The opportunity for presidential hopefuls to announce their intentions is now. So far, two have made themselves known, former Minister of Defence Abdel Fattah Al-Sisi and Nasserist politician Hamdeen Sabahy. Perhaps others will announce their candidacy, but it is unlikely that any will greatly change the contest.
Most expectations are that Al-Sisi will be elected the next president of Egypt. This is bad news for those that oppose him. His supporters, however, strongly believe he is exactly what Egypt desperately needs – a man that can bring results in two critical dimensions, security and the economy. Many among them also believe that those in opposition (or at least some) will change their perspective once the economic situation improves.
But for whom will the economic situation improve? The next president of Egypt will inherit substantial economic problems that require dire attention. Whether it is the rising budget deficit, government wage bill, or energy subsidy costs, he will have some very tough decisions to make. These will have to be delicately balanced with considerations of things like poverty and inequality, investment levels, and economic competitiveness and growth.
The consequences of these decisions will affect different groups in Egyptian society unequally. With each decision, some will gain and some will lose. For instance, a major reform of the food subsidy system could greatly improve the lives of poor Egyptians. If done well, the improvements could be remarkable in a relatively short period of time (not the “generations” or “generations and generations” as popularly estimated). Many experiences around the world strongly indicate this is the case provided smart decisions are made.
However, while the poor could greatly benefit, many others (although way, way fewer in number) would lose from a major food subsidy reform. Chief among them are bakers, smugglers, fish farm owners, and all of the non-poor that enjoy the benefits of the food subsidy system intended for the poor.
This is true of all types of economic decisions, not just those related to poverty or government spending. Consider economic competitiveness. Sectors in Egypt tend to be dominated by a few companies that face little competition. Things like innovation, increased product variety and availability, lower prices, and a more productive labour force are less likely without competition.
Reducing privilege and increasing competition would mean the owners of firms operating in uncompetitive sectors would lose. The winners would likely be many other important groups in the country, like consumers and small and medium business owners (who might be able to provide more job opportunities if things were more competitive), not to mention the benefits to the economy as a whole.
If (or perhaps when) Al-Sisi becomes president of Egypt, he will have many tough economic decisions to make. Each decision will have winners and losers among the many varied groups in Egyptian society: business elites, the middle class, the poor, youth, government bureaucrats, small and medium business owners, labour unions, smugglers, profiteers, etc. For some, the economic situation will likely improve. My question is whose economic president will Al-Sisi be?
Iris Boutros is an economist and strategist. She focuses on growth, impact investment, and decision-making. Follow her on Twitter @irisboutros
