Al-Ahram Weekly attended a roundtable where the government, once again, re-affirmed its commitment to further reform. Niveen Wahish reports The Business Roundtable, organised by Economist Conferences in cooperation with members of the Egyptian government, has in the past been the scene of major economic policy announcements. It was, after all, during the first roundtable in February 2003 that the then prime minister Atef Ebeid announced the floatation of the pound. Nothing as momentous has taken place since. However, during the fourth roundtable, held this week, the government stressed that investment- led growth and the creation of new jobs remained its top priority. Prime Minister Ahmed Nazif acknowledged that despite moves -- including a radical overhaul of the customs and tax regime -- to reduce the difficulties faced by investors, much remained to do. "We have no illusions," he said. "Egypt faces a formidable challenge to remain competitive with regard to attracting foreign direct investment while also raising living standards for its citizens. Therefore, it is important that the pace and scope of economic reform does not slow over the next five to 10 years," said Economist Intelligence Unit analyst Ania Thiemann in a press release. Not that Nazif intends for it to slowdown. He has set 2025 as the deadline for meeting all OECD requirements. "It looks ambitious," he insists, "but is doable." The private sector seems to share his optimism. Tareq El-Husseini, vice-president of Visa International for Central and Eastern Europe, the Middle East and Africa, praised the government's progress in reforming the financial sector. "A massive restructuring programme is underway which will ultimately transform the way the Central Bank of Egypt operates," he said, adding that the steps already taken by the Ministry of Finance in areas such as customs and tax will change the face of finance in Egypt. He did, however, point out that the government needs to push harder for electronic payment systems. They are required, he argued, to ensure money stays within the banking system where it can be used to furnish loans for investment. Other investors complained of continued bureaucracy, difficult and lengthy conflict resolution scenarios and overpriced land. All three, said Nazif, were high on his government's reform agenda, and a new law, creating specialised courts for the settlement of business disputes, is due to be presented to the People's Assembly during its current session. Existing projects in new communities may expand to utilise 65 per cent of available land rather than the currently planned 50 per cent while the Industrial Development Agency had been set up to ensure the provision of land at reasonable prices for industrial projects. The government will also undertake a revision of subsidy structures as it prepares for next year's budget, with particular attention being paid to energy. Nazif pointed out that some LE40 billion will be earmarked for energy subsidies next year. "It is up to parliament, and to society as a whole, to decide if they want to spend such a sum while only LE32 billion is spent on health and education combined. Two-thirds of gasoline subsidies go to the rich while only a third trickles down to the poor." The government, he said, aims to develop a clear policy across the entire energy sector, the aim being to utilise resources more efficiently and give priority to projects that provide added value, such as in the petrochemical industry. Imported butane gas will be gradually phased out, to be replaced by natural gas, to which end a programme will be launched to extend the natural gas grid to cover six million households. Nazif also announced new opportunities for the private sector in health, education, housing and transport provision, with public-private partnerships leading the way in increased investment. "The private sector will invest," said Nazif, "while the government will lease the project and guarantee a return on the investment." Training programmes to develop human resources will be put place, along the lines of those to develop IT skills which began five years ago and are already bearing fruit. Interns will be placed with companies for training, their salaries paid out of public money, on the understanding that at least half the interns will receive offers of full time employment following the completion of their training. While conceding that the benefits of economic growth will take time to trickle down, his government, said Nazif, plans to start out by establishing a safety net for the nation's poorest three million families: "the mandate of the new Ministry of Social Solidarity is, after all, to develop better strategies to direct help to the neediest."
