Reducing poverty and Egypt’s continued economic success

Published in Ahram Online 

Egypt has successfully re-established macroeconomic stability, attained impressive growth figures, attracted new investments and lowered formal unemployment rates. As often is the case, such successes place other developments in a starker light.

For instance, recent reports suggest that close to one-third of the population lives below the national poverty line and that one out of three children may not go to school full-time, may not have good and nutritious food or adequate healthcare.

Also, growing formal employment figures mask low labour force participation rates of women for example, as well as un- and under-employment in the informal sector and agriculture; and finally, not all recently secured investments contribute in equal measure to employment creation, sustainability and the social common good.

These are indeed growing challenges that can be resolved, now that macro-economic stability has been achieved. Egypt, by right, can look at the future with both determination and confidence.

I have heard some arguments that Egypt has been in this spot before and that it has not always been capable of undertaking some of the deep reforms required for success. Many will point at the adverse impacts of the global recession of the early 1990s and, more recently, the global financial crisis of 2008. At a time when the global media is speculating about another global slowdown, the first signs of which are declines in investment in emerging economies like Egypt, this feels decidedly uncomfortable; dark clouds are gathering.

Over the past year, the United Nations system has been collaborating with the Ministry of Planning and Administrative Reform to provide integrated policy support to the multidimensional challenge of achieving Sustainable Development, as articulated in the Egypt Vision 2030.

With the Organisation for Economic Cooperation and Development (OECD) and the United Nations Development Programme (UNDP), we explored how the government could organise for success, with greater emphasis on formalised coordination and making sure that well-articulated national plans find their expression in the national budget and medium-term public investment thinking.

Led by the United Nations Children’s Fund (UNICEF), we reviewed how the citizens of Egypt move in and out of poverty and have jointly understood that ill-health (sickness in the family) is the quickest way to the bottom of the economic pyramid. We have also confirmed that good social protection measures and good education are the quickest ways out.

The United Nations Population Fund (UNFPA) conducted an exercise about localisation of global sustainable development targets, based on the premises that socio-economic challenges of modern economies like Port Said are different from rural agriculture based economies such as Qena.

Closely related to this is the work that the UNDP and the World Bank undertook on macroeconomic modelling. That engagement concluded that efficient and effective institutions (good governance) have a direct and significant impact on economic growth.

Moreover, models show how Egypt’s response to demographic challenges and population growth will become a major determinant of future success.

It is important to catch the undertone of this collaboration; Egypt can build on its recent successes and become a global example of how sustainable development can bring a nation to unprecedented levels of prosperity and well-being for all its citizens – inclusive of the marginalised, youth, women and children. No country in the world can simply take a pill to become immune to global economic dynamics. Countries can, however, focus strongly on the capacity of their citizens to withstand shocks.

The UN system in Egypt is continuing its engagement with the government to accelerate success. The International Labour Organisation (ILO), UNICEF and the World Health Organisation (WHO) are working together with the Ministry of Social Solidarity on the social protection floor connecting social safety nets, while new laws on pensions and the new health insurance scheme are driving change. UNFPA, UNICEF and UN Women have been providing strategic support to the immediate expansion of the family planning system.

The UNDP, UN Women, the United Nations Capital Development Fund (UNCDF) and others are taking major steps to support the National Council of Women’s goals for women’s economic empowerment through financial inclusion. Nevertheless, internally we are beginning to question if we have a sufficient focus on poverty reduction. We would welcome greater debate on vulnerability and resilience. Especially for those at the bottom of the economic and social pyramid, life is not easy and all partners need to move quickly before a new form of multidimensional poverty becomes deeply entrenched.

Mr. Richard Dictus is the UN Resident Coordinator in Egypt. He has been seeking to foster key strategic debates in Egypt on how Sustainable Development can be achieved, building on Egypt’s track record of change and adjustment to often adverse external circumstances.