CAIRO: In an interview with Charles Hodson for CNN’s Marketplace Middle East, Minister of Finance Youssef Boutros Ghali talked about future plans for privatization and economic reforms trickling down to Egypt’s lower income brackets. While the complaints of the average citizen can be heard loud and clear, he says, the fruits of reform need time to kick in. The reforms had a quick effect on economic growth and foreign direct investment, and now he’s hoping that they will be just as quick in reaching the underprivileged.
Charles Hodson: Youssef Boutros Ghali, you had two major sales in the last year: The sale of 80 percent of Bank of Alexandra to Italy’s San Paolo and the United Arab Emirates becoming the third mobile phone operator. Is there still the political will to continue with such large-scale privatizations?Youssef Boutros Ghali: The political will is there, the question is do we still have such large-scale privatizations. What we have created is the momentum for a private sector presence in Egypt; a significant, dominant private sector in Egypt. We would like them to lead but we can’t flood them with all sorts of assets that they may or may not want to buy. So we, as the private sector, will provide them with the assets, but pretty soon we’re going to be running out of private assets to privatize.
Let’s look at the other end of the scale if you like. The proportion of people living in absolute poverty in Egypt is approaching 20 percent, what kind of pressures does that impose on you as you formulate this kind of policy?[The segments of] Egyptian society that are not touched by the reform directly – and as you say, there are people below the poverty line reaching almost 20 percent… Like [the situation in] all developing countries, these reform programs will trickle down but they will not trickle down overnight. We have complaints in Egypt, a lot of those who are less privileged are complaining. They are complaining very loudly. What makes it worse is that we feel for them, we know that they are right to complain and we know that they deserve some of the fruits of the reform.But take something like opening up markets, which is something you’ve done and.you’ve earned praise from UNCTAD (United Nations Conference on Trade and Development), which is the relevant UN body, and of course from the World Bank. But that isn’t going to help the average Egyptian living in absolute poverty – certainly not for a while.In Egypt, we have been blessed with an economy that is flexible, that responded quickly and as soon as we took the . measures [for] tax and tariff reforms, it responded right away. Our foreign direct investment went from $450 million a year to $11 billion in under three years. Now, this is a quick response [and] now we’re hoping that we will have an equally quick response in reaching the underprivileged.
So, clearly an enthusiasm for reform. Reform is clearly a good word in Egypt, but so far only on the economic scale. Is there a feeling that it has to flow over into the political sphere? That there has to be political reform?It already has spilled over into the political sphere and it has been spilling over into the political sphere for the past five, six, seven years. The dynamics are different in the political sphere, the rhythm is different and the variables that are involved are much more complex. It’s a lot more difficult to get the political reforms we want than it is to get the economic ones. Both – and I can state this with confidence – both are equally important; they just happen to move with different dynamics.The interview first aired Friday night, and will be repeated this weekend on Saturday at 8:45 pm and Sunday at 10:15 pm.
