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Walking the tightrope

By the Gazette Editorial Board

The Egyptians are aware that they have to put up with more tough measures under the government's economic reform plan which took shape in November 2016.

 

The government's aggressive yet inevitable intervention to save the country's fragile economy has had a direct impact on the people's standard of living.

 

With unprecedented measures such as floating the pound and cutting subsidies on fuel, the government had to take counter measures to protect the strata whose income would be adversely affected by the reform programme.

 

Great efforts were and still are being exerted to create an investment-friendly climate to attract foreign investments, and to implement structural and administrative reforms to create jobs and encourage small and medium-sized enterprises.

 

Moreover, a number of social protection programmes have been introduced to help those living on a limited income face the waves of price hikes. This has included monthly pensions under the Karama and Takaful social programmes as well as increasing the value of monthly supplies for ration card holders.

 

The toughest part of the programme might be over; however, the government is expected to make another subsidy cut on fuel very soon.

 

Ahead of this extra cut, which will surely lead to an increase in the price of major commodities, the government submitted a draft law to parliament, which was approved on Monday, stipulating giving civil servants two bonuses and increasing pensions by 15 per cent. The increments will be effective as of next month.

 

The parliament has also approved a draft law to increase the minimum income tax threshold for each individual to LE8000 annually. Several income brackets will benefit from the proposed amendments to Tax law No. 91 for 2005. But the question is: Do these measures correspond to the actual cost of living?

 

 The government has done well to submit the increments bill to parliament before and not after the new subsidy cut, in a move that shows keenness on containing the repercussions of the reform plan on the low and middle-income brackets.

 

These efforts should not be underestimated. Yet the government still has several complementary measures to take to avoid any pay rise or social aid being swallowed up by market prices. Citizens have been complaining that the social protection package offered does not balance the increasing cost of living. And merchants know how to take advantage of this, especially when a new cut in the fuel subsidy is expected any time now.

 

The markets need to be controlled in a better way to stop unjustified price rises.

The people are showing patience and understanding because they are looking forward to the day when they will harvest the fruit of reform.

By: Gazette Staff

CAIRO, May 18, 2018 - The IMF and the Egyptian Government have reached a staff-level agreement on the third review of Egypt’s economic reform programme, which is supported by the IMF’s $12 billion arrangement, a senior Fund official said on Friday.

Mr. Subir Lall, who visited Egypt on May 2-17 to conduct the third review for the government’s reform programme, supported by a three-year Extended Fund Facility, said Egypt had begun to reap the benefits of its ambitious economic reform programme.

While the process has required sacrifices in the short-term, the reforms were critical to stabilise the economy and lay the foundation for strong and sustained growth that will improve living standards for all Egyptians, Mr. Lall wrote in his report.

“Egypt’s growth has continued to accelerate during 2017/18, rising to 5.2 per cent in the first half of the year from 4.2 per cent in 2016/17. The current account deficit has also declined sharply, reflecting the recovery in tourism and strong growth in remittances, while improved investor confidence has continued to support portfolio inflows. In addition, gross international reserves rose to $44 billion by end-April, equal to 7 months of imports,” he wrote.

“Annual headline inflation has declined from 33 per cent in mid-2017 to around 13 per cent in April, anchored by the well-calibrated monetary policy of the Central Bank Egypt (CBE). The CBE remains committed to reducing inflation to single digits over the medium term, with monetary policy underpinned by a flexible exchange rate regime that is critical for maintaining competitiveness and adjusting to external shocks. Egypt’s banking sector remains liquid, profitable and well-capitalised.

“Egypt is on track to achieve a primary budget surplus excluding interest payments in 2017/18, with general government debt as a share of GDP expected to decline for the first time in a decade. The budget for 2018/19 targets a primary surplus of 2 per cent of GDP, which would keep public debt on a firmly downward path,” he added.

 The government also remains committed to continuing energy subsidy reforms to achieve cost-recovery prices for most fuel products by 2019. Together with raising revenues through tax policy reforms, this will help create fiscal space for important infrastructure projects, targeted social protection measures and essential spending on health and education.

“The government continues to move forward with structural reforms to modernise the economy and tap the potential of Egypt’s growing population. This includes steps to support exports and reduce non-tariff barriers, streamline and enhance industrial land allocation process, support small and medium enterprises, strengthen public procurement, improve transparency and accountability of state owned enterprises, and tackle corruption. These reforms will help attract private investment, which is essential to raise growth and make it more inclusive,” Mr. Lall wrote in his report.

“Strengthening the social safety net remains a top priority for the Egyptian authorities and is strongly supported by the IMF, Mr. Lall wrote in his report.
The Fund welcomes the plan to further expand the “Takafol” and “Karama” programmes to help protect Egypt’s most vulnerable. The school meals programme for children as well as expansion of child care centres also aim to increase women’s participation in the labour force, which will be essential to sustaining strong and inclusive growth over the medium term.


CAIRO, May 5, 2018 (MENA) - Egypt's Planning, Follow-Up and Administrative Reform Minister Hala el Saeed said the government adopted a comprehensive program for economic and social reform, based on the 2030 Egypt vision.

The program mainly focuses on restoring confidence in the Egyptian economy through liberating exchange rates, improving the status of the balance of payments, increasing reserves of foreign currency, reducing deficit in the State budget and promoting investment and economic growth, she said in her address on Saturday at an international conference for manufacturing and sustainable development.

She said the Egyptian economy achieved a growth rate that exceeded 5.2 percent during the first half of the fiscal year 2017/2018.

In its lowest rate, employment has decreased to 11.3 percent, she said, adding that the inflation rate also was reduced to 13.1 percent in March, 2018.

 

By the Gazette Editorial Board

WITH the new education system to be introduced to schools as of the next academic year, no more will there be "model answers".
The Minister of Education, Tarek Shawki, this week announced the new development plan for education, the cost of which has been estimated by the World Bank at $2 billion.

The plan will break the weakest link in the old system related to examinations and assessments. Under the decades-old system of examinations teachers checking answer sheets were guided by model answers. This parrot-like pattern was the outcome of rote learning that left little room for originality and innovation.

Now, the Ministry is set to change all this by upgrading learning resources and obliging pupils to depend more on online research. And for this reason, pupils at government-run schools will each get a free tablet.
So, according to the ministry plan, which boasts of a vision and a strategy that aims to build the pupils' minds and characters, the examination system will be more flexible.

Secondary school pupils throughout the nation will not be required to sit for the same examination. Each school will get different examination sheets provided by the Knowledge Ban – an Egyptian on-line facility that provides access to learning resources to on-line users.
The pupils' assessments will rely on multiple examinations throughout the three years of secondary school rather than the present final year exam result.

This new system then will make a quality shift in cognitive methods as well as in the role of the teacher. And the question to be posed here has to do with teacher performance. Are the teachers of the government-run schools, not only those in the capital or big cities but also in towns and villages, qualified to take on this new role? Will the Ministry be capable of providing quality training to the huge number of teachers involved before the start of the school year?

The new system is bound to disperse the halo that hovered over the Thanawiya Amma (General Secondary School Certificate) studies which developed in recent years into a detestable race for pupils to get the highest scores regardless of their true academic standard. And the race in turn encouraged private tuition to thrive at the expense of teaching at school and the pupils' learning skills.
The new system will, it is to be hoped, bring back pupils to classes and end the phenomenon of private centres which has been blamed for spoiling the educational process.

This is a real opportunity for change. The people have been complaining of a dismal education system that failed to cater to the labour market and failed equally to produce analytical and critical minds.
The plan seems promising but the Ministry should open a societal debate to reassure the people of the guarantees that have been put in place for sound implementation.

The Minister of Education, Dr Tarek Shawki, has concluded a plan to develop education. Government sources said that the new strategy was thoroughly examined during an extraordinary meeting recently held by the cabinet. It will also be reviewed extensively by the president before he announces it to the nation.

There can be little doubt that without a good education which  can cope with an age of breathtaking technological achievements reverberating in the advanced world, the renaissance unfolding in Egypt will not bear fruit.

The renaissance pioneered by President Abdel Fatah El Sisi since he assumed office in 2014 is manifesting itself in the economic, industrial, agricultural and logistic sectors across the nation. It will give rise to job-creating sectors. Qualified, skilled workers will be in high demand. Less fortunate colleagues will have no opportunity to taste the fruit of development.

Dr Shawki must have appreciated the new realities of the job market, be they at home or abroad, in drawing up his new education strategy. According to official sources, the minister is giving priority to upgrading basic infrastructure, such as schools and facilities serving different educational purposes. Top priority, however, is given to creating a suitable technological environment in schools the length and breadth of the country – from the Delta to Upper Egypt. And the Internet will be available in schools in the remotest towns and villages. So, a double click will give schoolchildren in state-run educational facilities wherever they are access to the outside world. 

Providing schools with the Internet will increase the children’s curiosity and help them broaden their skills. The Internet in poor areas will make it fundamentally important to upgrade curricula. Outdated curricula and a miserable teaching philosophy used to cripple talents and frustrate the child’s fertile imagination.  Teachers will now have the opportunity to improve their teaching skills.

Due to the upsetting circumstances Egypt has undergone since the January 25 Revolution, Dr Shawki was given firm instructions that he should not seek loans from domestic or external sources for his education plans. He is reported to have confirmed to the prime minister that the new education plan gives high priority to grants. He was quoted as saying that it would not add any financial burden to the state budget.

So, it can be hoped that the nation is likely to celebrate very soon the reality of an education comparable to a springboard, which helps a new generation to make a big leap forward to a better future.