• 09:09
  • Tuesday ,16 September 2014

Promoting Transparency: Unleashing growth across the board

By Omar Khedr, Daily News Egypt



Tuesday ,16 September 2014

Promoting Transparency: Unleashing growth across the board

There appears to be no limit to the possibilities that come from combining the internet, social media, and ground-breaking innovations to achieve significant changes across the globe.

It is a movement that is restructuring government institutions, revolutionising how news is delivered, and forging entire new commercial industries. Eager to capitalise on this momentum, many Egyptians have quickly adopted many of these innovations.

Based on data collected by the Ministry of Communications and Information Technology, the number of internet users within Egypt in the four years to 2013 grew at an average annual growth rate of 31.6% reaching a total of 38.75 million subscribers.

What has been slower to achieve, though, is greater levels of transparency across government institutions, businesses, and non-profit organisations. Pushing for higher levels of transparency across these three sectors can make these sectors more efficient, instil greater confidence in them, and allow Egyptians to make more informed decisions.

The public sector is a key segment where greater levels of transparency can have significant payoffs. Already, several government ministries release data on a number of industries like tourism and manufacturing.

However, the bulk of this data is difficult to find, difficult to manipulate easily for statistical studies, and in many cases data provided by one ministry may contradict data provided by another government agency. As figure 1 illustrates, Egypt has 25 official ministries, 5 more than China, a country that has a population more than 10 times the size of Egypt’s.

And further, Egypt has 10 more ministries than Turkey – a country with a GDP that is three times the size of Egypt’s according to the World Bank. Improvements to enhance government transparency can take the form of consolidating overlapping ministries, clearly outlining which ministries are responsible for the release of what specific data, and displaying the data in a visually appealing manner using the latest graphic and web design features available.

Implementing these steps may be costly in the short term, but will give decision makers, researchers, and individuals greater confidence in government data – a very important long-term economic payoff.

Transparency initiatives are not limited only to the public sector. Increasingly, private enterprises across the world are opening dialogues with stakeholders, public activist groups, and individuals.

Today, with the internet bringing down barriers on a daily basis and allowing consumers and global suppliers to connect with each other in an instant –companies in Egypt need to pay closer attention to what is being said about their public image, services, and products.

In 2013, the World Economic Forum ranked the ethical behaviour of Egyptian firms at 57th, which was below that of Jordan, Saudi Arabia, and Bahrain. If firms operating within Egypt are to maintain their market share, they need to fine tune their outreach efforts.

To take an example, Procter & Gamble Egypt and Vodafone Egypt are two companies that have pioneered the transparency movement within Egypt by developing corporate social responsibilities programmes. These programmes outline the business practices, philanthropic activities, as well as community support projects that senior managers within these firms have agreed to carry through in Egypt.

In the financial services industry, Banque Misr is another example of a firm that has implemented a corporate social responsibility programme that has supported academic scholarships, development projects, as well as providing grants to hospitals.

Despite this promising start, firms in Egypt can push the transparency envelope further. One way they can do so, is by utilising their respective areas of expertise to craft profitable solutions while addressing important social issues. For instance, Adidas met the 2009 challenge of Mohammad Yunus – the Noble Laureate in Economics, by crafting a shoe worth only one euro.

Egyptian companies should be encouraged to seek out similarly creative solutions. Doing so will spur innovation across a field of different industries resulting in higher economic growth for the entire country.

With a deep commitment for civic virtue, many Egyptians take great pride in helping others. According to the Helping a Stranger 2012 index compiled by the Charities Aid Foundation, Egypt ranked 58th in the world – ahead of many more developed countries like South Korea, Turkey, and even tied with Sweden.

This is a testament to the hard work that charity establishments and their volunteers do on a daily basis. Many non-profit organisations provide essential aid to orphans, medical assistance to impoverished families, as well as recreational activities like sports to Egyptian youth.

However, perceptions regarding the responsible usage of funds have adversely impacted Egypt’s non-profit sector for many years. Egypt ranks 114th in the Corruption Perceptions Index falling behind many Arab countries making many wealthy Egyptians reluctant to donate money to newly established organisations without an established track-record.

This in turn has resulted in Egypt being ranked 105th overall in the World Giving Index out of 145 countries surveyed. To combat this urgent crisis, non-profit organisations in Egypt need to make transparency a higher priority.

The creation of an independent Egyptian charity evaluator, like www.charitynavigator.org in the United States, can reassure potential donors about an organisation’s fiscal responsibility as well as provide donors with other useful performance metrics. Another important improvement can be the publication of audited financial statements. These steps would encourage potential donors to contribute more funds, thereby benefiting the entire spectrum of Egyptian society.

The prospects for greater transparency across these three sectors vary significantly, as do the probable payoffs to Egypt’s economy. Much will depend on whether decision makers take an innovative and pro-active approach.  Looking ahead, though, observers should expect greater sophistication from Egyptians as they utilise the internet to become better informed citizens, customers, and philanthropists.