In Focus: Taking the helm While critics are trashing the government on development, few realistic proposals are being tabled, and things are not that bad, writes Galal Nassar Egypt's economic performance has remarkably improved over the past three years. Gross Domestic Product (GDP) is growing by a minimum of 5.5 per cent. Per capita income has broken the $1,500 barrier. And domestic and foreign investment is higher than it used to be. Still, critics are questioning the credibility of Ahmed Nazif's government, and the relation between the government and the public. Consequently, trust eroded, public frustration mounted, and a wave of disturbances and protests swept the country. One of the issues critics bring up is conflicting data issued by various government departments. Prime Minister Nazif says that the economy is growing by 7.2 per cent; Minister of Economic Development Mohamed Othman puts the figure at 6.8 per cent; and Finance Minister Youssef Boutros Ghali believes it is 6.2 per cent. There is obvious confusion here, casting a shadow on the credibility of the government and its data. Despite the apparent conflict of figures, all available data suggests that the economy is doing well. No one claims that the economy is shrinking. So apart from the need for accuracy, we all know that the economy is growing at more or less respectable rates. The second major issue has to do with whether the poor are benefiting from ongoing development. At a "last chance" meeting of the government a few days ago in Alexandria, President Hosni Mubarak discussed this issue. Critics of the government say that most growth is focussed on luxury resorts, fancy housing, land grabs by Arab and foreign investors, and suburban shopping malls. The main consumers of such goods and services are, of course, the rich. But let's not forget that for those goods and services to reach their final consumers, thousands of poor and middle-class people are hired in production and delivery. Every fancy residential building creates jobs for builders and artisans, generates demand that keeps brick factories in business, and requires maintenance and security services on a permanent basis. And yet many citizens still lack the simplest needs of a decent life, such as bread, drinking water, health and social care, accommodation, and transportation. The third issue is about the level of wages in the country. Wages, especially for low-skilled labour, are extremely low. Critics conclude that the current mode of development is ill directed, but this is the wrong conclusion. Workers take low- paying jobs because they need them, and they know that having a poorly paid job is better than having nothing. Despite what the critics say, this is a rational decision. We mustn't reject the current mode of development out of hand. And although higher wages are something we should strive to have, we need to be realistic. Low wages can be an advantage to the economy as a whole. China achieved an economic miracle through low wages. China's low wages allowed it to compete effectively in regional and international markets, generating more profit and creating more investment and jobs. Wages are not the only factor that we need to consider. We need to ask ourselves if it's higher wages or more jobs that we need most. We also need to keep in mind that our competitive edge depends on other factors than low wages. To improve competitiveness, we need to reduce waste, improve labour skills, enhance management, and reduce government corruption. All of the above can help reduce our costs, and thus allow us to increase wages without blunting the competitive edge of local products. Wages will remain, however, an important factor. We need to find a middle way that would balance the needs of both the economy and the poor. And we cannot do that through fiery rhetoric, but through an earnest discussion about jobs and development. Empty slogans don't put bread on the table, but they can create demagogues and lead to endless disasters. The needs of the poor are not necessarily at variance with the needs of development. We need to look at development from a realistic point of view. We're all -- rich and poor -- in the same boat. Unless we steer that boat to safety, we may end up lost at sea.
