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The US elections (and their aftermath), covered as we do African elections

November 13, 2016

Had to be done (actually surprised it hasn’t already):

Writing about the latest US elections like US media writes about African countries.

eddie-murphy

**COUNTRY CRISIS WATCH** [insert CNN “breaking news” type of jingle]

The US of A, a nation located in the center of the North American continent, is shaken by its latest electoral results, which threaten the weak racial equilibrium the nation has painstakingly built since the abolition of racial segregation, a mere half a century ago, thus heralding a fresh round of racial tensions and social instability.

Donald Trump, a local TV star and known megalomaniac who has repeatably admitted to sexual assault and is known for exotic hairdos and inexplicably poor vocabulary, has risen to unlikely prominence on the back of a populist wave, which saw him make unattainable promises to the large swathes of the population reeling from economic difficulties, blaming them on local minorities and foreign trade, vilifying millions citizens and insulting the country’s main trade partners in the process. His political (and general) ignorance – his ‘highest office’ has really been a gilded (and rather tasteless) office on the 26th floor of a building that has his name on it – did not seem to deter his voters; somehow they seemed to have liked that. Odd.

In parallel, Trump was supported by a media machine bankrolled by some of his tribal members and key supporters, which was successfully reaching the minds of some of the least educated segments of the population, preying on their economic and identitarian despair to support his political ambitions.

The Whayte tribe (also spelled White, or Ouayte), the largest in the country, has overwhelmingly put their support behind the candidate appealing to their tribal pride – some because of, and some despite, his hateful rhetoric, which has threatened to conduct race-based registration of minorities, and promised to “deport or incarcerate” up to three million residents who have sought refuge or opportunity in this nation, once an immigrant haven in the not-too-distant past. The opposing candidate, the first female nominee from a major party on the electoral ballot in the country’s young democratic history, failed to counteract her opponent’s tribalism. She barely obtained a third of the Whayte women’s support. She did, however, obtain nearly two million votes more than Mister Trump, but this  – for strange local traditions which we expand on further – was NOT chosen president. Such a strange country that is.

The Blaak tribe (also spelled Black), once enslaved by their Whayte countrymen and effectively responsible for the country’s foundational economic success, has been engaged over the past year in a campaign to convince the majority Whayte that, surprisingly, their lives also matter, but the election’s result happens to unravel the few successes achieved.

It is key to underline that the US of A practices a strange brand of “democracy”, whereby the winner of the popular vote, the person chosen by a plurality of voters, was NOT – for the second time in this century, our newsroom has discovered – selected as president. This  collegeocracy practiced in this exotic land means that, by the perversion of ancient laws they failed (or refused) to update from the Blaak enslavement era, the choice of the people will be, once again, ignored, in favour of the votes of what they refer to as an ‘electoral college’. This Electoral College does not even amount to an indirect democracy: it enshrines the concept that votes are not equal, with someone in the village of Wyoming ((population 592414, 3 college votes, thus 1 college vote = 197471 people) is worth, in effect, 3.6 times a person in the faraway lands of California (population 39,350,000, 55 college votes, thus 1 college vote = 715455 people). Perhaps even stranger is how little objection there is to this unfair system.

Already, thousands of race and religion-motivated attacks by Trump supporters and Whayte tribesmen and  their supporters have taken place, attacking members of the Blaak tribe and the cross-ethnic religious group of Muzleems (also spelled Muslims), in the public space, and targeting their homes, offices, and places of worship, with public and private messages pledging additional violence and using vocabulary eerily reminiscent of Rwanda in the years leading to 1994.

There are more weapons in circulation in the fragile nation than there are people, with an estimated 357 million guns in circulation (end of 2013). Access to higher firepower is also surprisingly easy, with weapons fairs a peculiarity of this country, where people can purchase assault weapons on the spot with few checks.

We call upon the International Community to stand ready for intervention to protect the safety of minorities in the conflict-torn country.

**Updated 17 Nov**

Refugees don’t want handouts: they want jobs

August 25, 2016

A refugee takes part in a workshop to receive new professional skills, organized by the Arrivo Berlin initiative in Berlin, Germany

Jobs would give refugees both money and dignity
Image: REUTERS/Hannibal Hanschke

 

 

Polykastro, Greece

 

Khaled wakes up early. Most people in the refugee camp in Polykastro, in northern Greece, do – the tents get too hot to sleep shortly after the sun rises.

But Khaled wakes up with intent: he has to get to work, one of the rare people in the camp who do. He starts prepping the falafel stand he holds, in a corner of the gas station convenience store next to which the refugee camp is set up, sprawling across the parking lot and surrounding spaces.

Across the camp, a family also wakes up early. After the elder son comes to the kitchen to take the dough, the family will spend the next couple of hours cooking flatbread on a makeshift outdoors oven, on a tin over a woodfire, right outside their tent.

Together, they make the cheapest falafel wraps in the country: €1 each. The sandwiches offer an affordable respite to the refugees from the terribly bland food rations they normally receive. Volunteers working in the camp are also regular patrons.

The falafel stand barely generates any income. “For every 100 sandwiches sold, the net profit will be €3 or €4,” Khaled tells me. He’s making sandwiches, he says, “as a service to people here”. But there’s another reason: working for free is better than the idleness of the long days. “Otherwise, you go crazy,” he says.

 Khaled prepares falafels in the EKO station camp

Khaled prepares falafels in the EKO station camp.
Image: Mohamed El Dahshan

Working to make ends meet

Job creation in refugee camps isn’t a luxury. It’s a necessity.

“If we don’t get jobs soon, refugees will start turning to theft – from each other, mainly. Then perhaps from people outside,” explains Anas, an engineering school graduate, suffering the idleness of the wait.

As we stand around a fire on a cool evening in the camp, everyone agrees. Even though people can receive the required calorific intake and some (often ill-fitting) clothes and shoes from the distributions offered by NGOs and independent volunteers, many of their basic needs are not covered, and there is no mechanism in place for fulfilling them or for offering financial support of any kind.

Ad-hoc volunteer attempts to provide telephone credit or internet connectivity to refugees, their online lifeline to the world outside their camps, are heroic but terribly insufficient. From obtaining a simple juice box for a child to fixing your broken glasses to obtaining diabetes test strips, going through overstretched NGOs is tedious and long-winded, and refugees need to provide for themselves and their families.

A meager camp economy

Throughout refugee camps in Greece, the story is very much the same. Some refugees have made a routine of walking a few kilometres into the nearest town, buying from supermarkets the items most in demand in the camp, and reselling them for a small markup. Cigarettes, fresh vegetables and fruits, biscuits, milk cartons, flip flops and Crocs will be set up on small stalls at the entrance to the camp.

One astute man even managed to find a Greek shop selling shisha tobacco, which he then divides and sells in smaller packets, more affordable to fellow refugees.

A couple of barber shops, displaying their trade with a pair of scissors drawn on a piece of cardboard, complete the landscape of the market. In one camp, a man fashions some trinkets out of scrap metal – a heart with an initial enclosed on a wooden stand or such, which will probably be picked up as a souvenir by foreign volunteers.

A place nobody wants to call home

Effectively, this is the sum total of the camp economy, and it’s meagre, hardly fulfilling the needs of the residents. And the reasons for this are multiple. Some are obvious.

First, there’s the little amount of disposable income available to refugees: as their stay in Greece lengthens, the precious few savings they have managed to hold on to after their long journey, exploitation by smugglers, and robbers, are rapidly dwindling.

Then there’s the lack of opportunities, with neither the conditions nor regulations allowing them to set up more complex economic operations. Language barriers prevent them from engaging in partnership with the neighbouring Greek villages and towns, unlike in places such as Jordan, where refugees have promptly plugged into the local economy.

But there’s also the psychological barrier, the one that makes refugees maintain their luggage constantly half unpacked: if they were to unpack it and set up anything more than transient, it would be an admission that their journey ends there, at least for a while. It is a prospect nobody wishes to face, painfully realistic as it may be.

In some camps, entrepreneurialism thrives

The development of the camp economy is commensurate to its perenniality. For instance, the world’s largest Syrian refugee camp, the Zaatari camp in Jordan,has nearly 3,000 businesses, from elaborate pastry shops to bridal gown rental stores.

 Syrian refugees shop at the main market in the Zaatari refugee camp

Refugees shop at the main market in the Zaatari camp.
Image: REUTERS/ Muhammad Hamed

Goods manufactured in the camp are sold outside, to Jordanians and Syrians alike. But Zaatari is five years old – and its inhabitants expect to remain there until conditions in Syria allow them to go home. As such, the Jordanian government has slowly relaxed some of its restrictions on refugee labour, especially in light of a pre-war agreement with Syria regarding exchanges of qualified workers, and often willfully turns a blind eye to informal work.

Back in Europe, in the once-sprawling and squalid Jungle camp in Calais on France’s northwestern coast, refugees had also developed a local economy, having realized that their hopes to cross the Channel were being blocked. Bakeries and eateries, bike repair shops, and a public bath were among the additions to the local camp economy, in addition to corner shops, more elaborate than those in the Greek camps. Most of this was bulldozed by the French government in February, and many of its inhabitants forced to relocate to another, equally squalid camp.

Tearing down what refugees have built

But Greek camps are a fresh wound to the refugee heart. After 20 March – fatidic date when a highly controversial agreement that supports sending refugees back to Turkey came into effect – all refugees who crossed the Hellenic border in the hope of continuing onwards to other European countries found their plans shattered by closed borders and armed guards.

Around 60,000 refugees find themselves thus stranded in Greece, and have since lived in a handful in large, informal camps hugging the country’s northern borders, which they looked towards every morning in the hope that the gates would be open, allowing them to carry on, but in vain.

It gets worse. After more than three months, during which refugees started to organize their living quarters with the help of volunteers, these informal tent cities have been cleared and refugees transferred, at times forcibly, into army-managed warehouses and other disaffected buildings where large tents were hastily erected. As a result, refugees have been forced to recreate the fragile social ecosystems they had painstakingly built, with foreign volunteers largely excluded from providing assistance.

The precariousness of the refugees’ existence in Greece is further compounded by the growing dislike of Greek authorities regarding the refugees’ sojourn – the new camps they were moved to, even more insalubrious than their previous irregular accommodation, is a clear indication that the state has no intention of allowing them to pursue any kind of livelihood during what all hope will be a brief stay. It is unlikely the Greek authorities would ever allow the most enterprising of refugees to set up anything more formal than a flatbread oven on wood.

That many host communities are hoping for a quick dismissal of the refugees is deplorable, but understandable. But the Greek government’s policy, of making life barely tolerable for the refugees in the hope that they will choose to leave voluntarily, is both unsustainable, and deeply unjust. Nobody wants the precarious situation in the refugee camps to end more than the refugees themselves.

An urgent need for short-term solutions

As everyone ponders long-term solution, few are considering the short-term economic needs and dynamics of refugees, even though those are of most immediate concern.

Nearly all initiatives to help refugees obtain work and generate income – including initiatives providing refugees with job-matching services, online piecemeal work à la Taskrabbit, or even prepping them for interviews and helping them draft resumes in the hopes of obtaining jobs in the formal economy – are geared towards refugees with a more permanent residency status. The gap in analysis and intervention is staggering.

Involving refugees in the provision of services to their own camp, in exchange for pay, would be an important first step. From cooking to cleaning to teaching children, these functions should be formalized and remunerated, if only for a few months. It takes much less time than that for a soul to despair anyway. And formalizing this employment would generate important services to camp residents, most notably education to children, who right now have none, or at most a couple of hours of basic school per week.

Making it work

An important funding gap emerges here: where would the money come from? With the bulk of the support provided by independent volunteers on shoestring budgets themselves, it is unlikely they would be able to sustainably offer financial remuneration to the refugees, even those providing vital services and functions. UNHCR, embarrassingly understaffed and overstretched, will never be able to keep track of payroll functions.

Temporary work permits allowing refugees to conduct some basic labour – with the language barrier, there will be little beyond that anyway – would resolve an important part of the problem. The numbers in question would hardly affect the local economy.

Of course, a system where refugees were offered cash handouts or redeemable vouchers would be best, because it would allow people to obtain the basics they need while preserving their dignity. However, the barriers to such an intervention are more than regulatory: with Greece in the throes of its own economic crisis, it is possible that some locals might perceive refugees obtaining any source of income as a precursor for their resettlement, and thus generate an unnecessary backlash.

A few days after we spoke, Khaled the falafel vendor had upped his prices – but as his entire informal camp was removed, so was his little business.

 

Back to square one.

 

Originally published by the World Economic Forum.

Amid Talk of Floats, the Pound Is Still Sinking

August 19, 2016

pound falling graph.PNG

EGP vs USD.  It’s bad.

On Monday, July 25, the Egyptian pound (LE) reached its lowest value ever in the parallel market. The unofficial exchange rate, LE12.95 per U.S. dollar, was a staggering 47% below the government-set rate of LE8.88 to the dollar.

The accelerating decline of the Egyptian economy has brought unprecedented public scrutiny of economic conditions, with citizens increasingly feeling the pinch. In May 2016, headline urban inflationincreased by an annual equivalent of 12.3%, the highest monthly figure since May 2015. More worryingly, this inflation was led by basics needs: food and health expenditures.

This scrutiny, however, also amplifies crises, and with the exchange rate crisis on everyone’s mind, it is a spiraling self-fulfilling prophecy, fueled by short term mismanagement and long-term economic decline.

In 2015, Egypt allowed the currency to depreciate three times by a combined 8.7%. In March 2016, a further 13% depreciation—the largest in 13 years—brought the exchange rate to LE8.95 per dollar, on hopes that this would be sufficiently close to the currency’s real price to regain investor confidence, quell the parallel market, and replenish the country’s foreign currency reserves. This was to be supported by a more flexible exchange rate which would allow for fractional daily variations of the exchange rate. Withdrawal restrictions were eased, and it seemed, for a brief moment, that the worst of the crisis had passed. But the Central Bank of Egypt (CBE) never reviewed its exchange rate policy. Instead, it reverted to a currency peg which allowed for little fluctuation, while it continued to allocate dollars to banks. The trend of depreciation, if only on the black market, resumed.

A number of short-term factors, exacerbated by a background of overall economic decline and currency and capital flight, accelerated the crisis over the past week. Deliberate speculation and hoarding—in addition to a self-fulfilling market panic, where investors and consumers demand more than their actual needs for fear of not finding dollars when they need them in the future—explain part of the problem . The central bank’s mismanagement in this crisis is inexcusable, with the governor of the CBE regularly suggesting in interviews that the currency will be devalued, apparently forgetting the power of such declaration to affect faith in the currency and thus exchange rates.

On July 3, CBE Governor Tarek Amer told financial newspaper al-Mal in a phone interview that he was not targeting the dollar-pound exchange rate, and that maintaining the exchange rate was a “huge mistake” that had cost the country billions of dollars over the past five years. Amer added that the central bank had received loans and deposits to the tune of $22.5 billion over that same period, most of which was wasted on exchange rate targeting, and “which should have been used to fix the monetary policy and the forex system.”

While his mea culpa was correct, the statement’s timing immediately before the Eid al-Fitr long weekend set the market into a frenzy, on the expectation that the CBE would devalue the currency immediately after the holiday. But the bank did not devaluate, and the black market rate kept climbing.

The CBE further fueled the panic by imposing currency withdrawal restrictions to laughable sums, with the customers of some banks reporting that their withdrawal quota while abroad decreased by 90%, from $5,000 to $500 per month. Such restrictions are instrumental in encouraging informal transactions, as consumers turn to the black market to fund their currency needs for travel or purchases.

On July 20, Amer said that the time was not ripe to float the currency, but left the door open for further devaluations, which only fueled the frenzy further. Pinning the entirety of the crisis on the CBE’s performance over the course July would be unfair. Its mismanagement goes back further than the past few weeks, long predating the mandate of the current CBE governor. It is, however, essential to underline his mismanagement of the crisis.

The general economic context has not made this easy. Devaluations usually entail imported inflation—price increases for imported goods and domestic products relying on imported raw materials—and in a country with no consumer protection regulation to speak of, inflation often overshoots the devaluation itself.

In addition, the government’s budget deficit has been increasing rapidly. In the first 11 months of the 2015-2016 fiscal year (the most recent data available) the deficit exceeded LE311 billion, or 11.2% of GDP, well above the 8.9% projected at the start of the year. For the 2016-2017 fiscal year, the government plans a deficit of LE319 billion, or 9.8% of projected GDP.  As such, the government is constantly contemplating the introduction of additional taxes – currently, plans to impose a Value-Added Tax (VAT), which would likely range between 12 and 14% on a number of consumption goods, is under discussion in parliament. While the government may need the tax revenue, raising prices is going to further hurt Egyptian consumers.

The import-export balance also keeps severely declining. The balance of payment recorded a gap in the second half of 2015 of $3.4 billion, compared to $1 billion in the same period a year prior—a frightening 240% growth. The current account deficit more than doubled, from $4.3 billion to $8.9 billion over the same period. Tourism revenue declined by a third; Suez Canal proceeds declined by 7%; export proceeds declined by more than a quarter (though the latter was more than offset by the decline in the import bill, thanks to the decline of oil prices).  Though foreign direct investment rose by 20%, capital markets remain weak,  leading many Egyptians to park their funds in safer locations. This flight of capital also exacerbates the currency problem. 

This is best illustrated by a report by the Dubai Land Authority published this week and widely debated in Egypt, which showed that Egyptians were the second largest non-Gulf Arab buyers of real-estate in Dubai in the first half of 2016, investing  1.4 billion Emirati dirhams ($381 million)—a 40% increase compared to 2014. That these non-productive investment would go to a market that may itself be exhibiting signs of a bubble is not very surprising; many Egyptians, after all, are seeking to put their money in what is perceived as a safe location, rather than to take advantage of investment opportunities. These particular investments are not causing the crisis, but they are symptomatic of an increasing outward movement of capital that is putting additional pressure on the value of the pound.

An official devaluation is inevitable. There is simply too much pressure, from the weakening economy, the demand of businesses, individuals, and speculators, for the status quo to persist. The amount of this devaluation will depend on the CBE’s estimates of the real exchange rate, disregarding the temporary panic and speculation. While the CBE is hoping to choose a time to limit the inflationary effect of the devaluation, it is clear that additional delays will only exacerbate the problem.

Originally published by the Tahrir Institute for Middle East Policy (TIMEP).

2016 wishes: Letter to Mina, the little refugee girl

January 1, 2016

 

Ahram Online was kind enough to ask me to write a 2016 postcard to whomever I wished. I wrote this – which was four times the limit number of words. I guess I wanted to write a letter…

So here is the full version. An abridged version should be published soon on the Ahram Online website.

Happy new year, friends.

—————————————————

Dear little refugee girl,

I know you didn’t choose that. You were happy in your home, going to school in the morning, playing with your cousins in the afternoon. And then this war happened, and all the laughter disappeared, replaced with the sounds of explosions and of your father crying in his room. He tried to pretend he wasn’t, but you heard him, I know. You told me.

And one night, you had to leave your home. Your mama told you you were going to a nicer house, but you doubt it – since you’ve left, you’ve walked so many roads, your feet still hurt. You’ve crossed countries, sometimes on foot, sometimes on the back of a truck. You’ve had to sleep in small beds with all your family. Some nights you even slept in the forest, under the rain. Then one night, this horrible man, we call him the smuggler, put all of you with ten other families in a teeny tiny boat. He threw away your brother’s wheelchair, your mother’s insulin, and even your little pink backpack with your favourite doll. You wanted to cry but your mother squeezed your hand so hard to make you not. The bad man pointed a gun at your dad and made him pilot the boat across the water, as he jumped out of the boat and sent you into the dark sea.

The waves were so scary, weren’t they. And the water entering the boat made your clothes wet and cold. And all those people on the boat were shouting and crying. It seemed like this night would never end. And then you arrived to the other side, and that’s when I met you. You jumped from your boat into my arms, you crazy little one, even though we told you to wait! And you hugged me and I hugged you and you smiled. And I made funny noises and you laughed at me. And, after my friends helped you wear some dry clothes, we blew soap bubbles. And you knew you were safe. Your mama and daddy were smiling, too. For a brief moment I like to think you were happy.

I wish I could tell you it would all be fine from here on. But it probably won’t. Not for a while at least. You’ve got many roads to walk. You’ll share massive, smelly tents in refugee camps. Some angry uniformed men with guns will yell at you. You won’t know why they’re yelling. I don’t know either. I think it’s because you scare them. I know, I know, I think it’s silly too, that you would scare a big man with a gun. But grown-ups are silly. But there will be nice people too along the way. The world is like that. There are mean people and there are good people. It’s not a lesson you should have had to learn at such a young age, but you did. One of many such things you did along the way.

Things will get better. Eventually. Remember that. The absurdity of hope is what keeps us going. Be nice to your mama and daddy, because, like you, they miss their house and their bed and their friend and the view from their window. But more than all of this, they want you to be safe, and to have a future, even if it means that they might not have one.

I love you very much and I’m proud of you, you’ve been so brave. Hug your parents and your brother for me.

Your friend with the funny hat,

Mohamed

What the Economic Conference Got Right, and Wrong, in Sharm el-Sheikh: The Scorecard

March 25, 2015

Photograph by U.S. Department of State - Flickr: President al-Sisi Listens as Secretary Kerry Addresses Audience of Several Thousand Attending Egyptian Development Conference in Sharm el-Sheikh. Licensed under Public Domain via Wikimedia Commons - 

“Today is not the time for criticizing. Today is the time for cheerleading. Tomorrow, we criticize,” said my venture capitalist friend, responding to my skeptical comments after we attended the presentation for the Capital Cairo project the government wishes to build, at a cost of $45 billion. The desperate need for optimism took away their critical capacities, as many attendees at the Egypt Economic Development Conference left no room whatsoever for even a healthy skepticism. One speaker took the cheerleading very much to heart, shouting “Go Egypt!” repeatedly from the stage, his fist pumped, asking the audience to follow.

Most did.

But after the conference excitement calmed down, sending everyone back to real life after three days in a secluded conference room by the Red Sea basking in the spring sun, taking a step back and evaluating the conference with a clear mind is in order.

It is difficult to define what success would be for an event that has had difficulties defining what it is. The conference could not settle on a name, and the “Egypt Economic Development Conference” (or EEDC) had a different name in Arabic: the “Egyptian Economy Support and Development Conference”. While the support element is certainly accurate—the conference was originally set to be a donor conference by “friends of Egypt,” and the opening ceremony was a series of speeches by foreign royal heirs, princes, and dignitaries pledging multi-billion-dollar donations and announcing their support for Egypt and its president—the rest of the conference was a government policy forum, where the state expanded on its macroeconomic and sectorial plans for the years ahead.

Although the news coverage focused on photo ops, signings of memoranda of understanding, and the rising tally of investment deals announced every day of the conference (though they had been negotiated days or weeks prior), these were secondary. People meeting in corridors argued about the minister of energy’s plan or the technical merits of the Suez Canal Zone project, networked, learned about each other’s work across sectors, and many attendees found this to be a key success of the conference.

At the end, numbers dominated the headlines.  Investment Minister Ashraf Salman put the conference’s financial outcome at $38.2 billion in signed deals, in addition to $12.5 billion pledged by Gulf countries. The minister also floated the figure of $92 billion in memoranda of understanding for future deals. As President Abdel Fattah al-Sisi put the figure of funding needed to “rebuild the economy” at $200 to 300 billion a year, one may wonder if the triumphant euphoria was justified, or whether all would be better served if the conference was seen as the success that it was, without being sacralized as it was in the local media.

Ultimately, the EEDC should be perceived as an excellent kick-start to the Egyptian economy, without obfuscating the hard work that needs to follow, and with no pretenses that the international goodwill will be repeated every year, along with new editions of the EEDC. The yearly EEDC gathering—Sisi promised it would become an annual event—should gather the various parts of the investment ecosystem, lower the barriers between economic operators and the government, and shift the discussion to a real development conversation, involving all segments of society and, more importantly, relying on local resources.

To offer a more detailed assessment of the conference’s successes, below is a scorecard for what went well and what did not at the EEDC.

Photograph by Mohamed El Dahshan

1. Offer a vision and sustain optimism

The president’s opening speech, which outlined the government’s economic strategy and its sustainable development strategy 2030, had a single message: “We have a vision.” This vision was summarized, in one document distributed at the conference, as:

The government is committed to continue supporting a market, comprehensive, diversified, knowledge-based, and private-sector led economy, characterized by a stable macroeconomic environment, sustainable inclusive growth, maximizing value-added, and generating adequate and productive job opportunities. By 2030, the Egyptian economy will be an active player in the world economy, capable of adjusting to international developments and well positioned to join the ranks of the world’s medium-income countries.

But aside from the statement, the document (and Sisi’s speech) included a novelty: actual targets and key performance indicators. For most of the audience, this was a refreshing change. Coupled with the message that this government is here to stay, many economic actors felt confident that this was a government with an action-oriented plan, with difficult but achievable targets if the proper conditions are met. This plan was summarized in a “five-year macroeconomic framework and strategy”, published in English under the title “Strat_EGY”. The strategy lists a plan for restoring macroeconomic stability and supporting growth, through fiscal consolidation, tax reform, public spending prioritization, managing the public debt, a deflationary monetary policy, an export promotion strategy, and other means. Interestingly, attendees were more impressed by the mere existence of this strategy than by its content (which is very reasonable in itself).

“The economy is a self-fulfilling prophecy,” one investor reminded me. “If we feel optimistic, we will put our money in, and the economy will engage in a virtuous cycle; conversely, if we feel down on the prospects of the economy, we will not, and the economy will suffer.”

As it stands, the EEDC has engaged investors on the first step toward an upward spiral. The onus on it remains to sustain this optimism. It takes more than a three-day conference to reboot an economy, but this was an excellent first step.

Score: A on creating a positive economic environment.

2. Build an investment ecosystem

A second and equally successful outcome of the conference has been the creation of an “investment ecosystem gathering” where policymakers and economic agents could meet, discuss, and learn about the work of other sectors. There was an obvious hunger for such dialogue, and hopefully this ecosystem will outlive the conference.

However, this investment ecosystem was limited to the larger economic players, chiefly the government’s economic authorities, large companies and investors, some banks, a few international companies operating in Egypt, and has excluded representatives of small and medium enterprises, most independent policy think-tanks, other financing institutions such as microfinance institutions, as well as actors in connected sectors, such as labor or education. Nevertheless, this was an excellent first step.

Score: B+, with hopes that this process will be sustained and widened in the future to include more economic actors.

3. Allow participation in policymaking

Egypt has been ruled by its executive for nearly two years, and more than 200 laws have been passed by the government without a minute of public debate. While this may seem appropriate to proponents of a strong government, it certainly is not for an aspiring democracy. Much of the legislation passed is expected to have an adverse effect on the poorest; the absence of dissenting opinions from the legislation process has meant that no sufficient social mitigation measures were put in place.

The government did rely on economic experts, from within and outside Egypt, to develop its economic strategy, perhaps a minor saving grace. The prime minister also claims the strategy involved the input of the private and the nonprofit sector, but a closed consultations process may be as good as moot if it does not involve a diversity of perspectives.

Score for participatory policy-making formulation: C+, the low score for lack of participation partially offset by the quality of the end product.

4. Do not overpromise and underdeliver

“In the private sector, we try to underpromise and overdeliver. This government seems to be doing the opposite,” one businessman told me, shaking his head as he heard of the severely curtailed deadlines that the president has made a habit of imposing on contractors and service providers. While absolutely understandable that the state would wish to unveil its projects in the shortest timeframes, it can be risky to make promises that would only be kept in the unlikely event of a flawless implementation.

Recent examples under this very government should serve as a reminder. In March 2014, for instance, the Egyptian army announced a partnership with UAE construction firm Arabtec, aiming at the construction of one million affordable housing units at a cost of $40 billion. The project stalled, however, and a little over a year later, the project is struggling to survive.

Even the highly touted “New Suez Canal” has encountered difficulties. The day after the conference, Mada Masr, an online newspaper, reported that the Suez Canal Authority took out $450 million in short-term loans from local banks. The Authority had to contract with two foreign dredging consortia after ambitious deadlines set by the government made it impossible to rely solely on Egyptian companies.

The government’s goals and reputation would be better served if it loosened the pressure and accounted for eventual delays or failures. Otherwise, it will only hurt its reputation, and squander the goodwill it has accumulated.

Score: C, based on past performance and repeated mistakes.

A model of a planned new capital for Egypt is displayed for investors during the final day of Egypt Economic Development Conference

5. Heed the fine line between the inspiring and the unrealistic

Egypt’s plans for past national projects have alternately inspired its citizens (see the Aswan High Dam) and fallen flat (the Toshka project). The announced plans for a new capital city for Egypt (project title: The Capital Cairo) which would cost $45 billion USD and would be the size of 12 Manhattans (or the entirety of Singapore) squarely belongs in the latter category. At the very least, its feasibility, social value, adherence to budget, and return on investment are seriously dubious. The new capital’s business and government downtown area (not the entirety of the city, as is sometimes reported) is supposedly due to be completed within seven years. Other grand promises—such as plans to host the soccer World Cup in Egypt in 2028, as announced in one plenary session on the last day of the conference— also fall on the wrong side of the inspiring-unrealistic divide. These megaprojects bear some resemblance to the overpromising and underdelivering discussion above. The deadlines and promised benefits for some of the proposed projects are significantly more remote, perhaps even past the mandate of the leading government officials today, and almost certainly beyond the active memory of the population.

Score: D-. There is an infinitesimal chance those projects would pan out, but the projects rely on more unknowns than a Drake equation.

6. Pay proper attention to social justice

While speakers at the conference mentioned social inclusion—not the social justice that has been called for in revolutionary slogans of the past four years—the plan presented tended to be devoid of detail, making just vague, medium-term promises. The government’s macroeconomic strategy, and other official statements, did commit to “increased spending on health, education and Research and Development (up to at least 10% of GDP) as mandated by the constitution” (sic).

The conference did include a panel on social inclusion, which, as testimony to the topic’s importance, was held on the morning of the third day of the conference in parallel to four—yes, four—a workshops on various technical aspects of the Suez Canal Zone, arguably the only realistic megaproject in the government’s plans. Despite hosting such heavyweights as Aramex founder Fadi Ghandour who has for years championed bottom-up approaches to growth with the support of the private sector, or Oxford’s Paul Collier, one of the world’s most prominent development economists who specializes in post-conflict and transition economies, the session lasted a grand total of forty minutes, was dominated by a defensive minister of social solidarity, leaving the other panelists precious little time.

The government’s “Strat_EGY” included a paragraph on Egypt’s economic performance between 2004 and 2008, noting that growth in that period “did not alleviate rising social and political pressures primarily due to the lack of tailored programs to protect the people’s quality of life.” Nevertheless, the government’s current plan is headed precisely down the same path.

Score: A disappointing D for failing to consider the needs of the large segments of its population unrepresented in Sharm el-Sheikh, and forgetting that bread, freedom, and social justice do not merely comprise a slogan that can be swept under the rug, but are necessities and rights.

7. Continuing transparency with the business community and beyond

The main reason why so many Egyptian investors and economic agents were present in Sharm el-Sheikh was to hear from the government, and they were not disappointed.  Ministers in charge of various portfolios were candid, giving detailed PowerPoint presentations to rooms too full to accommodate overflow audiences, taking unmoderated questions from the floor—a genuinely unfamiliar sight in Egypt.  However, the density and importance of such information could not be absorbed on the spot and should not be confined to those participants. The government needs to make speeches, documents, and other materials from the conference available to the public.

While the level of transparency we saw in Sharm el-Sheikh will be difficult to replicate, various ministries must begin publishing more information about their work and exposing themselves to inquiries from the public. A good start would be for the documents distributed and presentations used during the EEDC to be made public. So far, only a few documents can be found on the conference website.

Score: B+. I am staying positive about this.

8. The quality of organization

The level of organization was really near world-class. While a number of inexcusable faux pas occurred—accredited media were not allowed inside the conference hall for a day and a half, nor were they offered meals—denting the perfect score that the organizers were going for, the quality of speakers made up for it. The organizers succeeded in gathering a veritable who’s who of the Egyptian business community, along with some quality guests from overseas. The government had also heavily invested in the use of multimedia—the infographics, video presentations and animations were surprisingly good—and this helped it pass along its message seamlessly.

Score: B+, on account of a few organizational errors as well as the unavailability of large parts of the material in Arabic.

Originally published by the Tahrir Institute for Middle East Policy (TIMEP).

What Egypt Should Realistically Expect from the Economic Development Conference

March 13, 2015
Logo of the Egypt Economic Development Conference

Egypt’s Economic Development Conference (EEDC), launches this weekend in the Red Sea resort of Sharm el-Sheikh. Its stakes, in Egypt at least, seem to be getting higher by the minute. The conference has become an event of national interest, and expectations rising as the public and media discourse has been touting the conference, in no ambiguous words, as the make-or-break event of Egypt’s recovery.

A poll conducted by a private polling institution claims that 84% of Egyptians have heard about the conference, a staggering figure in a country with an official adult illiteracy rate of one in four (and some put the figure twice that high). It is important to recognize though that the campaign runs intensely through all media. Print and television run countdowns to the conference. Newspapers offer “exclusive” headlines with leaked agendas, lists of projects, or names of participants to the conference—this national state of infatuation with what is really a specialized conference has never been seen before.

But this infatuation with the EEDC seems increasingly disconnected from reality and may run the risk to simply disappoint, even if it is deemed successful by any reasonable standards.

To put the EEDC in better context, it is important to remember the genesis of this event. In June 2014, late King Abdullah of Saudi Arabia called for a donor conference to aid Egypt, saying that friends of Egypt should pledge financial support to the country. The goal was unequivocal: Egypt’s battered economy, like any country in a post-crisis situation, required urgent financial support to keep its economy afloat, its deficit in check, its currency from tumbling and the government from defaulting on its international engagements.

But the Egyptian state, more acquainted with hostingdonor conferences than being the subject of one, chose to present the event differently, and put Egypt in the driver’s seat rather than merely along for the ride. Buoyed by positive economic results in the short term—most notably a growth rate of more than 5% in the second half of 2014—the donors meeting thus became an investment conference, then a development one, and the key public message skillfully morphed from a fundraising drive into “Egypt the Future,” as goes the conference’s shorthand slogan, and so very much to the government’s credit.

The risk, however, is that this glitzy presentation might obfuscate the realities of the economy, as well as make implicit promises about the conference that are simply not in the government’s hands to keep. While the public may fall for the charm and well-designed YouTube advertisements for the conference, investors are well aware of Egypt’s current challenges and its hardly stable economy.

Politically, as long as the government fails to take steps toward long-term resolution of the existing political stalemate, the low-intensity conflict is expected to remain, as exemplified by the regular bombings occurring nearly daily in the capital and increasing in the run-up to the conference. Economically, while the fundamentals are improving on the short term, improvements are slow – and most observers keep their optimism in check. This is reflected in Egypt’s international credit, which had seen a slight improvement in 2014 but with ratings agencies remaining cautious about the medium and long term. Only last month, Standard & Poor’s reviewed and maintained its rating for Egyptat B- with a stable outlook, hailing the government’s fiscal reforms but recognizing high public spending, which would limit the government’s ability to rein in the public deficit—and the deficit would have been worse if it had not been for the influx of foreign assistance.

In the end, official development assistance packages and budget support will be announced; investment deals, some of which will be worth billions of dollars and likely agreed ahead of the conference, will be launched with great fanfare; several of the key investors, including state-owned enterprises of allied countries, hailed and their governments as true friends of Egypt and visionaries making the right bet. The sectors that will emerge with financing will overwhelmingly be those in the sectors that have systematically attracted investment in post-crisis countries: oil and gas, real estate, hard and soft infrastructure, and telecoms. Investments in industry and productive sectors are traditionally dwarfed in comparison, and this conference will likely be no different, perhaps to the disappointment of many of the hopeful Egyptian business owners and entrepreneurs earnestly taking part in the conference and seeking investment.

And while the government should be content with those pledges, it remains to be seen whether they are deemed satisfactory by the larger public and commensurate with their immense expectations. As donor pledges help replenish the State’s coffers and buoy the megaprojects that have become a key component of its economic policy, whether Egyptians’ development aspirations are met will be a longer-term affair, be it as a result of the conference’s investments and job creation, or as the  fallout of the multitude ofinvestment-friendly reforms passed ahead of the conference. The government would do well to temper expectations; declarations, such as Minister of Investment Ashraf Salman’s earlier this month that the conference “would form the backbone” of the state’s growth policy in the upcoming period do the opposite. The government should also adopt and maintain a policy of full transparency, and be clear that while the conference could represent an important stepping-stone to regaining investor confidence, the road to prosperity is still long.

Originally published by the Tahrir Institute for Middle East Policy (TIMEP).

Jordanians Unite in Mourning. Why Can’t Egyptians Do the Same?

February 10, 2015

Jordanians Unite in Mourning. Why Can’t Egyptians Do the Same?

Along with sadness, grief, and anger, there was another emotion I felt when I heard the news of the horrible death of Lt. Muath al-Kasasbeh: namely, envy. I envied Jordan.

I envied Jordanians for their collective compassion and outrage. I envied them for their ability to cut through political lines to come together in a national moment of sadness and anger, out of respect for a heroic man who looked death in the eye and did not falter.

Even those who stand in opposition to the king, and those who vehemently oppose Jordan’s participation in the strikes against Islamic State (IS), were able to differentiate between their political positions and their unequivocal condemnation of Muath’s murder.

Despite the unfortunate frequency of political violence in my own country of Egypt, it’s been a long time since Egyptians came together in a moment like that. In Egypt, even death has become repulsively politicized. The killing of protesters and activists, now a tragic weekly occurrence, never fails to attract mockery, sometimes even malicious delight and unconcealed schadenfreudefrom government supporters. Victim-blaming has become the norm. “Why did they go there in the first place?” people ask cynically when they hear of yet another killing — as if protesters across the country had chosen to stand in the path of police bullets and clubs.

Such comments seem especially ironic coming from the supporters of a regime that explicitly acknowledges that it came to power on the back of protests. Even teenage soccer fans, like the 22 supporters of the Zamalek clubwho were killed yesterday when the police fired teargas and birdshot at them as they attempted to enter the stadium, find no sympathy from the state and its supporters. Government sympathizers insisted, as if that was somehow a justification for the death of two dozen teenagers, that “they didn’t have tickets.”

The public reaction isn’t much better when Egyptian soldiers die in military conflict. Sadly, there are those who have expressed indifference or, worse, joy at the death of Egyptian military personnel in Sinai. Those who exhibit such sentiments don’t seem able to differentiate between the military-political leadership and the conscripts standing at border posts; in some cases, they also appear to be suffering from a misplaced desire for vengeance against anyone in uniform. (Perhaps it’s worth noting that such people are failing to adhere to the quintessential Islamic edict that no one should be blamed for someone else’s faults.)

Unfortunately, the military leadership itself, and its media mouthpieces, have collectively cheapened the sacrifice made by these men. They persist in blaming the Muslim Brotherhood for the deaths in Sinai because of its alleged connections with the IS-affiliated “Province of Sinai” terrorist group (formerly known as Ansar Beit al-Maqdis) — despite the complete lack of proof for such allegations, and contrary to the fact that an Islamic State spokesperson has declared the Muslim Brotherhood to be infidels. By doing so, the military has intentionally turned these brave men into political playthings, exploiting their memory (and allowing others to exploit it) for the sake of the odd disparaging headline and a few points of popularity. (The photo above shows relatives mourning members of the security forces killed in a terrorist attack in the Sinai at the end of last month.)

Some entirely well-minded activists find it hard to mourn military personnel as fervently as they do fellow members of the opposition, fearing they’ll be perceived as “pandering” to the military government. In doing so, such people have succumbed to the facile dichotomy that turns activists into automatic opponents of the military. Yet this simplistic stance tends to run roughshod over a positive Egyptian tradition of the military as the “army of the people” — or, as the Egyptians refer to it, the “army of the fellahin,” thefellahin being the peasants who have historically made up the core of the population of this agricultural nation.

It is difficult to think of Muath without thinking of Ayman El Dessouky, whose murder — while less spectacular than Muath’s – was also caught on camera just a few days prior.

Snatched from his vehicle in broad daylight, he can be heard, on the video released by the terrorists, telling his assailants that his wife is pregnant. Later, as the video continues, Dessouky reads out a message from the terrorist group demanding the release of female prisoners; cut to the next scene, where, blindfolded, be he is brought to his knees and shot in the back of the head.

Yet these widely viewed images have failed to drum up the kind of national outrage we’ve seen in Jordan.

The Egyptian compassion deficit has reached dangerous levels. If the fates of all of these myriad victims fail to bring people together in shared moments of grief and simply become tools for cheap political point scoring, then the lack of compassion may very well be irreversible.

Originally Published in Foreign Policy Magazine – Transitions.

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