Overall poverty in Egypt may have dropped but there is a growing welfare disparity between urban and rural areas. Niveen Wahish looks at the findings of a recent report Amm Abdel-Ghaffar is poor. All day long, he stands by a set of Dokki traffic lights selling tissues, Ramadan lantern medals or balloons, depending on the time of year. It probably wouldn't interest Ghaffar that, according to a recent World Bank/Ministry of Planning joint report, poverty in Egypt has dropped from 19 to 17 per cent of the population. He has not benefited from this drop. In fact, there are still 10.7 million individuals living under the poverty line in Egypt despite these promising statistics. The World Bank/Ministry of Planning report entitled, "Poverty Reduction in Egypt: Diagnosis and Strategy", attempts to diagnose the constituent elements and extent of poverty in Egypt in the latter half of the 90's. It is part of a larger effort to come up with detailed strategies to tackle poverty reduction. The report draws on data from the Household Income, Expenditures and Consumption Surveys conducted by the Central Agency for Public Mobilisation and Statistics (CAPMAS) in 1995-96 and 1999-2000 as well as national accounts data and secondary data from government sources. Arup Banerji, task team leader at the World Bank, said the report used the basic food and non-food needs approach to estimate the poverty line. Using expenditures or income as an indicator of poverty, the team concluded that there are multiple poverty lines for Egypt, depending on age and location. The average figure arrived at was LE998. However, Banerji noted that poverty was relatively shallow and not very severe, that is, most were close to the poverty line. According to the report, the two per cent drop in poverty was achievable because of a high growth in the late '90s. However, this growth was not sustainable: "Since the time of the survey, growth rates have slumped, a slowdown in the domestic stimulus (especially credit) has also slowed the construction industry and tourism has slumped since 11 September. Given that poverty is shallow, there is a chance that many of those who escaped poverty during the 1995-2000 period, may have slipped back into poverty again." But on the other hand, Egypt has made considerable progress towards improving some of the non-income dimensions of poverty such as improving literacy, mortality and healthcare. While poverty has dropped, the drop has not been uniform across the country. According to Banerji, "the poverty pattern has changed into a geographical/ regional pattern." Rural areas are poor whereas urban areas are better off. The report found that most of the poor live in rural Upper Egypt. Moreover, the number of poor people and the share of people who are poor have also gone up in Upper Egypt. It attributed this "to a regionally biased pattern of growth during the late 90's. Most import- substituting manufacturing and domestic construction and trading has been in Lower Egypt. Upper Egypt has seen very little manufacturing activity". This difference may also be due to the differing productivity and crop patterns in the two regions. Not only was there a disparity between regions, but poverty also varied according to the degree of education. The rate of poverty was highest amongst the illiterate. Almost 46 per cent of the poor are illiterate and 40 per cent have a basic education or less. "Poverty fell sharply as educational attainment grew," the report said. One factor which made a difference to poverty is Egypt's safety net. However, according to the report, it was minimal and expensive. "350,000 more individuals would have been in poverty in 99/2000 had it not been for cash transfers from the government," the report stated. Subsidies on basic commodities, especially baladi bread, have raised 730,000 individuals out of poverty, the report added. But while this government assistance was useful, it could do with some modifications. For example, the bread subsidy, while being the most effective of commodity subsidies, was available to all Egyptians, regardless of their financial status. As for cash transfers, they need to be adjusted to take into account increases in the cost of living. They also need to be better targeted by broadening the eligibility criteria and making larger allocations to poorer governorates. With these findings the report has set a number of criteria on which a poverty-eradication strategy could be based. It has pointed to the importance of establishing the economic foundations for more sustainable job growth with an increased focus on productivity. The report also stressed the need to improve education, whether by expanding primary education or improving the quality of secondary education. Furthermore, the government needs to work on improving regional disparities. "Upper and rural Egypt in particular, need a continued push in terms of effective development investments."
