Opposition and independent MPs took the government's liberal economic policies to task for raising poverty levels and socio-economic inequalities, Gamal Essam El-Din reports On 30 December 2007, the liberal-minded Prime Minister Ahmed Nazif came to the People's Assembly to deliver his government's long-awaited policy statement. Nazif said, "it was a big honour for me that on this day two years ago President Mubarak approved renewing confidence in my government... I am here today to give a statement about the achievements of my government over two years and the challenges facing it in the coming period." Nazif described the economic performance of his government over the last two years as remarkable. "Egypt's economy which grew by 7.1 per cent in 2007, saw a drop in poverty levels, and attracted $11.1 billion in foreign investment," he stated. Nazif boasted that tourism generated $2 billion more in 2007 than it had in 2006 and 2005, with the number of tourists visiting Egypt exceeding 10 million for the first time. Besides, dollar reserves in the Central Bank of Egypt (CBE) hit an unprecedented $31 billion and the Suez Canal generated a record $4.2 in transit fees. But the prime minister admitted that these achievements did not pass without controversy, such as his government being accused of ignoring the needs of the poor and middle class by phasing out social subsidies and failing to address poverty and unemployment problems. He reassured that subsidies are "a main tool for achieving social justice" and that "it is not on the agenda of my government to phase out or even reduce." Nazif explained, however, that subsidies would serve better if offered in cash, rather than in kind. Cash subsidies, he argued, would ensure that basic goods such as bread would really go to the poor and needy. "Right now, subsidised flour is being sold on the black market which is highly detrimental to the interests of the poor," Nazif asserted. The second success for his government, continued Nazif, is reducing unemployment to eight per cent. "I insist that employment opportunities should be generated by investment projects, rather than by appointment in government and state offices," he said. "The government is also doing its best to upgrade technical education to raise the skills of young people ready to enter the employment market." Nazif deplored that media headlines focussed on young people who died on the beaches of Europe in search for jobs. "These headlines ignored the fact that the government has created thousands of job opportunities in Egypt and helped 210,000 young Egyptians find jobs in foreign countries," he noted. In fact, in his eyes, Egypt is like China and India in becoming a success story in terms of steady economic growth. He admitted, however, that "the benefits of steady growth did not trickle down to limit-income and poor families." Nazif argued that his government cannot stabilise prices or impose fixed prices on the market, because this would be "a delusion which would cause market distortions." He blamed rising international prices -- especially of oil and wheat -- for the dramatic rise in the cost of food and the increase in the number of Egyptians living under the poverty line. To counter the adverse effects of price hikes worldwide, Nazif vowed that his government would continue pushing salaries to levels higher than those of inflation. "Please remember that salaries rose from LE35 billion in fiscal year 2003/2004 to LE59.5 billion in 2006/2007," Nazif said. Like many of his policies, Nazif's statement did not pass without controversy with as many as 14 opposition and independent MPs attacking it. They argued that his government's liberal economic policies are to blame for double-digit inflation rates, and the fact that more than 15 million Egyptians now live in slums and "cities of the dead". They also charged that his government has been seeking to shed old socialist policies, in favour of free market economic policies dictated by such international organisations as the International Monetary Fund (IMF), the World Bank and the World Trade Organisation (WTO). Mohamed Abdel-Alim Dawoud, a Wafdist MP, said Nazif's government enjoys the support of an alliance of wealthy businessmen and corrupt politicians in the ruling National Democratic Party (NDP). Dawoud charged that Nazif's economic policies are being dictated by a liberal economic team led by the son of President Hosni Mubarak, Gamal. Dawoud cited the American Embassy in Cairo's annual economic trends report, which estimates that 52 per cent of Egyptians now live below the poverty line, as evidence of Nazif's failure to improve the lot of the poor. Detractors were also sceptical about the prime minister's figures. Kamal Ahmed, an independent MP with leftist leanings, said Nazif's figures are entirely unfounded. "The government-funded Institute of National Planning [INP] estimates that the number of poor people in Egypt rose from 28 million in 2005 to 52 million in 2006," said Ahmed. Hamdeen Sabahi, another leftist MP, warned that Egypt is about to see the revolution of the hungry, the sick and the downtrodden. In a surprise move, several ruling NDP MPs joined forces with critics. Yassin Eliwa, an NDP MP from the Upper Egyptian governorate of Fayoum, accused Nazif's government of offering businessmen and monopolisers LE20 billion in energy subsidies per year. "This is too much and unfair in view of the fact that these businessmen export their products at international prices and make huge profits," stated Eliwa, revealing that subsidies for poor people stand at only LE9 billion. The MP asked Nazif to take a tour of Cairo's bakeries himself to see how poor people wait in long queues to receive their quota of subsidised bread. Abdel-Ahad Gamaleddin, NDP's parliamentary spokesman, asked Nazif to set up a wide network of cooperative societies to help the poor acquire their needs at cheaper prices. Mustafa El-Feki, another senior NDP official and chairman of parliament's foreign relations committee, said the number of people falling victim to neo-liberal economic policies is increasing and posing a serious threat to social stability. NDP businessmen also had a say about Nazif's statement. Mustafa El-Sallab, a tycoon wholesale merchant, agreed that economic reform did not trickle down to the poor, arguing that Nazif's figures about economic achievements do not mean anything to the poor "as long as their standard of living is deteriorating all the time." That said, NDP MPs refused to endorse a vote of no-confidence in Nazif's government that was tabled by 70 opposition and independent members of parliament.
