The media and economists frequently ring alarm bells about Egypt’s bleeding treasury and looming cash crisis. It is not uncommon to see doomsday analysis in newspapers about the country going completely bankrupt.
There is less than a month before voting begins in the presidential election, and one of voters’ primary concerns for Egypt’s future is the economy. Candidates are now in a position where they will have to show how they will plug the large deficit and ensure new cash injections into the economy. They will also need to show how they intend to improve people’s day-to-day lives.
But most candidates have so far presented remarkably thin platforms when it comes to the economy — if they have presented anything substantial at all. Most candidates seem to have economic ideologies, but their plans for implementation are vague.
Economic platforms are not very heavily informed by the Islamist-secularist divide that has dominated the conversation about the presidential race so far. For Muslim Brotherhood candidate Mohamed Morsy and expelled Brotherhood leader Abdel Moneim Abouel Fotouh, the only thing distinctly Islamist in their economic agendas are suggestions to increase the use of Islamic financial tools and institutions. Morsy would like for these institutions to gradually replace others over time, according to his platform.
Most candidates highlight the importance of regional trade agreements, especially with new industrial giants such as Turkey and Iran, or the cash-rich Arab Gulf countries.
And, perhaps most crucially for voters, all candidates claim to support policies that will improve “social justice,” though they differ on the extent to which their policies are redistributive.
Getting out of the red
Behind a smiling, suit-clad Amr Moussa on his main campaign posters, smoke stacks fill the sky line, and along with them the promise of flourishing industry. For his short-term plans, Moussa comes from the same school of thought as former Finance Minister Hazem al-Beblawy, which believes that Egypt is in dire need of immediate foreign cash injections.
Moussa promises to use his good relations with the Arab world to attract funding and investment to end the “hemorrhaging of the local economy,” as his program states. He stated during his campaign platform launch that he has received confirmation from Arab and European world leaders that once Egypt’s security situation is stable, he will be able to secure US$80 billion in foreign aid.
Nasserist candidate Hamdeen Sabbahi believes funds can be raised by securing reparations for corrupt business deals conducted under the previous Mubarak regime. When it comes to raising money for the state budget, Sabbahi says he intends to place a once-in-a-lifetime 10 percent tax on the wealth of individuals who hold more than LE50 million in assets. This, Sabbahi told Hiwar Online Magazine in a February interview, will kick start projects that promote social equality and finance the initial priorities of his presidency. He calls it the “Tahrir tax.”
Morsy’s economic policies revolve around the Muslim Brotherhood’s nebulous Renaissance Project. According to this, the more immediate budgetary needs could be filled by demanding compensation from landowners who bought property in corrupt deals.
Like Morsy, many of the candidates speak of dealing with the cash crisis in a more long-term manner, and with specific reference to budgetary policies.
The budget
Egypt’s fiscal year starts on 1 July and the next president may be sworn in with just enough time to try and make his mark on the coming budget. However, since the budget deficit is one of the core issues facing the current cash-strapped government, the president may still want to have his say in attempting to limit this deficit.
Budgetary policy is where presidential platforms offer the most comprehensive suggestions. Candidates almost unanimously agree on the need to redirect subsidies in a way that is more beneficial to the poor.
Abouel Fotouh’s program clearly states that he intends to overhaul the subsidies system in a way that is more beneficial to the poor. Hesham al-Bastawisi, who is backed by the leftist Tagammu Party, Morsy and Abouel Fotouh believe in abolishing energy subsidies that go primarily toward heavy industries.
Bastawisi, Sabbahi and independent leftist candidate Khaled Ali all see the need to immediately increase spending on health care, education and pensions.
One of the most pressing budgetary issues is the unaccounted for spending and corruption which candidates unanimously agree must end. Bastawisi and Moussa both propose the need to consolidate ministerial budgets so they are subject to oversight from the Finance Ministry. Under the budgetary system developed under Hosni Mubarak, there was no unified budget. The armed forces and the president, for example, had their own independent budgets.
Public vs. private
Abouel Fotouh’s platform says it rejects “binary,” or public vs. private, industries, and instead calls for the proliferation of “new forms” of ownership and administration, such as public-private co-ops and privately managed public companies. However, there is little detail on what this means exactly or how it would work.
Abouel Fotouh stresses in interviews his belief in the importance of the market and the private sector as the main driver of growth.
Amr Moussa tends to focus more on the infrastructural role of government and the public sector. A large part of Moussa’s economic plan is to build on scientist Farouk El-Baz’s idea of a “developmental corridor,” a super-highway meant to solve many of Egypt’s logistical problems. Moussa believes that projects such as the corridor, and other infrastructural projects in Sinai and Upper Egypt, will help attract investors in tourism and industry.
The Muslim Brotherhood’s Renaissance Project looks to empower the private sector and reinforce it with a public sector that can provide good infrastructure, oversight and information. He would also like to attempt to direct development by affording labor-intensive and environmentally friendly companies tax breaks.
Sabbahi wishes to revive many large-scale national projects to give the country a more directed push in certain directions, such as creating an Egyptian “Silicon Valley” project, becoming a solar power center and developing the Suez Canal. According to his program, he would like the government to directly help funding small businesses.
Bastawisi wants to ease the barriers to entry before starting cooperatives and private businesses alike.
Khaled Ali’s program aims to “redefine the relationship between the public, private and cooperative sectors.” For Ali, the public sector must remain the main driver for growth. As one of the main crusaders against corrupt privatization deals, he would like to continue annulling such deals as president to help revitalize these companies and use them to solve unemployment. While Ali does not reject the private sector, he holds that it must not include strategic goods such as water, and that all private companies should be subject to strict anti-trust laws.
International economic cooperation
Moussa is looking to continue encouraging investment and capital injections from oil-rich Arab countries as a main method for development. While he stresses the need for Egypt to be a producing and self-sufficient economy, he also refers very frequently to external investment, though he claims he would like to eliminate Egypt’s reliance on any form of foreign assistance.
Sabbahi, an Arab nationalist, unsurprisingly sees Arab cooperation as extremely important. But while he sees the need to attract Arab and foreign investors in the short-term, in the long-run his plan is to encourage a self-sufficient state through production and increased land use.
Khaled Ali and independent Islamist Mohamed Selim al-Awa both mention the importance of creating alliances and trade agreements with Turkey and Iran. According to Awa, both countries in the past used long-term projects to enhance their exports and make their products regionally widespread and trusted. Egypt can also make use of its technical expertise, he says.
The Brotherhood wants to build a causeway over the Gulf of Aqaba to Saudi Arabia to facilitate the flow of tourists — this would ostensibly be one-way, given how difficult it is for Egyptians to obtain visas to Saudi Arabia. This would aim to enhance general economic ties with the kingdom. Morsy’s plan also includes opening the borders for Egyptians into other Arab countries, while removing regional trade barriers.
Taxation and social justice
The poor and working classes are important constituencies for any candidate, and demands for economic justice are running high in the wake of an uprising that demanded “bread, freedom and social justice.” Most candidates have programs that at least pay lip service to this demand.
Morsy, Bastawisi and Sabbahi all call for a LE1,200 minimum wage. Abouel Fotouh believes that the wage must be set after further study.
Moussa declares in his campaign events and platform that “poverty is Egypt’s biggest enemy now.” He offers ways to escape poverty mainly through hiring in the public sector for large-scale projects, or by supporting labor-intensive sectors.
Like Ali and Abouel Fotouh, Moussa believes in the need for training and helping with employment opportunities.
All candidates agree on implementing a system of progressive taxation, except for Moussa, whose platform does not mention whether he supports or opposes such a plan. Abouel Fotouh sees a need to reevaluate the real estate tax, so that larger estates are taxed more.
The few presidential platforms and sparse campaigning materials indicate that every candidate claims social justice as a main element of their agenda. Voters might hope, however, that between now and the election the candidates will get more specific about their plans.
