A popular explanation for the “Arab Spring” has focused on the economic challenges that the Middle East faces. In Egypt, the Arab world’s most populous and influential state, long-term economic mismanagement has had a debilitating impact on the economy and on the aspirations of millions. Since the departure of Hosni Mubarak, many Egyptians hoped that the country was on the cusp of a new era of democracy and prosperity. Yet, even as Egypt’s new president, Mohamed Morsi, seeks to restart the economy and promote job growth, many of the legacies of the Mubarak-era continue to hold him back.
In this vein, the Middle East and North Africa Center at the Asan Institute for Policy Studies, in conjunction with the Middle East Division at the South Korean Ministry of Foreign Affairs and Trade, hosted a presentation by Ahmed El-Sayed El-Naggar, a leading Egyptian economist and the Head of the Economics Department at the Al-Ahram Center for Political and Strategic Studies in Cairo to discuss emerging trends in Egypt’s economic situation since the “Arab Spring.”
Mr. El-Naggar’s presentation began by discussing how the systemic corruption of the Mubarak regime has hindered Egypt’s economic growth over the past two decades. He noted that this corruption extended to all aspects of the state, including public finances, the assets of state-owned companies, land for cultivation or real estate development, and the supply of contracts for goods and services to the state. Most seriously, the widespread mismanagement of the country’s privatization program and the corrupt awarding of government contracts have enriched a tiny minority while leaving millions of Egyptians struggling to survive.
Mr. El-Naggar went on offer a number of practical recommendations for capitalizing on Egypt’s enormous potential and improving its future economic prospects. He argued that Egypt needed to adopt an integrated system that capable of preventing corruption via regulatory bodies, boards of directors, and general assembly’s that are entirely elected. Furthermore, such a system also had to toughen sanctions and punishment on the corrupt while building institutions capable of independent oversight. He also noted that Egypt needed a new constitution clearly defining the separation of authorities to minimize abuse of powers. Next, Egypt could also review its system of contracts including: land contracts, privatization deals, public works contracts, deals for the supply of goods and services to the government, and contracts for the exploitation of mineral wealth and quarries.
In conclusion, Mr. El-Naggar expressed optimism that Egypt could fundamentally transform its economic policies to build a transparent and impartial economic system and a fully free private sector. Furthermore, he noted that the country is well-placed to rapidly grow in the coming years due to several factors. First, Egypt’s large, demographically young labor force gives it enormous manufacturing and industrial capacity. Second, its significant natural resource endowments including oil, gas, minerals such as gold, and quarry products such as cement, phosphate, and gypsum can all be harnessed for labor-intensive industries such as the metallurgical and engineering industries, quarantine and automotive industries, and ship-building. Finally, Egypt’s unique location in the heart of the Middle East and at the crossroads of Europe, Asia, and Africa means that it has the potential to emerge as a vital global trade hub in the coming decades.
Date / Time: Tuesday, October 23, 2012 / 5:30pm-7:00pm
Place: Conference Room (2F), The Asan Institute for Policy Studies