Dr. “Gouda Abdul Khaliq”, Former Minister of Solidarity, said in an interview to “MEO” that Egypt recently encounters various economic challenges; it is necessary to bring back the ministry of economy and not to count on foreign investments to solve the economic crisis.
What are the substantial economic challenges faced by Egypt in 2015?
The most important challenges lie in the economic management which will be the biggest challenge in 2016, if the situation is to remain as it is. In other words, under the current circumstances, consecutive choices are made without any realization of their basis, the role of the citizen in them who is a main partner in this system, nor their impacts on society. For, there is not one authority in Egypt responsible for managing the economic affairs;thus Egypt is like a boat rocked by enormous waves, whether regional or international.
All current ministries of government; starting from Investment, Planning and International Cooperation, to Finance; and even the Central Bank (CBE) have not among them a single ministry responsible for managing the economy. If CBE supposedly manages the economy, then it should have realized that it is of utmost necessity for economy to maintain the EGP’s value taking whatever actions necessary for that purpose. Yet, this is not what has happened last year after the deprecation of EGP against appreciation of foreign currencies reacheda dangerous level.
What are the economic solutions to end this confusion?
We need to change thepublic perspective based on the belief that the solution for all economic problems of Egypt is found abroad. Official statements always call on attracting foreign investments, without any mention of local investments at the same rate and level. This should be handled soon, if the economy is to progress.Another thing is that if we analyze the public speech in Egypt, we will find that one of the most key words in economic models is missing; namely saving.Yet, ironically all the talking now is about foreign grants; e.g., China has announced that it will give Egypt a huge grant during its president’s visit to Egypt next month. This is a proof that all the talking now focuses on grants which in fact hurts the economy.
Therefore, consumption has to be rationalized, production has to be increased, andsaving must be carefully considered since it is a key to boost economy. This requires a promotionof this culture in the society and an advanced study on the economic political tools.
Moreover, to further assert the absence of an economic management; we have a state that is economically and regionally important, since it is a founding member of IMF, and WTO. Thus, it is startling that the economic situation is that degraded.If I was in control of the economy, I would declare the state of war economy; for our economic situation entails considering things from that perspective. As, if we to compare our current economic position with that at the 1973 and 1967 wars, we would find them nearly similar.
That’s why we refer to Egypt’s membership at WTO according to which it has rights; if it counters an economic crisis, it is entitled to take all measures necessary to control imports. Yet, this was not mentioned at all; it is because the one responsible for managing economy now thinks that Egypt’s membership in these international organisations is curbing it.
What do you think of the major projects implemented last year; especially the Suez Canal Project?
Some of these projects are significant, useful, and well-implemented; whereas others are useless and poorly implemented. Among the first was the new Suez waterway, because The Canal was under an existential threat represented in an Israeli scheme to establish a land transport system to be a replacement for the Suez Canal. Israel has already approached the World Bank to take part in the studies and funding of the project. It has also been agreed with Chinese companies on constructing a railway between Eilat toAshdod; which is considered a land path tying the Red Sea to The Mediterranean. Israel’s scheme was based on the fact that rail transport is cheaper and faster; causing as a result an irreparable damage to Suez Canal. Egypt, therefore, had to proactively foil this scheme by implementing this project. The New Suez Canal reduces wait time for ships leaving the Eilat-Ashdod project without any strategic significance.
That’s why; this project is considered an act of defending the strategic geographical position of Egypt. Yet, not everything is subject to political and strategic examination only; there is also an economic aspect to be taken into consideration.From a political and strategic perspective, it is a great project; except that, from my view-point, this project has a very high economic value that could have been easily avoided. In other words, when the time of the project was limited to one year instead of 3, 34 km2 were dug using 75% of world’s cranes; meaning that the cost is three times higher than average…could this have been avoided?…I believe it could have been without any harm to the strategic aspect of the project.
