Month: February 2017

http://english.alarabiya.net/en/features/2017/02/08/Is-Egypt-extremely-poor-like-Sisi-says-it-is-.html

“So, nobody told you that you are extremely poor?” asked Egyptian President Abdel Fattah al-Sisi at the annual Youth Forum, held this year in the southern city of Aswan earlier this week.

“Then let me tell you that we are very poor. Very poor!” he added.

Despite the fact that the two-day conference witnessed discussions on several issues, especially ones pertaining to Upper Egypt, this statement was the most widely circulated.

Reactions to the statement mainly ranged between many taking it seriously and others were mocking it. Between the two lay a bunch of analytical speculations over the real meaning of the statement.

Journalist Hossam al-Hindi said that the statement is in line with the general discourse Sisi has been adopting since he came to power and which basically promotes austerity.

“In last year’s Youth Forum he said that for 10 years he had only water in his fridge yet never complained and following the crash of the Russian plane over Sinai he said that it is not important if we starve as long as we are united,” he wrote.

Hossam, however, sees an obvious contradiction between this discourse and actual state expenses. “For example, the inauguration of the New Suez Canal cost LE 250 million ($13 million) and the Economic Development Conference in Sharm al-Sheikh cost LE 100 million,” he explained, adding that huge amounts of money are spent on presidential motorcades and private jets and the salaries of ministers and officials. Hindi also mentioned examples of “provocative” statements by officials and which demonstrate lack of sensitivity towards the poor.

“For example, Minister of Electricity Mohamed Shaker said that the increase in electricity prices equals the prices of a cup of tea in a café, former Minister of Transportation Hani Dahi claimed that underground commuters demanded an increase in ticket prices, and former Minister of Justice Ahmed al-Zind claimed that the average Egyptian citizens can live with LE 2 daily.”

Professor of political science Moustafa Kamel al-Sayed disagreed with the notion that Egypt is a poor country.

“People who argue that Egypt is poor, among them the president, rely on the several factors such as the fact that 26% of the population do not get their basic needs and the decrease of the per capita share of natural resources,” he wrote.

“But this is not the only way poverty is measured.” According to Sayed, the president’s statement contradicts the view of major international institutions such as the World Bank, which does not classify Egypt as a low-income country.

“It also contradicts the fact the Egypt is rich in natural and human resources and enjoys several geographical, historical, and climate privileges.”

According to Sayed, there are three reasons why Egypt can be seen as poor: First, the inability to make the best use of resources; second, unfair distribution of wealth; third, public spending priorities. “Many countries can go through financial crises, but are not classified as poor. This was the case in Mexico, Brazil, and several countries in Southeast Asia.”

Who’s ‘we’?

Meanwhile, journalist Mohamed Hammad questioned who the “we” in the president’s statement refered to. “Does this refer to the people? Or does it refer to the police, army, judges, ministers, and senior officials?” he wrote. “And if Egypt is poor, why is it being controlled by billionaires and foreign franchises?” Hammad argues that poverty is not about money and resources, but is rather about management and governance, policies and priorities.

“For example, Japan is poor in resources, but through good governance managed to become on the world’s greatest economies and China was not hindered by its population challenge,” he added. For Hammad, poverty is only an excuse for governments to maintain the status quo and not embark on a real change. “Governments talk about poverty as if it is a country’s destiny and totally overlook the fact that it can be subverted through a change. When Lula Da Silva came to power, he did not tell Brazilians that they are poor, but took serious steps towards taking Brazil from poverty to prosperity and in eight years made a miraculous transformation.”

Writer Mahmoud Khalil believed the Sisi’s was addressing officials and not the Egyptian people in order to warn them that their actions do not take into consideration the economic problems through which the country is going.

“The president is telling officials to make sure they do not take actions that provoke the poor,” he wrote. “These include the purchase three 18-million-pound cars by the House of Representatives and requests for increasing the salaries of senior officials such as the prime minister and his deputies, the ministers and their deputies, and governors and their deputies.”

On the other hand, Khalil noted, the government abstains from increasing minimum wages citing budget deficit and the large amounts allocated to wages and salaries and several major institutions, such as the National Bank of Egypt, which paid large bonuses to their staff following the recent price hike.” For Khalil, Sisi is siding with the poor in the way he criticizes the government and the parliament for their spending patterns that contradict their continuous statements about the financial crisis, which detach them from average people. “Sisi is instigating them to feel for the people and offer an example of wisdom and integrity.”

http://english.alarabiya.net/en/features/2017/02/02/Why-is-Egypt-s-military-entering-the-pharmaceutical-industry-.html

The Egyptian government gave the military a license to establish a pharmaceuticals company. According to the prime mister’s decree, the National Authority for Military Production, which is affiliated to the Egyptian Armed Forces, will establish the Egyptian National Company for Pharmaceutical Products. The announcement came after President Abdel Fattah al-Sisi called upon the military to play a bigger role in major infrastructure projects and in the distribution of subsidized goods. While this step could be seen as a solution to the shortage of a large number of drugs and the soaring prices of available ones, it also heats the already-existing debate on the army’s control of the Egyptian economy.

Osama Rostom, vice president of the Pharmaceutical Chamber at the Egyptian Industrial Federation argued that the army’s establishment of a pharmaceutical company comes at a time when the Egyptian drug market is suffering from a lot of problems mainly related to drug shortage and price hikes. “The state’s involvement in the pharmaceutical industry can regulate prices to a great extent since raw materials would be imported in bigger quantities and in fewer shipments, which would in turn reduce production cost,” he said. “If this would benefit Egyptian citizens, especially poorer classes, then why not?”

A different solution

Rostom, however, added that the same result could have been reached in a different way that does not involve the military. “If the same privileges that will be given to the military are instead given to the existing 154 drug factories and the 55 under construction, this would solve the crisis and there would be no need for creating a new company.”

Mohamed Ashraf, secretary general of the Pharmaceutical Chamber at the Egyptian Industrial Federation, had previously called for the army’s intervention in the pharmaceutical sector through becoming in charge of importing raw materials. “This will protect the sector from manipulation and monopoly,” he said, specifically mentioning the Armed Forces Logistics Authority, which has always stepped in at times of shortage, as the most suitable entity for such step.

Politician and head of al-Geel Democratic Party Nagi al-Shehabi said that establishing a national company for pharmaceuticals is the only way to face the drug crisis following the devaluation of the Egyptian pound. “Medicine is a matter of national security and that is why it is important for it to be manufactured locally,” he said.

According to Shehabi, the army stepped in at the right time as it always does at times of crises. “This is because only the army can protect the country from different dangers and it does so even while it is facing huge domestic challenges as well as external conspiracies,” he added.

Journalist Anas Fares sees in the establishment of the pharmaceuticals company another attempt on the part of the Egyptian army to control the economy. “This is not the first time the Egyptian Armed Forces get unprecedented privileges and it’s not a coincidence but only part of an expansive investment plan that targets the monopolization of several industries,” he wrote.

For Fares, the main problem with economic activities carried out by the military is lack of transparency. “All economic institutions owned by the Egyptian military are not subject to any form of monitoring by any government entity and their financials are listed in the state budget in one single figure under one item.” Even though the Egyptian military has for decades been involved in several economic sectors, Fares argues that this increased since the coming to power of Sisi. “In December 2015, Sisi issued a decree that allows the military to establish companies with national capital or in partnership with foreign capital. This is the key to the army’s interference in investment in all sectors.”

Mohamed Hussein, founder of the Egypt Parallel Constitution initiative argued that the intervention of the army in the pharmaceutical industry does not allow for free and fair competition. “The army gets free labor through obligatory military service since conscripts work in all institutions affiliated to the army,” he said. “These institutions do not also pay taxes and do not pay for utilities such as electricity and water.”

Hussein added that this will allow the army or a few companies with strong ties with the army to monopolize the pharmaceutical industry.

Tackling shortage

Mohamed Ezz al-Arab, medical advisor at the Egyptian Center to Protect the Right for Medicine, begged to differ. “We have suffered a lot in the past few months from shortage in the most strategic drugs and many people actually died because their medicine was no longer available,” he said. “This was specifically the case with cancer drugs.”

Ezz al-Arab said that the state has to interfere in order to prevent similar crises from taking place. “The military in particular took this initiative because it is the institution that currently has the capabilities and the technology to do that. Plus, the discipline with which the military is characterized would guarantee the quality of the products,” he added.

For Ezz al-Arab, the issue is more humanitarian than political or economic since the priority is making medicine available to citizens.

A few days after the decree, Minister of Military Production General Mohamed al-Assar, announced that the ministry is working on establishing a factory that specializes in manufacturing cancer drugs. “This is part of a mega project that includes several pharmaceutical industries such as syringes and avian flu vaccines,” he said, adding that projects of that type are a matter of national security. “We cannot just be at the mercy of imports.”