Politics and economics at the crossroads

This is a cross-post of a piece entitled “Political Economy” written by Niveen Wahish, published on Al Ahram Weekly Newspaper

Egypt’s upcoming parliamentary elections are cause for concern not only to politicians but also to economists. “A suitable political environment would allow those in charge of the economy to take decisions that might otherwise be impossible,” Ziad Bahaa El-Din former Deputy Prime Minister and Minister of International Cooperation told a conference earlier this week. The event was focused on Egypt’s future and was organised by the Economic Research Forum (ERF).

There have been reservations that the draft parliamentary law does not allow enough seats for political parties and gives too much room to individual candidates. There is concern that figures from the former Mubarak regime may make a comeback. As well, some analysts say the law may not result in a fair representation of society as a whole.

“The states succeed or fail depending on whether or not they have an inclusive political system,” said Ahmed Galal, Managing Director of ERF. He gave the example of North and South Korea, which have the same type of resources and people but very different political systems.

“We are at a critical juncture,” Galal said. “Either we create a good political system, or we are back to square one.”

According to Ahmed Al-Borai, a former Minister of Manpower, the next parliament will have the difficult task of realising the demands of the 25 January Revolution, the most important of which is social justice. This demand was about dignity, says Moshira Khattab, a former Minister of Family and Population, stressing that social justice is not about charity.

Social justice means equality of opportunity in matters like education, healthcare, and freedom of speech and participation, Khattab said. While the government sets the framework for such things, it cannot carry out policies alone and needs the full participation of civil society, she added.

In the absence of social justice, Egypt risks another revolution, Al-Borai said. “If the new parliament does not have voices who believe in the importance of social justice there could be a catastrophe,” he said.

Mohamed Abul-Ghar, head of the Egyptian Social Democratic Party, agreed. “The demands of the revolution need to be realised. If they are not we may see a bloodier revolution carried out by the poor and the marginalised. We need economic and democratic reform,” he said.

Abul-Ghar told conference participants that while it was impossible for the Muslim Brotherhood to return to power in the short term, if the government failed to create a genuinely participatory economic and democratic system the now-banned group could make a comeback.

Egypt needs free and fair parliamentary elections, he said, and the president should not be afraid of a strong and independent parliament.

Galal warned that those who demand swift change might be disappointed. As he said, experience in other countries has shown that change only really starts to happen a decade or so after political revolutions. “Big changes start with small changes,” he said. “Things happen gradually.”

He said that growth without social justice is unacceptable, but social justice without growth is unachievable. “There will not be anything to distribute,” Galal said. “We will only be distributing poverty.” In order to achieve growth, countries need to depend on a package of policies, not just mega-projects.

Abla Abdel-Latif is an advisor to the Ministry of Industry and small and medium-sized enterprises. She said that it is important that the country has a vision of what it wants to achieve in order to apply the right policies.

“In the longer term we need to think of sustainable development and must decide what type of investments we want,” she said. Abdel-Latif added that the economic effects of the current mega-projects will not be felt immediately but there should be other immediate projects to create jobs and improve the lives of citizens.

She gave the example of setting up small industries in underprivileged areas to raise the standard of living of their inhabitants, and work on improving conditions in the governorates, with the aim of slowing the movement of people to Cairo.

Both Abdel-Latif and Galal stressed that the policies carried out should be suited to Egypt’s needs. Policymakers should neither imitate other countries blindly, nor adopt a specific ideology, whether socialist or capitalist, because history has shown that those countries that have taken a middle way, such as Scandinavia, have experienced better results, they said.

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