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new cabinet gets down to be business

by rehab el-bakry

egypt’s new cabinet was sworn in on december 31, 2005 following months of colorful press speculation about its final makeup. the new cast of characters includes more businessmen drawn from the private sector and a notable absence of some familiar faces, whose exit, at least from the perspective of many egyptians, was long overdue.

while the local press has had a field day harking on the business sector’s “encroachment” into politics, socio-political analyst emad gad of al-ahram center for political & strategic studies (acpss) says the results of the late-december shuffle suggest president hosni mubarak, who must approve all appointments, is pleased with the nazif government’s economic performance. “there were very few changes in the economic portfolio management, sending the message that the policies adopted by these ministers have been successful during the past year and a half,” he told business monthly. “the reappointment of the same ministers points out that the policies that characterized the last government – privatization, economic liberalization and public-private partnership – will continue.”

islam azzam, professor of economics at the american university in cairo, sees the reappointment of the ministers with economic portfolios as a reflection of the ability of these ministers to put egypt’s economy on the right track. according to the government’s own statistics, gdp reached 5 percent in fy 2004-05, while fdi grew by $900 million to reach $3.9 billion, and the inflation rate fell to 4.7 percent, from 16.7 percent the previous year.

“the fact that we have seen no changes in the management of the economic portfolios indicates that they succeeded in implementing the preliminary steps of economic liberalization,” says azzam. “this will probably mean that, at least on the economic policy front, no major changes will be introduced. we are more likely to see more of the same policies with some fine-tuning or some expansion. but i would be very surprised if we see any major shifts in
policies.”

samir radwan, managing director of the economic research forum (erf), points out that while most of the successes of the last 18 months have been in the performance of the economy, this has increased that public’s expectations of government for the first time in a long time. “everyone expects more changes and more movement on the part of the government and policies, which is a testament to the success of the previous cabinet,” he says. “this will, however, put pressure on the government to deliver and to be accountable to the public. this is new territory.”

many egyptians are apprehensive about the growing number of businessmen managing cabinet portfolios: zuhair garana, minister of tourism; amin abaza, minister of agriculture; hatem el-gebali, minister of health; mohamed mansour, minister of transportation; rachid mohamed rachid, minister of trade and industry; and ahmed el maghraby, minister of housing. some fear these private sector veterans lack the political experience and understanding of the country’s socio-political complexities, or may be compromised by conflicts of interest.

“it’s not exactly clear how the appointment of these businessmen will affect the performance of the cabinet,” gad explains. “in some cases, such as that of rachid, time showed that he was a good choice as a minister of foreign trade and industry. but this doesn’t mean that just because someone comes from the private sector, he will make a good minister. in the last cabinet we had mahmoud mohieldin, who was a good minister but didn’t hail from the private sector. the point is that there are no guarantees.”

radwan sees it differently. he argues that the appointment of so many private sector businessmen was a courageous move on the part of the government – one that sends a message of confidence to both domestic and foreign investors. he points out that since egypt is moving toward economic liberalization, and in light of traditional private sector complaints about the inefficiency of technocrats and academic government staffers, placing businessmen in the cabinet will at least ensure that its members are all speaking the same language.

of particular concern, say analysts, is the appointment of ministers to portfolios outside their area of specialty. ali moselhi, the new minister of social solidarity, for instance, has no hands-on experience in social welfare, and his appointment to the post was more likely on his track record as a project manager, as demonstrated by his successful transformation of the antiquated national postal authority.

“some of the businessmen who have been appointed to the cabinet have extensive experience in the sectors they are in charge of, which gives them great familiarity with the advantages, disadvantages and challenges,” radwan explains. “in the case of those who don’t have much experience in these sectors, all they really need is good management skills and a vision of what the problems are and where they want to go... coming from the outside, they might be better at identifying problems and developing solutions outside the box.”

he points out that egypt is not the first country to appoint ministers to manage portfolios in which they have little to no background involvement. since world war ii, for instance, few french ministers of defense have come from the military – something unthinkable in egypt. “what is important, on the other hand, is the ability of the members of the cabinet to work together,” he explains. “no minister can achieve anything single-handedly.”

the shift toward “privatizing” the cabinet has, however, renewed concerns over the conflicts of interest that could result. in mid-january, questions concerning ownership of a 23-percent stake in calyon bank by mansour and el maghraby investment & development group raised concerns that certain businessmen in the cabinet might have undue influence over the performance of the companies they own. [see brief, page 14.]

more worrying for some is that certain members of the cabinet have common business interests. cousins mansour and el maghraby have been in business together for several years. el maghraby and garana are also business partners in the tourism sector.

radwan insists the media is “making too much out of absolutely nothing,” but says the interpellations could help make the cabinet more responsive to the people. “i actually see this as a good thing because it is the first real incident where the government is accountable to the people’s assembly and the public,” he says. “this is a very important shift from the way things have been done before. if the cabinet sees itself as accountable to parliament and if the parliament sees itself as there to protect the interests of the public, then this is a move forward in the system as a whole.”

he also suggests that cabinet members adopt a tradition from developed countries such as the uk, where all public figures, ministers and members of the house of commons disclose all their associations with any group, committee, ngo or business in a book published annually. the failure of an official to disclose his or her association with a particular body can result in the loss of his or her immunity.

perhaps the cabinet shuffle’s biggest surprise was the exit of several high-profile members of the ruling national democratic party (ndp), including kamal el shazli, minister of state for people’s assembly affairs, who was ousted from the cabinet after almost two decades in the post. also left out of the new cabinet lineup were mohamed ibrahim soliman, minister of housing, and hassan khedr, minister of supply. some see the exit of these ndp oligarchs as a clear continuation of the “out with the old” policy first adopted in the 2004 cabinet shuffle.

“people have been surprised by the absence of these particular ministers... they had come to be seen as permanent fixtures in the government,” says gad. “but this is in line with the policy of slowly eliminating [the so-called] old guard of the ndp, to be replaced by younger members who are closer to gamal mubarak, head of the party’s policy committee. while these might be good token movements to bring in new blood, it doesn’t really mean any significant change in the way the government does things or allocates political
authority.”

the move to bring in new cabinet figures, according to radwan, is not only overdue but also inadequate. he grants that the changes could inject new ideas into government. “at the same time,” he says, “when the press is producing evidence against a minister on a daily basis and he remains in power without the government issuing a statement that what is being published is lies, there is something wrong with the picture. it’s very harmful to keep them in the government.”

the most significant structural change marking this cabinet shuffle was the reduction in the number of ministries from 34 to 30. the planning and local development portfolios were merged into a new entity to be headed by osman mohamed osman, previously the minister of planning. meanwhile, the ministry of youth was disbanded altogether and its place taken by two authorities reporting to the prime minister.
although the new cabinet has been in office for barely a month, it has spawned no shortage of controversy. the initial furor surrounding the dominance of businessmen was overshadowed by the revelation that the newly appointed minister of manpower, aesha abdel hadi, the first veiled female minister in egyptian history, has only a sixth-grade education. although abdel hadi says she has never made a secret of the fact that she was forced to leave her education and join the work force at the age of 12, the press criticized the government for not publicly disclosing the matter.

abdel hadi has argued that her 40-year career in the egyptian trade union federation, culminating in a place on the executive committee, compensates for any educational shortcomings. “she said that her long experience as a worker will give her a better understanding of the problems of labor in egypt, which may or may not be true,” relates gad. “the problem is that we are at a point where we’re encouraging people to keep their kids in school and having a minister without a high school diploma seems contradictory. the government has justified the selection as an illustration that it is making the appointments based on merit, but it’s more a token inclusion in the cabinet of someone who doesn’t come from the upper middle class.”
in fact, according to gad, it would have been better to dissolve the ministry altogether. with privatization the order of the day, the system has little use for a labor ministry to begin with.

radwan, however, feels egypt’s revived privatization agenda will increase the ministry’s importance provided it can accommodate the shift from labor to employment issues, or another ministry is created specifically for this purpose. “while we need a minister to represent the workers and their concerns, especially at a time of transition, historically, the ministry of labor has not been a ministry of employment, [but] rather one that represents the relations between workers, big unions and government. what we really need is a ministry of employment, because employment and job creation are going to be the focal points of the next six years... this ministry [of employment] should be one that would work very closely with the ministries of finance, trade and industry, and
investment.”

unlike the 2004 shuffle, which was expectation-free, this cabinet faces pressure not only to top the performance of the previous 18 months, but also to fulfill the promises that president mubarak made during the election campaign, including the creation of 4.5 million jobs in six years. radwan points out that the last 18 months have been the governmental equivalent of “fixing the plumbing.” now, however, the cabinet needs to move on to fixing everything else. “since the key is employment, job creation should be the binding factor for the performance of all ministries,” he says. “if the cabinet sees employment as the overall goal and works together as a team to achieve this goal, then we will make real strides to improve the country economically, politically and socially.”

while the state media has already begun the cheerleading and the opposition media is full of criticism, auc’s azzam says it is simply too soon to jump to any conclusions or predict the performance of the new cabinet. “they haven’t even had time to read through the details of their portfolios and people are already making assumptions about their success and failure,” says azzam. “it might be a lot wiser for people to adopt the wait-and-see attitude. let’s praise them when they make good decisions and hold them accountable if they make mistakes.”

ministers to contunue at their posts:

ministers leaving the cabinet

* these ministries no longer exist. they have either been completely dissolved as part of the shuffle, renamed or the portfolios have been added on to other ministries.

ministers reassigned or whose portfolio has changed

new to the cabinet:

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