Chairman of the Central Audit Agency Gawdat El-Malt has launched a scathing attack on the government of Prime Minister Ahmed Nazif, complaining about Egypt's escalating public debts, Gamal Essam El-Din reports The People's Assembly -- the lower house of Egypt's parliament -- is expected to be the scene of a clash between Gawdat El-Malt, chairman of the Central Audit Agency (CAA), and Minister of Finance Youssef Boutros Ghali next week over the government's finances and the ballooning state of public debts. Next week's predicted clash, already ignited by an attack by El-Malt on the government of Prime Minister Ahmed Nazif because of what he has described as the ballooning state of the country's debts, threatens to repeat a scenario that took place last year when President Hosni Mubarak was obliged to intervene to head off a serious conflict between El-Malt and Ghali. El-Malt accused Ghali of following policies that benefit the better off, especially businessmen and the country's investment community, at the expense of the poor. Ghali, for his part, made clear that he believed that El-Malt represented the country's old guard and was someone who still considered that the public sector could serve as the engine of economic growth. In this year's attack El-Malt said the country's debts had risen from LE64.8 billion in June 2004, the year in which Nazif took office as prime minister, to reach LE666 billion in June 2008, a figure that represented 74.4 per cent of GDP. "Worse," El-Malt said, "servicing these debts will cost the government LE58.6 billion this year, compared to LE53.5 billion last year, and consumes 20 per cent of public expenditure." El-Malt said that the dramatic increase in public debt reflected what he called the fiscal irresponsibility of Nazif's government, and he urged the People's Assembly to exercise stronger supervision over the government in an attempt to end what he called the chronic misuse of public funds. However, in support of the government's policies the chairman of the parliament's Budget Committee, steel magnate Ahmed Ezz, said that Egypt's mounting public debts were part of an international trend and similar situations had been experienced by many other countries besides Egypt. "The United States and most European countries currently have huge public debts, and Egypt is not a special case," Ezz said, arguing that the country's indebtedness had been exacerbated by difficulties in collecting revenues, such as those due from the Egypt Railway Authority and various press institutions. In some countries, Ezz said, public debt had reached as high as 120 per cent of GDP. In response, El-Malt insisted that there was a big difference between Egypt and developed countries such as the US and the countries of Western Europe. "Those countries borrow money to establish development projects, but in Egypt the government borrows to cover its budget deficit," he said. El-Malt said that he had submitted some 160 CAA reports to the People's Assembly, in total amounting to some 16,000 pages, detailing the poor performance of Nazif's government. Many government projects were not based on sound feasibility studies or on valid research, he said, adding that "as a result such projects become a drain on the state's budget, costing millions of pounds at the expense of fiscal prudence and the prosperity of ordinary citizens." Such misuse of public money should be considered a crime, he said. "Corruption and the poor supervision of public finances have become pervasive in this country," El-Malt said, urging the People's Assembly to intervene to bring to an end what he called the country's spiralling public debt and chronic government inaction. Seizing on El-Malt's attacks, a number of independent and opposition MPs joined in the attack on the government, saying that the CAA's reports should ring alarm bells about Egypt's economic situation. In a statement submitted to parliamentary speaker Fathi Sorour, MPs Saad Abboud, Abdel-Alim Dawoud, Gamal Zahran and Mohsen Radi said that El-Malt's reports on the poor economic and financial performance of Nazif's government should be a matter of public discussion. Corruption and inaction had led to "the wide gap in confidence that currently separates the Nazif government from the public," they said. Many independent and opposition MPs also criticise what they call the role of Ahmed Ezz in turning a blind eye to CAA reports. In addition to being the chairman of the parliament's Budget Committee, Ezz is also head of the ruling National Democratic Party's influential Committee of Organisational Affairs. Prime Minister Nazif is expected to give an address on the impact of the global financial crisis on Egypt's economy in the People's Assembly next Monday.
