Politics or economy: which comes first?

28-10-2015 03:13 PM

Fady Labib




Towards the end of the 1980sthe world held its breath as communism, a political force in Russia for 70 years, started to fall apart, to be replaced by a system that favoured democracy and a free market economy. At almost the same time, free market reforms were introduced to China, leading to what is today very nearly the mightiest industrial and trade powerhouse in the world, but still with much to be desired on the political front. Russia, for its part, pursued political reform, but its economy embarked on a frenzied roller coaster which at some points bordered on chaos. All through this the world watched, with many pondering the question: which should have come first, political reform or economic development? To this day there is no definite answer to the question.

That same question has imposed itself on the Egyptian scene to the point that a recent conference in Cairo, dubbed a ‘national dialogue,’ was dedicated to discussing just that. The dialogue was organised by the Economic Research Forum (ERF), a regional network dedicated to promoting high quality economic research to contribute to sustainable development in the Arab world, Iran and Turkey as part of a series of national dialogue events under the title “The Egypt of the Future”.


Cruel choice

Opening the conference, former Finance Minister and Executive Director of the ERF Ahmed Galal posed the question of whether or not Egyptians were satisfied with the political and economic achievement since the Arab Spring in 2011 and the subsequent overthrow of the Muslim Brotherhood (MB) regime in 2013. Was there really a “cruel choice” between economic growth and political reform, he asked? And if so, which should come first?

Amr al-Shobaki, political analyst and head of the Arab European unit at Al-Ahram Centre for Political and Strategic Studies, praised many of the economic accomplishments achieved recently at a time when Egypt was suffering from the aftermath of the Arab Spring. Dr Shobaki described the post-Arab Spring period as politically charged with conflict and mistrust among the various political forces in the country. “Future advancement needs the establishment of a certain state of balance,” he explained. “The economic development we are seeking must go hand in hand with political reform. The opinion that suggests focusing on economic development and temporarily postponing political reform is mistaken, because all State institutions must together answer the people’s needs.”

As for recent suggestions of amending the Constitution, Dr Shobaki said that many of the rumours being circulated were not to be taken seriously since they emanated mainly from political fears and insecurities that are more or less natural following the turmoil the country underwent in the wake of the Arab Spring. The proposed amendments concern the authority and prerogatives that the Constitution grants the parliament, the president, and the military, and calls for amendments vary between widening or curtailing these rights in no consistent manner. The year-long MB rule with its attendant harsh legislation, Dr Shobaki said, generated a state of panic and fear of granting powers that might be misused.  


Societal acceptance

For his part Ziad Bahaa Eddin, former Deputy Prime Minister and former Minister of International Cooperation, wondered whether it was actually possible to postpone political reform until economic reform was achieved, a point of view supported by many people. Dr Bahaa Eddin believes that economic decision by its very nature is a form of political decision making. Politics and economics were inseparable, he said, when an issue such as managing the State resources was concerned. “It is imperative to establish a healthy political climate because political participation in economic decision making yields results that are more just, less corrupt and better applicable to real life,” Dr Bahaa Eddin said. “For instance, the real estate tax law proposed during the presidency of Hosni Mubarak was revoked because erroneous rumours were spread that it would hurt the poor. This was mainly owing to lack of political participation in the economic decision.” Incidentally, that tax is being applied now.

Dr Bahaa Eddin stressed that Egypt was about to make major economic decisions; it was therefore of utmost importance for these decisions to achieve societal acceptance by involving the society as a whole in the decision making, through parliament.

“Anyone who has worked in the State executive apparatus knows very well that the real challenge lies in the implementation of decisions and laws,” Dr Bahaa Eddin said. “People may show resistance to some decision because they are not convinced it would work in their best interest.” This is where political effort is needed, he said, citing many instances when this could help block loopholes in economic decisions. He criticised those who claim that political discourse could slow down economic growth and insisted that participation was the only practical way for society to achieve major advances.





Administrative reform

Former Secretary General of the Arab League Amr Moussa, head of the Committee of the Fifty which drafted Egypt’s Constitution, said that for any economic development and political reform to bear fruit the State administrative apparatus should first be reformed.

“Administrative reform is in no way less important than political or economic reform,” Dr Moussa said. “Community participation is therefore imperative and can only be achieved through the people’s representatives in parliament.”

The Constitution, he said, included several articles that aim to achieve both economic development and social justice by allocating expenditure in the State Budget to important sectors, such as health and education.

“The economic and political committees in the upcoming parliament must include first rate experts because Egypt’s fragile condition cannot be compromised by experimentation,” Dr Moussa explained. “Development and advancement are no longer restricted to the countries of the developed world, but now include emerging markets such as India, Brazil, Malaysia, Turkey and Indonesia. These countries did not advance by experimenting but rather by following a well-drawn path to development.

“Success is no longer a choice but a responsibility of the State institutions which will be complete once the new parliament is elected and starts its activity by year-end,” he said.

Dr Moussa explained that during the 20th century the two main challenges were the eradication of poverty and catching up with the developed world. In the 21st century, poverty remains the main impediment to development and its eradication requires adopting new methods that follow a new concept of social justice. Today’s world, he says, opens the door for advancement of the poor who can take advantage of the many opportunities that globalisation provides.


Hopes pinned on parliament

Dr Moussa described the current campaign demanding that some articles of the Constitution be amended as senseless and aimed only at wasting time and effort.

The political process, Dr Moussa said, must begin in parliament, where visions would shape up during the discussion of thorny issues and the vote on debatable laws. This is exactly where the real political currents and coalitions will develop, through party and parliamentary engagement which are considered the two main components of political development within the constitutional framework.

Abla Abdel-Latif, head of the presidential expert council for economic development, told the conference that the economic reform achieved so far was not sufficient. “Our ambitions reach higher,” Dr Abdel-Latif said, “and we can achieve it if we channel our efforts in the right direction.” She said the target was to be numbered among the best performing 30 countries in the world by 2030, a target that could never be achieved without going to the root of our problems and attempting to tackle them, while taking into consideration the variables on the global economic front. All of which, she explained, needed the full support of correct political decisions and participation.

Banking expert Salwa al-Antari and former Minister of Population Moushira Khattab affirmed that political decisions and economic reform were inseparable, and that the Egyptian Constitution secured social justice through the clauses concerned with the distribution of resources and wealth. Dr Antari pointed out that social justice pre-required consumer protection and anti-monopoly laws which should fall among the responsibilities of the upcoming parliament. In this she was strongly supported by Dr Khattab, who said that society was eagerly awaiting a large bunch of laws it badly needed and which had to be passed by the new parliament.


Watani International

28 October 2015




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