Economy scores behind Yemen and Oman regionally
CAIRO: Egypt advanced one position to No. 127 out of 161 countries on the Heritage Foundation’s annual Economic Freedom Report. An overall score of 53.2 percent, the country came in 13th in the Middle East and North Africa region out of 17 countries, scoring less than 50 percent in five of the 10 categories measured by the report.
The report is the second international study in the past five months to downplay the effects of the Nazif government’s reforms implemented since 2004. In September, the World Bank’s annual Ease of Doing Business Report ranked Egypt No. 165 out of 175 countries in 10 areas of doing business including starting a business, obtaining licenses, employing workers and obtaining credit.
The Heritage Foundation Report also ranked economies in 10 categories including business, trade and fiscal freedoms, freedom from government and corruption and property rights. Egypt’s highest score came in fiscal freedom with 93.6 percent, as a result of the income and sales tax reforms. The economy scored 30 percent in financial freedom for state dominance in the banking sector and 34 percent in freedom from corruption, where the report cited the problem as “significant.
As of press time, the Ministry of Investment had yet to issue comment on the report but the General Authority for Free Zones and Investment (Gafi) told The Daily Star Egypt the authority takes the reports into consideration in the implementation of its reforms.
Among the criticisms cited by the report are obtaining a business license and closing a business, where both processes were described as “very difficult, despite Gafi’s creation of the one-stop-shop for investment.
The report also cites an average of six years for decisions on commercial cases, with appeals lasting beyond 15 years, as part of its assessment for property rights where Egypt scored 40 percent.
“The government sometimes circumvents the independence of the judiciary by using fast-track military courts, the report said. “Nevertheless, local contractual arrangements are generally secure. Judicial procedures tend to be protracted, costly, and subject to political pressure.
Speaking on the government’s reaction to international economic progress reports, Gafi Chairman Ziad Bahaeddin said his office’s efforts are always directed to address the deficiencies cited, but the process takes time.
It takes time to dig into rules and policies that have been put in place over many years, said Bahaeddin. There are certain obstacles to investment but it’s an issue not for the government alone, it s a matter of national importance. Each of us has a role to play.
Israel and Bahrain led the Heritage Foundation report for the Mena region with global rankings of 37th and 39th, respectively, and a tie in their overall score of 68.4 percent.
The Economic Freedom report has been in production since 1995 and is a joint-production of The Heritage Foundation, a non-profit Washington D.C.-based think tank, and The Wall Street Journal.