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Reactionary not progressive: Egypt’s economic policy

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Farah Halime

Farah Halime

By Farah Halime

In a desperate move to save power, Egypt’s international airport will close most of its runways for four hours each day from early June, Reuters has reported.

The airport is the latest casualty of Egypt’s struggle to pay for fuel imports.

As if to soften the blow, Reuters quoted the civil aviation minister Wael al-Maadawi as saying: “The closure should not have any impact on air traffic as the airport has seen a dramatic reduction in flights, and runways had been kept open without being used.”

“The decision came after detailed study on the rate of work that had witnessed a huge reduction (in traffic) in the past two years,” he added.

So he’s essentially saying it is OK to shut down the airport sometimes because tourism is down the drain anyway.

It’s simply a poor and lazy excuse to ignore the real root of the problem, more frequent power cuts caused by shortages, which are in turn ultimately caused by delayed reform of energy subsidies.

But it is also a reflection of the Egyptian government’s approach to the economy: reactionary in every way.

If a problem crops up, a plaster is swiftly administered. If it leaks, the patch is replaced or stuck on harder, and so on.  In this case, closing the airport for a few hours each day is conceivable only because there is another problem, flights into Cairo have dramatically reduced because of the political situation.

It may be a short-term solution, relieving the government of more energy bills, but it is by no means sustainable. 

Aside from actually making concrete moves to solve the energy crisis, shouldn’t the government invest some time and money into improving the airport, a tourist and international investor’s first impression of Cairo? At least, work on smaller aspects such as creating a managed system that would help allocate arriving passengers to a designated driver, saving passengers who have just touched down the hassle of haggling over fees with taxi drivers.

Instead, Egypt has decided to ignore the underlying problems that will plague most Egyptians this summer in chronic blackouts and also manage to limit arrivals into Cairo at a time when the country is desperate for hard currency.

Under Morsi, the government has repeatedly made these ad hoc decisions, which seemingly are not connected to one another and stray far from a long-term economic plan.

The biggest ad hoc decision that has come back to haunt President Morsi is, of course, the backflip on tax reforms in November when the president announced a broad spectrum of tax hikes in the early hours of the morning, only to rescind this the next day. That is now being used as ammunition against Morsi and has severely hurt any government efforts at economising.

At one point, Egypt also imposed a curfew on shops to save money, only to backtrack a week later. And most recently, the government raised customs on luxury imports in a basic manoeuvre that misses the point (i.e. the need to overhaul the tax collection system and widen the income tax base, discussed more here).

No, let alone any attempts to restructure the economy, Egypt still has no long-term economic plan and the government has fallen back on reactionary measures time and time again.  

Morsi, whose presidential campaign was based on the Brotherhood’s 20 year Renaissance Project, has failed to plan even a few days ahead. 

Egypt should drop its shrill and reactionary approach to the economy, abstaining from shutting huge operations down when they cannot sustain them any longer, and look immediately to gradual reform using a progressive and transparent plan. 

 

This post originally appeared on Rebel Economy


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