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Reading: The government’s economy and the people’s economy
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Dailynewsegypt > Blog > Opinion > The government’s economy and the people’s economy
Opinion

The government’s economy and the people’s economy

Abdallah Al-Moghazy
Last updated: 2017/03/04 at 6:49 PM
By Abdallah Al-Moghazy 6 Min Read
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by asmaa gamal
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It is now clear, as time goes by, that we are talking to, criticising, and offering solutions to an unworthy government that unfortunately treats us the way an Egyptian employee deals with Egyptians. Of course, I do not have to explain to you how Egyptian employees function in Egypt. This shows how the government is unable to manage our current economic crisis successfully, since it uses the routine way of thinking adopted by Egyptian employees, mixed with the mentality of day-to-day labourers and breadwinners. This mix hinders the development of the country.

Through the use of popular media, the government is trying to convince us of its famous trends that imply we are walking down the right path, depending on some reports by international bodies that we will be absolutely great by 2030. We are living a dark comedy. The Egyptian government has a booming economy in its own fantasy; however, Egyptians have a dying economy, substandard educational and health services, and other problems.

We need to be honest with ourselves. The volume of foreign and local debt has reached terrifying historic levels, with foreign debts reaching more than $60bn. Locally, debts have reached more than EGP 2.3tn; hence, projects are not the result of surplus in the national income or a real tangible effort made by the state.

We try, one last time, to advise someone who would not take advice—the Egyptian government—by telling it that there are several ways to treat the structural imbalance in the Egyptian economy, including benefiting from the major projects set up by President Abdel Fattah Al-Sisi—especially road projects. He has done something great by allocating about 2km on the sides of these roads to industrial, agricultural, and residential projects; however, until now, the government has not utilised these major projects and was unable to merge even part of the unofficial economy with the official one. This could have doubled the state’s revenues from taxes and enabled it to utilise the non-official economy to control markets when necessary, especially regarding the occurrence of crises in strategic goods.

To identify the non-official economy, it is important to explain several issues about the concept and ways to benefit from it in Egypt.

Fatima Tibi, a researcher at the Economic Studies Center, explains that the non-official economy consists of all the economic activities taking place outside of the official economy’s field. These activities are not subject to taxes or monitored by the government as they are not part of the gross domestic product (GDP), unlike the official economy.

Even though the presence of the non-official economy is greatly connected to developing countries, all economic systems include non-official economies.

The issue of the non-official economy has gained the interest of economic researchers, with its various names, whether the black market, the hidden economy, the unorganised economy, or the non-productive economy.

There are studies currently carried out by international institutions regarding the issue, such as the Organization for Economic Cooperation and Development (OECD) and the Bureau International Du Travail (BIT).

A report from the BIT said that in developing countries, there is about 50%-75% of the non-agricultural labour force working in the non-official economy. Despite the fact that there is a clear difficulty in generalisation, there is another factor that is playing into this concept; namely the non-availability of job opportunities, along with the pervasiveness of poverty and a group of jobs that lack protection in terms of wages and bonuses for extra work hours, in addition to the employer’s ability to fire a worker without notice or compensation. In addition, there are dangerous work conditions and a lack of social privileges, such as health insurance, pensions, and sick leave. This forces some women and immigrants from vulnerable segments to accept unstable, non-official jobs.

During the International Labour Conference held in July 2002, some laws were established to meet the needs of workers in the non-official economy. It is noted that the non-official economy phenomenon has increased in developing countries, where this kind of economy contributes up to 40%-60% of the GDP—a figure which calls for examining the situation.

There is much to be said about the government’s failure and the deliberate silence of the parliament about these failures. It is stunning that the parliament is busy with its battles with the media, without having the courage to withdraw its confidence of any minister up until this point, despite all the troubles caused by the government of Prime Minister Sherif Ismail—a record holder in creating foreign debts owed by Egypt.

Egypt is rich with resources and its people abroad and locally; however, Egypt is certainly poor when it comes to administration.

Long live Egypt.

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TAGGED: Abdel Fattah Al-Sisi, Economy, government
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By Abdallah Al-Moghazy
Former assistant to both Prime Minister Sherif Ismail and former prime minister Ibrahim Mehleb. He previously served as the spokesperson for President Abdel Fattah Al-Sisi’s electoral campaign. He also held a position on the Youth Advisory Council for the Supreme Council of Armed Forces, and was a spokesperson for the Al-Wafd Party.
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