the Egyptian bureaucracy grasp the very concept of investment.

Although the conference was attended by representatives of governments and states, it was clear that the driving force behind it was the enthusiasm of Egyptian investors, foreign entrepreneurs who had previously invested in Egypt and international economic organisations that believe that the route to progress and development is through the private sector.

Once we realise this we will understand that a key to the roadmap for the future is how to ensure that the government is equipped to deal with people with capital to invest in Egypt. The experience so far has not been easy.

There is a big mental block that stands between government bureaucracy and nongovernmental investment. Throughout almost all of our history, land and the wealth in and on it (including, sometimes, human beings), were the property of the ruler, whether the pharaoh, imperial viceroy, khedive, king or president.

The chief preoccupation of these rulers was their grip on power and how to perpetuate it. Their possessions were managed by those who worked for them, or by the state machinery. Thus, private investment, whether domestic or foreign, delivers the land and wealth of Egypt from the grip of those who control them, regardless of whether that power derives from force of law or brute force.

Herein lies the secret as to why investment processes have floundered since the time of the deregulation of the consumer market under Sadat, and through the deregulation of production under Mubarak. It was all about “politics”, namely, the ability to control the people through subsidies, avenues for employment and the management supplied by the government and its followers, and “class.”

Investment generated growth in the wealth of investors and the emergence of the rich, which, in turn, sent civil servants (the more than six million people on the government’s administrative payroll) down the social ladder from the middle class to the “limited income” sectors.

This explains the long lament over the “decline of the middle class”, whereas, in fact, this class has expanded over the past quarter of a century because it added new members ones who did not come from the government bureaucracy.

Handling this situation requires much training and change. Perhaps the starting point for this is to link our bureaucracy with the rest of the world and the modern age. One means is to fully mechanise the government sector.

After all, now that we are a decade and a half into the 21st century, it does not stand to reason that the overwhelming majority of our government employees do not know how to use a computer, while those that do use it more for décor than for actual work.

But the computer is more than a sophisticated typewriter or a data storage device. It is an entire culture for organisation and work. The problem is that an entire generation of our bureaucratic leaderships has little more than a rudimentary knowledge of this subject, which is part and parcel of a larger issue.

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