Prime Minister Ahmed Nazif's political and economic performance has inspired a mixed bag of reactions. Gamal Essam El-Din assesses a year at the helm "My government," Prime Minister Ahmed Nazif says as his first year in office comes to an end, "has implemented Egypt's 'third generation' of economic reforms." While the first generation -- in the 1980s -- focussed on rebuilding and improving infrastructure, and the second -- in the 1990s -- was devoted to selling loss-making public assets and creating a robust stock exchange, Nazif's reforms have been more about fighting recession and raising rates of growth. By slashing taxes and tariffs nearly in half, Nazif boasts, "the growth rate climbed to an unprecedented five per cent, exports boomed by 31 per cent, inflation fell to 4.5 per cent (from 12 per cent), while foreign currency reserves surged to $18 billion (from $13 billion)." Nazif also claims that these reforms did not result in the all too familiar social ills that other countries pursuing similar policies fall into. "Instead, they led to lower prices on 15 basic consumer products, meaning ordinary citizens can now reap the fruits of reform." Some would disagree with that last claim at least, arguing that the Nazif government's generous package of tax and tariff reductions will be problematic in the long run. These critics -- the most vociferous of whom come from the People's Assembly's leftist and independent camps -- caution that the budget deficit (which currently stands at 10 per cent of GDP) may increase to more than 15 per cent as a result of these very same tax and tariff cuts. They also claim that Nazif's reforms cater for a handful of businessmen at the expense of the majority of ordinary Egyptians. Complicating matters, on the macro level at least, Nazif's reforms have definitely been generating a positive response on the international scene at the same time. During the prime minister's recent visit to the United States, the White House spoke highly of Nazif's economic programme, which also received upbeat coverage from prominent magazines like Business Week and Newsweek. This government's success, said People's Assembly Economic Affairs Committee Chairman Said El-Alfi, is largely due to the fact it is being led by a team of young and dynamic technocrats and industrialists. This team, which includes Nazif and the three young ministers of finance (Youssef Ghali), industry and foreign trade (Rashid Mohamed Rashid) and investment (Mahmoud Mohieddin), seem to have completely changed the nation's philosophy on economic reform. "They have broken many long- held taboos," El-Alfi said, "including ones that said public sector banks should be left out of the privatisation programme, that economic cooperation with Israel should be delayed, and that tax and customs duties should always be raised rather than lowered because these constitute the nation's two untouchable and supreme sources of income." According to El-Alfi, this remarkable change in economic thinking could not have taken place without the political support Nazif has been getting from the ruling National Democratic Party's (NDP) Policies Committee, led by Gamal Mubarak. "This committee's political support was essential to spearheading key and bold economic reforms." Here again, Nazif's critics have reservations. Al-Ahram economic analyst Ahmed El-Naggar, for one, argues that "in both the political and economic spheres, the Nazif government's job was just to rubber stamp the agenda engineered by the NDP's powerful Policies Committee." El-Alfi sees no problem with that. "Nazif's government is the first embodiment of the NDP's self-proclaimed 'new style of thinking' -- namely, that the government should belong to the NDP, and not vice versa." NDP Policies Committee Chairman Gamal Mubarak has also expressed his surprise at the opposition's concerns. They have "slammed the NDP many times in the past on the grounds that previous governments were usually filled with old guard ministers who had lost touch with changing times," Mubarak told a press conference after Nazif's appointment. "Now, when the NDP appoints a government with a young, dynamic and reformist-minded team, I wonder why it is still being attacked?" Some, like leftist MP Abul-Ezz El-Hariri, would answer that question by pointing to the way the Nazif government's reforms have tended to stay clear of prominent NDP figures like Ahmed Ezz, the iron and steel magnate who also doubles as a member of the NDP Policies Committee and chairman of Parliament's Budget Committee. Ezz's business interests emerged unscathed from the government's attempts to limit monopolistic practices. El-Alfi, on the other hand, would interpret Ezz's case as having less to do with any bias on the Nazif government's part than the reality of global economics. "This matter was heavily scrutinised by the Central Auditing Agency (CAA)," El-Alfi says, "which found that the rise in local steel prices had more to do with global market developments than local monopolistic practices." Nazif's detractors -- most of whom come from Nasserist and Marxist- oriented backgrounds -- also believe that the government's next move will involve lowering subsidies. "It started on staples like diesel fuel and cooking oil," said a statement released by the leftist Tagammu Party, "and more [subsidy cuts] are on the way after the presidential and parliamentary elections." Responding to these attacks, Nazif has often reiterated that President Hosni Mubarak's instructions to his government make clear how sensitive a subject subsidies are. "Our aim is just to rationalise subsidies and make sure that they go to the right people," the prime minister has said. When it comes to the political scene, Nazif's record has also met equal doses of gloom and cheer. While the prime minister has claimed that his government has made tremendous progress towards democratisation, the opposition calls the package of political reform legislations recently passed by Parliament mere window dressing. Speaking before Parliament's final session on 5 July, Nazif said the new laws would "make of Egypt a beacon of democracy in the region". Describing these very same laws as being even more restrictive than the ones they replaced, an alliance of opposition parties decided to boycott a national dialogue with the NDP. Nazif has also come under fire for his government's decision to initiate two major economic agreements with Israel, as well as for a series of statements he made on political reform and human rights during his recent trip to the US. NDP reformers, meanwhile, say Nazif's US tour was a success. "It broke the ice between Egypt and the US, and opened the door to a free trade agreement," El-Alfi said. "What the opposition does not understand is that regardless of anything else, political relations -- especially with a superpower like the United States -- should be harnessed to serve the country's economic interests." Whether Nazif will continue to be seen as a hero by some, and a technocrat lacking in political experience by others, may have a lot to do with whether that particular strategy will result in the kind of lasting cures that the nation's political and economic ills require.
