CAIRO: Earlier this week at the World Economic Forum on the Middle East in Sharm El-Sheikh, Prime Minister Ahmed Nazif sat down for an interview with CNN’s John Defterios to talk about combating inflation in Egypt.
Stressing on the need to further grow the economy, Nazif pointed out the decline in unemployment rates as one result of recent reforms that people on the street can actually feel.
He also commented on US President George Bush’s controversial speech, which ruffled many feathers in its indirect references to the state of democracy and human rights in Egypt.
Nazif said people were waiting to hear “some balancing thoughts to those that he gave in his address to the Knesset.and wanted to see maybe a more pragmatic effort towards resolving the problem rather than just saying that it is going to be resolved.
John Defterios: It is the first time at a regional summit where we have a frank discussion about Gulf oil transfer, taking the money from the Gulf oil revenues and keeping it closer to home. Should there be a re-think about building up a pan-Arab market?
Ahmed Nazif: Well, I’m not sure that this is the way to go about it, because you can’t force money where it doesn’t want to go. I think, it’s important to attract money and the way to do this, is really, by opening up opportunities for them to do so. Money can either go to opportunities or run away from danger. But don’t try to impose a frame that, you know, will work because it’s there.
I believe that real opportunities exist today in the region, whether it’s in infrastructure, whether it’s in capacity building, education and other aspects of it, but also in new opportunities. Look at the problems with food for example, the food crisis. People now are thinking more about re-investing in agriculture. So, I think the key is for governments and for the business community to start formulating projects, fundable projects, projects with real value to those owning the money, so that they can invest in it.
We’ve come from a stage on inflation from chronic to acute, very rapidly. It’s a huge challenge. Besides from throwing money at the problem, realistically, what’s in the toolbox to combat inflation for you in Egypt, where it’s quite severe?
Growth. I think that essentially what we need to do is to have more growth. Growth is what sustained us last year. Yes, it ate up almost all the gains that we got from the growth in terms of throwing money at the problem, as you said. We can’t afford to do this all the time, obviously. But at the end, if we have more growth, if we increase our productivity, our competitiveness, in the region and outside, than we have a chance to weather those kinds of inflation reactions that take place.
Do the people have patience for this, the Egyptian society have patience for seeing the reforms through? You are four years into what realistically is a 10-year process. And inflation just complicates that process, does it not?
That’s definitely [right], but people have seen some fruits. One good example is unemployment. You can see clearly that more jobs are being created, everybody feels that on the street at the end of the day. If you have somebody who has been unemployed for a long time and starts getting employed, then it makes a difference to their own family, to the income that they get and to the security.
I heard at the meeting, there are great expectations of US President George Bush raising the profile of the meeting and hoping to advance the Palestine Peace Initiative. But he took a tone in the speech that many ministers, I spoke to, many businessmen, I spoke to, said, was lecturing, not encouraging. Did you walk away with the same impression from this speech?
I think President Bush spent a lot of time speaking about democracy and how to go about it and what happens in the West in this direction. And many people have interpreted it this way. I think also, that people were expecting a different speech and this is in itself is what disappointed them, and not just the way the speech was given but the content of the speech itself.
People wanted to hear from the President some balancing thoughts to those that he gave in his address to the Knesset, more commitment to the Palestinian State theory. He did say it, but I think they wanted it earlier on in the speech and wanted to see maybe a more pragmatic effort towards resolving the problem rather than just saying that it is going to be resolved.
