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Rehabilitation
On Oct. 4, Prime Minister Kamal El Ganzouri received
a surprise – and surprisingly strident – send-off from
Samir Ragab, editor in chief of El Gom-huriya newspaper. President
Hosny Mubarak had led people to expect a thorough change in the
Cabinet. But it wasn’t until Ragab, who is said to be close
to the president, blasted El Ganzouri for “weak management,
arrogance, aloofness, paralysis and self-adoration” that it
became clear exactly who was out.
In hindsight, it shouldn’t have been such a surprise El Ganzouri
would go. He had been criticized almost immediately after taking
office in January 1996 for amassing too much power in his hands,
and it was never a secret that he made a gruff boss.
But even if El Ganzouri’s management style produced a polarized
and ineffective Cabinet, and even if he’s no hero, it’s
far from clear he deserves to bear the weight of opprobrium Ragab
hung about his neck.
First, critics forget that El Ganzouri had to centralize power to
ram economic re-form measures through a largely reluctant Cabinet.
People speak hopefully about the ascension of privatization minister
Atef Ebeid to the top post, but they forget that it was El Ganzouri
who started the program moving with the sale of a majority of shares
in Nasr City Housing & Development in May 1996. That sale, the
first of its kind, triggered the rebirth of the stock market and
whetted the market’s appetite for further offerings. El Ganzouri
also oversaw important strategic investor transactions like the
sale of Al Ahram Beverages and Beni Suef Cement, and the sale of
two cellular telephone licenses, which brought the government $1
billion in license fees and set up a competitive market in basic
utilities for the first time since the Revolution.
Second, El Ganzouri also rammed a critical package of reform legislation
through the People’s Assembly. In the past three years, the
People’s Assembly has passed laws allowing private investors
to buy shares in the state-owned banks, insurance companies, power
companies and telecommunications authority. Groundwork has al-so
been laid to facilitate private investment in utilities and infrastructure
projects under build-own-operate-transfer arrangements. The People’s
Assembly has also passed an updated investment law, and legal limitations
on foreign investment in the insurance sector have been dropped.
Third, the gains of the past have been preserved. Egypt’s foreign
debt, budget deficit and inflation remain low despite huge investment
in the megaprojects. Tariff rates continue to drop, and import bans
on chicken and cloth have been discarded.
Critics may argue that much of this would have been accomplished
regardless, but that line of thinking applies equally well to policy
failures. Surely, for example, no one believes Egypt’s disastrous
decision to render the pound semiconvertable was made at the level
of the prime minister. Whatever El Ganzouri’s personal failings,
he leaves office with probably the most accomplished record of the
decade.
El Ganzouri’s firing, as Ragab’s editorial made clear,
was personal. Ragab’s list of the former prime minister’s
political failings was so broad as to be meaningless. So too the
mandate El Ganzouri’s successor, Ebeid, has received from the
president. In fact, Ebeid’s Cabinet, with its proliferation
of committees and dictate to decentralize, looks more like a caretaker
administration than a government with a purpose.
It couldn’t really be otherwise. After a near decade of successful
economic stabilization, Egyptian policy has hit a wall. The pound
is only one example, and the problem runs much deeper than Kamal
El Gan-zouri. Egypt’s political system is closed to new ideas.
People know this, which is why the president’s promises of
thorough change raised such hopes. That promise has not yet been
fulfilled. Eventually, however, the president will have to deliver.
ANDREW DOWELL
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