Egypt: Lavish Promises(Mubarek election)

The Economist Intelligence Unit ^

[Alex Marko]

Foregone conclusion or not, Egypt’s September 7th presidential election has stirred President Hosni Mubarak, the incumbent candidate, into domestic political action, staking his campaign for re-election on a detailed plan to attack chronic unemployment through aggressive economic expansion.

In his August 17th campaign-opener speech, Mr Mubarak promised to create at least 700,000 new jobs over the course of his next six-year term, through E£700bn (US$55bn) worth of investments in manufacturing, trade, agriculture and tourism. While the government would provide the stimulus with new roads and sewerage networks, more than half of the proposed package would come from the private sector, as economists from the ruling National Democratic Party (NDP) pointed out amid concerns about rising public debt. Any debt increases will be more than offset by GDP growth, which is meant to rise to more than 6%, compared with around 5% last year, according to Mahmoud Mohieldin, the investment minister.

Mr Mubarak also promised to double the salaries of more than 5m poorly paid government and public-sector employees, thus maintaining social welfare alongside ramped-up market incentives. Business Monthly, a magazine published by the American Chamber of Commerce in Egypt, called the Mubarak plan “an extension of the policies adopted over the past 24 years, except speeded up.”

Meanwhile, second-ranked contender Nomaan Gomaa, leader of the historic liberal Wafd party, produced his own 11-point economic plan, calling for limits on government spending, restrictions on foreign borrowing, and a tax and customs overhaul to attract foreign investors and stimulate exports. Seemingly shunning populist sentiments, the 70-year-old lawyer promised faster privatisation to stimulate employment.

Mr Gomaa’s main rival for second place is Ayman Nour, an expelled Wafdist leading the newly formed Ghad movement. Mr Nour talked at length about reforming the constitution and limiting presidential powers. He also promised, more vaguely, to eliminate corruption, control inflation and, of course, create jobs. Rather than boosting salaries, he would offer a flat wage for the unemployed.

Democratic Unionist nominee Ibrahim Turk, a former insurance manager running for the Democratic Unionist Party, has come out (like Mr Gomaa) in favour of privatisation, seeing its proceeds as a way to support national development schemes. Mr Turk has blatantly courted hometown Alexandria support, saying that he would make the northern port city a vast duty-free zone (as well as moving the national capital there, instead of Cairo). Another advocate of reducing the state’s economic role is 91-year-old Ahmed al-Sabahi, of the Umma (Nation) Party, a government-sanctioned Islamist movement. Mr Sabahi, however, would curb profiteering on commodities with a 25% cap on profit margins.

Opposition voices often equate free rein for private investment with ruthless exploitation of ordinary Egyptians. The main Nasserist party has boycotted the election, objecting to the obvious tilting of the playing field. However, two candidates—Wahid Al-Uksory of the Arab Socialist Egypt Party, and Mohamed al-Agroudi of the Social Accord Party—called for an end to privatisation and a widening of the public sector’s (already overstretched) job-creation role.

Others vied for votes with even less specific ideas. Solidarity Party candidate Osama Shaltout promised to solve unemployment “within one year,” without providing details. Mamdouh Qenawi of the Social Constitutional Party, focused on Egypt’s impoverished southern provinces, promising to eliminate corruption and create jobs gradually. Misr (Egypt) 2000’s nominee, Fawzy Ghazal said he would attack unemployment by speeding up development.

By comparison, Mr Mubarak’s statistics-laden plan would seem a clear formula for “crossing into the future,” as one of his campaign slogans says. Young reformers at the NDP policy secretariat incubated the economic platform for three years, Mr Moheildin said. The same group, clustered around Mr Mubarak’s son and potential successor Gamal, has already scored some economic successes over the past 13 months, under reform-minded cabinet headed by Ahmed Nazif, who was appointed prime minister in July 2004. Gamal Mubarak, though avoiding public statements in the election campaign, has been constantly in the wings, visibly advising his father.

SOURCE: ViewsWire Middle East