The Ministry of International Cooperation released a brief report on Thursday outlining the government’s economic policies over the past six months and its future plans, as well as reflecting on the current state of the economy following years of instability since the January 25 revolution.
The government has adopted an expansionary policy despite the scarcity of resources and the unprecedented budget deficit, the ministry said. The report acknowledged that more needs to be done to aid the poor and those with limited resources.
The government has a short-term plan to take action on three levels, the report said. This would include improving quality of life by increasing spending on the public sector, as well as presenting legislative reforms that would achieve social justice and staunch government corruption.
Measures could include tuition exemption for students enrolled in public schools and universities, decreasing fare rates for inter-governorate public transportation and lowering consumer prices for several goods.
The economic plan would also offer a series of stimulus packages to increase spending on public sector investments. The first such package was already included in the government’s 2013/14 budget, and is worth LE29.7 billion.
The package would finance projects to improve transportation and roads, support national economic projects, improve public utilities such as water, electricity and natural gas, fund housing projects, support local development and develop health programs.
The second stimulus package is financed by a loan from the United Arab Emirates and will finance similar projects.
Legislative and institutional reform measures would include raising the minimum wage in the public sector to LE1,200, setting a maximum wage at 35 times the minimum wage and raising pensions by 10 percent, all to start in January 2014. The report also suggested legislation to improve the lives of doctors over the next three years with programs that would cost LE3.5 billion.
In addition, the report proposed amending the Conflict of Interest for State Servants Law, which bans public officials from holding positions in private firms.
The Cabinet has also amended a law meant to support small business owners, and has suggested amending the Competition and Monopoly Prevention Law to foster increased market competition.
In terms of the state of the economy since 2005, the report said Egypt saw a high economic growth rate between 2005 and 2010, as reflected by an increase in the gross national product (GDP) from LE643 billion to LE1.206 billion in this period. Foreign direct investment reached LE13.3 billion in 2007, and economic growth reached 7.2 percent that year, the report continued.
However, this economic growth was not matched by a social policy that would utilize that growth to achieve social justice, and poverty rates consequently rose from 19.6 percent to 25.2 percent of the total population in that period, the report concluded.