Social justice was one of the main goals of the 25 January Revolution and a lynchpin in the economic platforms of Egypt's presidential candidates. Sherine Abdel-Razek looks at how the main runners plan to achieve it Combating poverty, creating job opportunities, increasing the minimum and maximum wages and restructuring the subsidy system to benefit those with limited incomes are but a few of the policies that are common to the agendas of Egypt's presidential frontrunners, as seen in their manifestos and media interviews. The ill-reputed trickle-down effect has disappeared from all programmes, replaced by promises of quick fixes for persistent poverty and unemployment problems, a way to flirt with the demands of the revolution calling for social justice. The way to this end differs according to backgrounds and political leanings of the candidates. Amr Moussa, former foreign minister who spent the last 10 years heading the Arab League, Mohamed Mursi, the head of Freedom and Justice Party, the Muslim Brotherhood's political arm, and Ahmed Shafik, the last serving prime minister under Hosni Mubarak, agree on adopting an open economy with private-led growth, a free market, scaling down the role of government while guarding the social dimension. On the other side of the spectrum, Abdel-Moneim Abul-Fotouh, secretary-general of the Arab Medical Union, rejects "heartless capitalism" that does not respond to human needs, advocating instead what he calls "national capitalism" based on human development while assuring that he encourages the role of the private sector. The Nasserist Hamdeen Sabahi calls for a mixed economy, like the Brazilian paradigm, where the state has an important role -- especially in strategic projects with stakes not less than 35 per cent. On the far end of the spectrum comes socialist Khaled Ali who wants a centralised economy with the main role being played by the state and more labour rights and fair wages. "Promises to encourage investors or support the poor are not the winning cards in these elections; the political views and track record of the candidates count more," said Hani Geneina, head of research at Pharos Investments, a leading local investment bank. "For the economic aspect to be a determinant in choosing this candidate or that, those contenders should have been organised under the umbrella of certain parties or associations with a known school of thought and a track record, so that the people can judge them," said Samar Suleiman, professor of political economy at the American University in Cairo. She added that there was limited time after the revolution to build popular parties or associations. The latest weekly opinion poll on Egypt's presidential candidates by the Cairo-based Al-Ahram Centre for Political and Strategic Studies puts Moussa in first place followed by Shafik, then Abul-Fotouh. The Muslim Brotherhood's Mursi comes in fourth place while independent Nasserist candidate Sabahi trails fifth. Whoever it is, Egypt's next president will inherit an economy burdened by the lowest growth rate and highest budget deficit among countries with traded external debt in the Middle East, International Monetary Fund data shows. After shrinking for two quarters, the quarterly growth rate never exceeded one per cent since the revolution. The budget deficit mounted to 10 per cent last year. "To prepare the economy to return back to grow and thus offer job opportunities the financing gap must be tackled," noted Geneina. Moussa meanwhile has vowed to "immediately employ" his regional and international contacts to plug the gap he estimates is as much as $12 billion and that may increase, according to his manifesto. This approach is criticised by Samer Atallah, assistant professor of economics at the American University in Cairo and an advisor to Abul-Fotouh. Talking to Bloomberg, Atallah decried "reliance on borrowing" in Moussa's plan. "It is the ultimate disease of the Egyptian economy: continuously relying on foreign borrowing. Instead, Abul-Fotouh's platform will depend on encouraging investment. The current government, appointed by the military that took over power from Mubarak, is in talks with the IMF for a $3.2 billion loan as foreign reserves plunged more than 50 per cent to $15.1 billion in March 2012. Khaled Ali refuses international funding, while Muslim Brotherhood members of parliament voiced reservations on the IMF loan, saying it is not compliant with Islamic law as it bears an interest rate. Mursi insists that it is not the idea of borrowing that they are against, but "foreign borrowing should not be the first option." Like Abul-Fotouh, Mursi would go for more investment to push the economy. "We have already met with investors from Arab and Europeans countries who have promised to pump $200 billion into the Egyptian economy," he told local media a couple of weeks ago. He promises to set up 100 national projects with investments of $1 billion each that would push growth rates to 6.5-7 per cent in five years and lower unemployment to seven per cent from its current 12 per cent. Another means to secure revenues to fill the deficit is tax system restructuring. Abul-Fotouh, Moussa and Ali agree on introducing a progressive tax, but while Moussa did not specify a target rate, Abul-Fotouh said it should not exceed 30 per cent and Ali asked for even higher rates. There is also consensus between the three on imposing a capital gains tax on stock market investments. Imposing a property tax is advocated by both Abul-Fotouh and Sabahi. The use of the Islamic concepts of zakat, sadaqa and endowments as a means of securing needed revenues is common to the programmes of both Abul-Fotouh and Mursi. Supporting the unemployed is an integral part in most of the campaigns. Abul-Fotouh's programme, which calls for reducing the unemployment rate by half, to six per cent by the end of the four-year presidency period, offers an unemployed allowance that varies according to location and education level. The allowance, to be given monthly for two years, will be higher in rural areas due to the very low level of incomes in such areas. Meanwhile, those who have a higher education will get a lower allowance as they have a better chance of securing a job. In Moussa's programme, the allowance will be equal to half the minimum wage and the unemployed will be eligible for support for up to nine months. Abul-Fotouh considers extending allowances for families whose main breadwinners are females with the condition that the children of those mothers do not leave schools. As for Mursi, he promised to double the number of families taking the social insurance pension, to reach three million families. Most of the contenders underline development as a means to fight poverty, and for Abul-Fotouh it is the human development based on agriculture and agricultural industrialisation that most counts. Sabahi would tackle poverty by making the poorest governorates in the country, those of Upper Egypt, the target of a wide industrialisation plan that will see the building of 200 factories with total investments of LE8 billion. All candidates promise to upgrade health and education services with some programmes offering a full-fledged health insurance system. Abul-Fotouh would direct 25 per cent of the government budget to improving education, compared to the current eight per cent. Moreover, he wants 15 per cent to go to better health insurance, rather than the existing 4.5 per cent. The minimum wage as well as setting a maximum level to salaries in public companies, dominated debate between the candidates. Ali put the minimum wage level at LE1,500, while Sabahi supports LE1,200. Mursi, who bases his economic plan on attracting $200 billion in investments, prefers not to set a minimum wage level but links increasing wages to investment growth. Coming after almost a year and half of continuous labour strikes, nearly all presidential contenders put labour rights front and centre. Ali promises to pass a law governing trade union freedoms. A draft of such a law has been languishing in the People's Assembly for almost a year. Moussa talked in his Labour Day address about giving workers representation on the boards of directors of public companies. Raising the skills of labour through government-funded vocational training programme is a point agreed upon by Abul-Fotouh, Moussa and Sabahi. Candidates are divided, meanwhile, in their vision on some policies that touch on their ideologies. While the Nasserist Sabahi underlines that he does not plan to nationalise any privately owned companies, he said that all privatisation contracts sealed during the last 20 years would be reviewed and any sale that proves to be illegal would be annulled. Ali has already helped return three privatised companies into public hands. Mursi's plan includes hints about privatisation and early retirement programmes for workers of to-be-sold companies. One policy position that triggered the reservations of businessmen is what Sabahi said about not allowing the private sector to own majority stakes in strategic infrastructure projects for fear that they would control the price of important commodities. Such protective and socialist policies sound appealing but do not suit the Egyptian case in the short term, said AUC's Suleiman. "Reading through the experiences of other countries that have suffered from oppressive and corrupted regimes, and with the absence of strong trade unions and well-managed state institutions, Egypt needs to adopt right-winged policies," Suleiman added. Agreeing with Suleiman, Geneina said he thinks Egypt has to adopt a managed but free market approach based on immediate borrowing from international donors to secure much-needed liquidity. Geneina gives a thumbs-up to the candidates' unanimous agreement on rationalising energy subsidies, extended to energy intensive industries. However, he has reservations on progressive tax proposals, which he believes cannot be handled well at present.
