The head of Economics department in the Al-Ahram Centre for Political & Strategic Studies, expert Ahmed Al-Najaar has stated that the Revolution
of the 25th January has nothing to do with the current state of the economy in Egypt, and that it is in no way responsible for stopping the wheel of production, as some are claiming.
Al-Najaar told ArabsToday that the Egyptian economy was completely destroyed about two years prior to the Revolution, with the Egyptian public debt peaking at 1,200 billion pounds in October 2010, after reaching 962 billion pounds in 2009; which proves that the economy collapsed before the Revolution took place.
Al-Najaar explained that government agencies are now claiming that the Egyptian economy is deteriorating and falling apart, attributing this to one reason only; before the revolution there were no official reserves, and the debt was kept secret, but after the January Revolution everything was revealed and publicised. When citizens hear about the size of the debt, it is natural that their reaction is to be extremely concerned about this troubling situation.
As for the assessment of the current balance adopted by the Military Council in recent weeks, Al-Najaar said that the policies for the preparation of the budget had perhaps seen rates reduced in important areas, where they should really be increased; such as health and education. He indicated the former Egyptian Minister of Finances, Samir Radwan, who he claims practices the same policies of the dissolved National Party, pointing out that Radwan was previously one of the founders of the Committee for the policies of the National Democratic Party, and still works along the same lines. Al-Najaar considered that is is as though he is saying to poor Egyptians: “That’s enough for you!”; the same sordid policy that national leaders applied to citizens before the Revolution.
Al-Najaar added that Egypt’s current general budget is as corrupt as its predecessor, given that the bulk of the support goes to the rich. He stressed that there is no doubt that it must be changed fundamentally, and in order for this to happen workers must pressurize the government to achieve social justice, and not to collide with it.
With regards to the privatization of public sector property, and void contracts, Najaar stated that the public sector in any country destroys what the previous generations have built, and that what has happened in Egypt as a result of the privatization of state land, is the destruction of the state’s system and its structure. He highlighted the fact that the previous government sold land for less than 5% of its real value, without charging for the cost of the buildings, in order to get bribes and kickbacks.
Al-Najaar indicated that there is a lot of funding being put towards supplying energy to privatized factories and companies, and emphasized that this does not benefit the Egyptian economy. For example, the Alexandria Fertilizers Company, owned by the Kharafi Group, receives gas supported by 60-75% of the components of the fertilizer. Al-Najaar mentioned that when the state asked them to sell some of their produce in the domestic market, they refused to do so, just as the cement companies sell at high prices at a time when they receive a great amount of support.
As for how the Egyptian economy can recover, Najaar said: “Tourism is the main source of income in Egypt, where we rely on industry and trade, so the government must work to provide security in the fastest time possible, to allow the tourism industry to restore itself normally, until the map of Egypt changes, and there is a source other than tourism that can provide the main income for Egypt.” Al-Najaar added that Egypt must not resort to borrowing at the current time, and that corruption must be completely eradicated from the public and private institutions, and he stressed that the figureheads of corruption, who have still not been removed, must be taken down.
On the topic of how to increase the income of Egypt after the Revolution to a rate higher than the nation’s previous experiences, Al-Najaar confirmed that Egypt can do without importing wheat, noting that the land allocated for cane sugar cultivation could be replaced by wheat. He also suggested that sugar beet extract, which is much cheaper than cane sugar, could also change Egypt’s agricultural map. He stated that rather than producing tons of vegetables their production could be reduced, and replaced by the cultivation of seeds, rather than of importing them at exorbitant prices.
He stressed that the Revolution of 25th January had not stopped the wheel of producation, and did not destroy the economy as some think, but rather it came at a time when the economy was already destroyed.