Dina Ezzat listens to calls for the humanisation of economy "So we hear on TV. We always hear this. They keep saying that more and more money is coming to Egypt. But why then do we still have the same problems?" asked Um Mahmoud. A house-help working in Heliopolis, Um Mahmoud makes an average of LE50 a day. This amounts to LE300 a week since she takes Friday off. Her husband Fathallah, she said, is also making some LE500 a month as a security guard at a 10-floor Heliopolis apartment building. However, with LE1,700 -- sometimes increased to close to LE2,000 when Um Mahmoud or Fathallah take extra jobs like cleaning the cars of the apartment owners -- she said it is still difficult to make ends met for the couple and their five children. Speaking as she was queuing up to buy subsidised bread for her family and for some other families in the apartment house she works for, Um Mahmoud was quite expressive, to say the least, in communicating dissatisfaction with her living standards and the many difficulties involved. "We are much better than others, I know, but everything is difficult. Private lessons are expensive. Bread is difficult to buy. One kilo of tomatoes is for LE3 and one kilo of macaroni is for about another LE4. If I wanted to feed the family just macaroni, I would need at least three kilos of each. Do you know how much that makes?" she said. As such, Um Mahmoud is not a rare example of those citizens who do not care much for the supposedly positive economic indicators that government officials are projecting daily through the state-run radio and TV. "If they want us to believe that there is more money, then things should not be getting more expensive every day," Um Mahmoud said. The economics involved in deciding the prices of some basic commodities vis-à-vis increased investments, national or foreign, are not as simple as this 40-year-old woman with only a few years of primary education might suggest. However, according to Supachai Panitchpakdi, secretary- general of the UN Conference on Trade and Development (UNCTAD), the issue of social cohesion is closely associated with the issue of investments. Governments, Panitchpakdi argued, need to make sure that investments, especially direct foreign investments (FDIs), are administered in a way that serves the interest of the public at large, not just investors or their partners. Speaking in Cairo on Saturday at a seminar organised by Egypt's International Economic Forum (EIEF), Panitchpakdi was not short on praise for what he qualified as considerable success by the Egyptian government to prove more attractive than ever before to foreign investors. Panitchpakdi agreed with the assessment offered by Nevine El-Shafei, director of the General Authority For Investment (GAFI) regarding the advanced share that Egypt receives of foreign direct investments directed to the North Africa region and with her argument that the regulatory and economic structural reforms adopted by the government during the past few years have played a key role in terms of improving the outlook for Egypt as an investment opportunity. Net FDI inflows to Egypt increased from $509.4 million in the fiscal year 2000/ 2001 to over $6.1 billion in the fiscal year 2005/2006. This figure doubled the following year according to the World Investment Report published by UNCTAD. As such, Egypt has become a leading recipient of FDIs not just in the North Africa region but indeed in the entire Arab world and the African continent. Panitchpakdi argued that more regulatory reforms could help this figure increase much more in a relatively short period of time. But increasing the flow of FDIs is not in and of itself a major economic gain to celebrate if not coupled with a diversification of the distribution of these FDIs and of a positive trickle-down effect to allow ordinary people to gain some positive results, he said. So far the oil and Information Technology (IT) sectors absorb a good chunk of the FDIs. "There needs to be diversification," he said. Moreover, Panitchpakdi said that Egypt, like any other developing country, needs to match the clustering of investments into one particular area with the accumulation of more know-how and technology transfer in relation to this area. Each country needs to also decide on its priorities for investments, he argued. For Panitchpakdi, "investments in water supplies should be a priority" not just for Egypt but for most countries of the Middle East. Panitchpakdi acknowledged the need for national mechanisms that would make sure that the increased inflow of FDIs is not conducive to higher rates of unemployment as the case could sometimes be. "Sometimes people look at FDIs only on the basis of numbers but it is the real impact of these FDIs in terms of promoting development that should really count," Panitchpakdi said. Indeed, he added, "Not all increases of FDIs" is good. "Sometime investors come and just go and suddenly the country has lost the investments when it has not gained much in terms of development." Whether Egypt has been exercising the necessary caution in this respect is a question that both UNCTAD and the Egyptian government will work closely in answering during the next few months. "This is a matter that I discussed with [concerned Egyptian officials] in Cairo this week," Panitchpakdi said.
