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After the elections
Published in Al-Ahram Weekly on 02 - 12 - 2010

Elections are designed to help the nation meet its aspirations, but these aspirations need to be well formulated and pursued comprehensively. Abdel-Moneim Said gives his suggestions
One round of the People's Assembly elections is over, leaving one more to go. It is too early for analysis of the results and the country's political direction. However, we can be certain of one immutable fact, which is that elections and institutions were invented for the purpose of helping society to realise its aspirations for progress and development. Before and after voters report to the polls, the country's vital needs will always be there, and these can only be met by higher economic growth rates that, in turn, require higher rates of investment. In like manner, President Hosni Mubarak's visit to the Gulf last week was occasioned, as usual, by the need to discuss Arab and regional issues as well as the affairs of the growing Egyptian expatriate community there. However, below the surface of such visits there is always another constant and pressing priority, which is to attract levels of investment from the Gulf that would give a significant boost to Egypt's economic growth rates.
Political and economic logic tells us the following. Egypt is growing demographically at an annual rate of 2.1 per cent, adding an additional 1.8 million people per year to its already burgeoning population. We cannot absorb this increase, as well as make up for the turndown during the global economic crisis, and then stimulate higher economic growth rates, unless we invest an addition LE58 billion. This is the amount it will take to spur a seven per cent economic growth rate and propel us towards yet higher rates in the future. Such a sum is unavailable locally due to the decline in savings rates and the rise in subsidy rates year after year. The solution, therefore, is to procure investment from international markets and the Gulf market above all.
Among the most evident truths in the economic world of today is that the main mass of global monetary assets now lies in China, followed by the emerging economies of Asia and then the Gulf, which has accumulated an amount of wealth that could not even be dreamed of. According to Global Finance, experts predict that sovereign wealth funds, which currently stand at $3.9 trillion, will rise to between $6 and $10 trillion by the end of 2010 and to $20 trillion by 2020. The Abu Dhabi Investment Authority, with assets of $627 billion, is the world's largest sovereign wealth fund. SAMA, the Saudi Arabian fund, ranks the third largest in the world, with assets of $415 billion. The Kuwaiti Investment Authority, the world's first sovereign wealth fund, founded in 1953, comes in eighth with assets of $202.8 billion. The Libyan, Qatari and Algerian sovereign wealth funds rank 12th, 13th and 15th in the world, with assets of $70 billion, $65 billion and $45.8 billion respectively. Other Arab sovereign wealth funds are somewhat further behind, but not doing badly at all. The Investment Corporation of Dubai, founded in 2006, places 25th with assets of $19.6 billion; the International Petroleum Investment Company, founded in Abu Dhabi in 1984, ranks 27th with assets of $14 billion; another Abu Dhabi fund, the Mubadala Development Company, which was established in 2002, ranks 29th with assets of $13.3 billion; the Mumtalakat Holding Company of Bahrain has assets of $9.1 billion, making it the 33rd largest sovereign wealth fund in the world; Oman's State General Reserve fund is the 35th, with assets of $8.2 billion; the Saudi Arabian Public Investment Fund is 37th with assets of $5.3 billion; and the Ras Al-Khaymah Investment Authority, founded in 2005, places 41st with assets of $1.2 billion.
We are speaking, therefore, of financial power worth, at present, more than $3.3 trillion, and it is looking for places to invest, for otherwise it will lose part of its value through inflation and speculation. Here is where Egypt comes in. As I have mentioned time and again in other articles, investment is the key to progress in Egypt, economically because it stimulates higher standards of living, socially because it opens the horizons of choice available to society, and politically because it increases the size of the middle class and gives it the weight to serve as society's keel.
There are two ways that we can handle the question of investment in Egypt. One is the partial approach, with which we are familiar and which is to gradually improve the investment climate through legislation, tax incentives, fiscal reform and bureaucratic facilitations. This approach has helped quite a bit -- enabling Egypt to climb from 165th to 92nd place in the world in terms of how favourable the investment climate is for domestic and foreign entrepreneurial firms. The other way is the comprehensive or holistic approach, which does not hone in exclusively on investment climate and economic growth, but rather seeks to furnish the necessary groundwork for progress on all fronts.
Now I have a suggestion. The EU has a set of rules that determine whether or not a country is eligible for membership. The ones that focus on a country's political and economic conditions are known as the Copenhagen criteria. They require that a country have the degree of institutional stability needed to ensure government stability (sound government) and to safeguard democracy, respect for human rights, the rule of law, and respect for and protection of minorities. Economically, they require that applicant countries have a functioning market economy capable of coping with the market forces in the EU. Countries must further pledge to fulfil the obligations of EU membership, which entail adopting the general rules, criteria and policies of the EU and bringing their legislation in line with EU law. The EU experience, as we know, began with narrow regional cooperation in a field of joint activity, embodied by the European Coal and Steel Community. At a subsequent phase this evolved into the European Community and the Common Market, and finally into the European Union. Until 30 April 2004, the EU had 15 members, after which it underwent the greatest enlargement in its history. On 1 May 2004, 10 new states were admitted, and on 1 January 2007 two more states were admitted, bringing EU membership up to 27. On 3 October 2005, accession negotiations began with Croatia and Turkey, the former now being poised to become the EU's 28th member by 2011 or, at the latest, by 2012.
Turkish accession remains a controversial subject in the EU. Germany and France are opposed to Turkey's membership, with Berlin prepared to offer Ankara a privileged partnership with the EU, and Paris preferring, instead, to incorporate Turkey into the Union for the Mediterranean. Ankara strongly rejects both suggestions. With regard to Turkey's ability to meet the actual criteria for EU membership, there remain a number of unsettled issues, most notably the questions of the Armenians and of recognition of Cyprus. Nevertheless, Turkish Prime Minister Recep Tayyip Erdogan has appealed to his fellow citizens to continue to work to modernise and develop their country at all levels, regardless of its geopolitical environment. At the same time, he stressed that nothing would divert Turkey from the realisation of its goal to join the EU. In this context he has said, "Europe is the instrument that can help us put the Turkish house in order. Our central aim is to put Turkey on course to Europe."
Serbia submitted its application for EU membership in December 2009. Most likely, Kosovo will follow the same course. As long as that road may be, it is well known and clearly demarcated. It involves fulfilling the Copenhagen criteria and a number of strategic and geopolitical criteria.
Why do we not adopt the Copenhagen criteria as a set of guidelines for development and progress? I suggest this not only because other countries that worked to meet these criteria succeeded in lifting themselves out of poverty and deprivation to prosperity and open markets, but also because they are the fruit of an accumulation of human effort and experience that constitute a clear and comprehensive handbook for how to change from one situation to the other.
Naturally, I am not proposing that we apply for EU membership. That is beyond the bounds of feasibility, identity and other considerations. At the same time, I am not unaware of the differences between countries in our circumstances and those that are currently applying for membership, not least of which is the EU's offer of facilities to applicant nations. However, it is possible to compensate for such facilities by other means, whether available at home, in the Arab world or in Europe as well. In all events, what is more important is that the Copenhagen criteria offer a package of ideas and principles that all Egyptian political parties and forces can agree on, because the Copenhagen criteria are ultimately the product of the combined efforts of Europe's conservative and liberal parties, to which have been added the ideas of democratic socialists and the contributions of European civil society and research centres.
Moreover, is it not a comprehensive approach that our political parties have always urged? The Copenhagen criteria certainly offer a comprehensive guide that combines economic, social and political dimensions in a single package that points the way to the realisation of the goals and aspirations of society. Come! Let us try to think holistically about how to get to where we want to be!

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