Governance and Development

Acronyms

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Is Better Governance a Prerequisite for Development in Egypt

Introduction:-

“An effective state is vital for the provision of the goods and services and the rules and institutions –that allow markets to flourish and people to lead healthier, happier lives. Without it, sustainable development, both economic and social, is impossible”. World Development Report, 1997

This paper will analyse the role of the Egyptian state, a middle-income country in the MENA region, in endorsing development and better governance. Discussed within are the policies undertaken by the state and an assessment of their impact on development and the quality of governance. This paper also includes an investigation into the compatibility of state role in supporting development and in mainstreaming and marinating better governance.

Socio-Economic and Political Background of Egypt:-

According to HDI of 2007; Egypt is considered a middle-income country, ranked 112 among all countries. It is regarded as the second richest Arab country after Saudi Arabia. Economic reforms from the 1990’s spurred growth and had a distinct modernising effect on the Egyptian economy (Roquette and Kourouma,2004).

Like many countries in the third world, Egypt has struggled to foster independent development, bolstered by a desire to remove obstacles resulting from occupation and involvement in wars. Zaalouk confirms that Egyptian development has been affected by different historical stages and the political economy of each stage informing the next. The most crucial of these inherited policies, affecting both Egypt’s development and economy, is that of the open door Infitah.The Infitah began in the 19th century during the era of Mohamed Ali of the Ottoman Empire; re-emerged in Sadat’s era (1977-1981) and later during Mubarak’s reign(1981 to date). This policy transformed the Egyptian economy into a dependent export one, a reform benefiting the Bourgeoisie over the poor (Zaalouk, 1989).

The late 1970’s and early 1980’s witnesses a rise in oil prices, causing a severe decline in the GDP of Egypt and other developing countries as a result of the downturn in foreign exchange. Various developmental problems arose, including ( but not limited to): low income levels ,increasing inequality both economic and social, a dramatic increase in unemployment, prices increase, inefficient infrastructures, high inflation rate and deficits in balance of trade(Zalouk,1989) and (Slater, 1993).

Egypt attempt to seek financial help from international funding agencies like the IMF and the World Bank , and USAID which incurred a critical debt crisis, a problem currently plaguing most of the developing countries (Bastawy, 1997). Essentially, development in Egypt relied on foreign aid which simultaneously fostered well- being in Egypt yet gave donors the power to intervene in the creation of Egyptian policies and impose their conditionalitities (Mosley et al 1991a). To ensure the repayment of the debts, “Washington- based multilaterals donors” applied the controversial structural adjustment programme. Although the programme promised to liberate the Egyptian economy, it primarily served the economic and political interests of the West, particularly the United states. Through the conditionalities of such multilaterals the open Egyptian economy was utilises as a means through which to achieve foreign endeavours in the MENA region. Focus remained on a global economy rather that of Egypt(El-Said et al,2005).

At a national level, the conditionality required Egypt to maintain a clean human rights record and combat corruption, resulting in the introduction and subsequent application of the ‘Better Governance’ concept .Better governance entails competent management of a country’s resources and affairs in a manner that is open, transparent, accountable, equitable and responsive to people’s needs as defined by AusAid (2000).

At international level, donors conditionalities extended to encompass political desires of their respective governments. Relying on its role among Arab countries, Egypt was essentially forced to participate in the Gulf war as well as intervene in the peace process between Palestine and Israel. According to one of strategic White House analysts “ we have no alternative to Egypt either in terms of the peace process… or strategic position. If we could not get to the Gulf through Egypt, with over flights for example, we would be in a very, very serious trouble”(Hiltermann,1985).

The Role of the Egyptian State in Promoting Development:-

Nowadays, the state has a significant role in addressing developmental issues. Desai accentuates the state can help in poverty alleviation, encouraging income equality, improving human rights and democracy records; supporting environmental protection , promoting sustainable development; and controlling conflicts and international crime. Desai (2001) . Furthermore, the state can also act as achiever of peace , social justice and freedom. Thus governmental structure, administration, operation and policies can either foster development or can lead to its deterioration.

The aims of the Egyptian state include basically alleviating poverty and achieving welfare. The various governmental actors responsible for alleviating poverty are as follows: The Ministry of Planning is responsible for setting up the overall socio and economic development plans, The Ministry of Social Solidarity (MoSS) provides safety net programs; The Ministry of Education (MoE) provides free education through a national literacy programme; Ministry of Health and Population (MoHP) is responsible for offering free health care services via health centres and hospitals, and the Ministry of Supply is the purveyor of subsidies for basic food like bread, oil and sugar (UNECA, 2002).

During the last twenty years, Egyptian NGOs have come to occupy a significant role on the routes to development. In addition to an rise in the establishment of such organizations, NGOs are creating different activities and entering new fields while implementing an enormous number of projects for marginalized communities through the funds received from donors (Abdelrahman, 2004). In the field of development, the participation of civil society (including political parties, workers syndicates, professional associations and NGOs) has also helped foster democracy within Egypt. However, through legal framework like the Egyptian NGO Law, the state continues to control and organize such forms of participation of civil society (EHDR, 2003).

The Egyptian Policies that foster Development:-

The state policies include all governmental plans, programmes and decisions that affect both public sector and civil society (Ayubi, 1991)

Over the past twenty years Egypt had and still have numerous numbers of policies that have great impacts on the different sectors of development either positive or negative. Herein under a selection of the recent policies that released during Mubarak’s era:-

The Social Safety Net Programs (SSNP):-

The main strategy for alleviating poverty in Egypt is the SSNP. There are two main categories for the SSNP. The welfare category that includes the food subsidy program and cash transfer program from The MoSS who provides cash and in kind assistance to needy people. The other category is the developmental that includes the Social Fund for Development (SFD) that established with support of the World Bank to reduce the impact of privatisation by offering micro credit loans for unemployed youth ( Galal, 2004). The SFD also started to improve the infrastructure and services in the poorest regions. Hence, the SFD small loans and public works, for instance, created around 50-70,000 jobs per year. (Roquette and Kourouma,2004).

MoSS is providing the social security payments, Sadat pensions and Mubarak pensions for elder people , female headed households, disabled as part of cash transfers program that suffered from low funds as it was representing only 0.04 percent of GDP in 1999( World Bank, 2002).

The food subsidy program provides to all population subsidised baladi bread, wheat flour that sold to consumers at any quantity required. It also provides subsidised sugar and cooking oil but restricted as distributed by ration cards according to income of households. The colour of these ration cards identify if the household should receive more subsidy (green cards) or low subsidy (red cards) the bread subsidy helped in moving 730.000 people out of poverty in 1999-2000(World Bank, 2002).

But these days “the government came under intense fire” as described by El-Sayed and Nkrumah( 2007) when government started to announce lifting the subsidies on a number of basic goods and try to compensate the low income people by paying them cash subsidies instead. “ Nazif’s government (the current government) is well aware that cancelling the commodities subsidies in light of the current system of wealth and income distribution could lead to rebellion. Therefore, this government resorted to the trick of bribing the poor by offering them cash subsidies” said Galal Amin (El-Sayed and Nkrumah, 2007)

Education policy:-

The Education policy in Egypt for long time suffered from inconsistency that resulted from the need of the state to react to the changing circumstances at national, regional and international levels. But Egypt made education a top priority to face its challenges that seen as main barriers to achieve an effective reform (EHDR, 1999).

In 2004 Mubarak inaugurated a conference for reforming the education system. His agenda for reform includes changing curricula and teaching methods, improving the teacher skills, decentralising the educational administration, supporting the scientific research, improving the service for special needs students and the university system should be overhauled(Khalil, 2004).As a result MoE, announced an ambitious project to prepare and build National Standards for Education; that aiming at achieving 5 basic domains: The Effective School, The effective Educator, Management excellence, Community participation, effective Curriculum Content and Learning Outcomes. These standards has succeeded in appreciating the role of the school as the change agent and in achieving the quality education and it managed to strengthen the relationship between government schools, private sector and civil society (MoE portal, 2007)

Egypt achieved good progress in promoting primary education; but there are still some constrains still need to be solved to achieve the desired reform including the fairly high costs of education that paid directly and indirectly for educational institutions by the majority of low income level population, the low absorption capacity of schools, the lack of attractive educational facilities and instructions that affects the efficiency of education, the high density classes accompanied with lack of available places for entertainment and physical activities, negligence of individual differences that lead to loosing interest in educational process and hence increasing the drop-out percentage , insufficient curricula that ignore different learning environments(EHDR, 1999).

Gender Equality Policy:-

Egypt for decades suffered from gender gap in education and employment which hinders development by depriving the society from the under representation of half of its labour force. Despite of the efforts that are undertaken by the state and NGOs to improve the position of women in society, there still high incidents of gender inequality; as representation in labour force is only (15.4 percent) and their enrolment in higher education is (29.4 percent)(EHDR,2003)

The state reacted towards this global issue by establishing the National Council for Women that is responsible for empowering women at all levels when gender inequality has been recognised as a barrier for economic growth(EHDR, 2001). Besides , NGOs have started to adopt gender equality policies as a cross- cutting issue in development and poverty reduction when dealing with bilateral and multilateral donors.

Health policy:-

Health system in Egypt is complicated and suffers from lots of problems as reflected by the worse health outcomes like the high infant and maternal mortality rate. Besides, there is a significant inequity among different groups in having access to health services that characterised by low quality in addition to the lack of basic equipments, supplies and drugs. At institutional level both the sector management and financing are disjointed; leading to confused decision making and inequity in spending. Although Egypt has higher number of physicians comparing to other LMIC but there is a shortage of primary care physicians in relation to the number of specialists(Loffredo,2004).

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