For months, numerous voices—mine included—have urged the President to turn to economic experts instead of relying solely on trusted advisors, to pull the national economy out of its torpor and stop the slide into recession, inflation, and declining investments.
So I, like many others across the political spectrum, was excited to learn that Dr. Farouk El-Okdah and Dr. Mohamed El-Erian had been appointed to the Coordinating Council on Monetary Policy (CCMP). Both men have a long record of competence, integrity, and broad expertise.
As former governor of the Central Bank of Egypt, El-Okdah successfully implemented an ambitious banking reform program and supported banks’ financial positions as well as management to enable them to overcome financial and political crises over the last decade; he also preserved the banking sector for the first 18 months after the revolution.
El-Erian, on the other hand, is best known for his wide-ranging experience with international institutions, investment funds, and capital markets. Internationally renowned, his views and pronouncements are followed by commenters and analysts around the globe.
The choice of both men to contribute in economic decision-making is cause for optimism, but some caution is also in order.
The CCMP is a mechanism for discussion and coordination between the government and the CBE on monetary policy generally, specifically inflation targets.
An agreement on this point is itself a step forward to ending the contradictory situation of one wing of the state applying expansionary policies and another pursuing austerity. But the CCMP does not determine the country’s economic policy.
While the economic community is buoyed by El-Okdah’s return to the scene and El-Erian’s move to his natural area of expertise, their role will be limited to the narrowly defined purview of the CCMP, unless the committee’s remit is to be expanded.
At the same time, Egypt’s current problem is not solely a matter of monetary policy; it’s related to the entirety of economic policy, the lack of vision, and the failure to identify clear priorities that can be understood and supported by society.
As such, the government chosen by the President after the seating of the new parliament must present a clear, detailed economic program that reflects specific choices and priorities. We shouldn’t go back to those days when the government presented programs full of grandiloquent promises to achieve anything and everything. We all know economic conditions are hard and resources are limited.
An honest government program would reflect choices and sacrifices and tell us what the government intends to do and what it intends to postpone or shelve. We can’t develop informal urban areas and build a new capital; improve irrigation efficiency on existing land and reclaim another million feddans; raise wages and increase government jobs and reduce the budget deficit.
We can’t increase fees while reducing costs for citizens, or encourage investment while clinging to flawed laws.
Egyptians do not expect an economic miracle. But they are waiting for clarity, honesty, and transparency. They want the state to declare its true intentions and show a genuine inclination towards the poor.
Finally, a society-wide dialogue on economic policy is needed, one that goes beyond the rote box-ticking of recent years. Societal dialogue does not mean a minister meeting some businessmen, then some journalists, then some youth, and then proclaiming the dialogue done.
The dialogue must start with the government declaring, with full transparency, the laws, programs, and policies it intends to pursue, while providing adequate information to the public.
Secondly, the dialogue must be with institutions—trade unions, civic associations, political parties, and organizations for businessmen, farmers, professionals, and consumers—not individuals. Some institutions may be weak or under the sway of funders, but they can’t be ignored or replaced by a handful of public figures.
These institutions must be engaged with because that’s how they will be reformed, their members will come to trust them, and they will assume their missing role.
Society is waiting for a clear economic policy. The entry of real experts is a positive step, but it must be followed by more transparency and dialogue around the government’s coming program.
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After writing this article, I learned that Dr. Ahmed Darwish had been appointed chair of the Suez Canal Development Zone. This is another propitious choice and I wish him success.
The writer holds a PhD in financial law from the London School of Economics. He is former deputy prime minister, former chairman of the Egyptian Financial Supervisory Authority and former chairman of the General Authority for Investment.
