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ELITE ISSUE 13, November 2019 Page 9

RADAR

What is your assessment of the economic reform pr ogram in the
The indirect subsidies do not necessarily reach those who are eligible
past five years? The economic reform in Egypt did n ot go beyond
for it. On the other hand, financial or direct subsidy contributes to the
the flotation of the Egyptian pound and the removal of subsidies.
workings of the multiplier effect. For instance the 10 LE going in the
I even wrote once about the myth of a completed eco nomic
form of direct subsidy will circulate in the economy and therefore
reform in reply to a statement that said that the r eform was done.
multiplies unlike the 10 LE going for petroleum subsidies which en d at
What makes such a statement unreasonable is the fac t that no
that point and has no further effect. Wouldn ’t the move to financial
economic reform is ever completely finished. It is a continuous subsidy increase inflation rates? Yes, surely. However, the effect would
process; there are always obstacles for investments . be minute in comparison to the benefits and its influence in the
satisfaction of the people.
What makes it even more evident that the economic reform is
not finished is the fact that both the GDP and pove rty rates
Do you see a relation between the economy and the form of the
increased simultaneously. This indicates the presen ce of a
political regime? Definitely, the political system in Egypt is taking over
deficiency in and the inability to gain the benefit s of the
a administrative role and it is well known that the state is an inefficient
achieved growth. What is important is not merely th e increase
administrator but it should monitor and regulate the markets only. The
in the GDP but rather the components of this increa se. For
intervention of the state in economic projects is a negative indicator. It
instance, to trace whether such an increase benefit ed only the
takes part in the competition and crowds out other competitors that is
state and the real state sector but did not reach t he workers. As
why the economic identity in Egypt is mutated and no one knows which
such, we are interested in development not only gro wth.
economic system we belong to.
What is your opinion regarding the removal of subsidies? Price
Do you think the current political events influence the econom ic
differentiation is no longer viable all around the world.
performance? Yes, it does. Nonetheless, it may as well be a blessing in
Therefore, we must keep in mind the difference between
disguise. What happened directed the attention of the Presiden t towards
indirect product subsidies and direct cash subsidies. The
the necessity for ministerial change. I hope that the upcoming ca binets
indirect subsidies do not necessarily reach those who are
would have the economic feature, a cabinet with an economic vision not
eligible for it. On the other hand, financial or direct subsidy
a merely architectural one. We have in Egypt many economic e xpertise
contributes to the workings of the multiplier effect. For instance
and great minds such as; Neamat Shafik, Mohamed Mohye Al Din , and
the 10 LE going in the form of direct subsidy will circulate in
Rania Al Mashat among others that must be benefited from
the economy and therefore multiplies unlike the 10 LE going
for petroleum subsidies which end at that point and has no
further effect.
You have witnessed more than one political regime, in your op inion,
what kind of regime is best suited for Egypt ’s current situation? I see
What is your opinion regarding the removal of subsidies?
that the best regime is one where the military is responsible for
Price differentiation is no longer viable all around the
protecting the state .
world.Therefore, we must keep in mind the difference between
indirect product subsidies and direct cash subsidies.

ELITE ISSUE 13, November 2019 Page 9