Efficiency and justice -- neither should be promoted at the expense of the other, writes Ibrahim Nafie In the past administrative reform seemed a finite process, something the government could accomplish within the space of a 10- or 15- year plan. Not any more. Technological and IT revolutions make reform a perpetual and on- going process, encompassing education, training and a host of environmental factors needed to keep pace with new and increasingly diverse demands for skills. In Egypt an administrative reform programme has already been set in motion. Unfortunately, however, the process is further complicated by phenomena inherited from earlier periods, perhaps the most salient of which is massive over-staffing. Yet in spite of the many difficulties this problem poses, the Egyptian leadership has refused to resort to the easy way out: layoffs. Rather, it has chosen the more difficult route of seeking to enhance performance without the employees incurring difficult costs, a course radically different from that adopted in many of the former socialist countries of Eastern Europe. Efficiency and justice -- it is one of the most difficult balances to strike. Little wonder, then, that the capitalist and socialist orders have felt compelled to emphasise one of these values at the expense of the other. According to capitalist thinking improving efficiency enhances the prospects of rapid economic growth, with payoffs in the availability of resources and higher standards of living across the board in the long term. In the short term, however, the more disadvantaged and lower income segments of the work force suffer, a prospect that the Egyptian leadership cannot countenance. But then, nor can it accept the traditional Soviet alternative. Although in theory this may appear fair in practice sacrificing efficiency inexorably leads to economic decline and increasing shortages of resources that can be distributed equitably. It results in the impoverishment of society as a whole. Administrative performance and economic management are intrinsically intertwined. For example, the Egyptian economy still suffers from the accumulated effects of import substitution, which worked to entrench vested interests in an economic structure that continues to hamper our efforts to spur the readjustments we need to make in order to compete effectively in the era of free trade. Although import substitution was an ideological choice that may have been politically appropriate in the 1960s the policy remained intact long after the shift to the open-door policy in 1974. In stark contrast Malaysia, which instituted an import substitution policy shortly after independence in 1957 had by the early 1970s already made the shift to an export- oriented economy, generating the resources for rapid industrial development and the restructuring of its manufacturing base. Malaysia's success would not, of course, have been possible without the managerial expertise to accomplish it. Indeed, what has most impressed students of the Malaysian experience is the care that was given to selecting qualified personnel and the originality and flexibility that was shown in creating organisational frameworks capable of fostering economic development. In Egypt, meanwhile, the priority given to full employment by economic planners in the 1950s and early 1960s generated a two-fold ill. Not only has overstaffing encumbered the state with a constantly growing payroll, but the presence of so many employees with guaranteed salaries yet with nothing to do has undermined the work ethic and its concomitant values. We are still paying the price for the categorical priority that was given to social justice at the expense of efficiency. By the 1980s the economic fallout from this had become so severe that reform could no longer be deferred, prompting President Mubarak to convene an economic conference that brought together a diverse gathering of Egyptian economists. The economic reforms inaugurated by this conference began to bear fruit in the early 1990s and produced increasingly encouraging results. However, when stagnation set in again in the late 1990s it became apparent that economic progress could not be sustained without a complete overhaul of our bureaucratic structures. Although this is the direction in which the government is now moving some hold that it is not moving quickly enough. Perhaps the most frequently voiced grievance is that new generations do not have sufficient opportunity to move into levels of responsibility. There is no question that new and younger blood in executive positions is needed, but this is only part of the issue. Indeed, of greater importance are the criteria that are brought to bear in this process. In many discussions I have attended I could not help but notice a prevalent inclination to demand change simply for the sake of change. Such shortsightedness can only impact negatively on the goals we hope to achieve. The efficiency-justice equation applies just as much to hiring or promotion policies as it does to other questions of administrative reform. As desirable as it is to see new generations rise in the ranks of management we still must keep our sights trained on the qualifications and skills they will need to fill these posts successfully. The management of human resources has become exceedingly intricate and the tasks of leadership are becoming ever more complex and challenging. According to a Harvard Business School study, there has been a 30 per cent rise in the turnover in executive positions in Western companies over the past 10 years. One of the major causes of this astounding rise is that increasing numbers of individuals stepping into executive positions are proving not to have what it takes. Of course the upheavals caused by globalisation -- the spiraling morass of breakups, mergers and reconsolidations -- are also responsible for the increase in the turnover rate, but there is no denying that management in this day and age demands new and more diverse skills than ever before. In Egypt, the problem of bringing new generations into upper management echelons has been exacerbated by the hierarchical rigidity that had made this process so sluggish in the past. As generation followed generation with no avenues for advancement many of our most talented and skilled managers were driven to search for better prospects abroad or with foreign organisations at home. One consequence of this brain drain has been to leave the less qualified in line for the executive positions in the public sector. Still, in spite of these drawbacks, we are beginning to see the formation of healthy second and third tiers in many ministries and government agencies. Our hope now is that administrative reform will hasten this process, but in a regulated manner that opens the doors of advancement to younger generations while simultaneously enhancing performance.
