Egypt's response to globalisation
By Taha Abdel-Alim Taha
Getting one's act together can be the right answer to globalisation. A democratic political system that upholds the law, human rights, and social justice could be of some help. There is much the government can do about the economy. There is much it can do to stimulate growth and create new jobs. Removing the barriers to trade is a first step towards the creation of an efficient and competitive economy. Also, the government can encourage similar businesses to merge, so as to increase their chances in the global market. In general, the government needs to stimulate competitiveness, prevent monopoly, and fight corruption.
The government can also engage in closer interaction with business and civil society groups. This could help raise the rates of investment and development and lead to the creation of new jobs. The government can encourage industries with high content of knowledge, technology, and value added. And it can revamp the research and development sector. The government also needs to improve health and education standards and fight poverty. It needs to empower the most vulnerable segments of the population, improve housing conditions, and protect the environment. The business sector, for its part, needs to use some of its profits to improve social conditions in the country.
Globalisation offers us an array of challenges, both international and domestic as well as social and economic. To cope with these challenges, Egypt needs to adopt a market economy that is efficient, fair, sophisticated and vibrant. We need to stimulate investment and growth without sacrificing our social responsibilities.
In a world where the rules of the game are decided on a global level, governments should use domestic economic policy as a means of stimulating investment, growth, and exports. Policy makers in any given country can, for example, change the structure of incentives so as to favour export-oriented businesses at the expense of less productive ones. Raising the efficiency of import-substitution industries is also a good idea. And one cannot overstate the need to integrate the non-formal economy into the formal one.
The social aspect is paramount. The creation of a social-oriented market economy is a complex matter and needs to be discussed in detail. Labour and business must engage in a constructive dialogue on what needs to be done, and policy makers should make a point of providing the right legislative and constitutional context for such dialogue to take place. The days of the socialist-oriented command economy are gone. But we cannot afford the consequences of a socially-insensitive capitalist system.
To sum up, this country needs to become a credible global partner with a competitive hi-tech economy. To do so, we need to stimulate industries with a higher content of knowledge and technology and raise our standards of education and research. We need to sell better products at competitive prices to stay in the game. For this to happen, we need to overhaul our legal, social and economic system.
Taha
Abdel-Alim Taha
* The writer is deputy director of Al-Ahram Centre for Political and Strategic Studies.
Al-Ahram Weekly Online : Located at: http://weekly.ahram.org.eg/2005/761/ec8.htm