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Egypt reveals 'economic constitution' ahead of IMF visit - Daily News Egypt

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Egypt reveals ‘economic constitution’ ahead of IMF visit

CAIRO: For the first time in the country’s history, the Federation of Egyptian Chambers released on Saturday an economic constitution, just a day ahead of a planned IMF visit to Egypt. Since the Jan. 25 uprising that toppled former president Hosni Mubarak, Egyptians have been calling for economic reform. Highlighting the dire need for job …

CAIRO: For the first time in the country’s history, the Federation of Egyptian Chambers released on Saturday an economic constitution, just a day ahead of a planned IMF visit to Egypt.

Since the Jan. 25 uprising that toppled former president Hosni Mubarak, Egyptians have been calling for economic reform. Highlighting the dire need for job creation and "social justice," the new constitution discusses the reality of the economic situation in Egypt and how it should be reformed.

Inspired by the movement which toppled Mubarak and demanded social justice, democracy, and equality among Egyptians, economic experts came together to draft the constitution after realizing a pressing need for real economic reform.

This week, discussions between IMF and Egyptian officials regarding a contentious $3 billion loan are scheduled to take place.

However, the ruling military council previously declined the loan package saying that any loans would add on to the country’s outstanding debt. Nevertheless, Egypt’s current Cabinet, under the auspices of Prime Minister Kamal El-Ganzoury, announced that the loan is back on the table.

According to state news, officials had previously announced the state would have to borrow at least $10–12 billion to stimulate the Egyptian economy once again after the effects of the 18-day uprising which took place last year.

“The IMF staff has continued to remain in close contact with the authorities since its last visit in early November on how to address Egypt’s economic challenges and how the Fund can provide support,” an IMF spokesperson told Daily News Egypt in response to inquiries about their scheduled visit.

Many activists have repeatedly slammed the idea of borrowing from institutions like the World Bank and IMF due to fears of "hidden stipulations."

“This economic constitution is meant to go side by side with our national constitution,” said Ahmed El-Wakil, chairman of the Federation of Egyptian Chambers.

"Despite the poor security situation, an imposed curfew earlier last year, our work did not stop. We struggled to play our role and to draft this economic constitution with Egypt’s economic future in mind," he said, addressing representatives from the country’s political parties and media.

Many of the parties present were groups that formed after the Jan. 25 uprising.

Economic representatives from the Muslim Brotherhood affiliated Freedom and Justice Party, the ultra-conservative Salafi Al-Nour Party, the Revolution Continues coalition, Al-Tagammu, and the Free Egyptians Party all attended the event held on Saturday.

About 56 economic experts from 14 universities across Egypt came together to conduct intensive studies on the economic situation in order to draft the constitution.

The editorial board included professors from the University of Alexandria, the American University in Cairo, the German University in Cairo, British University in Egypt, as well as Cairo University to write the constitution in five to six months.

The constitution discusses the rising unemployment problem in the country, despite the huge population of well-educated youth.

"What Egypt needs right now more than anything is more jobs, and to achieve this we need local, Arab, Islamic, and foreign investment," El-Wakil stressed.

Emphasizing trade in the coming period, the constitution pointed out that 70 percent of Egypt’s trade is with the European Union and the United States; therefore producers must focus more on the quality of Egyptian goods to boost Egyptian exports.

Egypt’s trade ministry has been showing initiative in boosting trade relations with international partners over the past six months with growing discussions.

Last week, US trade officials visited Egypt’s port city of Alexandria in order to discuss expanding trade through the Generalized System of Preferences (GSP) program, which offers traders duty-free access to the US market when trading specific goods.

Trade and Industry Minister Mahmoud Essa is expected to visit Washington this week in order to address specific program objectives and a timetable in which the two countries will boost bilateral trade. The ministry has also passed a decision to resolve the issues of closed and stalled factories by pushing for mediated discussions between the banks and the factories in order to increase production.

According to the constitution, to tackle unemployment, officials underlined the need for a free, yet regulated market.

"Egypt is a nation with a huge economy and it is rich with the population of its youth, yet we have unemployment with people who want to work but are not finding the right jobs," said Khalid Hanafi, dean of the College of International Transport and Logistics at Arab Academy.

Hanafi, who is also the head of the editorial board of the constitution, pointed out that a more practical distribution of wealth is needed.

"Salaries are extremely skewed," said Hanafi, referring to salary distributions of government intuitions. "An Egyptian citizen only makes five percent of what a citizen in an advanced country makes."

While more than 16 million Egyptians are living under the poverty line of $2 a day, which is less than LE 12, there is a community of slums incessantly rising in order to accommodate the people who can hardly afford housing.

These people are thus forced to live in places where there are no basic amenities such was water or electricity, creating an economy of their own.

"The state loses control over these areas, which are often built at random, and they become their own slum economies," said Hanafi.

Adding that a country the size of Egypt, politically and economically, should not have such blatant poverty, Hanafi pointed out that the country’s infrastructure must also change.

"We are living on 10 percent of the land in Egypt, we have been talking about solving this problem, but not implementing and postponing the issue, which is actually the source of several problems that can easily be avoided," he said. "Our goal is to increase this 10 percent to 25 percent," said Hanafi.

Alaa Ezz, Egypt’s secretary general of the Federation of Egyptian Industries and member of the constitution’s editorial board previously told DNE that a country like Egypt, which is trying to emerge out of an economic crisis, should also focus on infrastructure in order to stimulate investments as well as continue developing.

The constitution also proposes reforming subsidies and social solidarity programs, making them more efficient and available to those who truly need them.




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