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Signs of life They say a week is a long time in politics, referring to the fact that one event soon replaces another in the public’s attention. Likewise, a Cairene summer is an eternity, especially when it comes to economic developments. But around here, instead of one event eclipsing another, they seem to accumulate, and the overall effect is not so much one of action as reaction against a background of inertia. For example, among the summer’s news items we had the EU trade agreement, which came a step closer to reality but still awaits ratification by all EU members, not to mention Egypt’s parliament and president. These procedures may take another three years. After that, trade barriers will fall, but slowly – over a 12-year period. Egypt’s mortgage law was ratified after three years of drafting, and it too represents a small albeit crucial step towards the solution of the country’s ever-growing housing problem. Perhaps the summer doldrums are to blame, but the law’s passage – touted as a potential boost for the construction, housing and cement sectors – had no visible impact whatsoever on the stock exchange. The only increase in activity there resulted from the EFG-CIIC merger, a move aimed at enlarging Egypt’s financial services horizon. Time will tell if other second-string banks follow suit. But with a depressed market and small operations of all kinds vying for the same scarce business, the EFG-CIIC move may herald a new era of mergers and acquisitions. One thing is sure – trying times call for a consolidation of resources, a strategy of concentration rather than expansion, and, generally speaking, a pared-down and clean-cut course of action. Unfortunately, what we’ve seen this summer is a reluctance to admit that hard times even exist. Minister of State for Administrative Development Mohamed Zaki Abu Amer places the number of “educated jobless” members of the population at around 1.2 million. Perhaps these are the people Prime Minister Atef Ebeid was referring to when he said that Egypt’s unemployed numbered around 1.5 million. This rosy figure met with noisy critique in parliament. As is well known, while government figures place unemployment at around 8 percent, the International Labor Organization and the World Bank estimate between 15 and 18 percent for Egypt. This summer’s annual recruitment for university enrollment occurred beneath the shadow of these facts. High unemployment among university graduates does not encourage people to attend college. To add to the difficulties facing young adults who attempt to further their education, our institutions of higher learning are overcrowded, yet enrollment was increased by 7.9 percent. Only the Doctors' Syndicate protested, and without effect. The fact that millions of already educated people are unemployed points to the need for a serious reality check. Clearly the connection between our education system and the labor market is tenuous at best. The government is in a quandary. It needs to downsize an overblown bureaucracy while at the same time providing an estimated 800,000 new jobs per year. The way it proposes to reconcile these contradictory needs is through an enlarged, empowered private sector that is supposed to provide the better part of those desperately needed jobs. For that to happen, finances, as well as clear fiscal and investment policies, must be firmly in place. Decisions that take long-term goals into consideration must be promptly taken and applied. Most importantly, we must address the needs of an increasingly discontented segment of the population: the unemployed. We all share the responsibility to create productive enterprises that generate jobs – and lots of them. Ignoring the problem will not make it go away. On the contrary. Mohamed L. Mansour |
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