Situation Analysis:
Key Development
Challenges Facing Egypt
2010
Lead Author Professor Heba Handoussa,
Coordinator, Situation Analysis Taskforce
This Situation Analysis is a multi-stakeholder document prepared by a Taskforce, led by Heba Handoussa, which
consulted with sector-specific experts, independent advisors to government, UN Agencies and other national and
international development partners in Egypt.
The Taskforce also reviewed a wide array of official documents and recent development literature on Egypt.
The Taskforce has gratefully received and accommodated as much as possible numerous comments on the various
drafts of the report.
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CONTENTS
Preface Fayza Aboulnaga, Minister of International Cooperation
Foreword James Rawley, Chair of the Development Partners Group
Preamble Heba Handoussa, Coordinator Situation Analysis Taskforce
Acknowlegments
Acronyms
EXECUTIVE SUMMARY
INTRODUCTION AND CONCEPTUAL FRAMEWORK
1. Purpose of Situation Analysis and Guiding Principles
2. Participation and Consultation Process
3. Strategic Issues Facing Aid Effectiveness in Egypt
4. Conceptual Framework for the Situation Analysis and the Three Pillars of Sustainable Development
5. Progress on the Millennium Development Goals (MDGs)
6. Role and Participation for the Different Stakeholders in the Implementation of the SA
7. GOE Strategic Objectives and Five Year Planning
PART ONE: KEY CHALLENGES IDENTIFIED IN THE SITUATION ANALYSIS
PART TWO: SITUATION ANALYSIS
I. PILLAR ONE: SUSTAINABLE AND INCLUSIVE GROWTH
I.1 Macro Policy and Stability
I.2 Competitiveness
1.3 Growth Engines
I.3.a Manufacturing: Industrial, International Trade and Internal Market Policies
I.3.b Agriculture
I.3.c Tourism
I.3.d Information and Communications Technology (ICT)
I.3.e Renewable Energy
I.3.f Construction and Housing
I.3.g Micro and Small Enterprises (MSE)
I.4 Employment Strategy for Youth
II. PILLAR TWO: SOCIO-POLITICAL RIGHTS
II.1 Egypt’s Integrated Social Policy: Changes and Challenges II.1.a Safety Nets and the Welfare State
II.1.b Intended and Effected Changes in Social Policy
II.1.c MOSS Reforms and Capacity Building
II.2 Poverty Reduction
II.2.a Food Security, Consumer Price Index and the Poor
II.2.b Removing Energy Subsidies and Targeting the Poor
II.3 Gender and Youth
II.3.a Women: A Special Concern
II.3.b Youth Building the Future
II.4 Family, Child and Population
II.4.a Results of the Child Multidimensional Poverty Study
II.4.b The Issue of Fertility and Population
II.5 Education
II.5.a Literacy and Adult Education
II.1.b Education Reform at Pre-University Level
II.5.c Sector Analysis of Higher Education in Egypt II.6 Health and Nutrition
II.6.a The Health Sector Reform Program
II.6.b Impact of Environmental Degradation
II.6.c Disease Burden in Egypt II.6.d Female Genital Mutilation (FGM)
II.6.e Policy Formulation, Program Design and Implementation
II.7 Political Participation
II.7.a Governance II.7.b Corruption
II.7.c Decentralization II.7.d Human Rights
II.7.e Access to Justice
II.8 Social Protection II.8.a New Pension Law
II.8.b A New and Universal Social Health Insurance (SHI) System
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III. PILLAR THREE: ENVIRONMENT AND SUSTAINABLE NATURAL RESOURCES
III.1 Sustainable Agriculture, Rural Development, and Food Security
III.1.a Major Issues and Challenges facing Agricultural Development
III.1.b Government Strategic Orientation and Objectives
III.2 Egypt’s Water Situation Analysis
III.3 Energy Efficiency and Renewable Energy
III.4 Policies for Promoting Renewable Energy in Egypt
III.5 Protecting the Environment with a Focus on Climate Change
III.6 Water, Sanitation and Solid Waste Management
III.7 Urban Planning, Informal Settlements and Transport
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BIBLIOGRAPHY
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1: Capacity Building and Mutual Accountability
2: The United Nations Global Compact 3: The Role of Civil Society in Implementing Development
4. Essential Messages of the GoE Strategic Objectives
5: Institutional Reform and Requisites
6. Steps Towards Reforming Egypt’s Monetary Policy Framework
7: New Initiatives of the Social Fund for Development
8. The Global Entrepreneurship Monitor Survey (GEM)
9: Conditional Cash Transfers
10: Monitoring and Evaluation of the 1000 Villages 11. A New Multidimensional Poverty Index (MPI)
12. Gender Responsive Budgeting
13. A Special Emphasis: Teacher Professionalism
14. The Cost of Malnutrition in Egypt
15. Institutional Development Program (IDP)
16: The Role of Development Assistance in Protecting the Environment
17. Ecotourism
18. Vulnerability and Adaptation to Climate Change in the Health Sector
19. Small is Beautiful for Egypt’s Solid Waste Management
20. Addressing the Problem of Land Mines in Egypt’s Western Desert
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ENDNOTES
BOXES
TABLES
1: Dimensions of Aid Effectiveness
2: Three Pillars of the Situation Analysis
3: Strategic Objectives Matrix
I.1a: Elements of the Egyptian Information Society Initiative (EISI)
II.1a: Programs and Outcomes
II.2a Consumption Pattern, 2008/09, by Expenditure Decile
II.4a: Percent of children experiencing type of deprivation, by wealth quintile, 2008
II.5a: Distribution of the Population by Education Status (10 years or more), in millions
II.5b: Estimated Cost of Programs (LE thousand) 2005/2006
II.5c: Average expenditure per student in Egypt compared with other countries (PPP$)
III.5a: Volume of Assistance by Environmental Sector, 1991-2001
FIGURES
1: Pillars of Sustainable Development
I.4a: Distribution of New Entrants by Type of First Job
II.2a: Poverty Rates by Region
II.2b: Contribution of Indicators to the MPI (Intensity)
III.7a: Institutional Landscape of Public Land Management
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preface
In September 2008, at the Accra High Level Forum on Aid Effectiveness, I chaired a panel on ‘The Unfinished Aid
Effectiveness Agenda’. The discussion focused on: making further progress on reducing aid fragmentation and
conditionality; promoting country ownership; strengthening regional and South-South Cooperation; fostering
capacity development; and ensuring greater predictability of aid flows. While the Accra meeting was a step
forward, particularly in giving greater voice to developing countries, it is still the case that the aid effectiveness
agenda continues to leave much to be done. The key challenge for development partners, both aid providers
and developing countries, is not so much technical but rather finding the political will to push the agenda forward and ‘put our house in order’. We know what we have to do, but in most countries we haven’t yet tackled
obstacles to aid effectiveness with sufficient commitment and urgency.
While the support of Egypt’s Development Partners has been much appreciated by the Government, there is
agreement both on the side of the Government and on that of Development Partners that the financial and human resources invested in development have not produced the full set of results rightly expected. It was in this
context that, in early 2009, I engaged in discussions with the Chair and Co-chair of the Development Partners
Group (DPG), Mr. James Rawley and Mr. Wolfhard Behrens, that were soon translated into the “Cairo Agenda for
Action on Aid Effectiveness: A Mutual Strategy for Development Cooperation”, which was agreed to by August
2009.
The Cairo Agenda is an innovative concept note that addresses the key principles of aid effectiveness – namely,
ownership to ensure that we set our own development priorities and strategies; alignment so that our development partners fine tune their support to be consistent with our strategies and use our national systems; harmonization to avoid assistance duplication by improving coordination and simplifying procedures; managing
for results; and mutual accountability whereby we and our partners are accountable for development results.
The Cairo Agenda for Action is in fact a translation of the Accra Agenda for Action for the Egyptian setting, proposing a set of specific actions in the form of “deliverables” to enhance aid effectiveness.
Soon after work began on the first deliverable of the Cairo Agenda, namely the “Situation Analysis” which highlights the key development challenges facing Egypt over the next five to ten years, it became apparent that this
exercise could also serve to clarify national medium-term priorities and propose policies, strategies and investments that would facilitate progress on these key challenges. In this way, the spectrum of the Cairo Agenda expanded from aid to development effectiveness, embracing both national and international resources, financial
and human. It also incorporated the dimension of South-South Cooperation where Egypt is both a recipient of
valuable cooperation from other developing countries as well as a provider of a range of development services
to other countries, with a special focus on African and other neighbouring countries.
The Situation Analysis also highlights some important crosscutting challenges, for which more determined efforts are required to improve institutional and human resource capacities; achieve better coordination across
sectors and agencies as well as between central and local administrations; scale-up best practices; and upgrade
data reliability to enhance transparency and accountability. With meaningful and timely support of our development partners, the Government is committed to ensuring that these challenges are successfully addressed
in the coming years.
The Situation Analysis Taskforce, which under the excellent leadership of Professor Heba Handoussa took the
lead in preparing this document, made extensive use of existing government documents and studies, as well as
recent non-official documents provided by a wide variety of development partners. The Taskforce also engaged
in a constructive dialogue with the national and international development community, making the Situation
Analysis truly a multi-stakeholder nationally-owned document which I invite all stakeholders, including our
development partners, to make full use of in elaborating future strategic work plans, and doing so in line with
the Paris Principles on aid effectiveness.
Another work area envisioned in the Cairo Agenda is that of “Mutual Accountability” to which the Government
has assigned a high priority. Mutual Accountability is a process by which partners hold one another responsible
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for the commitments that they have voluntarily made to each other. I am pleased to note that agreement has already been reached in designing an operational mutual accountability mechanism based on: i) a shared agenda;
ii) a monitoring framework; and iii) a process comprising dialogue and negotiation to strengthen a transparent
two-way street to mutually resolve difficulties in a more effective and timely manner. This mechanism is about
to be piloted in two subsectors, namely primary health care and pre-university education, another positive step
in putting the Cairo Agenda into practice as a prelude to expanding its application to other sectors.
The Cabinet of Ministers has deliberated on an advanced draft of the Situation Analysis and signaled its approval in principle, subject to some refinements which were now completed. The Cabinet has also announced
the Government’s updated development priorities which are intended to guide our development partners in
setting future policies and work plans.
Through this initiative, Egypt hopes that this approach may become a model to be used by other developing
countries in pursuing the Accra Agenda for Action in a way that meets national development priorities. In so
doing, we look forward to reporting positive outcomes at the Fourth High Level Forum (HLF4) on Aid Effectiveness, Busan, 2011.
In closing, I would like to thank the members of the Situation Analysis Taskforce and its coordinator, Professor
Heba Handoussa for preparing this important document, and to express my appreciation to members of the
Cairo Agenda for Action Steering Committee, namely Dr. Talaat Abdel-Malek, Advisor to the Minister of International Co-operation and Co-chair of the OECD-DAC Working Party on Aid Effectiveness; Dr. Magued Osman,
Chairman of the IDSC; Mr. James Rawley, Chair of the Development Partners Group; Mr. Wolfhard Behrens Cochair of the Development Partners Group, and Professor Heba Handoussa, coordinator of the Situation Analysis
Taskforce for their continuous oversight and support to the Cairo Agenda for Action.
H.E. Fayza Aboulnaga
Minister of International Co-operation
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FOREWORD
Over the past fifty years, the international development community has made important contributions to
Egypt’s development progress. In recent years, however, Egypt has experienced a decline in external aid flows
- this in spite of the fact that it still faces a rather formidable set of development challenges. In part, this decline
is due to Egypt’s graduation to the status of a “Middle Income Country” (MIC), albeit at the low end of that spectrum, which typically triggers a shifting of development assistance by many international partners from MICs
such as Egypt towards “least developed countries” and/or “countries in crisis”. Another reason contributing
to this trend is the perception among partners that Egypt may not be taking full advantage of its development
cooperation resources due to several issues. These include a perceived lack of clarity on priorities for international cooperation, the need for better coordination among development actors, and the need to strengthen the
monitoring and reporting on development results.
Addressing these issues is the aim of the “Cairo Agenda for Action on Aid Effectiveness: A Mutual Agenda for
Action”, a joint initiative of the Government and Egypt’s Development Partner Group (DPG) comprising twentyseven bilateral and eleven multilateral agencies and two foundations. The Cairo Agenda, which was launched
in August 2009, takes into account two major considerations: the principles embodied in the Paris Declaration
and the Accra Agenda for Action on Aid Effectiveness (namely ownership, alignment, harmonization, managing
for results, and mutual accountability), and the specific development challenges facing Egypt. In so doing, it
highlights the need for progress in a number of areas, to be achieved through four key results or “deliverables”.
The first of these is a “Situation Analysis” that sets forth Egypt’s key development challenges for the next five
to ten years. The second deliverable is the identification by the Government of priority areas for international
cooperation. The third area is the strengthening of programme management and the reporting on results. And
the fourth deliverable is a “Plan of Action” on aid effectiveness that embraces the other three deliverables as
well as other considerations such as mutual accountability and aid information management.
There has been very good progress on the Cairo Agenda over the past year, with tangible progress being recorded on all four results.
The Situation Analysis has now been finalized following a participatory process carried out by a highly competent team of Egyptian social scientists coordinated by Professor Heba Handoussa. This process involved extensive consultations with Government, Civil Society, the Private Sector and other national and international
stakeholders. We in the DPG are very pleased with this way of working. We are also pleased that the Cabinet of
Ministers discussed the Situation Analysis at length during two Cabinet sessions. Moreover, it is gratifying to
see that several development partners, including the United Nations in Egypt, are opting to use the “Situation
Analysis” as the foundation of their own assessment and planning exercises, thus reducing duplication of efforts and burdens on Government and development partners.
In terms of the second deliverable, and following its deliberations on the challenges identified in the “Situation Analysis”, the Cabinet of Ministers has selected a number of core areas where it is requesting development
partners to focus their support in the coming years. As for the third deliverable relating to management arrangements, an initiative to strengthen the capacity of the Ministry of State for Administrative Development to provide
results-based management support services to other ministries will soon get underway in collaboration with
the UN Development Programme and with funding from the Governments of Canada, Germany, and Egypt as well
as UNDP. Finally, in terms of the fourth deliverable, the “Plan of Action” on aid effectiveness, the Government of
Egypt and its international development partners have put into place a mutual accountability framework that, in
a first phase, is set to operate in the primary health care and pre-university education sectors.
Throughout the work on the Cairo Agenda, the DPG has been extremely pleased with the high degree of Government leadership and enthusiasm. We also commend the extensive consultations that took place in the preparation of the Situation Analysis and the quality of the analysis underpinning this important document. There
is no doubt that the Situation Analysis is a nationally-owned, multi-stakeholder document that highlights key
national development challenges.
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Finally, as Chair, I would like to thank DPG members for their active support during the Situation Analysis
preparation process, including the sharing of documents and experiences, as well as for their participation
in formal plenary sessions of the DPG with the Situation Analysis Taskforce, all of which have contributed to
enriching this document.
James Rawley,
Chair, Development Partners Group, and
UN Resident Coordinator and UNDP Resident Representative
in the Arab Republic of Egypt
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PREAMBLE
The Egypt Human Development Report 2008 ‘Egypt’s Social Contract: the Role of Civil Society’ suggests that
the battle today is no longer between ideologies of the left or right but rather about which practical system
can manage and deliver better social justice through basic services and earning opportunities, higher levels of
transparency and accountability, and more freedom of expression.
The Report suggests that to create and to implement a system that delivers these social goods will require
new roles and responsibilities for civil society as the ‘third pillar’ of the nation, complementing the state and
the private sector. It indicates that the civil society sector has vast underutilized capacity and resources that
could compensate for inadequate government or private sector capacity to fulfill social targets and programs.
Civil society and its organizations have a significant role to play in national development –in partnership with
the state and the private sector –as a result of their experience in welfare and social development programs,
because they are the home to important interest groups, and since they are able to give voice to those many
segments of society that have been marginalized.
Under this new vision for partnership, national policies and their implementation become a shared task. The
ingredients of success for this undertaking are a more liberal legislative regime, a more comprehensive and
consultative process among all national stakeholders, and cooperation in the execution of social initiatives to
meet new social needs and interests. This will ensure that all national resources are drawn upon to secure
integration and community for Egypt’s development efforts. These were the aspirations behind the Egypt Human Development Report 2008.
Two years later while coordinating the Situation Analysis, I am confident that the aspirations behind the Egypt
Human Development Report are becoming more and more a reality. Civil society has played a crucial role in
the elaboration of the situation analysis and is – if implemented and endorsed by all stakeholders – playing an
important role in shaping the future path for Egypt’s development.
Beginning in November 2009, the Situation Analysis was prepared over a ten-month period spearheaded by a
Taskforce comprising a core group of nine advisers nominated by Ministers, which eventually embraced more
than 80 national experts from Government as well as Civil Society and Private Sector. In addition to carefully
reviewing the vast array of existing documentation, the Taskforce was given access to the Government’s “Eight
Strategic Objectives” and the ongoing work on the Vision 2030 being undertaken by the Information and Decision Support Centre (IDSC). The Taskforce made every effort to reflect in the Situation Analysis both official
as well as independent analysis of issues and challenges that fall under each of the “Eight Strategic Objectives”
and related sectors. It also undertook more than 25 meetings with national and international development
partners, including two full-day consultative meetings with approximately 300 representatives from civil society, private sector, academia and media. Moreover, two meetings were held with the DPG and three with the
UN Country Team to review drafts of the situation analysis and receive valuable comments.
Both national and international development partners have thus been involved very actively and provided
useful inputs and comments which have enriched the report and highlighted different perspectives on Egypt’s
development situation. This Report is thus a fully-owned Egyptian product, as the Acknowlegments will attest.
It is also well-balanced between official and non-government expertise which adds to its depth and credibility.
Professor Heba Handoussa
Lead Author and Coordinator, Situation Analysis Taskforce
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ACKNOWLEDGEMENTS
INTRODUCTION: Heba Handoussa, Magued Osman, Talaat Abdel Malek, Ashraf El Araby
PROGRESS ON THE MDGs: Hussein Abdel-Aziz Sayed, Ashraf El Araby, Ramadan Hamed, Hoda Sobhy,
Fatma Al Zanaty, Olfat Farag, Sherine Shawki, Nefisa Abou-El Seoud, Heba Nassar
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PILLAR I
I.1 Macro Policy and Stability: Amina Ghanem, Rania al Mashat, Sherine Shawarby
I.2 Competitiveness: Mona El Baradei, et al
I.3 Growth Engines: Adla Ragab, Akrum Bastawi, Hanaa el Hilaly, Karim Refaat, Lucia Cartini,
Nihal el Megharbel, Raafat Abbas, Sherif Kamel, Sina Hbous, Soad Kamel Rizk
I.4 Employment Strategy for Youth: Heba Handoussa, Ragui Assaad, Hala Hattab, Lois Stevenson
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PILLAR II
II.I Social Policy: Hania Sholkamy
II.2 Poverty Reduction: Heba el Laithy, Mohamed Ramadan, Magued Osman, Sahar el Tawila,
II.3 Gender and Youth: Maya Morsy, Heba Handoussa
II.4 Family, Child & Population: Aziza Helmy, Halla Shaffey, Alia Al Mahdi, Dina Magdy,
Heba el Laithy, Manal Metwaly
II.5 Education: Hassan el Bilawi, Hoda Mansour, Mohamed Fateh, Mohsen Elmahdy Said,
Mona el Baradei, Nadia Touba, Raafat Radwan, Amira Kazem, Inas Hegazy
II.6 Health: Habiba Hassan, Mohamed Abdel Rahman, Desiree Labib, Madiha Khattab, Wessam el Beih
II.7 Political Participation: Ashraf Abdel Wahab, Ghada Labib, Lobna Abdel Latif,
Naglaa Arafa, Ahmed Ragab
II.8 Social Protection: Mohamed Maait, Omneya Helmy
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PILLAR III
III.I Agriculture: Dyaa Abdou
III.2 Water: Khaled Abu Zeid
III.3 Energy Efficiency: Emad Hassan
III.4 Renewable Energy: Abdel Rahman Salah El Din Mohamed
III.5 Environment: Yasmine Fouad, Abdel Rahman El Gamal, Abeer Shakweer, El Sayed Sabry,
Ahmed Gohary Dalia Abolfotuh, Mahmoud Kaissouni, Mohamed El Raey, Mostafa Fouda,
III.6 Water, Sanitation and Solid Waste Management: Sahar Tohamy, Laila Iskander
III.7 Urban Planning, Informal Settlements and Transport: Mostafa Madbouly, Khaled Tharwat
Editor and Advisor: Gillian Potter Arabic Translation and Editing: Nadia Abdel Azeem
Cover Design and Layout: Joanne Cunningham
Research and Coordination: Defne Abbas, Frederik Matthys, Heba Abu Shnief, May Seraphim, Mohamed Bayoumi,
Mona el Agizy, Nadine Hisham Fawzy
The contributions of more than 15 ministries and authorities are gratefully acknowledged and were integrated in the
relevant sections of this report. In addition, 46 independent experts were solicited for their topic-specific contributions
and advice. The list of names appearing above may not be exhaustive, given the broad representation of government and
non-government experts.
A special word of thanks goes to James Rawley, UNDP Resident Representative and UN Resident Coordinator and Chair
of the Development Partner Group. His hands-on leadership and involvement in the Cairo Agenda for Action on Aid Effectiveness (CAA) process has been invaluable. Comments from members of the DPG and UNCT in Egypt are gratefully
acknowledged, especially for their insights in relation to particular technical issues and international experience. Most
of these comments were incorporated in the text of this Situation Analysis - the first of four deliverables that together
constitute the CAA.
The authors are also indebted to the many other individuals and agencies that provided valuable advice, data and documentation, most of which appears in the Bibliography.
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ACRONYMS
AAAAccra Agenda for Action
MSMEMicro Small and Medium Enterprises
CAOA
NAPNational Action Plan
BDS
Business Development Support
Administration
CBE
Central Bank of Egypt
Discrimination Against Women
CAA
Cairo Agenda for Action on Aid Effectiveness
Central Agency for Organization and
CAPMAS Central Agency for Public Mobilization and
Statistics
CDA
CEDAW
CESCR
CIDA
CPI
CSO
CSR
DAC
DPG
Community Development Associations
Convention of the Elimination of All Forms of
Committee on Economic, Social and Cultural Rights
Canadian International Development Agency
Corruption Perception Index
NCHRNational Council for Human Rights
NCWNational Council for Women
NDPNational Democratic Party
NEAPNational Environmental Action Plan
NGONon Governmental Organizations
OCHA
Office for the Coordination of Humanitarian
Affairs
OHCHR
Office of the High Commissioner for Human Rights
Development Partners Group
SA Situation Analysis
Corporate Social Responsibility
Development Assistance Committee
EHDREgypt Human Development Report
ENCCEgyptian National Competitiveness Council
ETAEgyptian Tourism Authority
ETFEgyptian Tourism Federation
EWRAEgypt Water and Waste Water Regulator Authority
FI
NCCMNational Council for Childhood and Motherhood
PEMAProject Evaluation and Macroeconomic Analysis
EEAAEgyptian Environmental Affairs Association
FDI
MWRIMinistry of Water Resources and Irrigation
Civil Society Organization
ECSEgypt’s Competitiveness Strategy
FAO
MTIMinistry of Trade and Industry
Food and Agriculture Organization
Foreign Direct Investment
Financial Institutions
GAFIGeneral Authority for Investment and Free Zones
GCIGlobal Competitiveness Index
GDPGross Domestic Product
GEMGlobal Entrepreneurship Monitor
GOE Government of Egypt
GRBGender Responsive Budgeting
HSRPHealth System Reform Program
IAEAInternational Atomic Energy Agency
ICAO International Civil Aviation Organization
PPPPublic Private Partnerships
RBM
Results Based Management
SARDSustainable Agriculture and Rural Development
SEDOSmall Enterprise Development Organization
SFDSocial Fund for Development
SHISocial Health Insurance
SMESmall and Medium Enterprises
SYPESurvey of Young People in Egypt
TVETTechnical and Vocational Education and Training
UNAIDS
Joint UN Programme on HIV/AIDS
UNCDFUN Capital Development Fund
UNCTUnited Nations Country Team
UNCTADUN Conference on Trade and Development
UNDAFUnited Nations Development Assistance
Framework
UNDPUnited Nations Development Program
UNECAUN Economic Commission for Africa
UNEPUN Environment Programme
UNESCO UN Educational, Scientific and Cultural
Organization
UNESCWAUN Economic and Social Commission
ICTInformation and Communications Technology
IFCInternational Finance Corporation
UNHCRUN High Commissioner for Refugees
IDSCInformation and Decision Support Center
IFADInternational Fund for Agricultural Development
ILOInternational Labour Organization
IOMInternational Organization for Migration
ITUInternational Telecommunication Union
MAMutual Accountability
MALRMinistry of Agriculture and Land Reclamation
MCITMinistry of Communications and Information
Technology
MDGsMillennium Development Goals
MIC Middle Income Country
MOEMinistry of Education
MOHMinistry of Health
MOLDMinistry for Local Development
MOSSMinistry of Social Solidarity
MOTMinistry of Tourism
MoTrMinistry of Transport
MSADMinistry of State for Administrative Development
MSEAMinistry of State for Environmental Affairs
for Western Asia
UNFPAUN Population Fund
UN-HabitatUN Human Settlement Programme
UNICUN Information Centre
UNICEFUN Children’s Fund
UNIDOUN Industrial Development Organization UNIFEMUN Development Fund for Women
UNISDRUN International Strategy for Disaster Reduction
UNODC
UN Office for Drugs and Crime
Refugees in the Near East
UNOPS
UN Office for Project Services
UNRWA UN Relief and Works Agency for Palestine
UNTSO UN Truce Supervision Organization
UNVUN Volunteers
UNWTOUN World Tourism Organization
UPRUniversal Periodic Review
UPUUniversal Postal Union
WFP WHO World Food Programme
World Health Organization
YENYouth Employment Network
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EXECUTIVE SUMMARY
Introduction
This Situation Analysis (SA) aims to provide an overview of the major development challenges facing Egypt
over the next five to ten years, drawing on existing documentation and a highly participatory and inclusive process. A review of Egypt’s challenges shows that these cover many dimensions of poverty and exclusion, notably
in regard to water, sanitation and housing for the poor; health, education and vocational training; social insurance for all; conditional cash transfers for the extreme poor and an expanded social safety net; and employment
in urban and rural medium-sized enterprises with increased productivity and agricultural mechanization. They
also include long-standing challenges such as gender equity, political participation, transparency and public accountability, and strengthening respect for human rights. And these development challenges include a new set
of issues that have surfaced in the past few years, including the effects of climate change, pandemic influenza,
and high international food and fuel prices, all of which have a disproportionate impact on the poor.
The Situation Analysis is the first of four deliverables that together constitute the Cairo Agenda for Action on
Aid Effectiveness (CAA). Building on the SA, the second deliverable intends to identify the country’s development priorities, distinguishing between those priorities for which Egypt seeks the cooperation of international
development partners, and those priorities for which Egypt considers that domestic resources (human and financial) are sufficient. The third deliverable relates to the setting-up or strengthening of results-based management (RBM) arrangements in the lead ministry or council for each thematic area in order to clarify development
outcomes and results, roles and responsibilities, as well as facilitate the monitoring and reporting on results.
And the fourth deliverable of the CAA consists of a plan of action on aid effectiveness, one that embraces the
other three deliverables as well as other dimensions of aid effectiveness, such as mutual accountability mechanisms and the strengthening of aid information management, taking into account best international practices.
Egypt has been experiencing a decline in external aid flows in recent years, in spite of the fact that it still faces a
rather formidable set of development challenges and has only recently graduated to the status of a “Middle Income Country (MIC)”, albeit at the low end of that spectrum.1 This first deliverable, the Situation Analysis, is intended to help focus national policies and strategies as well as national and international resources on priority
development areas key to sustainable and equitable development that bring tangible benefits to all segments of
the society, in all regions, with special attention to the most vulnerable segments of the population. The other
components of the CAA are expected to improve the transparency and predictability of aid flows and to improve
mutual accountability as per the Paris Declaration and the Accra Agenda for Action on Aid Effectiveness. In this
way, the CAA exercise is intended to strengthen the case for continued, and perhaps expanded, international
development cooperation for Egypt.
Measures of Aid Effectiveness
Five main criteria are used to measure and monitor a developing country’s performance in achieving aid effectiveness: ownership, alignment, harmonization, managing for results and mutual accountability. Egypt’s
1 According to World Bank classification, there are a total of 97 MICs of which 56 are considered as Low MICs and 41 as High MICs. A country is
considered as a Low MIC if the GNI per capita is between US$996 and US$3,945. It is considered to be a High MIC if the GNI per capita is between
US$3,946 and US$12,195. Egypt is one of the 56 Low MICs, in 2009, with a GNP per capita of US$2,070. This is according to the World Bank’s Atlas
method, which ranks Egypt as 147 out of 213 countries, or 30 out of the 56 Low MICs.
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Executive Summary
ownership indicator was rated as moderate. It should be recognized that ownership refers to a more inclusive approach, involving participation by civil society and the private sector, where Egypt has some way to go
before meeting this important criterion fully. Alignment was also judged to be moderate. An important step
was taken by introducing a matrix (2004/2005), which has triggered more consultations among partners to
coordinate and reduce unnecessary overlap. On the issue of harmonization of Official Development Assistance
(ODA), Egypt was given a “low” rating. This refers to aid effectiveness with the multiplicity of uncoordinated
missions and analytic work by individual development partners and difficulties of coordinating individual
partner priorities to generate greater impact. The last two Paris Declaration Principles refer to managing for
development results and mutual accountability (MA). Egypt was rated as having a “moderate” status on both. Egypt’s MA mechanism has no clear rules which bind both sides to undertaking more transparent accountability for their respective actions and meeting their commitments. This is now being rectified. Indeed, the
Development Partners Group (DPG) has recently endorsed a mutual accountability framework developed under leadership of the Ministry of International Cooperation and is ready for implementation in October 2010.
Another important area where reform is needed is the need to minimize expenditure from aid flows on fixed
costs, including fees and salaries on donor experts.
Participation and Consultation Process
The preparation of the SA was spearheaded by the SA Taskforce comprising a core group of nine advisers nominated by ministers and coordinated by Professor Heba Handoussa. This Taskforce was expanded to include
more than eighty national experts from the GOE as well as leaders in civil society and the private sector. In addition to reviewing the vast array of documentation readily available, the Taskforce was given access to the government’s “Eight Strategic Objectives” and the ongoing work on the long-term “Vision 2030” being undertaken
by the Information Decision Support Centre (IDSC). The Taskforce has made every effort to reflect in the SA
both official as well as independent analysis of issues and challenges that fall under each of the “Eight Strategic
Objectives” and related sectors. It also has taken into account some fifty official and non-official documents and
studies, including Egypt’s current Sixth Five-Year Plan (2007–2012) and Long-term Vision (2017-2022), the
Presidential Election Program (2005-2011), Egypt’s Millennium Development Goals Report 2010, and the New
Social Contract (2005-2015) as presented in the Egypt Human Development Report (EHDR) 2005.
The participatory process of preparing the SA involved more than twenty-five meetings between members of
the Taskforce and national and international development partners. These included several meetings with the
Development Partners Group (DPG), the UN Country Team (UNCT)2, as well as two full-day consultative meetings with approximately 300 representatives from civil society, the private sector, academia and the media.
Conceptual Framework
The overall framework for this SA report is sustainable development. The definition of sustainable development is “development which meets the needs of the present without compromising the ability of future generations to meet their own needs” and recognizes the three interdependent and mutually reinforcing pillars of
sustainable development as economic development, social development, and environmental protection. The
first pillar covers the production and growth parameters of well-being, the second pillar addresses the sociopolitical dimension of equity and human rights, and the third pillar ensures the medium and longer term
protection of the environment and natural resources. The links between the three pillars are such that any one
sector — such as agriculture — appears under all three pillars so that it is influenced by, and in turn, informs
policies and actions in other sectors. Under the first pillar (economic-based), agriculture is a potential engine
of growth, with increased productivity, higher value added and exports, and more off-farm employment. Under
2 The Development Partners Group (DPG) is currently composed of twelve multilateral organizations (African Development Bank, EU, FAO, IFAD, ILO,
UNDP, UNFPA, UNICEF, UNIDO, UNODC, WFP, World Bank), twenty seven bilateral organizations (Germany, Argentina, Australia, Belgium, Brazil,
Canada, Finland, France, French Development Agency, GTZ, India, Ireland, Italy, Japan, Japan (JICA), KFW, Korea (KOICA), Mexico, Netherlands, Norway, Russia, Spain, Sweden, Switzerland, Turkey, UK, USAID), and two foundations (Ford Foundation and Population Council). DPG meetings are often
attended by government representatives. As to the UN Development System, it is composed of the following twenty three resident UN agencies, funds, and
programmes: FAO, IFAD, ICAO, ILO, ITU, UNAIDS, OCHA, UNDP, UNESCO, UNFPA, UN-Habitat, UNHCR, UNIC, UNICEF, UNIDO, UNISDR,
UNIFEM, UNODC, UNOPS, UPU, UNV, WFP and WHO in addition to the IOM, the World Bank and the IFC. It also consists of the following eight nonresident entities: the IAEA, OHCHR, UNCDF, UNCTAD, UNECA, UNESCWA, UNEP, and UNWTO. UNRWA and UNTSO have liaison offices in Egypt.
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Situation Analysis: Key Development Challenges Facing Egypt
the second pillar (sociopolitical dimension), poverty reduction in rural communities is emphasized in terms
of health, literacy, and family planning, together with increased participation and voice in community affairs.
Finally, under the third pillar, challenges are analyzed to ensure the medium and longer-term sustainability
of agricultural and water resources, along with protection of the environment and natural resources. Beyond
agriculture, the same interlinkages can be found in all productive sectors such as manufacturing, and all service
sectors such as tourism.
Pillar I: Sustainable and Inclusive Growth
Pillar I covers elements of macroeconomic policy for sustainable and inclusive growth, and these depend on an
effective competitiveness strategy for production and service sectors, with employment and growth opportunities. Egypt has so far identified five engines of growth, which are manufacturing industry, tourism, agribusiness,
ICT, and the micro, small and medium enterprise (MSME) sector. Another three promising sectors are construction and housing as well as renewable energy. Another critical element under Pillar I is labor market policies
that ensure adequate education and skill formation, increased productivity, and decent job opportunities. The
emphasis is on youth employment, especially in the private MSME sector.
Macro Policy and Stability
Sustainable and pro-poor growth must be built on two important foundations. The first is sound macroeconomic policies that render sustainable fiscal positions and credible monetary policies. The second is competitiveness enhancing structural reforms. The present composition of public spending, however, undermines the
scope for fiscal policy to achieve the sustainability and inclusive aspects of growth. A large share of government spending consists of inefficient and costly energy subsidies. According to the final budget accounts for
2008/2009, subsidies for petroleum products amounted to LE 62.7 billion, more than the total budget expenditure on education and health (LE 39.8 billion and LE 15.7 billion, respectively). This energy subsidy, which is
mostly of benefit to the rich, is in fact three multiples of the subsidies for rationed commodities.
Egypt’s Competitiveness Strategy and Engines of Growth
In September 2009, the Prime Minister commissioned the Egyptian National Competitiveness Council (ENCC)
to develop an Egyptian competitiveness strategy as the key to creating more jobs, good jobs and sustainable
jobs for Egyptians. Three key overarching areas of focus are: i) Investing in People, or preparing Egypt’s youth,
the next generation, to be competitive members of the global economic community and make the most of the
current demographic transition and changing age structure. Doing this requires a more relevant and more
equitable education system including improved vocational training; ii) Green Transformation, which involves
the transition to 21st century forms of renewable energy, efficient uses of water and energy, the utilization of
“green” aspects in all industries, and the reduction of pollution; iii) Innovation and R&D to create a knowledge
economy by investing in innovation, creating a better climate for R&D and supporting new clusters of innovation, with higher value-added. In addition to each industry having to develop its own competitiveness strategy,
each governorate will also need to develop its own local economic development strategy.
Manufacturing Industry. The manufacturing sector has witnessed an impressive boost during the last four
years. The Ministry of Trade and Industry (MOTI) has adopted since 2004 an aggressive National Industrial
Development Strategy (NIDS) aiming for Egypt to be the main hub for medium-technology manufactured products. Existing industries in which Egypt has a comparative advantage include engineering, food processing,
chemicals and pharmaceuticals, textiles and garments, building materials, furniture, paper and paper-board
industries. New target niches have been identified in engineering, machinery and equipment, labor-intensive
consumer electronics, automotive components, life sciences, biotechnology and ethnic products. Despite the
impressive boost in recent years, there are challenges to maintaining a high growth level of exports, shifting to
higher technological intensity of manufactured products, and raising the productivity of labor.
Tourism. The Ministry of Tourism (MOT) has designed a strategy that aims at three objectives: (i) identifying
growth opportunities; (ii) identifying the investment and development requirements; (iii) producing a detailed
action plan for the first five years. The related vision includes a plan for the protection of natural resources and
the environment and upgrading the infrastructure to accommodate the target of 14 million visitors in 2011
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with a cumulative 240,000 hotel rooms. The long-term plan targets around 25 million tourists in 2020 and
increasing Egypt’s world share of the market for tourism. The growth performance and resilience of Egypt’s
tourism sector over the year 2009 confirms that tourism is a principal generator of income and foreign exchange earnings which contributes around 11.3% of GDP directly and indirectly. It is also a labor-intensive
industry, generating about 12.6% of Egypt’s employment. The need is to better coordinate the inputs of all the
many sectors that serve the tourism industry, including airports, aviation, transport and telecommunications.
The Agribusiness Sector. In spite of the abundance of high quality raw materials, especially fruits and vegetables, Egypt’s value added in the food-processing sector does not exceed 20%, considered relatively low when
compared to benchmark countries. However, frozen and canned products enjoy increasing demand as well as
supply. Egypt’s growth in this sector was 118% from 2005 to 2009. Exports of fruit juices have also been rising, mainly of exotic fruits and fortified juices. As for olive production, Egypt’s production has been increasing
in the past decade to rank 8th among world olive producers. Given that about 87% of the enterprises of the
food-processing sector are small and medium enterprises, the sector requires strategic planning, especially
when considering quality, food safety and traceability. It is also vital for policy makers to ensure market access,
making use of Egypt’s strategic geographic location.
Information and Communications Technology. The ongoing restructuring of Egypt’s ICT sector is to serve development by liberalizing the telecommunications sector and opening the market to new competition. This
restructuring has so far involved designing laws and regulations related to telecommunications, electronic
commerce, intellectual copyrights and industry development; investing in human resources and promoting
innovation and research and development. The creation of the Ministry of Communications and Information
Technology (MCIT) in1999 and the adoption of the national ICT plan has resulted in tremendous growth in the
ICT sector. Constraints on the penetration rate in the use of ICT and especially of computers in education and
business are related to income disparities and require accelerating the program ‘ICT for All’.
Micro, Small and Medium Enterprises. If effectively implemented, the National MSME Development Strategy
will lead to an expanding MSME sector. A 30% increase in the number of MSMEs by 2013 (that is, the addition
of close to one million) and an increase in the average size of MSMEs from 2.3 to 2.5 workers are projected
to result in an additional 2.25 million MSME job opportunities over the next five years (average of 450,000
per year). However, the MSME sector in Egypt suffers from many constraints: i) Demand constraints, such
as the weak purchasing power of their low-income customers, and limited linkages to larger firms; ii) Input
constraints, such as low utilization of technology, inadequate access to finance and to business development
services; iii) Labor constraints, due to a scarce supply of skilled and trained workers and inability to pay high
wages and cover high non-wage labor costs; and iv) Legal and regulatory constraints, which impose heavy
compliance burdens and costs on the smallest enterprises, leading to the high level of informality.
Employment Strategy for Youth
Today, Egyptian labor does not fulfill all market requirements and is a critical impediment to the private sector’s growth and competitiveness. University-educated youth are experiencing high unemployment rates as a
result of the mismatch between their education and labor market needs. Graduates of technical and vocational
education and training (TVET) also suffer from low employment rates, mainly due to poor quality training.
TVET has held the dead-end label for those who are pushed away from general or higher education. Most
TVET institutions are supply-driven and have a lack of clear standards for curriculum development and training delivery, and use outdated equipment that is misaligned with technological development.
A National Action Plan for Youth Employment (NAP) aims at reducing the unemployment rate for youth from
around 23% (2006 Census) to 15% within five years. Accordingly, the total number of jobs that should be created under the Plan amount to 3.1 million jobs with an average of 619,506 jobs annually, to absorb the annual
increase in the youth labor force as well as part of the stock of unemployed, (which reached 1.9 million unemployed in the age group 15-30 years according to the 2006 Census). The Plan has yet to be implemented. The
youth employment challenge is not only about creating more jobs. Given that the informal economy currently
represents the main source of employment for new labor market entrants, the challenge is also about creating
better jobs. Government and public sector jobs are still more attractive for a large proportion of young graduates than work in the private sector, partly because of private sector practices that do not provide adequate
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Situation Analysis: Key Development Challenges Facing Egypt
work conditions and pay for young graduates, especially for females. It is therefore imperative that minimum
wages should be revised and respected. It is also important to reform employment offices in the context of a
decentralized strategy for public employment services.
Pillar II: Socio-Political Rights
Pillar II covers all elements of human development including policies and programs for poverty alleviation,
access to social services, (education, health, family planning), for all segments of the population, with special
concern for children, youth, and women, as well as the handicapped and the aged. Human development is also
concerned with the processes of participation, democratization and good governance. This requires accelerating the on-going process of administrative, political and fiscal decentralization, promoting further reforms towards applying international human rights standards, reforming and implementing a new civil service reform
law, and furthering efforts in fighting corruption.
Poverty Reduction and Egypt’s Integrated Social Policy
Egypt has achieved the target of eradicating extreme poverty and the proportion of the population living in
extreme poverty3 has declined from 8.2% in 1990 to 3.4% in 2008/2009. However, as regards the national
poverty line, the poverty incidence has only declined from 24.2% in 1990/1992 to 21.6% in 2008/2009. Moreover, the upper poverty line has also stagnated at about 40% between the 1990s and 2008/2009, according to
Egypt’s Household Consumption and Expenditure Survey. The Ministry of Social Solidarity (MOSS) is mandated
with food subsidy and cash transfer programs as the main tools for its poverty alleviation strategy. Targeting or
‘finding the poor’ can only work if it is part of a policy reformulation and a new way of delivering entitlements
and protection. Three important initiatives of MOSS deserve recognition: the Poverty Targeting Project, food
subsidies and subsidies for liquefied gas cylinders, and Conditional Cash Transfers.
The 1000 Villages Project: The geographic poverty maps have identified the 1000+ poorest villages in Egypt and
illustrated that over 50% of households in these villages are below the national poverty line. These villages are
also deprived of basic infrastructure and services. The proposed integrated master plan combines the extension (or upgrading) of water, sanitation, roads, schools, health facilities, social services and programs, training
for skills development, micro-credit and investments by private sector industries and companies. However,
after almost two years, phase-one only encompasses 150 villages in which infrastructure and roads have been
extended. The other types of possible interventions have yet to materialize.
Food Security, Consumer Price Index (CPI) and the Poor: Global food price increases have affected the cost of living through two main channels, by increasing the prices of imported final goods, and by the increasing cost of
domestic goods and services and the cost of production. The CPI in Egypt has risen rapidly, peaking in August
2008, especially due to higher food prices. Expenditure on food represents 53% of total expenditure for the
poorest decile and 33% for the richest decile. The overall bias in favor of the rich is reflected in per capita expenditure experienced by each expenditure group. The average consumption of persons in the poorest decile is
LE 1,466 - less than half of the national average - and only 15% of consumption of persons in the richest decile.
This underscores the need for targeting the poor and responding to the challenge of food security.
Removing Energy Subsidies and Targeting the Poor: In FY 2008 and FY 2009, overall subsidies amounted to LE
84.2 billion and LE 93.8 billion, respectively. The size of the energy subsidy in Egypt is larger than the entire
fiscal allocation towards education and health. The richest quintile in Egypt accounts for a disproportionately
large share of the energy subsidy and compensating the poorest two quintiles would only cost a tiny fraction
of the entire energy subsidy. It is therefore important to revise the pricing policy for energy products and to
3 The incidence of poverty is the percentage of the population that lives below the poverty line. The food poverty line for the extremely poor is constructed
by using the cost of a food bundle that is consistent with consumption of poor households and reaches minimum calorie requirements. The MDG target of
eradicating extreme poverty at US$1 has been adjusted to US$1.25 to allow for inflation. The national poverty line is constructed by augmenting the food
poverty line with an allowance for expenditure on essential non-food goods. In Egypt in 2008, a person who spent less than LE 1,648 per year is considered
extremely poor and one that spent less than LE 2,223 is poor (lower poverty line). The upper poverty line is LE 2,801 per capita per year, with a slightly
higher allowance for non-food goods. The extreme poverty measure is very close to US$1.25 per day (MDG 1), whereas the upper poverty measure is very
close to US$2.5 per day. The equivalence is calculated at a purchasing power parity (ppp) exchange rate of US$1=LE3.1 for 2008/2009.
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reorient support and compensation towards the two or even three lower expenditure quintiles in Egypt. Egypt
will soon have in place an effective system of targeting and delivering assistance to needy households. MOSS
is working in collaboration with the Ministry of State for Administrative Development (MSAD) on an extensive
and integrated database and roll-out of ‘smart cards’, which is intended to replace the ration-card system and
be used to administer the food subsidies. These smart cards can also be used to deliver other forms of assistance (including cash compensation) to eligible persons.
Demography, Children, Youth and Gender
Family, Child and Population. Children under 15 represent one third of Egypt’s population and more than one
fifth of those children live in poverty. Sustained pro-poor and pro-child growth requires a commitment to build
the country’s physical capacity and social infrastructure. The most successful policies are those that tackle
child poverty on these multiple fronts, combining a universal approach (such as child income support) with
measures targeting the most vulnerable (such as childcare in deprived areas). The Ministry of State for Family
and Population (MOFP) is the national institution responsible for planning, policy-making and coordination
of efforts to enhance the status of family and population. The National Council for Childhood and Motherhood
(NCCM) has been able to advocate for a child rights approach, and to raise awareness on damaging social phenomena such as child labor, and promoting legislation to protect marginalized children. It has spearheaded a
number of important reforms, among which are Child Law 126/2008; amending the Civil Law and raising the
age of marriage to 18 years for girls while committing the applicants for marriage to be subjected to medical
tests; criminalizing the sexual exploitation and sexual abuse of children; cooperating with the Ministries of
Interior, Justice and Social Solidarity to train judges, prosecutors, police officers and social workers to ensure
enforcement of the Child Law. The introduction of a package of integrated interventions targeting poor families
may be the best route to reducing population growth.
Youth: A Special Concern. The youth bulge now means that in Egypt, almost 20 million young men and women
in the age group 18-29 represent both a risk and an opportunity. The two common features of disadvantage
for youth are the level of unemployment — the highest in the world for the past two decades, and a prolonged
“waithood,” with delays in family formation and setting up independent households. Elements of a strategy
for empowering youth can be classified into three groups: i) sectoral programs to develop better access to
high quality education, vocational training, health and sanitation, and housing; ii) an enabling environment
for micro and small entrepreneurs with better access to land, to credit, and to extensions services; and iii)
the promotion of youth-led and youth-run voluntary projects that target MDGs and national goals. For young
women, these programs would be community-based. The youth skills that are most in need are management
and leadership to partner with local government in service delivery and monitoring for good governance. On
the social and cultural front, an inter-ministerial national program to spread the culture of sports, physical
exercise and a healthy life style for young women and men, and the establishment and expanded coverage
of community libraries, community centers and safe places for youth to participate and express themselves
should be an important element in national policies and programs.
Women’s Empowerment. The Egyptian Constitution guarantees the same respective rights to men and women.
However, culture now seems to be less accommodating in opening the doors for women, especially to enter
the workforce and employment, with a regression in the female participation rate to under 20%. Political and
even judicial institutions also show slow movement forward, in contrast to other social indicators, especially
on the education, health, and personal status fronts. NCCM and the National Council for Woman (NCW) have
both provided an institutional framework to address gender issues and support women’s participation in the
development process. The NCW has spearheaded a number of institutional reforms for more participation of
women in government bodies, legislative changes to enhance civic and marital status, and the mainstreaming
of gender issues in the national planning process. One important reform has been the introduction of genderresponsive budgeting (GRB) in ensuring gender parity. Nonetheless, there is still a long way to go in meeting
the challenge of gender equity, not only in the economic and political spheres, but also in socio-cultural life.
Reform of the Educational System
Literacy and Adult Education. Law 8/1991 clarifies the responsibility of government, private and civil society
organizations in developing literacy and adult education programs in line with national plans. Presidential
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Situation Analysis: Key Development Challenges Facing Egypt
Decree 422/1991 set up GALEA - the General Authority for Literacy and Adult Education - whose concerns are
literacy/numeracy and literacy and life skills. A great increase in the budget for adult education and literacy,
growing from LE 109 million in 1997 to LE 192 million in 2006 indicates ongoing GOE commitment to literacy
programs. As a result, the annual numbers joining classes increased from 486,000 in 1997 to more than one
million in 2006 with a rise exceeding 130%. Further, numerous experiments and programs have been conducted in cooperation with all stakeholders at the local level, and several with international partners and the private
non-government sector. Despite these efforts, the CAPMAS 2006 census revealed that the number of illiterates
above the age of 10 was still 16.8 million.
Education Reform at Pre-University Level: About 22% of Egypt’s population is in school age, that is, between
the ages of 6 and 17. The system encompasses more than 43,000 schools, some 1.6 million personnel (teachers, administrators and others) and about 16 million students. It is one of the most important social services in
which Egypt has invested heavily, improving access to and raising total gross enrolment rates in basic education
to more than 100%. However, quality of education remains a problem. A comprehensive National Strategic Plan
for the Reform of Pre-University Education 2007/8-2011/12 addresses this issue through 12 priority programs.
Central to the success of education reform is quality for all. To this effect, the criteria for accreditation based on
the Egyptian Standards for Quality in Education has been designed, and a new teachers’ cadre was established
in 2007 and followed by the creation of the Professional Academy for Teachers. Decentralization of the education sector is an additional key issue. The plan calls for consultation with other line ministries (MSAD and MOF)
and support from national and international agencies to devolve authority, responsibility, and accountability for
education governance to governorate education offices (Muddiriyas and Idarras) and schools. The MOE has set
the basic pillars of gradual transformation, and piloted decentralization in three governorates (Fayoum, Ismailia,
and Luxor). A key constraint is the limited size of budget resources to fulfill all of the Plan’s programs.
Technical and Vocational Education and Training: Egypt’s TVET system at secondary and college level is supply
rather than market driven; there is little practical ‘hands on’ training; curriculums are outdated; and there are
shortages of modern and advanced specializations. The National Skills Standards Project, originally funded
through Egypt’s Social Fund for Development (SFD), in cooperation with employers, has not only established
skill standards but also the procedures for testing and certifying trainees. For sustainability, and further to an
Industrial Training Council/SFD protocol, the manufacturing sector’s skills standards have been handed over to
Egypt’s Industrial Training Council and respective federations. There are also a number of on-going programs
and projects that contain elements of excellence, particularly with regard the involvement of private sector
partnerships and firms’ after-training job offers. One key problem is the inability to scale up best practices to
meet more than a fraction of demand for various skills in the labor market.
Higher Education in Egypt: The Egyptian higher education system is highly centralized, across segmented agencies and multiple layers of control, and has highly interventionist powers. By international comparisons, institutions have extraordinarily limited discretions and incentives for performance improvement and responsiveness to changes in student demand and labor market needs. Budget allocations are not linked to the respective
roles and needs of individual institutions. Employment and staffing policies foster problems of overstaffing,
promotion by years of service, and poor remuneration. Private institutions are also subject to many of the same
regulatory controls imposed on public institutions, thereby negating the benefits of a strong and innovating
private sector. For public universities, there are widespread concerns about continuing reliance on the secondary school examinations as the sole basis for admission to higher education and the issue is still under debate.
Surveys also indicate inadequate preparation for employment as a result of curriculum irrelevancies; and limited practical skills formation because of an over-concentration on memorizing content, passive pedagogies
and inadequate facilities and equipment.
Egypt is transitioning in its approach to quality from a control model to a more decentralized and combined
quality assurance and enhancement model. A platform for progressing reform has been built up through the
development of a long-term strategic plan (2002-2017) to be executed in three five-year consecutive phases
adopted through the Higher Education Enhancement Project (HEEP). This confirms that issues of quality and
relevance need to be addressed, as do quality assurance and accreditation procedures, with improved institutional capacity for strategic planning and implementation management, including the articulation of institutional learning objectives as a basis for revising curriculum, pedagogy and assessment, and for reporting on
educational outcomes.
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R&D and Innovation: In Egypt, only 0.2% of GDP is allocated to Research and Development (R&D) and about
95% of R&D spending comes from the government. The recent establishment of the Higher Council for Science
and Technology provides the basis for high-level coordination and prioritization of R&D aligned with national
development goals and strategies. The new Science and Technology Development Fund (STDF) and the EU-Egypt
Innovation Fund provide incentives for raising research quality and linking research activity with industry development needs. Moreover, STDF has announced target calls for proposals for renewable energy, HCV, and agriculture. Currently a targeted call for proposals for water management is being developed. The STDF has now
also developed a range of competitive funding mechanisms to support world-class research, including national
research grants, which are directed to scientists living in Egypt and aim to landscape the scientific community
and reverse the brain drain phenomenon. In collaboration with different countries, STDF has also announced
Joint research grants that support joint research, scholarships, visits and exchange programs, and seminars.
Health and Nutrition
Egypt has made significant advances in reducing child mortality rates from just over 240 per 1,000 births in
1967 to 28 per 1,000 births in 2008. The Health System Reform Program (HSRP) has undergone a re-organization to integrate some of the vertical programs into mainstream activities. However, national scale implementation of the Family Health Program, the cornerstone of the HSRP through which the eventual universal
coverage by health insurance for all Egyptians will be implemented, awaits finalization of managerial details.
The Impact of Pollution on Health: The past decades have witnessed the impact on health of Egyptians of the
progressive degradation of the environment. The policy for increased industrialization and for intensification
of vertical agricultural production have led to increases in the practice of discharge of untreated industrial
wastes into nature and in the load of chemical fertilizers and pesticides that find their way into drainage canals
and the irrigation network. Indiscriminate evacuation and discharge of untreated raw sewage into waterways
and into fields further increases environmental degradation. The added burden of water scarcity and climate
change are expected to further complicate the picture. Informal settlements and the millions living in them
under unhygienic conditions, with minimal or no basic infrastructure services, further increase the magnitude
of environmental health hazards.
Infectious Diseases: Hepatitis B and hepatitis C at present constitute a major health threat in the country.
HBV infection in Egypt is of intermediate endemicity, ranging from 2% to 8%. Screening of blood in 2006 has
revealed that 1.1% of collected blood bags all over the country were HBV positive. Egypt is facing an HCV epidemic and has higher rates of HCV infection than neighboring countries as well as other countries in the world
with comparable infectious control measures. Nationally, 9.8% of the total population has active HCV infection
on the PCR-RNA test. The incidence is highest in the age group 50 and above, and declines to 4% among 15-19
year-olds. HCV is prevalent in all governorates, where Lower Egypt shows the highest prevalence at 11.5%,
Upper Egypt has 10.2%, and the lowest prevalence is in urban governorates at 6.2%.
There is evidence that Egypt’s HIV epidemic is changing from low prevalence in the general population (<1%)
to a concentrated epidemic (>5%) among some groups. Inadequate knowledge on HIV and AIDS especially
among women and young people, evidence of high level of risk behaviors coupled with very low use of condoms, low usage of services for counseling and testing and for preventing mother to child transmission are
all areas that need to be addressed urgently. Attention to other infectious diseases is also warranted. After
having improved in recent decades, there has been an increase in the incidence of tuberculosis attributed to
poor socio-economic conditions and rising malnutrition. Moreover, Egypt needs to remain vigilant in terms of
avian influenza, which has become endemic in the country’s poultry industry and thus remains a significant
threat to animal and human health, as well as having serious consequences for the livelihoods and nutrition of
millions of people. There is a need to improve capacities to obtain and use good quality data for surveillance
and effective response to reduce the threats posed by animal and pandemic influenzas, as well as other emerging infectious diseases arising at the animal-human-ecosystem interface. Likewise, longer-term strategies and
interventions for sustainable control of these diseases are required to reduce the ongoing threat to health,
livelihoods, food security and nutrition.
Malnutrition: The increase in food and fuel prices and the avian influenza epidemic as well as existing poverty
and unemployment has diminished the coping capacity of families with limited incomes. Recent scientific evixxii
Situation Analysis: Key Development Challenges Facing Egypt
dence on malnutrition has identified that it is the period from gestation to 24 months that is critical as it is the
foundation that determines the health outcomes in adult life. More needs to be done in this respect building
on the legal framework provided by the recently updated Child Law (2008) and on the coordination mandate
of the Ministry of State for Family and Population to rally the concerned stakeholders around this subject.
Overcoming the present crisis and deterioration in the health of the children in vulnerable households cannot
be guaranteed without a social protection program that targets families in need. The preparatory phase of the
MOSS program for conditional cash transfer (which among other benefits covers the health and education of
the child) has been completed and a field application is underway in Cairo and Upper Egypt.
Participation and Democratization
Decentralization: The vision of the National Strategy for Decentralization is based on ensuring the rights of local
communities in deciding their own needs and priorities and securing their own future. This is done through
expanding the roles of local executive bodies and creating an enabling environment for participation, transparency and accountability. There is a need for capacity building of lower administrative levels for stronger control
systems to assess performance and to prevent corruption in each sector. Political decentralization and citizen
participation in local or national elections remains very low. The culture of voice, political competition and
accountability need to be restored, and optimally, should be based on competence and local leadership. CSOs,
cooperatives, workers’ syndicates, political parties, human rights organizations, and the media can all play an
important role in spreading the culture of participation. Another issue is that under the current situation, local government is discouraged from raising funds. Fiscal decentralization can therefore lead to better budget
prioritization and improve people’s ability to identify their own needs.
Human Rights: Egypt has ratified most human rights treaties and still needs to show its commitment to implement the international human rights mechanisms. Egypt expressed its commitment to finalize the text of a
balanced counter-terrorism law and review the definition of torture in Egyptian law in order to ensure consistency with the Convention against Torture. In the State Report to the Universal Periodic Review, Egypt voluntarily pledged to conduct a wide-ranging review of Egyptian human rights laws in order to bring them into
line with Egypt’s international commitments; enact legislation on community-based and other civil society
organizations, violence against women, the rights of persons with disabilities, human trafficking, trade unions
and health insurance; and review the proposal by the National Council for Human Rights on the enactment of
a unified law on the construction of places of worship. On the positive side, Egypt has introduced legislative
reform such as the Child Law (which also criminalized the practice of FGM); the Law for Family Courts; women
passing on their nationality to their children; and the allocation of 64 additional seats for women in parliament.
Despite some progress and commitments, Egypt has still a long way to go to ensure good governance.
Governance and Corruption: The Presidential election program of 2004 targets several reforms of the administration, and these are well elaborated as one of the eight strategic objectives of the government (December
2009). The goal is to provide an effective and agile public service capable of managing resources wisely, ridding
the system of all forms of corruption and providing distinguished services to citizens. Both the Central Agency
for Organization and Administration (CAOA) and the Ministry of State for Administrative Development (MSAD)
are working together to finalize review of the new Civil Service Law. Four main programs are also being implemented — Institutional Development; Government Services Development; Public Entities Resources Planning;
and Linkage and Integration of National Databases. However, there are still many impeding factors that must
be addressed in order to institute transparency, integrity and discipline in the administration and in public
service delivery.
Social Protection
The New Pension Law: Egypt is introducing and enforcing a new fully funded pension system based on defined
contributions and a unified law that targets all segments of the population. To encourage compliance, the new
pension system reduces the contribution rates to 11% for the insured individual and 19.5% for the employer.
It provides protection against old age, disability, work injury, unemployment and death at a lower cost than
the current pension system, especially for low and medium wages, including casual and informal workers. The
retirement age will gradually rise to 65 years to face the increase in life expectancy and hence the financial
commitments of the system. An individual’s pension benefit replacement rate will represent 75% to 88% of the
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Executive Summary
value of his/her last net wage before retirement, disability or death. The gradual implementation of the new
pension system will help reduce the financial burdens incurred by the public treasury; enhance the system’s
fiscal sustainability; maintain the role of the state in income redistribution; improve economic efficiency; and
develop the capital market. To successfully implement the system it is essential to enhance public trust in the
government’s ability to honor its long-term commitments at retirement and not to excessively use pension
funds in financing the budget deficit.
A New and Universal Social Health Insurance (SHI) System. Egypt’s proposed new health insurance system is
to provide financial protection through risk pooling and protection from catastrophic illness that can push
people into poverty. Current political thinking proposes to cover the whole population (up from the current
50%) under a unified law aiming at achieving equity in access and quality services. The government is currently working to implement a plan that will offer a baseline minimum of healthcare for all Egyptians and
underwrite a long list of basic health procedures. Pilot programs are now underway in the governorates of
Suez, Sohag and Alexandria. A 10-year phased plan will roll out a partnership between the public and private
sectors in which the insurance industry plays an important supporting role. Financing the SHI system relies on
the principle of solidarity that will require income-related contributions which apply to those with a regular
or assessable income.
Pillar III: Environment and Sustainable Natural Resources
Pillar III covers all elements of natural resources including agricultural land, water, energy — both depletable
energy (petroleum and gas) and the potential for renewable energy (wind, solar) — and their sustainability.
The purpose is to analyze the status of the agricultural development strategy and issues of food security, water
and irrigation. Pillar III also gives special attention to the impact of growth and development on Egypt’s environment and related sectors, including water, sanitation, health and waste management. The importance of
introducing environment-friendly practices such as ecotourism is highlighted. Pillar III is especially concerned
with the potential threats of climate change, water scarcity, and energy scarcity, and the need for adaptation.
Finally, issues of long-term sustainability are covered in the areas of urban planning, informal settlements and
transport.
Sustainable Agriculture, Rural Development, and Food Security
Issues of Sustainable Agricultural Development: The link between environmental and sustainable agricultural
and rural development, enhancing food security, and reducing poverty is a central issue for achieving economic and social development in Egypt. The contribution of the agriculture sector in Egypt exceeds 13% of
GDP and over 30% of employment opportunities. Meanwhile, about 57% of the total population in Egypt lives
in rural areas, where poverty prevails. As such, enhancing sustainable agricultural and rural development as a
means to reduce poverty and food insecurity within the expected climate changes is a prerequisite for sustainable social and economic development and hence should be considered as a social and political priority for
Egypt. In Egypt, agriculture is recognized as a way of life and crucial for socio-economic development, but if
received the due attention, also as an engine for growth.
Rural Poverty and Food Security: There is a strong correlation between economic growth and the reduction of
hunger and poverty as well as a strong link between poverty and food insecurity. Most of the poor are either
under-nourished or food insecure. Lower income households spend a large share of their income to purchase
food. They are particularly vulnerable to variations in food prices and food scarcity. Nearly 70% of the poor
or food-insecure live in rural areas and a large share of these people depend very much on agriculture for
their food supplies (produced locally) and for generating incomes. Economic diversification starts at the farm
household, and agricultural and non-agricultural development reinforce each other. Pro-poor policies and
strategies must emphasize food security, access to land and water, agriculture and rural development. Large
numbers of rural households depend on agriculture and farming (production) but it is rarely the main income
contributor. Farm incomes account on average for about 25-40% of total rural income, agricultural related offfarm incomes account for an additional 20-35%, and non-farm revenues and wages account for about 40% of
rural household incomes.
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Situation Analysis: Key Development Challenges Facing Egypt
Egypt’s Water Situation Analysis
Shrinking Water Resources: With a continuously increasing population since the Nile Water Agreement, the
per capita share of renewable water resources in Egypt has been decreasing from 2500 m3/capita/year in the
1950’s to currently 750 m3/capita/year; it is expected to reach 250 m3/capita/year in 2050, which is well
below the water poverty limit internationally known as 1000 m3/capita/year of renewable water resources.
The increasing gap between the available renewable water resources for Egypt and the water needs has been
met by water re-use, use of non-renewable groundwater, desalination, and imports of virtual water embedded
in many food products such as wheat, meat, maize, table oils and others. In addition to meeting future water
demands in Egypt, attention must be paid to the increasing population densities near the waterways, which will
eventually affect the available cross sections for water flows.
Improving Irrigation Efficiency: Pollution of waterways and groundwater due to domestic and industrial wastewater and solid waste disposal is another problem that reduces the availability of appropriate quality water for
use. The competition between development sectors on water and between users of the same sector is growing
and is expected to create water conflicts. The number of irrigation water complaints due to water shortages
is known to have increased recently. Due to the limited water resources, the irrigation water shortages are
exacerbated by illegal water intakes and violations in cultivating more than the allowable areas of high water
consumptive crops, such as rice. Treated wastewater is expected to be the renewable water resource for agriculture expansion in the future, if no additional share of Nile waters is mobilized, and the existing Egyptian code
for treated wastewater reuse in agriculture will need to be properly implemented.
Energy Efficiency and Renewable Energy
Depletable Energy Sources: Hydrocarbons (oil and gas) represent over 90% of Egypt’s energy resources, a situation that is expected to continue for at least the next 20 years, with natural gas slowly replacing crude oil.
Egypt’s reserves have been increasing at an average of 5% per year during the last five years and natural gas
reserves accounted for most of this growth, while crude oil and condensate reserves remained relatively constant. Domestic consumption however, has been rapidly increasing as a result of ongoing economic growth.
Recent and forecasted consumption patterns signal an alarm to those responsible for the country’s future economic development and energy security. Energy efficiency and renewable energy resources are expected to
play a critical role in facing this challenge.
Responding to Energy Demand: A set of key issues need to be dealt with and with urgency including: 1) restructuring of the energy pricing to protect against abuse and inefficiencies; 2) rationalizing energy consumption
in the demand sectors without reducing service levels or negatively impacting economic development targets;
3) diversifying the energy supply resources by increasing renewable resources such as wind, solar and bio
energy; and 4) allocating the country’s natural resources in a manner that maximizes the economic and social development mandates. To this end, energy efficiency and renewable energy are now becoming critical
to Egypt’s energy resource planning, and if properly designed and applied, energy efficiency can be the most
cost-effective tool to managing demand, deferring future energy supply investments and contributing to global
climate change mitigation efforts.
Investing in Renewable Energy: Egypt is endowed with plentiful natural resources, including wind and solar energies. However, there are important and expensive investments needed to exploit these renewable resources.
In pursuit of harnessing such potential resources Egypt has established a series of wind power plants that
constitute the largest grid-connected wind farm in the region. This includes 430 MW at Zafarana on the Gulf
of Suez. Another 120 MW is in the construction phase to be operated by mid-2010. Meanwhile, several new
wind farm projects are in various phases of preparation. In February 2008, the Supreme Council of Energy approved an ambitious plan to satisfy 20% of the generated electricity from renewable energies by 2020, including 12% from wind energy, translated into about 7200 MW of wind farms installed capacities, and 8% from
other renewable resources, mainly hydro and solar energies. It is also important to note that Egypt’s potential
for exporting solar energy is highest among Mediterranean countries given its solar intensity. It will therefore
be mutually profitable to invite partnerships for Egypt to fulfill the financing gap for investment in developing
solar energy fields.
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Executive Summary
Protecting the Environment with a Focus on Climate Change
Institutional Reform: There are a number of crosscutting institutional and systemic challenges that are interlinked, allowing for weakness in the environment sector in Egypt. Environment should not be a standalone sector responsible for cleaning up wastes generated from other sectors. The Ministry of State for Environmental
Affairs (MSEA) and its executing arm the Egyptian Environmental Affairs Association (EEAA) should be overseeing the integration of environmental policies in other sectors and coordinating the different environmental
activities. Furthermore there has been an inconsistency in the set of national indicators and available data for
monitoring natural resources status and environment sustainability, scattered between different national institutions. A National Committee for Sustainable Development (NCSD) has now been set up for the purpose of
coordinating policies and actions from various ministries, as well as to produce a strategic framework for the
national plan for sustainable development. However, the need is to incorporate environmental perspectives
and policies from the various sectors by including the MOED and MOF in the discussion of sectoral plans and
programs while still in the preparation stage so as to ensure the integration of the environment perspective.
It is hoped that the creation of the NCSD will allow better identification of national and cross cutting priorities
in the environment and climate change related sectors. These priorities, if tackled properly, will provide an
enabling policy setting to secure the sustainable use of the available natural resources. The task is complex
but economic and social rates of return will be very high. For example, the MSEA has been striving to achieve
complementarity between the environment and the production of valuable organic products such as fertilizer
and fodder from agricultural residues. Another example is in the waste management sector whose processing
includes recycling, composting and energy-generating projects.
Climate Change: The energy sector is the main source of greenhouse gas (GHG) emissions with 92% of the
country’s energy demand met by using fossil fuels. It is worth noting that Egypt’s GHG emissions are relatively
limited (0.7% of global GHG), where they grew to 193 million tons of CO2 equivalent in 2000 from 116 million
tons of CO2 equivalent in 1990 (Egypt’s INC/SNC). However, Egypt is subject to potential impacts of climate
change, including sea level rise, inundation of the low lying lands in the Nile Delta that could reach 10-12% of
the total area, impacts on water resources and agricultural productivity and associated social and economic
effects. Moreover, 57% of the Egyptian population lives in rural areas, considered more vulnerable to climate
change, with an expected shortage of basic food items.
Impact of Climate Change on Health: Climate change is also closely linked to the health sector, with expected
increases in morbidity and deaths due to non-communicable diseases, disasters, and vector-borne diseases.
There are some efforts to reduce the impacts of climate change in some sectors. Currently, however, there are
no efforts to cope with the different direct and indirect impacts of climate change on health. Moreover, building institutional capacity must be pursued vigorously in order to deal adequately with the necessary adaptation measures, providing the country with both a strategy and a trained capacity to implement the required
measures.
Water, Sanitation and Solid Waste Management
Over the past five years, the GOE completed 1,669 water and sanitary services projects that cost LE 50 billion.
Despite priority being given for water projects, the government completed 257 sanitary service projects that
added 2.5 million m3/day of capacity until the end of 2009. The cumulative cost of these projects is over LE
15 billion. The bulk of the current budget is allocated to sanitary service projects, where a total of 96 projects
are expected to be completed in cities and in peri-urban areas around cities, adding some 1.6 million m3/day
of sanitary service capacity. The total capacity of sanitary services will be 15.3 million m3/day, representing
some 68% of the capacity currently needed (based on the formulae relating the amount of water produced to
the needed capacity in sanitation).
Expanding Coverage of Sanitation: As of 2009, the total sanitary services capacity needed is 21 million m3/day
and current sanitary services capacity is 13.7 million m3/day, representing 65% of required capacity, with the
ratio set to increase to 68% by June 2010. The pledge made in the Presidential Program to increase the number
of villages covered by sanitary services from 4% in 2005 to 11% in 2011 has been achieved, and 13.6% of villages will have access to sanitary services in 2010. A major challenge is to expand coverage of rural sanitation
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Situation Analysis: Key Development Challenges Facing Egypt
to reach 100% coverage of villages. To finance full rural coverage, it is estimated that a total of LE60 billion will
be needed and it is expected that it will require three five-year plans to complete the task.
Reforming Solid Waste Management: Additionally, solid waste is one of the largest sectors causing pollution
in Egypt. The administrative structure in charge of waste management is complex, fragmented and dispersed
in numerous government agencies. There is therefore an urgent need to introduce a new and comprehensive
waste management strategy. This would include incentives and programs to make recycling, composting and
energy-generating plants using waste economically and financially rewarding. Decentralized measures and
civic education programs at the community level can also be reviewed in order to encourage the sorting of garbage at source. It is also urgent to support MSEA to deal with dangerous waste from the medical and electronics
sectors.
Urban Planning, Informal Settlements and Transport
Public Land Policy: Access to public land for investment purposes represents one of the most critical development hurdles facing the Government today. The vast majority of the population still lives on only 5.5% of
Egypt’s national territory. Independent sectoral authorities affiliated with the ministries of Agriculture, Tourism, Industry and Housing were each assigned control over large areas of public land outside the so-called
Zimam which created a set of segmented and isolated and sometimes conflicting land markets that are more
supply-driven. Accordingly, the problem is not of limited supply but rather of a lack of suitably located, properly
serviced and adequately priced land that is adapted to the needs of development; this, in turn, is the result of a
dysfunctional public land management system. A clear and comprehensive public land policy that reasserts the
role of the market in public land allocation and puts in place a rational framework of planning and incentives
that reflect current needs and priorities is needed.
Coping wiht Population Growth: Confronted with the continuation of a high rate of natural population increase,
it is anticipated that Egypt will exceed 140 million inhabitants by 2050, which adds another 60 million to the
current population. Egypt needs to develop a new vision that aims to achieve balanced urban development by
focusing on the development of small and medium-sized cities, especially in Upper Egypt, to eradicate poverty
and improve the socio-economic status within those deprived areas. It should also redefine the roles of existing
poles based on the regional competitiveness potentials of each pole and how it can be integrated within the
overall new urban development policy. The inhabited area should rise from 5.5% to 15% during the next four
decades through the establishment of new urban centers that are well connected with efficient road networks
and national public transportation systems, where each center would work as a catalyst for the development of
its surroundings, and attract a defined number of the increasing population with a clear economic basis and activities. Finally, there must be support for the decentralization of management, planning and implementation.
The Transport Sector: Egypt’s transport sector has seen important developments over the past two decades,
such as expanding maritime ports airports, and extending the road network. The GOE is keen to prioritize
public (mass) means of transport, in order to reduce the use of private vehicles and the related congestion The
third underground metro line in Greater Cairo is expected to provide some relief from road congestion, and a
fourth line is being studied. Also under study is the introduction of a rapid tramway system to link dense urban
communities, especially in the Greater Cairo region. A complete rehabilitation of the railway system, including
its extension to new cities such as Sadat and Borg el Arab is also underway. A sustainable transport strategy
must take into account the sector’s impact on the environment and air pollution, energy conservation, traffic
congestion, and passenger safety. The transport infrastructure must also be expanded to cater to the growth in
tourism, providing roads into cities, tourism sites, coastline resorts and other tourist destinations.
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Situation Analysis: Key Development Challenges Facing Egypt
INTRODUCTION AND
CONCEPTUAL FRAMEWORK
The overall objective of the Situation Analysis (SA) is to provide an overview of the major development challenges facing Egypt over the next five to ten years, drawing on existing documentation and a highly participatory and inclusive process. A review of Egypt’s challenges shows that these encompass many dimensions of
poverty and exclusion, notably in regard to water, sanitation and housing for the poor; health, education and
vocational training; social insurance for all; conditional cash transfers for the extreme poor and an expanded
social safety net; and employment in urban and rural medium-sized enterprises with increased productivity
and agricultural mechanization. They also include long-standing challenges such as gender equity, political
participation, transparency and public accountability, and strengthening respect for human rights. And these
development challenges include a new set of issues that have surfaced in the past few years, including the effects of climate change, pandemic influenza, and high international food and fuel prices, all of which have a
disproportionate impact on the poor.1
The Situation Analysis is the first of four deliverables that together constitute the Cairo Agenda for Action (CAA).
Building on the SA, the remaining three deliverables will, at the next stages, deal with the means with which to
address various aspects of these development challenges: The second deliverable intends to identify the country’s development priorities, distinguishing between those priorities for which Egypt seeks the cooperation of
international development partners and those priorities for which Egypt considers that its domestic resources
(human and financial) are sufficient. The third deliverable relates to the setting-up or strengthening of resultsbased management (RBM) arrangements in the lead ministry or council for each thematic area in order to clarify
development outcomes and results, roles and responsibilities, as well as facilitate the monitoring and reporting
on results. The fourth deliverable of the CAA consists of an action plan on aid effectiveness, embracing the other
three deliverables as well as other dimensions of aid effectiveness, such as mutual accountability mechanisms
and the strengthening of aid information management, taking into account best international practices.
Egypt has been experiencing a decline in external aid flows in recent years, in spite of the fact that it still faces
a rather formidable set of development challenges and has only recently graduated to the status of a “Middle
Income Country” (MIC), albeit at the low end of that spectrum.2 The SA is intended to help focus national
policies and strategies as well as national and international resources on priority development areas key to
sustainable and equitable development that bring tangible benefits to all segments of the society, in all regions,
with special attention to the most vulnerable segments of the population. The other components of the CAA
are expected to improve the transparency and predictability of aid flows and improve mutual accountability
as per the Paris Declaration and the Accra Agenda for Action (AAA) on aid effectiveness. In this way, the Cairo
Agenda for Action exercise is intended to strengthen the case for continued, and perhaps expanded, international development cooperation for Egypt.3
It is hoped that together, the four deliverables in the CAA exercise will demonstrate that development cooperation works and will strengthen the argument for continued international engagement. It is also hoped that this
endeavor, when completed, will improve coherence among national and international development partners
and enhance development effectiveness and efficiency. It will help the Government of Egypt (GOE) and development partners to better account for development results so that citizens can more easily see tangible results
of development efforts.
1. Purpose of Situation Analysis and Guiding Principles
The five specific objectives of the Situation Analysis (SA) for the Cairo Agenda are to:
1. Assess recent development trends in Egypt and identify key challenges that the country needs to over-
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Introduction and Conceptual Framework
come to accelerate progress on human development and the human rights agenda, applying a humancentered approach;
2. Promote sustainable and inclusive growth for present and future generations. The SA analysis draws
primarily on existing documentation, supplemented by a limited number of new studies to “fill gaps”
especially in the area of climate change and its implications for Egypt;
3. Focus on institutional bottlenecks and management policies that constrain development outcomes at the
macro and sectoral levels, in order to better understand the capacity building requirements for effective
results;
4. Support Egypt’s efforts at developing an integrated development strategy for the year 2030 and accomplish its vision to become a developed country. More specifically, to support the GOE’s strategic objectives4 as presented in December 2009; and
5. Encourage Egypt to design – with active support from donors – country-based action plans that set out
time-bound and monitorable proposals to implement the Paris Declaration and Accra Agenda for Action
(see AAA, September 2008, paragraph 28).
Three underlying principles of development effectiveness are guiding the preparation of the Cairo Agenda SA:
•
Build more inclusive partnerships among national partners such as civil society and the private sector
as well as international partners, including countries in the South;
•
Strengthen national ownership of the development agenda; strengthening accountability among all development partners and achieving greater alignment between national priorities and the priorities of
development partners; and
•
Bolster national capacity to manage development, with partners assuming a supporting role as well as
focusing on delivering results by applying results-based management strategies.
It is hoped that the SA will replace or reduce assessment exercises undertaken by development partners. In
this way, the SA will constitute a common analytical framework for development partners and reduce the time
and resources typically invested by development partners in undertaking their own assessment exercises. For
example the UN Country Team have agreed that the SA will form the basis for the forthcoming United Nations
Development Assistance Framework (UNDAF) substituting for the Common Country Assessment (CCA), which
is typically undertaken by the UN to assess a country’s development progress and challenges.5
2. Participation and Consultation Process
The preparation of the SA was spearheaded by the SA Taskforce comprising a core group of nine advisers nominated by ministers and coordinated by Professor Heba Handoussa. This Taskforce was expanded to include
more than eighty national experts from the GOE as well as leaders in civil society and the private sector. In addition to reviewing the vast array of documentation readily available, the taskforce was given access to the government’s “Eight Strategic Objectives” and the ongoing work on the long-term “Vision 2030” being undertaken
by the Information Decision Support Centre (IDSC). The Taskforce has made every effort to reflect in the SA
both official as well as independent analysis of issues and challenges that fall under each of the “Eight Strategic
Objectives” and related sectors. It also has taken into account some fifty official and non-official documents
and studies, including Egypt’s current Sixth Five-Year Plan (2007–2012) and long-term vision (2017-2022),
the Presidential Election Program (2005-2011), Egypt’s Millennium Development Goals Report 2010, and the
New Social Contract (2005-2015) as presented in the Egypt Human Development Report (EHDR) 2005.
The participatory process of preparing the SA included more than twenty-five meetings between members of
the Taskforce and national and international development partners. These included several meetings with the
Development Partners Group (DPG)6, the UN Country Team (UNCT)7, as well as two full-day consultative meetings with approximately 300 representatives from civil society, the private sector, academia and the media.
3. Strategic Issues Facing Aid Effectiveness in Egypt
While the overall objective of the Cairo Agenda is to improve Egypt’s overall development effectiveness, improving aid effectiveness (i.e. the financial and non-financial cooperation provided by international development partners from the North and the South) is a crucial part of the Cairo Agenda. Based on the assessments
made of the performance of developing countries that have volunteered to take part in the two aid effectiveness surveys of 2006 and 2008 by the OECD/DAC, it became obvious that Egypt has performed better along
certain dimensions of aid effectiveness than in others.8
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Situation Analysis: Key Development Challenges Facing Egypt
Table 1: Dimensions of Aid Effectiveness
Dimensions
2007
Challenges
Priority Actions
Ownership
Moderate
Harmonisation
Low
Weak Budget preparation
and implenetation process
n Limited use of country
systems
n Low proportion of donor
missions are co-ordinated
n Low quality of poverty
related data
n No mutula assessments
have taken place
Strengthen capacity of line ministries
in budget process.
n Fully implement public financial
management procurement reforms.
n Donors improve co-ordination of donor
missions.
n Improve national information
systems and plans.
n Formalise assessments between
ministries and donors.
Alignment
Moderate
Managing for results
Mutual accountability
Moderate
Moderate
n
n Source: OECD/DAC 2008 Survey on Monitoring the Paris Declaration: Making Aid More Effective by 2010
The following is a brief assessment of Egypt’s status, including work-in-progress:
1. The OECD/DAC assessment of Egypt’s “ownership” indicator was rated as moderate. Government has
taken ownership of the development agenda for many years and has secured Parliament’s endorsement
(December 2004). However, ownership refers to a more inclusive approach, involving participation by
civil society, the private sector, etc. Egypt has some way to go before meeting this important criterion fully.
The Situation Analysis is a step in the right direction in that it has widened the scope of consultations to
include non-government entities, but more progress is needed through genuine and continuous participation at all levels.
2. Alignment was also judged to be moderate. An important step was taken by introducing a matrix, in
which development partners have categorized the projects they fund according to Egypt’s approved development priority listing. This matrix, first introduced in 2004/2005, has triggered more consultations
among partners to coordinate and reduce unnecessary overlap. More active involvement on the government’s side is needed in working closely with development partners to accelerate this process. One
difficulty is the absence of the necessary technical and negotiating expertise to engage in substantive
discussion with Egypt’s partners. This underlines the big challenge of building capacity, and Egypt must
take this challenge more seriously than it has done so far, despite commendable efforts by the Ministry of
State for Administrative Development, for example.
3. On the issue of harmonization of Official Development Assistance (ODA), Egypt was given a “low” rating.
This refers to the multiplicity of uncoordinated missions and analytical work by development partners,
low coordinated analytic work and difficulties in securing a more integrated aid strategy implemented
on the ground. Among other things, these have led to aid fragmentation, increased transaction costs and
emergence of aid favored and aid orphan regions. Despite the enormous efforts of the Minister of International Cooperation over the years, the Ministry still requires the injection of more qualified manpower
with analytical and conceptual skills, rather than routine handling of ODA files and routine follow up.
In fact, the burden of policy making, policy analysis and independent/critical thinking – together with
knowledge of what is happening globally – are falling primarily on the Minister and her office’s shoulders. In this sense, the Ministry could also benefit from a capacity development program, thus initiating
in-house processes to strengthen existing capacities that would ultimately have a spillover effect. Once
more of these skills are in place, the questions of harmonization, coordination and many others will be
addressed across the table with development partners on an equal basis.
4. The last two Paris Declaration Principles refer to “managing for development results” and “mutual accountability”. Egypt was rated as having “moderate” status, which is a generous rating. Most development projects evaluated by PEMA for example have concluded that the overwhelming percentage of
projects were managed to deliver outputs, not results, let alone sustainable outcomes. Anyone familiar
with development writings and thinking will easily recognize the huge distinction between producing
“outputs” and generating “outcomes” that last. Unless this failing is addressed, government attempts to
manage for results will produce only very limited gains. This points to the need to build both national and
sectoral capacities.
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Introduction and Conceptual Framework
Box 1: Capacity Building and Mutual Accountability
Mutual accountability requires donors to provide more transparent mechanisms that govern their actions and commitments.
Equally important, it requires Egypt’s aid recipients to implement clear rules and systems for transparency and accountability. In
fact, it would seem clear that capacity weaknesses are perhaps the most difficult bottleneck handicapping Egypt’s accelerated and
socially-oriented development efforts. Weak institutional capacities, a less enabling environment, poor performance appraisal systems and non-discriminating incentive practices have damaged institutional performance and caused substantial waste of public
funds, as evidenced by the annual reports of the Central Audit Agency and similar watchdogs. Some efforts are worth recognizing
including the reform measures carried out by the Ministry of Administrative Development and the Centre for Project Evaluation &
Macroeconomic Analysis (PEMA) of the Ministry of International Cooperation which carries out impact evaluations on a selected
basis. These two institutions are currently collaborating to upgrade the quality of monitoring & evaluation units in key ministries,
but this is an initiative at the early stage. Nevertheless, the tasks of upgrading the capacities of Egypt’s development institutions
require much more commitment from senior government levels and persistent follow up to ensure that such efforts bear fruit, and
are not simply more of the usual training events which have done little to produce tangible and sustainable results.
In short, Egypt needs an explicit national strategy for capacity development – a strategy that it owns and supports by firm actions at the highest levels. And it is not enough to concentrate on individual institutions; these work in a political, social and legal
environment that shapes their performance. Is this environment “enabling” or “disabling” for institutional capacity development,
or systemic strengths and weaknesses? If, for instance, institutions get away with violations of laws and codes of conduct, then it
is difficult to develop technical and managerial capacities and improve performance. In this regard, the Accra Agenda for Action,
which Egypt endorsed in September 2008, makes provisions for development partners to support Egypt’s capacity building efforts as long as there is a clear owned strategy and a commitment to carry out a specific and bold reform programme.
Another issue related to capacity is the urgent need to remove current legal and security restrictions imposed on civil society
in order to mobilize its energies to support the government’s development. While the given reasons for impeding the developmental role of a mobilized civil society tend to be very shallow, underlying reasons pertain to maintaining the status quo in the
interest of ‘national security’. It is time to learn otherwise from other developing countries that are no less jealous in defending
national security. At the same time, there has to be a mechanism to hold civil society organizations accountable, not before security courts but before relevant independent judiciary bodies.
One small example will suffice. Egypt has used several hundreds of millions of US dollar ODA on training at different levels.
Yet, after more than thirty years of such generous spending, there is not much to show for it; some trainees have left seeking
greener pastures; others have gone back to their institutions to find that the managerial and systemic environment does not
encourage change; others were given training as a way to reward them rather than to learn and come back to help improve performance. There is no doubt that some trainees have done an excellent job and have helped build robust institutions, but these
are the absolute minority. Why? Many international studies have shown that training alone does not build capacity; it is just one
component in an integrated well-thought out development plan that overall creates a more enabling environment for change. Unless this serious shortfall is rectified, the pursuit to manage for results will reap very modest benefits.
Source: Talaat Abdel Malek, Economic Advisor to the Minister of International Cooperation
5. Mutual accountability (MA) is perhaps the one single measure that can be instrumental in helping to
move the whole ODA reform agenda forward. It would be unfair to say that Egypt does not have any MA
mechanisms. The Minister holds periodic reviews with individual partners. Her department chiefs follow
up on outstanding matters. There is a number of “thematic groups” formed by the Development Partners
Group (DPG) that meet in which they and Egyptian counterparts exchange views and attempt to resolve
issues. And yet, Egypt has no MA mechanism with clear rules and a modus operandi which bind both
sides to undertaking more serious and more transparent accountability for their respective actions and
meeting their commitments. This is a noticeable shortcoming, which is now being rectified. A Task Group
of DPG members have volunteered to join the GOE efforts to design and establish a mutually acceptable
mechanism by the end of 2010. While it is too early to make any projections, Egypt – represented by the
Minister of International Cooperation – is fully committed to this initiative, which will also be supported
by introducing results-based management as its core pillar.9
4. Conceptual Framework for the Situation Analysis and the Three Pillars of Sustainable Development
The choice of theme for this report is sustainable development, with the emphasis on sustainable. Today, the
most challenging future scenario for Egypt is one of rapid decline in access to water per capita, rapid decline
in depletable energy resources (petroleum and gas), encroachment on arable land at an unsustainable rate,
and the potential threats of climate change. The negative impact of environmental neglect on health is already
being felt and the population has suffered seriously from the global food crisis of 2007, which is likely to recur.
It should be noted that the theme of sustainability has now been incorporated in some of the most important
documents on development, such as the Stiglitz Report commissioned by French President Sarkozy in 2009.
4
Situation Analysis: Key Development Challenges Facing Egypt
Figure 1: Pillars of Sustainable Development
The three pillars of sustainable development, from left to right: the theory, the current situation
and the change needed to better balance the model
h
Economic
Social
Enviromental
n
The Theory
Economic
Social
h h
h
h h
Economic
Enviromental
Enviromental
n
Now
Social
n
The Change Needed
Source: Brundtland Report 1987
This comprehensive and bold approach incorporates human rights and ecological balance, and is consistent
with the achievement of the MDGs.
At the international level, focused attention to sustainable development started about two decades ago with
the Brundtland Report (1987). The report defines sustainable development as “development which meets
the needs of the present without compromising the ability of future generations to meet their own needs”. In
the UN 2005 World Summit Outcome Document, reference is made to the “interdependent and mutually reinforcing pillars of sustainable development as economic development, social development, and environmental
protection” (see Figure 1).
There now exists a body of tools and mechanisms that can assist policymakers in formulating, elaborating,
and implementing sustainable development strategies. These include integrated sets of indicators that allow
analysis of the interlinkages among the economic, social and environmental dimensions of sustainable development. One of the strengths in the Egyptian context, is the presence of highly developed technical skills that
can design tailor-made indicators for measuring the status and progress of human development. Moreover,
political will is evident in the preparation of a number of observatories to monitor well-being indicators (social
equity, children, youth).
Reliable information, data and measurement, together with quality research and analysis are the crucial basis
for good policy-making, programs and projects. Evidence-based policy-making must itself start from a set of
objectives and preferably a broad vision for inclusion for all those vulnerable segments of society, whether
women, the young, or the poor. Management tools that measure inputs, outputs and outcomes and make full
use of monitoring and evaluation that are results-based are also needed. Yet, capacity is still missing to engage
on two crucial aspects of policy-making. The first is the identification of best practices for scaling up. The second is building capacity for results-based management itself and all of the elements that provide transparency
and accountability.
The proposed approach adopted by the SA Taskforce emphasizes that development cooperation and the improvement of aid effectiveness should ultimately support Egypt’s efforts to make the transition beyond merely
economic growth and development to sustainable development. This critical transition has not yet been realized, based on evidence of stop-start efforts/programs and meager results relative to the large resources
directed at the grassroots, as well as the fluctuating trends in macroeconomic indicators, even in the absence
of external shocks/crises.
Another key problem has been the lack of integration of the Ministry of Finance in the development of policies
and strategies for social development. This is necessary in order that the setting of priorities is automatically
reflected in the national budget, including revenue-generating options. A third problem has been the absence
of interlinkages across issues and initiatives. Even Egypt’s long-term plan documents are more of a compila5
n
n
Introduction and Conceptual Framework
Table 2: Three Pillars of the Situation Analysis
Sustainable and Inclusive Growth
(Economics-based)
Socio-Political
Rights
Environment and Sustainable
Natural Resources
Macro-economic Growth
Competitiveness Strategy
The six engines of growth,
plus renewable energy
n Employment
Productivity, Work ethics, Decent work
n Macro Policy and Stability
Inflation targeting, Access to finance,
Enabling environment, Property Rights,
Budget allocation
Dynamics of Poverty
Gender
n Health
n Education
Participation
Governance
Decentralization
n Social Protection
Pensions
Universal Health Insurance
Climate Change
Mitigation and adaptation
n Water Scarcity
Water management
n Energy Scarcity
Renewable energy
n Food Security
Land use in agriculture
n Pollution
Coordinated action
n Informal Settlements
Urban Planning
n n
n
Source: Situation Analysis Task Force
n
tion of objectives and programs rather than an integrated vision. Here again the answer is better interaction of
disciplines and sectors both at the national and decentralized levels.
It is important to remember that Egypt is still in a process of transition from the traditional fixed planning to a
more adaptive system that can improve continuously. It is also in the process of designing an overall national,
sustainable development strategy that can encompass all of the sectoral strategies that are in place and that
continue to evolve. The process is also taking on a longer-term perspective, reaching 2030 and beyond.
For the purpose of the SA, the following three pillars were selected to represent the intrinsic and interrelated
elements of successful and sustained economic, social and political development with protection of the environment and natural resources. The task set for all members of the SA team was to think across sectors and
provide the links between the three pillars whereby the first pillar covers the production and growth parameters of wellbeing, the second pillar provides the sociopolitical dimension of human rights, and the third pillar
ensures the medium and longer-term protection of the environment.10
5. Progress on the Millennium Development Goals (MDGs)
Tailoring the MDGs to coincide with national needs can help change planning from a “narrow, technocratic
exercise” to a much broader public debate on the goals of the society and the ways in which they can be
achieved11 However, the MDGs do not specify policies or provide a specific strategy on how these should be
achieved.
Egypt actively participated in the global consultations that led to endorsing the Millennium Development Goals
in 2000 and its priorities and programs outlined in its five-year Development Plans are clear signals of Egypt’s
commitment to meet the MDGs. With regards progress towards fulfilling the MDGs, the information provided
below is based on data from the 2010 report12, which is under publication and marks an important benchmark
since it is only five-years until the target date. Previous reports indicate that Egypt remains on track to achieve most of the MDGs, but they also highlight the
significant gaps in income levels and living standards between different regions of the country. The most critical areas of deficit are poverty and hunger, employment, gender disparities, and access to safe sanitation. As
detailed according to each of the eight goals below, Egypt’s most challenging tasks over the next five year leading up to 2010 are to reduce the incidence of those living below the national poverty line, which has plateaued
at about 20% for a decade. Unemployment is perhaps the most critical second challenge, and especially among
youth under the age of 30, who represent 90% of total unemployment, the rate for which itself stands at just
under 10%. With regards gender discrimination, in spite of reducing the gap in enrolment in basic education,
female representation in political life has persistently been among the lowest in the world. Moreover, female
participation in the labor force has come down in the last few years, on account of poor working conditions in
6
Situation Analysis: Key Development Challenges Facing Egypt
the private sector including low wages, long working hours and poor public transport. As to lack of access to
safe sanitation, in rural areas in particular, and despite significant improvements recently, the challenge is still
daunting and there is an increase in the spread of related diseases, such as kidney failure.
n MDG 1 (Eradicate Extreme Poverty and Hunger): Poverty reduction is one of the main objectives of the GOE,
and the government has adopted a national target of reducing poverty to 15% by 2011/2012. However, the
national poverty line13 has only declined from 24.2% in 1990/1992 to 21.6% in 2008/2009. The percentage of
children living in poverty stands at almost 24%, which shows that children are disproportionately poor. On the
other hand, Egypt has achieved the MDG target of eradicating extreme poverty and the proportion of the population living in extreme poverty has declined from 8.2% in 1990 to 3.4% in 2008/2009. Full and productive
employment and decent work for all remains a challenge, particularly for women and young people. Egypt’s
unemployment reaches almost 23% among women and young males aged 15-24, and exceeds 60% among
young females in the same age group, compared to the overall unemployment rate of approximately 9.4% in
2009. Almost 75% of jobs created between 1998 and 2006 were in the informal sector. As to Target 3 (halving
between 1990 and 2015 the proportion of people who suffer from hunger), the problem of malnutrition among
children under five years of age is severe, where 29% were stunted and 14% severely stunted in 2008. Disparities by place of residence are significant with children in rural areas slightly more likely to be stunted than urban children: 30% and 27%, respectively (Egypt DHS, 2008). The progressive increase in malnutrition among
children is currently under investigation. However, the abrupt disruption in the supply of poultry and eggs that
followed the culling of millions of birds in response to the avian influenza outbreak in February 2006 was found
to have a significant and sustained impact on household consumption of poultry and eggs, especially by young
children, and also put a considerable strain on household financial resources since poultry sales accounted for
nearly half of the incomes of many Egyptian households prior to 2006, according to the FAO in 2009.
MDG 2 (Achieve Universal Primary Education): The net enrolment ratio increased from 86% in 1990 to 96%
in 2008/2009, and it is possible to achieve Universal Primary Education by 2015. Moreover, the decade of the
2000s witnessed expansion in pre-school education, which reached 22% for males and 21% for females in
2007/2008. Regional indicators, however, still show disparities, and coverage is significantly higher in urban
governorates (over 40%). The illiteracy rate among 15-24 year olds was 15.1% in 2006 (12.1% for males and
18.2% for females). In absolute terms, there are nearly 2.5 million illiterates in the age group 15-24, one million
males and 1.5 million females. A major challenge is the high level of drop-outs from school. The 2006 census
indicated that around half a million children (6-18 years) dropped out of school (2.4%) and 1.3 million have
never attended school (6.5%). Beheira, Beni Sueif, Fayoum and Menia have the highest percentages of children
not attending school.
n
MDG 3 (Promote Gender Equality and Empower Women): Egypt has eliminated gender disparities in general
secondary education by achieving a higher ratio of girls to boys, and the country is on its way to achieving the
same in primary education. The number of one-classroom schools increased from 418 in 1993 to 3,237 in
2008 and around 66,000 girls attended these. Moreover, expanding coverage of pre-school classes to reach an
admission rate of 60% is one of the government’s commitments. The ratio of girls to boys in primary education (Target 5) increased from 81.3% in 1990/1991 to 93% in 2007/2008. Projections indicate that the target
will be reached by 2015. However, the female participation rate in the labor market in 2008 lagged far behind
that of males (22.7% females compared to 75.5% for males)14, and achieving gender equality is not expected
by 2015. At the same time, the unemployment rate of women at the national level in 2009 reached 22.9 % (4.3
times more the rate for men of 5.27%). The share of women in wage employment in the non-agriculture sector
is also very low and declined in the period 1990-2005. Female representation in both houses of parliament is
still far below equality. In fact, female representation in parliament shows a declining trend. The percentage of
elected and appointed women decreased from 3.9% in 1987/90 to 1.8% in 2005/2010. However, in 2009, the
Cabinet adopted a bill providing a quota of 64 seats for women in the legislature, representing around 11% of
Parliament. In the Shura Council, female representation increased from 5.7% in 2000 to 7.9% in 2007 because
of the additional appointment of women by the President of the Republic. It is expected to reach only 10% by
2015, meaning that neither expected target would be achieved.
n
n MDG 4 (Reduce Child Mortality): Infant and child mortality rates in Egypt are undergoing sustained decline, and there has been noticeable progress in measles immunization coverage, reaching 98% in 2008 (EDHS
2008). The government has also demonstrated continued political commitment to improving maternal and
7
n
n
Introduction and Conceptual Framework
child health; Egypt was one of six countries that supported the 1990 Summit Conference for the Protection and
Development of Children, and the Convention on the Rights of the Child, which strongly endorsed safe motherhood programs and strategies. Egypt has already met the goal of reducing the U5MR by two-thirds according
to EDHS 2008, and is on track to achieving the target of IMR. U5 mortality rates declined from around 85 per
1,000 live births to about 28.3 per 1,000 in 2008, which is the target for 2015. However, one of the challenges
that Egypt faces now is to reduce neonatal mortality, which does not show the same rate of improvement as did
infant mortality (first year of life) and U5M. The rate of decrease was 33/1000 births at the 1990 midpoint to
16/1000 births in 200815. Accelerated progress can be achieved by improving the nutritional status of underfive children, where special programs have to be dedicated to combating stunting. Policies for improving child
health could involve promoting exclusive breastfeeding up to six months, promoting healthy diet for breastfeeding mothers, and providing supplements for vulnerable mothers at a low price. Moreover, promoting
prenatal care, child spacing and family planning would also be beneficial.
MDG 5 (Improve Maternal Health): Egypt has succeeded in achieving a significant reduction in the maternal mortality ratio and has already achieved this MDG. MOH estimates for MMR in 1992 were about 174 per
100,000 live births, 84 in 2000 and 55 in 200816. This reflects a significant reduction, approaching 50% between 1992 and 2000 and about 70% in the later period to 2008. If continued, Egypt is likely to achieve the
goal by 2015 (reaching 43 deaths per 100,000 live births). The proportion of births attended by skilled personnel has also shown substantial increase, from about one third in 1998 to 80% in 2008. Disparities are still
noticeable, however, where medically assisted deliveries reached 90% in urban areas compared to 72% in
rural areas. Contraceptive use doubled during the period 1980-1992 from 24% to 48%, and it reached 60% in
2008, although a plateau has been observed since 2003. According to the 2008 EDHS, adolescent fertility (for
15-19 year olds) is 50 per 1,000 women, compared to approximately 73 in 1990-1991.
n
MDG 6 (Combat HIV/AIDS, Malaria and Other Major Diseases): Egypt needs to adopt steps to avoid experiencing a turning point from a low to a concentrated HIV epidemic. The HIV infection in Egypt is not only confined
to the high risk groups, but it is clustered in the most productive age span and the country is experiencing a
relatively high share of females in the epidemic. By the end of 2008, 3,735 HIV infected cases were detected
in Egyptians and foreigners, of which 963 (25.8%) developed AIDS.17 However, UNAIDS/WHO estimates reach
11,000 [7,100-19,000] HIV infected cases in Egypt by 2008. The difference is attributed to the limited active
surveillance mechanisms and the prevailing passive approach. Persistent low comprehensive HIV knowledge,
insufficient condom use and unavailable national data on children orphaned by AIDS are confirmed by recent
data. HIV/AIDS interventions that are needed include developing an HIV resource center to fill the gap in HIV
strategic information, supporting the national efforts to monitor HIV, supporting the ongoing sentinel services
and outreach programs and VCT centers, providing non-stigmatized HIV services to enhance case detection
and management, and expanding clinical care for opportunistic infections and AIDS cases. Egypt has succeeded
in controlling malaria, while tuberculosis and schistosomiasis (bilharzia) are regressing. With respect to tuberculosis, Egypt has achieved the global targets in case detection and treatment success. Egypt is ranked as a
country with intermediate incidence of tuberculosis (TB) in the Eastern Mediterranean Region (EMR). In 2007,
TB incidence rate was 21 per 100,000 and prevalence was 27 per 100,000 (World Health Organization, 2009).
With regards bilharzia, the prevalence of intestinal schistosomiasis dropped from 14.8% to 1.9% between
1993 and 2004, and the prevalence of urinary schistosomiasis dropped from 6.6% to 1.6% (MOH, 2008).
n
MDG 7 (Ensuring Environmental Sustainability): This area remains a challenge despite government policies
and increasing investments. Egypt needs to curb population growth and its negative impact on the environment, as well as better control the increasing demands made on natural resources. The first target of this
goal is related to the natural environmental resources or the ecological system (land, air, water and biological
diversity) while the second is related to the environmental related services or the man-made environment
(drinking water and sanitation) and another relates to the urban environment (housing quality). Based on the
2006 census, the target of improved drinking water source (IDW) has been achieved. However, it might be recommended to reconsider the definition of “improved drinking water sources.” Also based on the 2006 census,
the target of improved sanitation services has only been achieved for urban areas. One of the important actions
in narrowing the gap between regions is targeting the poorest 1000 villages.
n
There is a need to balance the supply and demand of water resources, especially with limited additional sources of water. Enforcing the implementation of the national integrated management plan of water resources
8
Situation Analysis: Key Development Challenges Facing Egypt
and allocating needed resources is becoming essential. Potential challenges include: Increasing demand for
water to cope with population growth; water pollution from different sources such as disposal of industrial
and domestic waste water; and limited opportunities to develop alternative water resources due to high cost.
Another target aims, by 2020, to achieve a significant improvement in the lives of slum dwellers. In Egypt, between 1993 and the end of 2007, a total of LE 3.148 billion has been allocated to remove, upgrade or develop
a total of 1,221 slum areas in all governorates. Greater Cairo governorates have more than one half of the slum
dwellers (52.5%) and thus have been given great interest as well as nearly 54% of the total budget.
MDG 8 (Develop a Global Partnership for Development) rests on five main pillars: Official Development Assistance (ODA), market access (trade), debt sustainability, access to essential medicines, and access to new
technologies. With respect to trade, the good performance of Egyptian exports has been reflected in the decline of the ratio of debt interest to exports of goods and services. Egypt’s exports of goods and services have
increased over the past years from US$10.5 million in 2003/2004 to US$25.2 million in 2008/2009. The EU
share of Egyptian exports reached almost 34% in 2008/09, while USA’s share reached 25.5%. This benefited
from the increased duty-free access to developed country markets and the reduction of tariffs on developing
country exports of agricultural products, and of textiles and clothing that took place during the period from
2000-2007. Egypt’s external debt as a percent of GDP fell from above 100% in 1990/91 to 16.7% in 2008/09.
In addition, debt service as percentage of current account receipts fell from above 25% in 1990/91 to 6% in
2008/09. With regard adoption of new technologies, the ICT sector in Egypt has been growing fast, especially
with the increased access to cell phones and the internet. While the rise in number of fixed line subscribers
was from 7.6 in 1999 to 13.3 per 100 inhabitants in 2009, that in the number of cell phone subscribers has
risen from 1 per 100 people to 70.1 per 100 people, while the number of internet users reached 18.9% in 2009.
However, wide disparities among governorates persist. Telephone lines are concentrated in Cairo, Alexandria
and Port Said, while in Upper Egypt, the rates are much lower. Similarly, the number of internet subscribers is
much higher for urban governorates than for Lower and Upper Egypt.
n
6. Role and Participation for the Different Stakeholders in the Implementation of the SA
Addressing the development challenges identified in this report requires the implementation of a new social
contract with new roles for all of Egypt’s stakeholders and actors.18 A review of all of Egypt’s challenges in all
dimensions requires a comprehensive and integrated approach. This broad-based assault, especially on the
sources and outcomes of poverty, will need all players in society to put their weight behind it, including private
enterprise. In fact, the strategic objectives of the GOE as presented in the Challenges section emphasize the
importance of public/private partnerships in implementing programs for water and sanitation, education, and
health, while the government maintains full responsibility for an expanded social safety net. As for civil society
organizations, the strategic direction of the GOE is also to promote CSO involvement in partnership with local
government in all programs supporting social services and poverty alleviation.
A key message of the 2007 Business Solutions Report is that the current context and development indicators
in Egypt serve as a call for firms to reassess their responsibilities to all stakeholders, while still keeping the
profit motive in mind.19 The plea is for private businesses to perceive and implement a new role in generating
prosperity and opportunity in the community. The report highlights the potential for private enterprise to
work alongside local community organizations, and to expand the reach of such programs to the most disadvantaged.
The UN Global Compact (GC) is a policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor standards,
environment and anti-corruption. It was launched in Egypt in 2004 and Egyptian companies began to embrace
the trend towards Corporate Social Responsibility (CSR) quite actively. In August 2007, Egypt had a total of
37 participants, accounting for nearly half of all Arab companies in the Compact. However, there has been a
serious decline in the growth of the program since its launch. Most of the current members joined before 2004,
with new membership declining sharply in the following two years for both companies and MSMEs. Annual
progress reports produced by Egypt’s participating companies support a more encouraging view of the GC’s
potential impact in Egypt. A number of the reports provide good examples of efforts to adhere to the principles
and to ensure that the companies have a positive impact on their communities and the nation as a whole. The
private sector needs to be able to operate in an environment that provides due process and good governance,
at a minimum, and in partnership with the government and civil society in new ways. Given the level of invest-
9
n
n
Introduction and Conceptual Framework
Box 2: The United Nations Global Compact
The UN Global Compact (GC) is a strategic policy initiative for businesses that are committed to aligning their operations and
strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption.21 It has
today become the world’s largest corporate citizenship and sustainability initiative. The GC has called on companies and other organizations to pledge to adhere to and advance 10 broad principles in the areas of human rights, labor, the environment and anticorruption. Participants have formally signed their commitment to the GC’s ten principles. Since its official launch on 26 July 2000,
the initiative has grown to more than 7700 participants, including over 5300 businesses in 130 countries around the world.
Local networks are clusters of participants who come together to advance the GC and its principles within a particular geographic context. Their role is to facilitate the progress of companies (both local firms and subsidiaries of foreign corporations)
engaged in the Global Compact with respect to implementation of the ten principles, while also creating opportunities for multistakeholder engagement and collective action. Company participants, including their subsidiaries, are encouraged to be involved
in local networks.
The Egypt local network was launched in February 2004, and since then several Egyptian companies have embraced Corporate Social Responsibility (CSR) quite actively. It is currently managed by the Egyptian Corporate Responsibility Center (ECRC),
established as an initiative between the Ministry of Investment (MOI) and the United Nations Development Program (UNDP). The
ECRC offers CSR services including awareness, training and consulting services and acts as the focal point for the United Nations
Global Compact in Egypt, in partnership with the Mansour Group, and empowers businesses by providing CSR services including
capacity building, advocacy, consultations, knowledge management and certification. The goal is to form sustainable business
models, which encourage businesses to comply to CSR principles and improve the national capacity to design, apply and monitor
sustainable CSR policies while addressing geographical disparities.
Despite a decline in the growth of the local network after the launch in 2004, awareness raising campaigns and capacity
building initiatives offered to new companies by the ECRC in cooperation with Mansour Group have helped Egypt to take the lead
among Arab nations in embracing the Global Compact, with 46 Companies22, Foundations, SMEs, NGOs, Business Associations,
Public Sector Organization or Academic Institutions active members of the GC. Moreover, since 2006, regional meetings for local
networks have been convened to provide the opportunity to learn from the achievements of other networks and to share experiences on the processes and issues relevant within the regional context. Source: Nahla Zeitoun, Focal Point in UNDP Egypt for UN Global Compact
ment required in providing business solutions for development, companies need long-term guarantees that
they will reap the benefits of adopting the new approaches proposed.20
According to the 6th Egyptian National Competitiveness Report (2009), Egypt’s competitiveness depends on
following a responsible development path, promoting investments that utilize resources efficiently and respect the environment, as well as worker and consumer rights23. Sustained economic growth via productive
investments that lead to higher productivity will not directly lead to a prosperous and equitable society. As
such, increased productivity and competitiveness must be coupled with active leadership to develop the skills
of the workforce, provide health care and other social services, and manage the environment and natural resources for sustainability. Improvements in these dimensions of responsible competitiveness require systems
that engage civil society, government and business alike. The Responsibility Competitiveness Index (RCI) also
illustrates the fact that Egyptian companies can do much better in relation to the UN Global Compact. RCI
was developed by AccountAbility with the goal of capturing national progress in 108 countries in promoting
responsible approaches to competitiveness by measuring various aspects of policy drivers, business action
and social enablers. In this regard, Egypt is ranked as a “compiler” “striving to meet international standards of
quality, labor and environmental protection, in order to further integrate economic activities in international
markets.”24 According to the report, Egypt could move up to the average level of “asserters”, closing the gap of
nine percentage points from 53% to 62%, on condition that policy drivers, social actors and businesses take
needed actions in terms of environmental policy, labor policy, the business climate, governance systems, engagement, environmental management systems, and promoting talent.
An evaluation of the impact of the different stakeholders’ programs on MSMEs shows that much more can be
achieved with the help of CSOs. Although the number of MSMEs that received finance grew from 3-5 % in 1998
to between 15-20 % in 2006, the outreach is still limited in relative terms and the Social Fund for Development
(SFD) can do much more to expand access to micro credit via the expanded use of NGOs and CDAs. There is
a vast space to fast involve larger numbers of CSO intermediaries in all of the credit, training and other nonfinancial services that SFD is entrusted with providing to the MSME sector. Other sectors where CSOs can
deliver public services are detailed in the 2008 Egypt Human Development Report (see Box 3).
10
Situation Analysis: Key Development Challenges Facing Egypt
Box 3: The Role of Civil Society in Implementing Development
For Egypt, as for most countries, CSOs are the most viable channels to promote increased empowerment, ownership and participation and to make all voices distant from political power and decision-making heard. By virtue of physical proximity to local
communities and through a better understanding of special groups’ demands and needs, CSOs are best suited to implement the
scaling up of poverty-related programs geographically and among all target groups so as to achieve the MDGs by 2015. The role
of civil society and its organizations in realizing the proposed new social contract was the chosen theme of the EHDR 2008. The
report advocated the adoption of six principles and related actions to give direction and promote Egypt’s civil society and CSOs.
Key messages that are of immediate relevance to the SA report are the following:
n CSOs are the most effective vehicle for delivering on MDG indicators and Social Contract programs The CSO sector has vast
underutilized capacity that could complement and compensate for inadequate government capacity to fulfill on schedule the
various targets and programs of social development. This is especially true for service delivery to poor and remote regions in the
areas of poverty reduction, conditional cash transfers, preschool education, literacy, girls’ education, micro credit, youth and IT
clubs, and in environment protection and conservation. More broadly, civil society must be considered as the legitimate arena in
which citizens increasingly participate in the transition to a democratic society. CSOs should be encouraged to enter into more
diverse fields of activity for community empowerment and collective action. All forms of CSO partnerships should be promoted
including those with government, private business and donors.
nThe state must maintain and improve on its role as the key provider of public goods and services, but it should retreat from
its monopoly in particular segments in the social services chain so as to make space and crowd in CSOs. Examples are in hospital
management and university education where the private sector caters for the rich and the CSO sector could play an important
role for the non-rich. NGO trusts and foundations are only just emerging in Egypt, even though their pioneering efforts are well
recognized historically. It will be important for all three players – the state, civil society and business – to encourage and support
a renaissance in philanthropy for the development of quality and competition in all services.
nA ‘national campaign’ could mobilize society towards achieving the MDGs and advocating the new Social Contract. The
multiple benefits of such a national campaign would include (a) providing a forum and focus for citizen awareness and participation; (b) promoting debate on options and priorities among the three players – the state, civil society and the private sector; (c)
creating a platform for CSOs to become more visible and improve on their advocacy activities. The proposed structure of roles
and relationships to be tested is fourfold: The state provides the regulatory framework within which CSOs can operate freely; line
ministries are responsible for setting standards for each service (education, health, etc); CSOs create an independent federation
of CSOs whose main purpose is to set governance standards and provide CSO accreditation for government service procurement;
and the private sector refers to the independent CSO federation as a neutral arbitrator that can guide it in selecting NGOs to implement its Corporate Social Responsibility activities.
Source: Egypt Human Development Report 2008 – Egypt’s Social Contract: The Role of Civil Society
7. GOE Strategic Objectives and Five Year Planning
The GOE has recently published an ambitious and forward-looking strategic objectives document (December
2009) with eight strategic objectives:
1. Maintaining high rates of growth and employment;
2. Achieving high levels of integrated human development;
3. Upgrading infrastructure to better service the citizen;
4. Raising social equity and fighting poverty;
5. Promoting competitiveness in local and international markets
6. Raising political participation and modernizing cultural environment (including media complex);
7. Preserving national security and the environment for future generations (including R&D, water and energy);
8. Achieving high standards of administrative efficiency and governance (legislative reform and decentralization).
The challenges identified in this SA report reflect all of the key issues that fall under each of the eight strategic
objectives of the GOE and related sectors. The report has also pursued all of the links between the three CAA
pillars and the themes and topics under each of the eight GOE strategic objectives.
The following Strategic Objectives Matrix (SOM) summarizes all of the policy areas subsumed under each strategic objective. The SOM provides tentative answers to three questions: 1) Who are the stakeholders or actors
for each policy area? 2) Which GOE entity is primarily responsible for each policy area? And 3) Where are the
relevant sections of the SA elements that correspond to each SOM policy area? Each policy area has a corresponding challenge or set of challenges that can be found in the SA. It is therefore hoped that the SA can inform
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Introduction and Conceptual Framework
Box 4: Essential Messages of the GOE Strategic Objectives
The underlying aim of the GOE strategy is to make Egypt an ‘advanced’ country by the year 2030. It is designed to create a
modern society, based on a set of policies drawn up in agreement with the National Democratic Party (NDP) to ensure achievement. The thrust of the growth policies (Objective 1) is first to further undertake reforms of the business environment. Second,
it is to promote employment intensive growth by increasing productivity via better training for the skills needed in the labor
market. Third, it is to vigorously promote exports with incentives and sector-specific support for adherence to international
standards. Objective 5 is also concerned with growth and concentrates on policies to raise Egypt’s competitiveness in the local
and global markets. The engines of growth spelt out include industrial and agricultural development, tourism, commerce, ICT and
the real estate sector.
The strategy gives greater emphasis to the social dimension of development by improving social services in the fields of
health, education, transport and housing, as well as speeding up the implementation of the president’s electoral platform (20052011), which is anchored in meeting the MDG goals while also enhancing employment-intensive growth. The focus of attention
is poverty alleviation and its attached programs, targeting in particular youth, women and children. With regards equity, three
of the eight strategic objectives are complementary in tackling equal opportunity and social justice. Objective 2 (achieving high
levels of human development) is focused on raising the quality and not just access to education and health services, in addition to
special services related to children, youth and women. Objective 3 (upgrading infrastructure) covers the need to provide citizens
with better infrastructure services, namely water, sanitation, electricity, natural gas, transport, and communications, including
those for informal settlements. Objective 4 (raising social equity and fighting poverty) includes poverty reduction programs such
as the 1000 Poorest Villages program, the expansion of social safety nets, consumer protection and upgraded population policies
and programs.
Another direction of reform is in the realm of governance, democracy and human rights. The government must further shrink
and become an instrument for decentralized governance, peoples’ participation, and shared community-state responsibilities. In
fact, all of Objective 8 concerns institutional development, civil service reform, reform of the justice and judiciary system, more
effective government services, especially using ICT, combating corruption and implementing administrative decentralization for
local development. The private sector is being encouraged to play an increasingly pivotal role in the economy while organizations
of civil society are promoted to increasingly engage on the social welfare front. However, the government continues to take on full
responsibility for providing social safety nets.
Source: Magued Osman, IDSC
policymakers in their attempt to complete the design and formulate the substance and details of this comprehensive and ambitious new sustainable development strategy.
A number of key elements are still missing in order to connect the Government of Egypt strategic objectives on
two levels: The level above, which is an overall national vision, and the level below, which are policies and programs related to each objective. The first area of focus should be to provide a well-articulated national vision
that serves as an umbrella to sector-specific, issue-specific and regional-specific strategies. Beyond the goal
of making Egypt an advanced economy by the year 2030, there needs to be a complete and feasible panorama
of where the country could ideally be situated in terms of its social, political and economic dimensions. The
vision should also include the specific levels of achievement that are sought for human resource development,
spatial and demographic reconstruction, and the division of roles among stakeholders.
The second area of focus of the GOE should be to design a new system of coordination that can integrate sectorspecific strategies so that the aggregate efforts serve the grand and common purpose of achieving the vision,
most importantly poverty alleviation, creating a knowledge society, and generating productive employment.
To date, there are at least ten sectors that have produced well-designed strategies, such as for agriculture, industry, ICT, environment and tourism. Other sector strategies are still in process, such as for the financial sector, MSMEs and renewable energy (as described in section I.4 on engines of growth). It is essential to ensure
that these strategies are interacting on a regular basis and that those responsible for their implementation are
in communication with one another.
As a third and final focus, it will be crucial to encourage alliances between public and private as well as central
and local stakeholders and players. The GOE Strategic Objectives provide a wide scope for such partnerships
to also include civil society organizations and donors, which will be essential to ensure the timely implementation of strategies and policies using the efforts of all parties wherever possible. Examples include opening the
door for private sector investment in infrastructure, inviting NGO participation in education and health delivery
of public services, and donor support in piloting models of best practice according to priority sectors/areas.
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Situation Analysis: Key Development Challenges Facing Egypt
Table 3: Strategic Objectives Matrix
Strategic Objectives of the Gov. of Egypt
Actors
n 1.Maintaining high rates of growth
and employment
Investment
PRIV
Finance
PRIV
Monetary
PUB, PRIV
Fiscal
PUB, PRIV
Employment and Training
PRIV, DON
n 2. Achieving high levels of integrated
human development
Educaton
PUB, PRIV, NGO, DON
Health
PUB, PRIV, NGO, DON
Gender
PUB, NGO, DON
Youth
PUB, NGO, DON
Children
PUB, NGO, DON
Sports
PUB, NGO, DON
n 3. Upgrading infrastructure to better service the citizen
Urban development and Planning
PUB, PRIV, DON
Water and Sanitation
PUB, PRIV, DON
Electricity and Natural Gas
PUB
Transport
PUB, PRIV
Communications
PUB, PRIV
Informal Settlements
PRIV, DON
n 4. Raising Social Equity
Poverty Reduction
PUB, NGO, PRIV, DON
Social Safety Nets
PUB, NGO
Consumer Protection
PUB, NGO
Population
PUB, DON
n 5. Promoting competitiveness in local
and international markets
Industrial Development
PRIV
Agricultural Development/Food Security PRIV, DON
Tourism
PRIV
Commerce
PRIV
Knowledge Society/Technological Dev.
PUB, PRIV, DON
Real Estate Development
PRIV
n 6. Raising political participation and
modernizing cultural environment
Human Rights
PUB, NGO, DON
Democracy and Citizenship
PUB, NGO, DON
Internal Security and Citizen Rights
PUB
Cultural Development
PRIV, PUB, DON
Medi Development
PUB, PRIV
n 7. Preserving national security and
environment for future generations
National Security
PUB
Foreign Policy and Foreign Cooperation
PUB
Energy Security and Water Security
PUB, DON
Environment
PUB, NGO
Research and Development
PUB, PRIV, DON
Crisis and Disaster Management
PUB, DON
n 8. Achieving high standards of administrative
efficiency and governance
Institutional Development
PUB, DON
Civil Service Reform
PUB, DON
Quick and Effective Justice
PUB, DON
Government Services
PUB, DON
Combating Corruption
PUB, PRIV, DON
Decentralization and Local Development PUB, PRIV, NGO, DON
Policy Executive
Match SA
MoI
Banking and CMA
Central Bank
MoF
MoManpower, MoFTI
I.2
I.2
I.2
I.2
I.5
MoE, MoHE, GALAE
MOH
NCW
NCY
NCCM
NCSports
II.5
II.6
II.3
II.3
II.3
II.3
GA Urban Planning
GA Water & Sanitation
MoElectricity, MoPetroleum
MoTransport
MoICT
GA Urban Planning
III.7
III.2 & III.6
III.3
III.7
I.2
III.7
MoSS
MoSS
GA Consumer Protection, MoFTI
MoFP
Intro 5
II.1 & II.6
I.2
II.3
MoFTI
MoAgriculture
MoTourism
MoFTI
MoICT
MoHousing
I.4.a
III.1
I.4.c
I.4.a
I, II, III
III.7
HRC
HRC
MoInterior
MoCulture
MoInformation
II
II
II
II
II
MoDefense
MoFA
MoElectricity, Petroleum, Irrigation
MoEnvironment, EEAA
MoHE
IDSC
II
II
III.2 - III.4
III.5
I, II, III
II
MoAD
MoAD ++
MoJustice
MoAD
MoI, GAAccounting&Auditing
MoLD, MoAD
I, II, III
I, II, III
I, II, III
I, II, III
II.7
II.7
Source: Situation Analysis Task Force, based on GoE Eight Strategic Objectives
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Introduction and Conceptual Framework
Box 5: Institutional Reform and Requisites
The shift from formal and rigid plans to flexible strategic planning should evolve, especially given the level of uncertainties
and risk attached to Egypt’s medium-term and longer-term scenarios with respect to the water constraint, environmental threats,
climate change and the difficult equation of land, population, and water nexus. It will be necessary to establish a clear legislative mandate for a new process of national strategy formulation for sustainable
development. Four key innovations may be considered:
1) The national strategy for sustainable development should be allowed to move from one (or few) entities within the Cabinet
to become a key element of decision making across all ministries and authorities, and further still, a subject of continual public
debate, performance monitoring, and continuous adaptation and improvement. Design of proposed, integrated policies should
become a collective endeavor across the Cabinet ministries and semi-independent authorities, such that policy initiatives in the
future are formulated in a collective and coordinated manner by the government and subsequently debated with the general
public and various stakeholders.
2) Implementation of specific policy initiatives and programs should be decentralized to specific organizations and agencies
that operate at the community level. Decisions on such sectors as health, education, agriculture and energy must first be taken
at the central level but transmitted immediately to the competent jurisdictions at the local level. For Egypt, one mechanism that
will help is the existence of detailed governorate level human development reports (HDR), and one can also envisage monitoring
and follow-up of MDGs at the governorate level. The production of local HDR reports is now institutionalized and can act as the
conduit between center and region to ensure that monitoring progress on objectives and targets, policies and programs becomes
a standard feature of monitoring and evaluation (M&E). The purpose is for the ultimate beneficiaries at the community and family level to understand the process of delivery and fully enjoy their rights, not only to the service itself but also to the process of
assessing the performance of those who deliver.
3) Strengthening the authority of the Ministry of State for the Environment. One possibility would be to broaden the responsibility for implementation of policies and action plans related to the environment to a higher level that is inter-ministerial and reports directly to the Prime Minister. The current system whereby implementation authority rests with the Environment Ministry
alone limits its power of enforcement. This constraint could also be relieved by the creation of a ‘national council for sustainable
development’ that reports to the Prime Minister and has key Cabinet ministers and civil society representatives as members.
4) The system of monitoring and reporting on progress in implementation of initiatives should be adopted as soon as possible, taking into consideration the elements of transparency, accountability and participation. For monitoring and follow-up to
be effective, Egypt needs to develop an integrated set of indicators to allow analysis of the linkages among the economic, social
and environmental dimensions for sustainable development. A wide set of indicators already exist at the level of particular sectors and themes. What is now needed is to open up the system for transparency and accountability, and to make further progress
towards integrating indicators of economic performance with those of governance and social and environmental development.
Source: Heba Handoussa, Lead Author of the Egypt Human Development Report
Egypt’s Economic and Social Development Plan
Egypt’s current and Sixth Five Year Plan (2007-2012) emphasizes the priority areas of employment, education, the economy, and various social development targets. It rests on a group of pillars, namely: The LongTerm Vision (Egypt 2017 and 2022), the Presidential Election Program (2005-2011), the Millennium Development Goals (MDGs 2015), and the New Social Contract (2005-2015) as presented in the EHDR 2005.
The conceptual framework of the Plan is based on a set of principles, of which the most important are:
•
Fostering economic growth and employment by stimulating investment and enhancing economic reforms;
•
Community participation is essential for effectuating the development process;
•
Preserving natural wealth and rationalizing its usage to achieve sustainable development;
•
Raising the competitiveness of the Egyptian economy to speed up integration into the world economy.
The Plan embraces all goals included in these pillars; specifically:
•
In the field of economic development: Average annual growth of 8%, growth in real per capita income
by an average annual rate of 6%, and providing 750,000 new jobs per year.25 The Sixth Five-Year Plan
(2007-2012) was prepared for the first time with the help of the private sector, given the recognition of
its increasing role. The Plan continues to encourage the private sector through the creation of a better
investment climate and a wider spectrum of investment opportunities.
•
In the field of social and human development: Reducing the population growth rate from 2.04% to 1.9%,
controlling inflation to a limit of 6%, reducing the population living under the poverty line from 20% to
15% by 2012 and to 12% by 2015, and illiteracy from 29.3% in 2006 to 20% by 2012.26 n
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Situation Analysis: Key Development Challenges Facing Egypt
PART ONE: KEY CHALLENGES
IDENTIFIED IN THE SITUATION
ANALYSIS
As mentioned in the introduction, the overall objectives of the SA report is to present an overview of key challenges that need to be faced over the next five to ten years to accelerate progress in human development in
Egypt. The following is a brief listing of those challenges that stand out as being of large magnitude and needing
immediate attention. However, three remarks are in order. First, this list is by no means exhaustive, and there
are many more challenges that could be added based on the analysis in this report. Second, although all of the
following are key challenges, some of them may be subdivided into separate elements, each of which is a selfstanding challenge that can be dealt with as an entity. Third, the process of prioritization that is expected to
accompany the SA should involve distinguishing between those challenges for which Egypt would like to seek
the cooperation of development partners to overcome, and those for which domestic resources (human and
financial) are sufficient for Egypt to resolve on its own.
Cross-Cutting Institutional Challenge
The Challenge of Capacity Building: Capacity weaknesses are perhaps the most difficult bottleneck handicapping Egypt’s accelerated and more socially oriented development efforts. Insufficient institutional capacities, shortfalls in performance appraisal systems and non-discriminating incentive practices have negatively
impacted on good performance and on public funds, as evidenced by the annual report of the Central Audit
Agency and similar watchdogs. The tasks of upgrading the capacities of Egypt’s development and regulatory
institutions require much more commitment from senior government levels and persistent follow up to ensure
that such efforts bear fruit, and that training events produce tangible and sustainable results. In short, Egypt
needs an explicit national strategy for capacity development – a strategy that it owns and that it supports not
only in words but by firm actions at the highest levels. And it is not enough to concentrate on individual institutions; it must be recognized that these work in a political, social and legal environment that shapes their
performance. For instance, violations of laws and codes of conduct makes it difficult to develop technical and
managerial capacities and improved performance. In this regard, the Accra Agenda for Action on Aid Effectiveness, which Egypt endorsed in September 2008, makes provisions for development partners to support Egypt’s
capacity building efforts as long as there is a clear owned strategy and a commitment to carry out a specific and
bold reform program. In addition, civil service reform has become crucial to the development of institutions to
allow them to attract the good caliber employees necessary for the development and reform processes.
The Challenge of Coordination and Connectivity: A chronic problem in the policymaking process and in
implementation has been insufficient coordination across sectors and agencies, (i.e. horizontally) as well as in
the vertical direction between central and local administrations. Moreover, the institutional setup for monitoring, evaluating, and reporting progress on development initiatives needs to be firmed up. What is also needed is
the elaboration of the requirements for an effective program of capacity-building for monitoring and evaluation
for specified agencies and authorities at the central and local levels. Moreover, clear lines of information, communication, and accountability at relevant ministries or authorities are essential, as is the need for objectives
and priorities to be translated into unified and well-coordinated strategies, policies, and indicators that can
be recognized and monitored by the staff in all agencies and ministries. A third problem has been the absence
of effective inter-linkages for long-term planning to be continuously updated. The integration of the Ministry
of Finance in the development of policies and strategies for social development is necessary so that prioritysetting is automatically reflected in the national budget, including revenue-generating options. The Challenge of Scaling-Up Best Practices: The achievement of social development and the implementation
of specific programs recommended in this report will all benefit from evidence-based identification of best
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Part One: Key Challenges Identified in the Situation Analysis
practices in Egypt over the past decade. These best practices exist in all realms of human development, ranging
from preschool education to sanitary networks for low density villages. Scaling-up calls for reform policies,
institutionalization of capacity at different levels, resource mobilization, and strengthening monitoring.
Major challenges facing scaling-up interventions include the following constraints:
• New innovative practices do not fare well in old bureaucratic organizational structures and systems;
• Insufficient attention to scale up successful projects by providing technical assistance and necessary
funding for local communities;
• Lack of adequate financial planning and resource mobilization.
Activities that can be scaled-up to a national level could thus include housing and sanitation schemes for the
poor, upgrading informal settlements, health insurance for various levels of household incomes, extension services for agriculture and mechanization, research and higher education on a not-for-profit basis. Scaling-up
efforts require extending and strengthening partnerships to achieve wide coverage. New partnerships will
require creating new management and operations systems to support scaling-up while maintaining the core
values and quality of pilot projects.
The Challenge of Access to Reliable Data: There are very few reliable data in all sectors, in part due to lack
of transparency and access, but mostly because of lack of capacity to actually gather data, compare data among
different institutions and agencies, perform economic analysis, and use modeling systems. In addition to capacity building for data collection and analysis, one solution would be to take advantage of the GOE’s newly
announced Eight Strategic Policy Objectives to press forward with a reformed system of information-sharing,
and coordination in the division of roles and responsibilities. The law on disclosure and public access to data
has been drafted and will be presented for debate in Parliament at the next Parliamentary sessions. This will
resolve many of the problems related to transparency and accountability.
Challenges Related to Pillar I: Sustainable and Inclusive Growth
The Challenge of High and Sustainable Growth: Although Egypt’s growth is higher than expected – given the
global recession – there is a permanent loss of output of five percentage points by 2014 according to the IMF,
(2010e). In addition, The IMF reports that Egypt’s potential growth stands at 5.6%, one percentage point lower
than the pre-crisis level. While the crisis may have permanently reduced supply-side capacity worldwide, the
impact on Egypt could be more potent, given pre-existing vulnerabilities, notably higher unemployment and
poverty. Hence a medium term fiscal policy framework should be developed to address long-run concerns about
the quality of growth, labor productivity, competitiveness, growth and jobs.
The Challenge of Unifying Laws on Social Protection: The increasing purchasing power of some Egyptians
has enabled many to buy better services, including those who can buy private education and health care, private roads and areas, private transportation, private security, and private leisure spaces and activities. Public
spaces and services have come to be the domain of the poor and those with diminishing incomes. But social policy should not be just about the poor. Social policy is for everyone. Very importantly, it includes introducing the
principle of solidarity in both the new pension law and the new law on social health insurance. The increased
contribution of the rich is therefore essential to ensure social solidarity and a reduction in social disparities.
The Challenge of Providing an Enabling Environment for Business and Entrepreneurship: Egypt’s poor
ranking on global indicators of competitiveness is driven largely by some weaknesses in the Egyptian economy,
including poor labor market efficiency and the weak quality of educational institutions. For producers and investors in industry, trade and services, there are still a number of impediments that explain why Egypt, in spite
of being at the top of the league of reforming economies (World Bank Doing Business Report), is way behind in
its relative ranking. Therefore, Egypt should move faster on pursuing reforms in the regulatory framework for
business. Egypt should also address the efficiency of its financial sector to improve access to short and longterm finance and introduce new financial products that suit various business sizes and segments.
The Challenge of Implementing Micro and Small Enterprises (MSE) Strategy: Success in achieving the
goals and objectives set for the National MSE Development Strategy will depend on a number of critical internal
factors related to structural elements, including:
• Establishing a coordination unit with the accountable mandate for implementing the strategy;
16
Situation Analysis: Key Development Challenges Facing Egypt
•
•
•
•
•
•
•
Achieving national level “buy-in” for the strategy from relevant ministries and agencies;
Setting-up institutionalized mechanisms for ongoing consultation with and reporting to MSE stakeholders on the strategy implementation;
Establishing a regional partners network for value-added information on good practices, enhanced
tools and training;
Building the information system on MSE service providers and MSE programs on a geographic basis;
Increasing the supply of qualified MSE support professionals and business development service centers across the country;
Putting into place the necessary tracking system to monitor performance against the quantifiable indicators for each goal and objective;
Improving the quantity, quality, and timeliness of data, and research on trends and performance of the
MSE sector, and reporting performance on an annual basis.
What is now needed – with input from stakeholders – is the preparation of an action plan for implementation
of the strategy. This would address specific programs, projects, initiatives, to be undertaken on an annual basis,
to achieve the stated objectives and targets by the end of a five-year period. It would include estimated annual
budgets, human resource requirements, and responsible implementing partners/bodies for each program/
project/initiative. Use of a results-based management (RBM) framework approach is recommended.
The Challenge of Youth Employment: Over the last decade, the mismatch between education and labor market demand has grown, leading to the jump in youth (15-29 years) unemployment among university graduates
to nearly 45% for females and 25% for males, according to the 2006 Census, as compared to overall rates of unemployment of 30% for females and 12% for males among university graduates of all ages (15-64 years). The
challenge is therefore to promote youth self-employment, entrepreneurship and innovation, especially with
technical and marketing assistance and better access to finance for entrepreneurs. Business development support (BDS) centers can also be used as a tool to raise the productivity and incomes, especially of poor women.
There is a need to improve incentives and wages of MSE lending officers, cluster facilitators, and BDS providers,
in parallel with what has been proposed for the upgrading of social workers’ status. Another channel for youth
employment is to promote job opportunities abroad through provision of accredited and market-oriented education and training. Schemes are also needed to facilitate Egyptian jobseekers access to suitable vacancies at
home and abroad.
The Challenge of Integrating Civil Society Organizations as Change Agents: The state and the legislature
must review the NGO law to provide an enabling CSO environment. Such a review should be carried out in the
context of a participatory consultative manner, in which CSOs be invited and encouraged to participate in the
law reform process. The reformed NGO Law needs to meet international standards while at the same time
being responsive to the Egyptian context to allow for greater freedom of association and for CSOs to work as
full partners with the GOE in development. This would include removal of barriers to registration and licensing requirements; expanding the scope of permissible activities; removing undue restrictions and controls on
financial resources and excessive bureaucratic interventions. The legal framework must be conducive to CSOs
freely advocating for policy change, introducing accountability practices and monitoring government, private
sector and CSO performance.
The Challenge of Export-Led Manufacturing Industry: After four years of putting the National Industrial
Development Strategy (NIDS) into practice, the industrial sector has witnessed impressive progress. In fact, the
performance of the sector over this period has outpaced the predicted objectives of the strategy. For example,
the sector is now growing at an annual rate of about 7.8 %, which is higher than the objectives of the NIDS for
the year 2011. However, the stage has been reached where the required process of industrial deepening would
require dealing with two major challenges. First, changing the structure of exports from its present state dominated by primary and resource-based exports towards a higher share of medium-tech and high-tech exports. Second, meeting the new hygiene regulations for food products entering the EU, as well as competition from
Asian imports have made conforming to global standards a matter of survival.
The Challenge of Sustainability and Product Diversification in Tourism: The Ministry of Tourism (MOT)
aims to formulate a comprehensive national plan for the tourism sector with a set of broad objectives. These include: identification of opportunities for future growth, development constraints and plans to overcome them,
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Part One: Key Challenges Identified in the Situation Analysis
development requirements and investment needs, implementation priorities and phases; developing a detailed
action plan for the first phase (five years); to be accompanied with a planned vision that maintains the industry’s profits and protects the natural resources and the environment for the benefit of current and future generations. This will necessitate the formulation and application of environmental friendly tourism practices and
policies. The MOT is also supporting a product diversification plan with the emergence of new products such
as: eco-tourism, golf, yachting, shopping, adventure, wellness tourism and residential tourism; the Awareness
Campaign: The campaign is addressed to Egyptian citizens to increase the awareness of tourism importance as
a vital industry for our economic development and welfare of Egyptian citizens; investment projects in tourism:
MOT has undertaken many steps towards reforming and improving business and investment climate in tourism development, and financial or fiscal incentives are offered to both Egyptian and foreign investors. Moving
forward in the implementation of these plans is important, given the considerable contribution of tourism to
the economy and its potential to take the lead in introducing new forms of energy.
Challenges Related to Pillar II: Socio-Political Rights
The Challenge of Poverty Reduction: While the number of Egyptians living on less than US$1.25 per day is
only 3.4%, the number living on less than US$2.5 per day is 42.8% (close to Egypt’s upper poverty line of 40.5%
in 2004/05 and 41.2% in 2008/09). This increases to more than half for children, revealing the overrepresentation of children amongst the poor. Another area of change in social policy has involved renewed concern for
poverty reduction and the necessary interventions in geographic targeting of budget expenditure on infrastructure in the South (Upper Egypt), where 30% of the population lives. The President’s Election Program of 2005
in fact promoted the delivery of a number of innovative and ambitious pro-poor development projects such as
housing schemes for the poor and Conditional Cash Transfers. The composition of budget allocation for government subsidies, grants and special benefits should be revised to accommodate increased budget for social
protection programs for poor families and their children.
The Challenge of Implementing Social Policy and Programs: A real challenge is the ability to implement
Ministry of Social Solidarity (MOSS) programs because of low pay, lack of interest, and very poor training.
However, the Ministry itself has succeeded in upgrading its records, its points of service, and in creating teams
of change agents; social workers who show particular talent and interest, at the governorate level are assigned
to train their peers in how to provide better services. But the real test is how to work within the current framework without stumbling over the hurdles of cynicism and lack of interest or ability. Even more serious is the rift
between upper level management, which forms a parallel system that pays well and that encourages innovation
and risk, and lower level administrators and social workers on much lower pay and who have had little training.
The Challenge of Egypt’s Demographic Transition: Egypt is still undergoing its demographic transition,
with a youth bulge of more than one million new entrants to the labor force annually. Although fertility declined from 4.1 to 3.1 between 1991 and 2005, it has since plateaued with serious implications in terms of
growing imbalances between land, water, and population. Turning Egypt’s demographic transition into a window of opportunity is therefore the most difficult challenge in the coming decade. Egypt’s Ministry of Family
and Population was re-established in 2009 to deal with the issue of a 2.1% population growth rate. Government
efforts must integrate population programs with those of literacy, reproductive health, poverty reduction and
gender inclusion in social activity at the community level.
The Challenge of Reducing Child Deprivations and Regional Disparities: Child outcomes and the fulfillment of children’s rights are strongly influenced by public policy. Sustained pro-poor and pro-child growth
requires a commitment to build the physical capacity of a nation and to develop its social infrastructure. Policies and strategies to reduce child deprivation should be an integral component of the multi-sector national development framework, effectively coordinated by the Ministry of Family and Population. Following the Second
Decade for the Protection and Welfare of the Egyptian Child (2000-2010), an integrated national plan of action
should be developed to address regional disparities. The successful design and implementation of such a plan
depends on the creation of a forum for maintaining a sustained trans-sector, multidisciplinary dialogue at the
policy level between all stakeholders and which has the power to decide on resource allocation.
The Challenge of Women’s Participation in Social and Economic Activity: According to the Social Contract
programs, thousands of jobs can be provided for educated young women in their own communities, by working in the NGO sector, such as in the delivery of preschool education for some three to four million children,
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Situation Analysis: Key Development Challenges Facing Egypt
the universal Health Insurance Program and the Conditional Cash Transfer Program. Between them, the execution of these three programs is expected to create more than half a million jobs for women educators, health
staff and social workers over the next few years leading up to 2015. The Ministry of Local Development and
the Federation of NGOs should introduce the notion of affirmative action at the Community Development Association (CDA) and NGO levels to promote a more equitable gender balance in the leadership and staffing of
CSOs. Women can best claim their right to increased political and economic participation through CSOs. The
potential of CDAs and NGOs for gender equality in leadership must be exploited. Given a woman’s comparative
advantage in social and family affairs, she can serve well at the CDA level as a training ground for her political
empowerment in local constituencies. Moreover, at the economic level, all types of income generating CSOs are
a stepping-stone for women beneficiaries into the business and entrepreneurial world.
The Challenge of Gender Responsive Budgeting (GRB): The institutionalization of GRB in the Ministry of Finance and gender sensitive planning in the Ministry of Economic Development is a key challenge, as is applying
GRB to both donor development partners and the national processes for planning and budgeting to make gender equality a cross-cutting theme. This would be complemented by the development of approaches to applying GRB and program-based budgets at sectoral and local levels for allocations and spending. Gender-sensitive
progress assessments, performance monitoring and indicators for aid effectiveness could be introduced across
ministries and in civil society, including systematic audits for GRB. Systematic mechanisms and tools would allow for tracking domestic resource mobilization efforts and ODA allocations in support of further development
and implementation of policies, laws and programs related to gender equality and women’s empowerment.
There is a need to increase attention to monitoring and reporting on development results to ascertain whether
development efforts translate into positive impacts on women’s empowerment and gender equality, and to
report on progress in this area.
The Challenge of Preschool Education for Equal Opportunity: The National Strategic Plan for Education
Reform aims to increase access to preschool to 60% by 2011/2012 (in 2007/8 at 23.2%). The Early Childhood
Education Enhancement Program aims to increase access to preschool to 33% by 2010, to improve the quality
of the education, and to build the capacity of the Ministry of Education in planning and managing the program.
The positive outcome of preschool education is threefold: It provides children with equal opportunity in preparing for basic school results; it provides the opportunity for mothers to place their children in kindergarten
and seek income generating activities; and it provides jobs for thousands of educated young women. However,
current human and financial resources, physical capacity as well as coordination among different ministries
and between government and CSOs are insufficient. The budget of LE 6-7 billion cannot be supported by the
ministry alone, and the significant physical infrastructure needed cannot be completed only by the General
Authority for Educational Buildings (GAEB).
The Challenge of Access to Quality Basic Education: There remains a need to move from a system with overconcentration on memorizing content, passive pedagogies, and inadequate facilities and equipment, to a quality
system where all students are active participants in a child-friendly learning environment, with access to suitable
learning material for knowledge, life skills and social capabilities. This implies reform of the curriculum and an
upgrade of physical facilities, including provision of libraries and laboratories and development of an inclusive
school environment, particularly for children with special needs. Teachers’ continued upgrade of skills and exam
accreditation must continue, as must the opportunities for promotion. The ratio of teachers to administrative
staff must be raised significantly. Finally, schools must have a great deal more autonomy and become accountable
for their processes and results. A comprehensive system of educational assessment, monitoring and evaluation
needs to be applied. Access to different types of schooling to meet the need of different groups of children must
continue to be developed, particularly in rural and remote areas, and with special attention given to girls’ needs.
The Challenge of Literacy and Adult Education: The illiteracy rate among 15-24 year olds was 15.1% in
2006, or nearly 2.5 million illiterates (one million males and 1.5 million females). A major challenge is the high
level of drop-outs from school. The 2006 census indicated that around half a million children (6-18 years)
dropped out of school (2.4%) while 1.3 million have never attended (6.5%). In the age bracket 25-65 years,
illiteracy is as high as 40.1% (12.2 million persons). Literacy and adult education programs should emphasize
contemporary thinking, critical thinking, adaptation to the changing marketplace, tolerance and acceptance of
the other; and integration with the technology of this era. These institutions must build criteria and standards
to upgrade quality and direct more attention to specific groups and deprived areas. Areas of priorities for a
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future higher education strategy include developing a national qualifications framework (NQF), with statements of graduate attributes for each type and level of qualification. This is a foundational reform, as it sets the
focus on learning outcomes that will drive subsequent reforms to educational practice. Coordination among
concerned ministries is a challenge for the successful development and implementation of the NQF.
The Challenge of Reforming Vocational Training Systems: A clear set of incentives – upgraded curricula
and equipment, cost-sharing for training and tax incentives to employers, or job openings – must be in place
to enable technical and vocational education and training (TVET) to become a viable option for youth. Moreover, accountability goes hand in hand with the introduction of proper certification, based on recognized and
preferably internationally-based standards of performance. The way forward would thus include close linkages between TVET providers and employers in curriculum content, equipment, and training of trainers, with
close support from training councils; international branding of trainees and prospect of mobility for further
education and employability; employer-driven packages of training and training related services; and accredited training organizations within an integrated system for quality assurance and certification. Moreover, the
transition of students from the general and vocational/technical tracks of upper secondary education to higher
education in universities, colleges, and other tertiary institutions is one of the most significant challenges for
education reform in Egypt. This transition is problematic because its structure and processes are not flexible
enough to enable young people or adults to navigate the passages between schooling and work at various
stages of their lives, and in the long-term it affects economic and social wellbeing.
The Challenge of R&D and Innovation: A number of challenges need to be overcome to transfer Science and
Technology (S&T) from being a burden to the government to a source of income. One is the absence of a national
vision and strategy for S&T that is related to development issues. Another major and continuing structural impediment to the development of future capability is the separation of research from university education and
knowledge exchange and the continuing predominance of a supply-driven approach to research and innovation.
Countermeasures to remedy these weaknesses are under consideration in the reform initiatives. Egypt is also
experiencing a brain drain since most researchers who acquire their degrees from a developed country do not
return back to their home institutions (Science and Technology Development Fund, 2010). Further, low salaries
for researchers, poor facilities in many of research institutions, and inflexible laws and regulations hinder the
participation of the private sector and the commercialization of technology. The transfer of knowledge from
research institutions into the market place has been identified as a key issue in the development of a world-class
research and technology commercialization environment.
The Challenge of Dealing with Health Repercussions of Environmental Degradation: In Egypt, the cumulated impact of the exposure to environmental hazards has reached critical levels and is manifested - inter alia
- by the increase in the incidence of diarrheal diseases, intestinal nematode infections, trachoma, malnutrition,
kidney diseases, several types of cancers, respiratory diseases, nervous system impairment, skin diseases, and
allergic manifestations. Neither scientific research initiatives nor causal analyses are able to keep abreast of the
manifestations of the environmental burden of disease in Egypt so as to be able to guide remedial action and
introduce preventive actions. The gravity of the conditions and the magnitude of the demand may be behind
the curative service response that has triggered the multiplication of dialysis centers and cancer hospitals in
lieu of a policy for risk identification, risk communication and risk management to lower the exposure of the
population to environmental risks.
The Challenge of Infectious Diseases: After having improved in recent decades, figures reported to the WHO
for 2009 show a rise in the number of new cases of tuberculosis over those of 2008, attributed to poor socioeconomic conditions and rising malnutrition. However, it is Hepatitis B and Hepatitis C that continue to constitute major health threats. Nationally, 9.8% of the total population has active HCV infection on a PCR-RNA test.
The incidence is highest in the age group 50 and above, and declines to 4% among 15-19 year-olds. Egypt also
needs to remain vigilant in terms of avian influenza, which has become endemic in the country’s poultry industry and thus remains a significant threat to animal and human health, as well as having serious consequences
for the livelihoods and nutrition of millions of people. There is a need to improve capacities to obtain and use
good quality data for surveillance and effective response to reduce the threats posed by animal and pandemic
influenzas, as well as other emerging infectious diseases arising at the animal-human-ecosystem interface.
Likewise, longer-term strategies and interventions for sustainable control of these diseases are required to
reduce the ongoing threat to health, livelihoods, food security and nutrition.
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Situation Analysis: Key Development Challenges Facing Egypt
The Challenge of a Strategy on Prevention of HIV/AIDS: Egypt also needs to urgently take steps to avoid experiencing a turning point from a low to a concentrated epidemic of HIV. Priorities include enhancing strategic
information related to key populations and to redefine the national response according to the drivers of the
epidemic based on evidence. This includes enhancing surveillance systems, monitoring and evaluation mechanisms, and conducting qualitative studies. There is also an urgent need to scale up programs addressing most at
risk populations to expand coverage and ensure prevention of new infections, promote the use of condoms, and
place more focus on ensuring non-stigmatizing services such as voluntary counseling and treatment, centers
for preventing mother to child transmission, and enhancing support for people living with HIV.
The Challenge of Eradicating Child Malnutrition: Malnutrition in Egypt, in particular child malnutrition,
is on the increase as evidenced by the 2008 Demographic and Health Survey. Malnutrition is one of the few
childhood indicators that have shown deterioration. Severe food deprivation that is measured by using data on
severe anthropometric failure in children under the age of five is estimated to affect 17% of children under five
years old, representing 1.5 million children under the age of five who are severely food deprived. The problem
of malnutrition among children under five years of age is severe with surveys indicating that 29% were stunted
and 14% severely stunted in 2008. Disparities by place of residence are significant with rural children more
likely to be stunted than urban children (30% and 27%, respectively). As nutritional problems of early childhood are at the origin of most of the nutrition related chronic non-communicable diseases (NCD) of adult life,
the protection of pregnancy and the health of early childhood can significantly reduce the incidence of chronic
NCD and reduce the health insurance bill for the chronic nutrition-related diseases to be paid by the future
national health insurance scheme.
The Challenge of Decentralization and Democratization: There is the necessity to localize Egypt’s development process and a need for a delineated authority or responsibility across authorities and between the center
and the periphery. Also, better assessment of the capacity of sub-national jurisdictions to formulate, execute,
and report programs must take place, as well as dialogue, representation and consensus building to guide the
process of prioritization at the local level. Moreover, to support democratic and competitive political processes
(which are key for sustainable development) a credible set of laws and regulations codifying democratic norms
and rules for political competition needs to be in place. Such a framework encompasses laws and regulations
that govern the political processes (defined to include elections, political parties and the environment in which
they operate). Finally, mitigating corruption and improving democratic governance to build greater transparency and accountability of public institutions is a challenge, where local popular councils must be helped to
raise their capacity to fight corruption and to provide oversight and monitoring in the delivery of services – the
capacity of civil society to effectively advocate for greater public accountability and transparency in their communities needs also to be improved.
The Challenge of Protection and Respect for Human Rights: The conclusions and recommendations for
Egypt in the Universal Periodic Review acknowledged government efforts to raise awareness on human rights
and recommended the enhancement of human rights education and strengthening capacity building programs
for the general public. These recommendations need to be implemented. Egypt has yet to realize a marked
change in attitudes and culture towards the protection and respect for human rights and to better enforce
human rights legislation. There is a need to build a national cadre of human rights specialists; develop human
rights curricula, manuals and training methodology; and implement strategies to integrate human rights in the
education system.
Challenges Related to Pillar III: Environmental and Sustainable Resources
The Challenge of Investment in the Agricultural Sector: Investment in the agricultural sector is low and
more attention should be devoted to financing the agriculture and rural development process. The importance
of the sector and its contribution to combating poverty, climate change and unstable international markets
should be considered closely by the national strategy and expressed in terms of increasing investment. Moreover, human and institutional capacities in the agriculture sector need to be upgraded. There is a need to assess
all the previous training and capacity building efforts and monitor their results and impacts. There is also a
need to strengthen the link between agricultural research centers and extension services. Finally, agricultural
inputs should be available in a timely manner and markets should be developed and monitored. Providing the
proper package of inputs to farmers at reasonable prices through cooperatives is crucial for achieving desired
yield targets.
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The Challenge of Deteriorating Land Efficiency with Increased Fragmentation of Agricultural Holdings:
The land availability and efficiency challenge, together with the scarcity of water resources, constitute a serious constraint to benefit from the evidenced liberalization of the Egyptian economy. Land and water scarcity
as well as deteriorating quality of land are all expected to increase in the future. This will further limit the ability of the agriculture sector to benefit from any increases in market prices for agricultural products and will
affect the specific and aggregate supply response to any improved market signals. Legislation governing land
use utilization involves several institutions and ministries and there is an urgent need for their upgrading and
streamlining.
The Challenge of Strengthening Technical and Institutional Capacities for Managing Natural Resources:
These capacities face serious financial, administrative and technical challenges that need to be urgently addressed at all levels. The close coordination among research, technical transfer, extension/outreach services
and civil society to enhance productivity and competitiveness in agriculture is highly needed. Increased investment in public goods with special reference to research/technological transfer and infrastructure seems
crucial. The existing food and agriculture institutions need to be modernized with special reference to capacities related to agricultural policy formulation, analysis and monitoring to support the agriculture sector as an
engine for growth. Vertical and horizontal coordination among institutions related to food and agriculture is
weak and should be enhanced.
The Challenge of Expanding Fisheries: Fisheries in Egypt have expanded but could be improved to meet the
protein needs of the increasing and more affluent population. The comparative advantage for producing fish
is not yet fully utilized. The legislation preventing fish farms on agriculture land needs to be revised to give
the possibility of fish producers to grow wheat or other winter crops. This calls for allowing wheat production
(mainly as fish-feed) in the designated non-agricultural land after fish harvesting. The Challenge of the Shortage of Nile Waters: This has become the leading constraint in ensuring food security and maintaining the legendary high yields and productivity of Egypt’s fertile Nile Valley and Delta. With
a population of 79.2 million, Egypt is the second largest country in Africa. The issue of Egypt’s share of Nile
waters is under difficult negotiations and the per capita availability of water plummeted from 1,893m³ in 1959
to 934m³ in 2000, which is below the recommended world standard of 1000m³ per person per year. The option
of charging farmers for water usage has been consistently avoided for socio-political reasons. The implications
for policy making are the urgent need to conserve water and reduce cultivation of such crops as rice and sugarcane. Other challenges related to water include the increasing population densities near the waterways and the
quality of water due to wastewater disposal in these waterways.
The Challenge of Renewable Energy: There is a massive untapped potential and very little commercialization for renewable energy installed capacity. This includes low expansion of solar energy application such as
solar thermal and solar photovoltaic. Although biomass technology in Egypt is cost effective in the long term,
its promotion has been weak and no efforts to commercialize the technology have been made. There is a weak
financial management cycle for renewable energy technologies. Moreover, awareness remains a vital challenge
for renewable energy. This includes the lack of information on the benefits of renewable energy to different categories of society and appropriate application for each category, even at the level of households in rural areas,
such as the use of biogas units.
The Challenge of Energy Security: Domestic consumption of oil and gas has been rapidly increasing as a
result of ongoing economic growth, which is a threat to Egypt’s future economic development and energy security. Subsidizing energy end-use prices for a long time to maintain social justice has resulted in a major
pressure point on the government budget, as it has to bear the difference between the costs of production and
the subsidized end-use prices. Keeping the subsidy to its current level (approximately LE 70 billion annually)
and format will drive the country to a major budgetary challenge, thereby threatening its economic growth and
energy security. It is urgent to rationalize energy consumption in the demand sectors without reducing the service levels or negatively impacting economic development targets and to diversify the energy supply resources
by increasing renewable resources such as wind, solar and bio energy.
The Challenge of Climate Change: Egypt is forecast to be a major victim of global warming. It is also feared
that the Mediterranean coastline may recede by several meters and a major part of the fertile Delta may become
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Situation Analysis: Key Development Challenges Facing Egypt
submerged by the sea. Climate change may have an adverse impact on coastal zone management in Egypt. The
most important impact of sea level rise is on the Nile Delta region and could involve inundation of about 1012% of the northern low land of the Delta. Mainstreaming of climate change actions in national development
plans is the primary challenge in Egypt. There is a need to develop a national Strategy for Adaptation to Climate
Change and National Strategy for Low-Carbon Economy through a multi-stakeholder approach with national
and international representation; there is also a need for an integrated carbon finance program as well as financial resources for implementation of climate change actions in different sectors.
The Challenge of Protecting the Environment: Environment is not a standalone sector responsible for cleaning up wastes generated from other sectors. The Ministry of State for Environmental Affairs (MSEA) and its
executing arm the Egyptian Environmental Affairs Agency (EEAA), should be overseeing the integration of environmental policies in other sectors and coordinating the different environmental activities, which is already
a huge task to fulfill. Challenges of solid waste are mainly related to systemic, institutional, and individual constraints within the government’s overall system. The administrative structure in charge of waste management
is complex, fragmented, and dispersed in numerous government agencies.
The Challenge of Land Allocation: There are segmented and isolated land markets that are supply-driven.
Accordingly, the problem is not of limited supply of public land for investment. Instead, it is the scarcity of
well-located, properly serviced and adequately priced land that is adapted to the needs of development, which
in turn is the result of a dysfunctional public land management system. A clear and comprehensive public
land policy would reassert the role of the market in public land allocation and then help put in place a rational
framework of planning and incentives that reflect current needs and priorities.
The Challenge of Expanding Transport Facilities: Egypt’s transport sector has been unable to cope with the
tremendous rise in vehicle use and inadequate development of alternative transport means to the road system.
The GOE is aware that public (mass) means of transport is the answer to reducing the pressure from private
vehicles and the related congestion. The challenges now facing it include (i) inadequate policies, poorly integrated plans and institutional weaknesses for the achievement of a sustainable sector; (ii) financial limitations
on the public budget because transport projects require large investments while financial returns are not attractive to the private sector; (iii) insufficient technical knowhow and limited capacity-building and awareness
programs; (iv) inadquate data and information necessary for planning programs in those areas to be serviced
by transport. As is true of any country, the positive external benefits from investment in expanding a transport
network are reaped by many, and yet the ability to charge full cost is difficult. Identifying specific charges, taxes
and tariffs for the most polluting of vehicles are in order to subsidize mass means of transport
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Situation Analysis: Key Development Challenges Facing Egypt
PART TWO: SITUATION ANALYSIS
I. PILLAR ONE: SUSTAINABLE AND INCLUSIVE GROWTH
I.1 Macro Policy and Stability27
The introduction of wide-ranging structural reforms introduced in July 2004 spurred strong economic growth
until June 2008, just before the onset of the global financial crisis. Growth rates increased from 4% in FY
2003/2004 to over 7% in FY2007/08, fueled by strong external demand, a competitive real exchange rate after
the large devaluation in 2003, and sizable foreign direct investment (FDI) inflows. Net FDI inflows increased
from $509 million in FY 2000/01 to $6.1 billion in FY 2005/06, $11.1 billion in FY 2006/07, $13.2 billion in
FY 2007/08 and $8.1 billion in FY 2008/09. As to private domestic investment, more than 33,000 companies
have been established between FY 2004/05 and FY 2008/09 with estimated investments of LE 134 billion in
2007/08 and LE 113.5 billion in 2008/09, up from only LE 46.4 billion in 2004/05.28 However, total factor
productivity increased by less than 1% per year, on average, during the period 2005-2008.29Another weakness of Egypt’s growth path has been the resource-intensity of exports, which is mainly due to the energy
subsidies and their impact on the capital-intensity of production.
As a result of the global financial crisis, growth slowed down to 4.7% in 2008/2009, compared to 7.2% in
2007/2008. Unemployment increased slightly to reach 9.4% for 2008/2009. Consistently, real GDP per capita
growth slowed down to 2.3% compared to 5% in 2007/2008. The current account deficit (2.4% of GDP) in
2008/2009 reversed the surplus of 0.5% of GDP, registered in 2007/2008. The government increased its
expenditure (from 31.5% to 33.8% of GDP), primarily reflecting an increase in subsidies and social benefits
(by 2% of GDP) to mitigate the effect of the crisis on the poor and higher capital expenditures (0.4% of GDP)
to stimulate the economy. International reserves at the Central Bank have also decreased from $34.6 billion in
2007/2008, to $31.3 billion in 2008/2009 (equivalent to 7.5 months of imports), perhaps reflecting a sharp
reduction in net FDI flows as well as capital outflows. 30
Egypt’s banking sector has weathered the global financial turmoil relatively well. Conservative banking, healthy
capital and liquidity buffers, moderate growth in private credit, strong retail funding, and limited exposure to
either foreign currency risk or sophisticated financial products limited the build-up of balance sheet vulnerabilities and eliminated the need for the government to undertake bank recapitalization or other measures
to enhance financial sector stability. Following the crisis, liquidity remains ample, with a loan to deposit ratio
holding at around 50% and substantial excess reserves.
Inflation is still a key concern for the Egyptian economy. Despite the slowdown in economic activity, headline inflation surged from 11.6% (year-on-year) in 2007/08 to 16.5% in 2008/09. Core-inflation kept close
proximity to headline CPI inflation, despite the significant surge in the prices of fruits and vegetables (24.1%)
which accounts for 8.8% of the headline CPI. The latter was mitigated by slower inflation in regulated items
(13.8%) that accounts for 19.4% of the CPI basket.31
The interruption of Egypt’s long-term growth trend of 7.2%, the worsening of fiscal indicators and the ensuing
slowdown of economic activities have had serious implications on increased poverty, not just lower income
levels. According to the World Bank’s Development Committee (2007, p. 2), “economic growth is not an end in
itself but a means to the overall objective of sustained poverty reduction.” However, Egypt’s fiscal policy has
been directed more towards raising growth rates, and more recently towards rebounding economic growth
to its pre-crisis levels (IMF, 2010e]). Egypt will be benefiting directly from the global economic rebound,
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while its pre-existing vitality could help lead the way toward stronger growth and lower poverty in the future.
However, this will be insufficient to achieve sustained growth and improvements in the wellbeing of all people
living in Egypt. The need is to implement policies directed at resuming strong and durable growth that alleviates poverty.
Sustainable and pro-poor growth must be built on two important foundations. The first is sound macroeconomic policies that render sustainable fiscal positions and credible monetary policies. The second is competitiveness-enhancing structural reforms. These include the implementation of policies to improve the human,
physical and social infrastructure and the social safety nets that protect the poor and vulnerable.
With regards to sound and sustainable macroeconomic policies, one recommendation is the adoption of a
medium-term expenditure framework for fiscal policy. It may also be suggested that the budget law could
request the government to submit a complete macroeconomic program together with each year’s budget, in
addition to a medium-term view of the public finances (three years). Such a plan would also, by necessity,
include an annual borrowing plan. Given that the productivity of public spending is essential, one should consider advocating disclosure and debate concerning budget allocation as a national development platform. The
way to improve the productivity of public spending is also by conducting cost-benefit analysis to appraise all
public projects. Finally, another element of sound macro policy should also entail a rule for monetary policy to
ensure independence of the Central Bank.
As to the second foundation, for growth to be pro-poor and sustainable, fiscal policy must be concerned with
a “pattern” of growth that is (i) strong; (ii) “inclusive”32 “in that it includes all segments of the workforce; (iii)
“broad-based” in that it includes all sectors of the economy (balanced growth); (iv) multidimensional in that it
is comprehensive and considers other social dimensions besides income; and (v)durable in that it is driven by
improved competitiveness. An inclusive pattern of growth will reduce poverty in the long term if the overarching fiscal policy framework is also sustainable.
There are three lessons regarding pro-poor fiscal policy. The first is that pro-poor fiscal policies are successful
when the expenditure switching alters the pattern of government spending in favor of productive spending.
In particular, increased spending on education, health, infrastructure, business environment, labor flexibility,
and research and development can boost factor productivity and long-term growth. The second lesson is that a
sustainable fiscal policy implemented through spending offers better opportunities than the tax side for reducing the budget deficit. A fiscal adjustment that relies on cuts in investment or excessive revenue increases may
lower a country’s growth trajectory. The third lesson is that a sustainable fiscal policy implemented through
spending offers better opportunities than the tax side for redistributing income in both the short and long
term. The literature shows a strong link between social spending, especially in education, pensions and health
reform, and health insurance in influencing better income distribution and in the formation and distribution
of human capital. Social welfare programs that focus on pension and health entitlements are also critical for
durable pro-poor growth.
Impact of Fiscal Policy on Competitiveness and Growth
The ongoing energy subsidy reform would help reduce spending inefficiencies and provide more room for
spending on priority social and infrastructure needs. In addition to crowding out priority spending on social
and infrastructure needs, subsidies are highly regressive. The present composition of public spending undermines the scope for fiscal policy to achieve the sustainability and inclusive aspects of growth. The expenditure
program is heavily weighted (75% of total public spending) towards debt service, wages, subsidies and other
transfers. A large share of government spending consists of inefficient and costly energy subsidies. Successive piecemeal increases in domestic prices have not brought domestic prices anywhere close to international
prices, and some prices remain well below international prices and prices in neighboring countries.
During 2009, domestic fuel prices were 30 to 75% below international prices, with LPG 75% below international prices. Fuel, oil, and gasoline (the least subsidized) are 30% below international prices. Despite the
post-crisis decline in international oil prices, more than a quarter of primary spending and about two-thirds
of government subsidies still go to a few petroleum products (gasoline, diesel, LPG, kerosene, and fuel oil).
According to the final budget accounts for 2008/2009, subsidies for petroleum products amounted to LE 62.7
billion, more than the total budget expenditure on education and health (LE 39.8 billion and LE 15.7 billion,
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Situation Analysis: Key Development Challenges Facing Egypt
Box 6: Steps Towards Reforming Egypt’s Monetary Policy Framework33
Over the last few years the Central Bank of Egypt (CBE) has taken many important steps to upgrade Egypt’s monetary policy
with a view to adopting inflation targeting (IT) as a monetary policy framework once the prerequisites are fulfilled. IT involves
the public announcement of medium-term numerical targets for inflation with an institutional commitment by the monetary
authorities to achieve these targets.34
The CBE has been granted more independence under the new banking law number 88 and an explicit institutional framework was set up for interest rate determination. In addition, the CBE launched a comprehensive and far-reaching banking sector
reform program in 2004, which contained important steps to help overcome the previous shortcomings in the banking sector and
fulfill the prerequisites for IT. It included the (Non-Performing-Loans-related) restructuring and privatization of banks with state
participation, and other regulatory reforms, the liberalization of the foreign exchange and money markets, and ongoing efforts to
strengthen the supervision of banks.
Restoring confidence in the foreign exchange market and replacing quantitative monetary instruments with price instruments
were the cornerstones in the CBE’s monetary policy reform program. The exchange rate has been abandoned as the nominal anchor,
and price stability has been declared the overriding policy objective. The CBE is committed to achieving, over the medium term, low
rates of inflation, which it believes are essential for maintaining confidence and for sustaining high rates of investment and economic
growth. Egypt made the transition to a unified, flexible exchange rate regime during 2004. The parallel market rate, which had a
premium of over 15 percent in late 2003, converged with the banking rate in the second half of 2004 as confidence was restored.
A deep and well-developed banking sector is also important to allow for proper transmission of monetary policy actions. Monetary policy within an IT framework is highly market-oriented, and the banking sector is expected to function based on market
principles. The dominance of the state-owned banks in the market had tended to create rigidities in the interest rate structure in
Egypt. Under the banking system reform program, the banking sector has undergone substantial transformation that has entailed
the exit of several weak banks, large-scale financial restructuring, and divestiture of state shares in private banks and privatization
of a major state bank. These actions have reduced the share of banks with state participation significantly. The large stock of nonperforming loans (NPLs) has been largely addressed through provisioning and cash settlements. The government and the CBE
have been implementing programs designed to clean up banks’ balance sheets and settle NPLs of public and private enterprises.
Moreover, several institutional and operational changes were initiated under the program to help facilitate monetary policy
formulation and assessment as follows:
Institutionally:
• To carry out its better-defined mandate, the CBE established a Monetary Policy Committee (MPC), which convenes on Thursday
every six weeks to decide on key policy rates. The MPC consists of nine members from the CBE’s Board of Directors.
• To enhance transparency, bolster the credibility of the CBE, and help anchor inflation expectations, MPC decisions are communicated to the market through a monetary policy statement, which is released on the CBE’s web-site after each meeting.
Operationally:
• The exchange rate has been abandoned as the nominal anchor, and price stability has been declared the overriding policy
objective.
• On June 2, 2005 the CBE introduced an interest rate corridor with two standing facilities, the overnight lending and a deposit
facility. The interest rates on the two standing facilities define the ceiling and floor of the corridor, respectively. By setting the
rates on the standing facilities, the MPC determines the corridor within which the overnight inter-bank rate can fluctuate. Effectively, steering the overnight inter-bank rate within this corridor is the operational target of the CBE.
• In August 2005, the CBE began to issue its own securities for liquidity management through open market operations to differentiate between monetary and fiscal tools.
• In October 2009, the Central Bank introduced a core inflation index that strips out fruits and vegetables as well as administered prices. The index has helped the Central Bank communicate better how it views underlying inflationary pressures. It
has been well-received and will serve as an important tool in an effort to prevent spill-over from food and fuel price volatility.
The CBE also launched a specialized monetary policy page on its web site and plans to introduce a periodical Monetary Policy
Report in 2010 further improving communication.
Source: Rania Al-Mashat, Head of Monetary Policy Department, Central Bank of Egypt.
respectively). This energy subsidy, which is mostly of benefit to the rich, is in fact three multiples of the subsidy
for rationed commodities, such as sugar, edible oil, as well as gas.
Another serious repercussion of the energy subsidies is its misallocating the structure of production away
from Egypt’s long-term competitive advantage. Regarding the natural resource-intensive nature of Egypt’s
exports (oil and gas), and the dependence of the budget on revenues from EGPC, there are two interconnected
policy topics: the real exchange rate effect of oil and gas booms, and the pervasive impact on the rest of the
economy. The second is the transparency of the institutions that are handling the resources. These would be
two topics that Egypt’s development agenda for the next decade or two should contemplate.
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I.2 Competitiveness
Egypt is appearing in more and more evaluations of competitiveness, including the World Bank’s Doing Business rankings, the World Economic Forum’s competitiveness index, the Global Entrepreneurship Model and
Transparency International’s Corruption Perception Index (CPI). With regards to the CPI, which ranks countries according to the degree to which corruption is perceived to exist among public officials and politicians,
Egypt’s score remained a 2.8 out of 10. It is indeed noteworthy that scores below five are said to indicate serious problems of corruption. In this regard, Egypt ranks 111th out of 180 countries.
According to the 2010 World Bank Doing Business Report, Egypt was listed as one of the top ten reformers
for the fifth year in a row.35 The top ten reformers are economies that improved the most on the ease of doing
business, making positive strides on at least three of the ten areas of doing business. Egypt improved on four
counts, namely starting a business, dealing with construction permits, getting credit, and enforcing contracts.
However, Egypt did not improve on the other six areas: employing workers, registering property, protecting
investors, paying taxes, trading across borders and closing a business.
Egypt’s rank in Doing Business ranges from as high on the list as 24 (for starting a business, up a staggering
101 places from 125 in 2007) and 29 (for trading across borders) to as low as 156 (for dealing with construction permits) and 148 (for enforcing contracts). It is notable that Egypt’s two lowest ranks are also two of the
four areas in which it is has made positive reforms. Moreover, the World Bank’s Investment Climate Assessment (ICA) surveys point at policy uncertainty as one of the main obstacles faced by entrepreneurs. Overall,
Egypt’s rank increased from 126th out of 183 countries in 2008, to 116th in 2009, and further to 106th in
2010. Along with other countries that consistently sustain reform programs, Egypt follows a long-term agenda
that aims to increase the competitiveness of its firms and economy as a whole, incorporating business regulation reforms into a more broad competitiveness agenda.
Turning to the Global Competitiveness Index (GCI), Egypt’s rank improved from 81st place (out of 133 countries) in 2009, to 70th place in 2010.36 The country scores a four out of a maximum seven on the competitiveness score, which has been the case for the past four years. The most notable improvement for Egypt is
reflected in the scores of the financial sector, despite the financial crisis, driven largely by the new Egyptian
Financial Supervisory Authority. The rank of Egypt’s financial market jumped 22 places from last year. Major
progress was also made in the areas of infrastructure, higher education and training, business sophistication,
and technological readiness.
The overall improvement in Egypt’s competitiveness ranking, however, was based in large part on the deterioration of conditions in other countries. In fact, Egypt’s average total raw score has remained quite static in
recent years, given that the improvement in some areas was balanced by the decline of others. Egypt has suffered from an uneven performance on the twelve pillars of the GCI, with low scores in areas related to human
development and macroeconomic stability. In particular, the weakest areas are primary education and health,
higher education and training, and labor market efficiency. Education and health are the two areas that contribute towards improving the quality of the nation’s human capital, the foundation that can guarantee optimal
outcomes for a competitiveness strategy for the country. While access to education has improved, Egypt still
ranks 123rd in terms of the quality of its educational institutions. Further, Egypt ranks 126th in labor market
efficiency, where tight regulations, the brain drain, and a low female participation rate continue to limit the
success of Egypt in this particular area.
Egypt’s Competitiveness Strategy (ECS)
In September 2009, the Prime Minister of Egypt commissioned the Egyptian National Competitiveness Council
(ENCC) to develop an Egyptian Competitiveness Strategy. The strategy will be formed with broad societal dialogue and will be conducted in a manner to forge consensus around a set of short and long-term priorities. It
is designed to foster comments, feedback and involvement by many thinkers, opinion shapers and leadership
groups. An Egyptian Competitiveness Strategy is the key to creating more jobs, good jobs, and sustainable jobs
for Egyptians. Economic competitiveness will drive Egypt’s prosperity in the 21st century and restore Egypt’s
place in the world. The focus of this strategy is on improving the lives of the people. A more competitive economy will lead to rapid poverty reduction and will enable Egyptian society to provide solutions for those most
in need. Competitiveness is about sustainable increases in productivity that result in improved standards of
living felt by the average Egyptian.
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Situation Analysis: Key Development Challenges Facing Egypt
The ENCC, in broad consultation with Egyptian stakeholders, will forge consensus regarding key drivers of
competitiveness. Three key overarching areas of focus, or ‘thematic areas,’ are Investing in People, Green
Transformation, and R&D and Innovation. •
•
•
Key Focus Area # 1 (Investing in People): Preparing Egypt’s youth, the next generation, to be competitive
members of the global economic community will help Egypt make the most of the current demographic
transition and changing age structure. Doing this requires an educational system that is responsive to
the demands of a rapidly changing economy. It means building a better, more relevant and more equitable education system including improved vocational training.
Key Focus Area # 2 (Green Transformation): The green transformation of Egypt’s economy involves the
transition to 21st Century forms of renewable energy, efficient uses of water and energy, the utilization
of “green” aspects in all industries as a competitive advantage, and the improvement of quality of life
through the reduction of pollution. Green transformation means sustainable development. Energy and
environmental technology can be a source of productivity growth.
Key Focus Area #3 (Innovation and R&D): Egypt needs to improve its innovative capacity in order to
keep up with rising competition from countries like India, China and the UAE. By investing in innovation, creating a better climate for R&D and supporting new clusters of innovation, Egypt can create a
knowledge economy with higher value-added. This in turn will require attracting foreign investment
by innovative companies and improved mechanisms that align incentives for commercializing the research of Egypt’s universities and research institutes.
In addition, Egypt’s key industries, such as tourism, agriculture, manufacturing, financial services, construction, logistics and retailing will have to each develop their own industry competitiveness strategies. Each
governorate will need to develop its own local economic development strategy. Local economic initiatives at
the municipal and governorate levels will thus become also key drivers of competitiveness. The business environment is often best shaped at the local or municipal level. Many governorates have begun the assessment of
their economic assets and potential in efforts to mobilize investment and bring jobs to their localities.
I.3 Growth Engines
“An Egyptian Competitiveness Strategy is the key to creating more jobs, good jobs, and sustainable jobs for
Egyptians.”37 The purpose of the strategy is to identify and promote key industries in the manufacturing, agriculture, and tourism sectors as well as construction, ICT, and financial services. The strategy recognizes the
need for a long-term vision that serves as an umbrella for all sectors and all regions of Egypt to form their
own strategies and action plans. The need is to focus on macroeconomic stability and human development if
Egypt’s competitive position is to improve. By implementing targeted interventions, the country can progress
in a number of promising sectors. The shared efforts of government, businesses, and civil society, as well as the
improved productivity of natural, human, and financial resources can move Egypt in the right direction. The
competitiveness of each sector or region is a function of both inherited comparative advantage, and various
factors such as research and development as well as infrastructure that create new competitive advantages.
The goal is to generate balanced growth across sectors and regions as well as inclusive growth that benefits all
communities and citizens. By definition, industrial strategy is about choosing from among alternative options,
those actions that will achieve the best results.
A number of sectors and sub-sectors have already demonstrated their potential, as evidenced in their high rates
of growth, employment, and exports. Some of these sectors, such as textiles and processed food, are based on
comparative advantage, including availability of raw materials, climate and abundant human resources, whereas others have been nurtured with innovation and entrepreneurship, especially in the fields of tourism and ICT. The creation of competitive advantage must involve quality education and training, infrastructure and business
climate, all of which are elements of the needed policy menu for these sectors to thrive in the future. The following sections demonstrate the actual and potential competitive advantage of manufacturing industry, agriculture, tourism, ICT, renewable energy, construction and housing, and micro, small and medium enterprises.
I.3.a Manufacturing: Industrial, International Trade and Internal Market Policies
Policy Background
Industrial, international trade and internal market policies are three aspects of national economic policy that
fall under the aegis of the Ministry of Trade and Industry (MTI).
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The MTI objective is to integrate with the global economy, but harnessing an international competitive edge
and registering higher rates of growth can only be achieved through linking industrial policy more closely
with trade policy, as well as making export policy, and the export of manufactured goods in particular a core
element of trade policy. The MTI is progressively working towards re-orienting Egypt’s industrial development efforts more forcefully away from the remnants of the import-substitution policies of the past and more
robustly towards a global approach based on exporting. Integrating Egypt into global supply chains, but
specifically value chains (where transformative value is added) is the fundamental centerpiece of this policy
rubric.
Manufacturing
The manufacturing sector has witnessed an impressive boost during the last four years. This has been reflected in an increase in its share in total investments from 5% in 2003/04 to about 23% in 2006/07, and in
its share of employment from 12% to 13% during the same period as mentioned above. The Ministry of Trade
and Industry has adopted since 2004 an aggressive National Industrial Development Strategy (NIDS). The vision underlying this strategy is for Egypt to be the leading industrializing nation in the Middle East and North
Africa as well as the main hub for medium-technology manufactured products.
These objectives were to be achieved through the consolidation of existing industries in which Egypt has a
comparative advantage. These sectors include: engineering, food processing, chemicals and pharmaceuticals,
textiles and garments, building materials, furniture, and the paper and paper-board industries. These sectors
require improvements in their quality and also their ability to penetrate export markets. Furthermore, new
target niches were identified as essential in strengthening Egypt’s industrial base. Intensive investments in
skills and technology are required in order to better enable Egypt to target new niches. The strategy proposes
the following target niches: engineering, machinery and equipment; labor intensive consumer electronics,
automotive components, life sciences, biotechnology and ethnic products. The NIDS also identified three major
building blocks: (i) building domestic capabilities, (ii) linking to global markets and (iii) industrial governance
institutional setup.
Egypt’s biggest challenge is to improve skills in management, raise productivity and improve the quality and
cost of Egyptian-made inputs. The low manufacturing value added per capita and labor productivity in manufacturing and the non compliance of domestic products with international standards remain worrisome compared to many other countries.
Notable Interventions by the GOE and its Partners
Within the context of the policy areas addressed by the MTI, there are several joint interventions with development partners running in parallel and complementary to the activities of the GOE. While there are programs in
the industrial policy and international trade policy area where such assistance is being provided on collaborative projects, the greatest area of new work reflects the challenges for the future.
First, there are dialogues to develop programs related to renewable energy on two levels (a) as a manufacturing sector (wind turbines, solar panels and other related equipment) and (b) as a mode of energy generation
and its ancillary delivery mechanisms (which under the GoE framework are the purview of the Ministry of
Electricity). This is important if Egypt is to gradually disengage from costly and unsustainable subsidization
of the energy sector, a factor that has also hampered local manufacturing from being genuinely competitive in
some sub-sectors. The governments of Japan, Germany and the United States have made considerable inroads
in participating in dialogues and further thinking in these areas. Regionally, there has also been some work
undertaken within the context of the Union for the Mediterranean (UfM), the initiative advanced by France, but
with a regional rather than a national character.
Second, there are initiatives to address the challenges related to the internal market disequilibrium of economic development. In 2009, the Spanish government, in cooperation with the United Nations’ Millennium
Development Goals (MDG) Fund awarded Egypt a project on Pro-Poor Horticultural Value Chains (PPHVC)
which, in summary, seeks to make interventions rooted in capacity-building to establish links between asymmetrically-developed regions within Egypt. The role of the private sector is critical and will link established
larger businesses on the retail end of the value chain with smaller economic actors who are on the production
end of the chain. It is highlighted herein since it is a microcosm of the overall model for how to resolve the dis30
Situation Analysis: Key Development Challenges Facing Egypt
parities in this policy area and ensure that the gains from economic development are not disproportionately
concentrated in some geographical zones at the expense of others.
Third, another important opportunity that needs to be capitalized on is the bilateral and regional trade agreements that give Egypt preferential access to Europe, the US and Turkey as well as other countries in the region
(Agadir Agreement) in Africa and the Middle East. The external economic environment is supportive of Egypt’s
export performance. Egypt is a member of the World Trade Organization and has concluded an Association
Agreement with the EU, which allows it immediate enhanced access to the markets of EU member states and
will force it to phase out tariffs on imports — a process that should be completed by 2015 after several large
cuts having already been implemented. Egypt is also a member of African and Middle Eastern trade bodies:
the regional trading bodies could become more significant for Egypt if the country manages to raise the overall
quality of its output and hence purchasing power gradually across African and Arab states
Key Challenges to Overcome
From an objective perspective, the GOE does face serious challenges in terms of the policy areas addressed by
the MTI in terms of (a) matching education and workforce skills to actual skills and knowledge demanded by
the private-sector, especially the capacity to innovate, (b) resolving logistical challenges in terms of facilitating inland transportation and distribution of goods and services which are stymied by a lack of existing or
adequate infrastructure, (c) encouraging the private-sector to invest in sectors that have long gestation periods to generate returns but clearly represent the direction of the future of economic growth (such as in hightechnology and research and development), (d) adopt tighter government driven safety and quality assurance
standards and systems; and finally (e) to encourage entrepreneurship and self-employment that is growthoriented rather than transient in nature.
I.3.b Agriculture
The Agribusiness Sector in Egypt
Gross production in 2007 exceeded EGP 81 billion (price reference period 2006). Major agricultural products
by quantity are sugar cane, tomatoes, wheat, rice and maize, while value wise, tomatoes, rice, buffalo milk,
wheat and grapes head the list. Agriculture contributes to about 15% of national GDP. Egypt has become a
net importer of agricultural commodities. Main imports by value include wheat, maize, meat, soybeans and
tobacco. Main exports are rice, cotton, potatoes, oranges and grapes.
In spite of the abundance of high quality raw materials, especially fruits and vegetables, Egypt’s value added in
the food-processing sector does not exceed 20%. This is considered relatively low when compared to benchmark countries (Turkey, Morocco, China and Spain). Comparative advantage is observed in the production of
potatoes and tomatoes specifically, as well as olives, yet their processed products are hardly exported.
Yet the fruit and vegetable processing sector, especially frozen and canned, enjoys increasing demand as well
as supply. Egypt’s growth in this sector was 118% from 2005 to 2009. Exports reached more than EGP 10
billion in 2009. Exports of fruit juices have also been rising mainly of exotic fruits and fortified juices. As for
olive production, Egypt’s production has been increasing in the past decade to rank eighth among world olive
producers.
About 87% of the enterprises of the food-processing sector are small and medium enterprises, which require
the attention of strategic planning, especially when considering quality, food safety and traceability. It is vital
for policy makers to ensure market access, making use of Egypt’s strategic geographic location and developing
demand driven products.
Challenges
The GOE is stressing the development of Upper Egypt and is putting it as a priority on its political agenda. Upper Egypt offers great potential for increased agricultural production than is currently being realized. Sources
of comparative advantage are the fertile soil and water, low labor cost, availability of arable land in the socalled New Reclaimed Land which includes approximately 2 million feddans. A distinct climatic advantage
gives growers in Upper Egypt the additional advantage of 3 to 4 weeks early fruit harvesting and off-season
vegetable supply, and a great part of the cultivated area is free of common pests and diseases and enjoys low
labor costs.
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Production is a major challenge in Upper Egypt, already hindered by the high degree of fragmentation, therefore the loss of economies of scale. There are problems with low yield traditional varieties, which are to a
great extent impure, and thus reduce potential gains. Post-harvest losses are high especially when considering
perishable products, caused by inappropriate pre and postharvest treatment, as well as deficiencies in transportation and infrastructure. Many growers suffer from insufficient information, from production to markets.
Input usage, including fertilizers, pesticides and water often relies on tradition and not on up to date extension
services. Moreover, logistics are a major obstacle of this sector, while rudimentary infrastructure and inappropriate transportation and handling cause major losses along the supply chain, from a quantity as well as
quality point of view.
Opportunities
The Egyptian agriculture sector transformation strategy represents opportunities and new prospects, especially if a sustainable development approach is further integrated by linking production with export systems.
As underlined in the seventh ENCC Report38, the agriculture sector can be a source of economic growth and
competitiveness as it possesses the ability to simultaneously achieve the goals of food security, increased employment, maximized farmer incomes and total national income as well as balanced, sustainable growth.
Under the Italian Egyptian Debt Swap Program and the Green Trade Initiative, the aim is to enhance the competitiveness of the Egyptian agricultural products towards the EU Countries, improving quantity and quality
of horticultural production in Egypt, easing its channeling to Europe, and building a comprehensive support
plan for the whole production and export chain. A demand driven approach will allow transformation from
basic to more challenging targets according to the response of the market, the cooperation established among
all the private stakeholders in the set up and management of the system and the political willingness to keep
supporting the sector in the future through the necessary investments.
Yet some opportunities are arising in Upper Egypt. There is a general trend for land reclamation in the outskirts
of Upper Egyptian governorates. Agriculture is turning more and more to the desert, making use of virgin lands
and using modern irrigation and production techniques resulting in higher yields and less water consumption.
Furthermore, the GOE has directed its attention to the development of Upper Egypt, attracting investments
and developing necessary infrastructure for market linkages, reflected in many newly constructed highways.
One observed success story is a sun drying facility for vegetables (mainly tomatoes) in Luxor, which was privately constructed. Making use of the abundance of tomatoes in the region, as well as the hot weather and
the dry air, the project poses a feasible alternative for value addition, income generation and reduction of
postharvest losses, in addition to harvesting export potential. Furthermore, an interesting shift to high value
crops such as grapes, pomegranates and cantaloupe is observed, recognizing their export potential. There are
success stories observed in the agricultural supply chain of potatoes. Contract farming is common in this sector, where processors supply farmers with potato seedlings, some inputs such as fertilizers and pesticides and
buy their produce at prices agreed upon by contract.
I.3.c Tourism
Ministry of Tourism (MOT) Strategy
The role of the MOT is to plan for the development of tourism and the coordination between public and private
sectors. Its main efforts are creating an environment that facilitates and enhances the growth of tourism and
prevents undesirable practices. The MOT is responsible for the regulation and control of tourism businesses
and encouraging enterprise development by resolving problems, removing constraints, and offering new opportunities.
The implementation of the above tasks is assigned to the main arms of the ministry: The Tourism Development Authority (TDA) and the Egyptian Tourism Authority (ETA) are responsible in cooperation with other
entities such as Cairo Conference Centre and the Egyptian Tourism Federation (ETF). The MOT has designed a
strategy to fulfill short-term and long-term plans: the short-term plan is laid out by the Five Year Plan starting
2005/2006 and consists of upgrading the infrastructure by creating an incremental 15,000 rooms every year
to achieve 240,000 rooms to accommodate the targeted visitors (14 million in 2011) which are estimated by
a yearly increase of 10% growth rate benefiting from major improvements in other sectors: telecommunications, transportation, airports, aviation, customs and tax reforms.
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Situation Analysis: Key Development Challenges Facing Egypt
The long-term plan consists of achieving around 25 million tourists in 2020 and increasing Egypt’s world
share of the market for tourism. These objectives imply increasing tourism investments by providing the incentives that attract investors which assume developing tourism and related infrastructure/ superstructure to
guarantee good hotels, build eco-lodges and provide MICE and business traveler’s tourism. Other facilities are
directed to pull interested investors to luxury shopping malls, attract holiday homes’ seekers and amusement
park planners, in order to to satisfy all tourist segments.
Current Situation (January to December 2009):
Figures confirm that tourism is a principal generator of income and foreign exchange earnings that contributes
around 11.3% of GDP directly and indirectly and provides the country with a share of 21.4% of foreign currency and a share of 44.1% of the non-tradable exports. These are counted as direct revenues of foreign exchange
earnings and give the sector importance among other exporting services like petroleum exports, remittances,
industrial and agriculture exports, and Suez Canal dues.
Key figures include:
•
Tourist arrivals 12.5 million (decline of 2.3% comparing to the same period last year);
•
Number of tourist nights: 126.5 million nights (decline of 2.1%);
•
Revenues: US$10.76 billion during the same period (decline of 2.1%);
•
Hotel Rooms Capacity: 214,5000 rooms (existing rooms)
•
Hotel Rooms under construction: 200,000 rooms.
Regional distribution of tourist arrivals (January to December 2009):
•
European Market share of 75.1%: Russians with 2035.3 thousand (+11.5%); British with 1346.7 thousand (+12%); Germans with 1202.3 thousand (- 0.01%); Italians with 1047.9 thousands (- 2.3%)
•
Arab share represents 14.9% of the total with a decline of 4% compared to 2008.
Tourism also contributes 4% of total investment (13% of the total investments of production services), where
the private sector investments play a major role with around 73% of these investments. In terms of tax contribution, it represents about 6% of total direct sales tax and 24% of direct taxes on services.
Tourism is a labor-intensive industry due to the forward and backward linkages of the sector with other activities (around 70 sectors) and creates jobs across the board. It is considered a main provider of jobs where
tourism employment (direct and indirect) is about 12.6% of the total employed population, with 1.2 million
workers directly engaged in hotels and another 1.5 million in travel and other related tourism services.
The Egyptian Tourism Authority (ETA) has 17 offices all over the world: 12 in Europe (Brussels, Bern, Frankfurt, London, Madrid, Moscow, Paris, Poland, Rome, Stockholm , Vienna, Istanbul); 2 in North America (Montreal, New York); and 3 in Asia (Mumbai , Tokyo, Beijing).
With regard to statistics and research, the MOT coordinates with other entities such as the National Statistical
Agency, the Central Bank of Egypt, and others in the management of all aspects of information and statistics
in order to create data for tourism planning, including the Tourism Satellite Account, and improvement of services. The MOT offers training programs with the cooperation of the Egyptian Tourism Federation Chamber
(ETFC) and other entities to generate higher profits and to meet the most demanding standards for sustainability. The MOT also encourages capacity building using a variety of skill development programs with several
donors and with self-finance in some programs such as apprenticeship and on-the-job training.
I.3.d Information and Communications Technology (ICT)
The ongoing restructuring of Egypt’s ICT sector is to serve development by liberalizing the telecommunications sector and opening the market to new competition. This restructuring has so far involved designing laws
and regulations related to telecommunications, electronic commerce, intellectual copyrights and industry development; investing in human resources and promoting innovation and research and development. ICT was
identified as a priority at the highest policy level in 1999, and a new Cabinet Office was established, namely
the Ministry of Communications and Information Technology (MCIT). The creation of MCIT and the adoption
of the national ICT plan resulted in tremendous growth in the ICT sector. MCIT was charged with the task of
creating an information society, which started with preparation of the national ICT plan (1999-2009).
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TABLE I.1a: Elements of the Egyptian Information Society Initiative (EISI)
eReadiness “Equal Access for All”
l Enabling all citizens with easy and affordable
access to new technologies
l Developing a crucial robust communication
infrastructure
n eGovernment “Government Now Delivers”
l Delivering high quality government services to the public in the format that suits them
l Reaching a higher level of convenience in
government services
l Offering citizens the opportunity to share in the
decision-making process
n eHealth “Increasing Health Services Availability”
l Improving citizens’ quality of life and healthcare
workers’ work environment
l Using ICT through to reach remote populations
l Providing continuous training for doctors
l Developing the tools for building a national health network
n
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eLearning “Nurturing Human Capital”
l Promoting the use of ICT in education
l Shaping a new generation of citizens who under
stand ICT and are comfortable with its use in their
daily lives
n eBusiness “A New Way of Doing Business”
l Creating new technology-based firms
l Improving workforce skills
l Using electronic documents
l Developing ePayment infrastructure
l Using ICT as a catalyst to increase employment,
create new jobs and improve competitiveness
n eCulture “Promoting Egyptian Culture”
l Documenting Egyptian cultural identity by using
ICT tools to preserve manuscripts and archives
and index materials
l Offering worldwide access to cultural and
historical materials
l Generating and promoting interest in Egyptian
cultural life and heritage
n
ICT Export Initiative “Industry Development”
l Fostering the creation of an export-oriented ICT industry
l Developing an ICT industry that will be a powerful engine for export growth and job creation
Source: Sherif Kamel, based on MCIT 2007
The plan, in a nutshell, aimed to build a knowledge-based society that could boost socioeconomic development
and entice economic growth with eight specific goals:
•
Completing the ICT infrastructure to avail universal interconnectivity;
•
Realizing infostructure across government, private sector and civil society organizations;
•
Linking Egypt to the growing global digital marketspace;
•
Investing in human capital through lifelong learning programs and serving different segments of the
community;
•
Building an electronically ready community capable of engaging in the global information society;
•
Updating Egypt’s infrastructure as a step in building the nation’s information highway;
•
Encouraging an export industry by promoting and supporting innovation, creativity and research and
development in ICT-related areas; and
•
Collaborating through public private partnerships in high-tech projects with business and socioeconomic
implications.
Due to changes in global and local markets, both the vision and strategy were amended in 2000 and 2004.
MCIT took concrete steps such as
•
Radically modernizing Egypt’s National Postal Organization in 2002 to engage effectively in eServices;
•
Establishing the National Telecommunications Authority (NTRA) in 2003 to orchestrate the liberalization process of the telecom sector; and
•
Creating the IT Industry Development Agency (ITIDA) in 2004 to promote an ICT export-oriented industry. The partnership between these institutions and the ICT private sector led to accelerating ICT growth, reaching 20% in 2006 and surpassing 25% in 2007.39 The ICT sector is driving the gross domestic product (GDP)
growth in many nations and Egypt is no exception. One element that was part and parcel in the national ICT
plan is Egypt’s most precious resource, people, especially the young, given that its young population between
15-29 years of age is over 31.33% of the total population of Egypt.40
ICT for Development
In May 2007, MCIT released its 2007-2010 national ICT strategy. The plan paved the way for the Egyptian In34
Situation Analysis: Key Development Challenges Facing Egypt
formation Society Initiative (EISI), which represented the vision of the ICT strategy translated into specific initiatives and programs to diffuse ICT connectivity. EISI is structured around seven major tracks, each designed
to help bridge the digital divide and speed Egypt’s evolution into an information-based society.41
To achieve the planned annual increase — over the period 2007-2012 — of 20% in internet users and information technology clubs, 25% in mobile phone users, and 15% in number of companies working in the field of
communication and information technology, the proposed policies include: creation of public-private partnerships wherever private sector participation is lacking; better regulation of the ICT market to ensure fair market
practices; expansion of both basic and ICT-facilitating infrastructure; and increased efforts to close the ICT
gap, especially in access to fixed broadband Internet service, given its growing importance in the way people
conduct business and communicate.
Electronic Readiness
MCIT has implemented different programs promoting computer literacy and encouraging the use of ICT across
the nation. One of these programs is ‘ICT for All’. Recognizing universal access to ICT as key to socioeconomic
development, the program is devised with two main objectives. First, it aims to assist the government policy
to integrate ICT in government and public services by increasing ICT penetration, fostering inclusion in the
knowledge society, providing better public services and quality of life, and increasing the use of post offices to
provide expanded public services. Second, the strategy aims to facilitate ICT access for all citizens by increasing
PC penetration, expanding the reach of Internet connectivity and broadband to all communities, raising youth
employability through ICT training and encouraging government employees to attain international accreditation in ICT skills.
I.3.e Renewable Energy
According to the Seventh Egyptian Competitiveness Report, Egypt’s long-term renewable energy prospects
will “provide ‘early-mover’ advantages in global growth industries, create new jobs and provide a healthier
and cleaner environment.”42 The Egyptian energy sector depends on diverse resources for its primary supply
of energy. Fossil fuels include oil and natural gas, while renewable sources include hydro, wind, solar, and
biomass. Fossil fuels are the dominant sources, while hydro and wind energy together represent about 4% of
energy production. Solar energy, however, holds a great variety of potential uses. There is a great challenge
in the energy sector in Egypt, as demand is currently growing far greater than supply of the nationally generated energy resources. According to the Egyptian National Competitiveness Report (2010), using renewable
energy to alleviate this demand/supply mismatch is key to Egypt’s ‘green transformation.’ Wind and solar energies as electricity generators are very important, even though the costs are not as competitive, because they
provide a so-called ‘hedge benefit’ against the potential unavailability of fossil fuels in the future.
Solar power uses direct sunlight and must be located in regions with high direct solar radiation. As such, the
Mediterranean countries and the Middle East are attractive sites for solar energy. Egypt’s energy potential
is highest amongst North African countries, but Egypt has not taken advantage of the huge potential of solar
energy production, and there are barriers inhibiting the growth of this source. Producing electricity through
photovoltaic technology is possible with solar energy, as is producing heat through solar collectors or in a
concentrated solar power system. Egypt has a huge capacity for photovoltaic technology, far greater than
other countries in the region, but the current installed capacity does not reflect this. In fact there are no
grid-connected applications for photovoltaic systems in Egypt, but rather they are used in applications where
modules are an integrated part, such as for powering mobile telephone towers. And given the limited size of
the market, the local photovoltaic market is dominated by service providers or installers. Additionally, despite
the highly cost-effective and efficient solar water heaters, Egypt fails to utilize this either. Egypt had one of the
very first plants in the world to utilize solar thermal energy in generating steam, but there was no follow up,
and the integration of solar energy in industrial processes is thus limited.
Egypt also has great potential for wind energy, and there are plans for its expansion. The costs of wind energy
are somewhat more affordable than those of solar energy. Egypt has a leading position and great economic potential in wind generation compared to the EU and MENA regions. However, the development of wind energy
is low when compared with the installed capacity. When developments first started in Egypt in 1988, there
were grand scale grid-connected projects for the New and Renewable Energy Authority. Now, the most recent
strategy from the Egyptian Supreme Council aims to have 12% of total electricity generation in 2020 coming
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from wind. While there was in fact limited demand for wind energy in the past, preventing the development
of strong local manufacturing industry, this trend is changing rapidly.
The ratio of Egypt’s oil and natural gas production to reserves ratio is still high, but the resources are being
depleted to meet growing internal demand and to balance trade. This will be difficult to maintain from nonrenewable natural resources. The growing demand for energy in Egypt is driven by population growth as well
as economic growth, and these will continue to drive increased demand for energy. Given this fact, energy
intensity must be the major focus of policy.
I.3.f Construction and Housing
The construction industry in Egypt contributes between 4 and 6% of GDP and between 7 and 8% of total
employment, according to the recent Seventh Egyptian Competitiveness Report. A competitive construction
industry is crucial for cost-effective provisions of residential and commercial buildings, as well as for the infrastructure of transportation, energy, water and sanitation. The size of Egypt’s construction industry coupled
with the human resource base indeed serves as a huge strength, but weaknesses include such things as difficulty with access to land and to finance, a high cost of financing for those with the access, and complicated
regulations and permit processes. Overall, increased transparency and more competitive tenders could improve the competitiveness of Egypt’s construction industry.
A comprehensive strategy is needed for the construction sector’s competitiveness, and this would serve as an
extremely valuable reference for policymakers and practitioners to promote construction and increase its contribution to development, growth and exports. Promoting ‘green construction’ is critical for Egypt to compete
in the global market, so encouraging market conditions that provide natural commercial incentives for firms
to adopt environmentally- friendly construction techniques is critical. Government-led initiatives should lead
and support, and regulations, fiscal incentives and legislative sanctions can help accomplish this. The government needs to be the leader in advocating for and raising awareness of contractors and customers in this
regard. The synergy between the market and the government is crucial for the construction industry, neither
of which currently push for green construction. Reducing construction waste is yet another area which needs
focus in the construction sector’s strategy, where recycling, reduction of noise and dust, and saving energy
must be encouraged.
The housing market in Egypt had seen a number of market-oriented reforms, crowned by Law No. 4/1996,
which allows landlords to sign definite duration contracts, and known in the housing market as “the new rent
law.” The growth in new rent housing in 2009 is tangent to a wide and different variety of young groups, and
this pattern of housing is gaining increased attention in rural areas. In addition, the new rent contract is becoming more attractive to all classes. The other marked change in the housing market is the increase in housing ownership, where the share of owned housing was 78% in the total housing market in 2009.
I.3.g Micro and Small Enterprises (MSE)
MSE Sector Background
Micro and small enterprises make up over 99% of private enterprises in Egypt and account for 85% of nonagricultural private sector employment and almost 40% of total employment. They have been the primary absorber of labor force entrants over the past eight years. Although the stock of micro and small enterprises has
grown at an average annual rate of over 4% during the past ten years, and micro and small enterprise employment has increased at an annual rate of over 5%, the micro and small enterprise sector is highly vulnerable.
The reason for these high rates of growth in enterprise creation is because of the high rates of unemployment,
which push young people to setup new businesses, especially in the retail trade, which leads to further risk of
mortality. The average Egyptian micro and small enterprise has only 2.3 workers, and almost three-quarters
of all private enterprises have fewer than three employees. Over 80% of micro and small enterprises are informal enterprises, with low value-added, low production quality, and poor export performance.
Formal micro and small enterprises are subject to a legal and regulatory framework that is cumbersome, bureaucratic and not sensitive to their operating realities. They face several other constraints, including difficult
access to formal financing, business development services, markets, information, technology, skilled labor, and
adequately priced inputs. And although the numbers of both micro and small enterprises have been on the
rise, this has not resulted in a reduction in the level of poverty; in fact, poverty levels have increased in recent
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Situation Analysis: Key Development Challenges Facing Egypt
years. Most new entrepreneurs finance their start-ups from their personal resources. According to the Global
Entrepreneurship Monitor (GEM), the vast majority of the nascent and start-up businesses in Egypt are small
ventures. Sixty percent of Egyptian early-stage entrepreneurs finance their start-ups with less than LE 50,000,
but the amount ranges from LE 100 to LE 10 million. However, the good news is that GEM results show that
the employment growth expectations of early-stage entrepreneurs would result in a 25% growth in average
firm size over the coming five years.
There has been controversy regarding the definition of micro, small and medium enterprises by different entities and organizations. However, Small Enterprise Law 141/2004 defines micro enterprises as companies or
sole partnerships with paid-up capital less then LE 50,000, and small enterprises as companies or sole proprietorships with paid-up capital between LE 50,000 and LE 1 million, and with 6–50 employees. According to
CAPMAS, 92.5% of enterprises are micro, 7.3% small, and less than 1% (only 0.2%) is medium or large. Only
about 1.5% of private sector enterprises have more than ten employees. While the predominance of micro enterprises is not in itself unusual, the number of private sector medium and large enterprises, and the proportion of the private sector workforce that they employ is low by regional and international standards. Micro and
small enterprises in Egypt tend to have very small amounts of capital. Around 59% of enterprises with 1–4
workers have capital of less than LE 5,000 (less than US$1,000) and only 6% of all enterprises have invested
capital of more than LE50,000 (less than US$10,000), according to Labor Market Panel Survey Data for 2006.
The proportion of micro and small enterprises is growing. While micro and small enterprises accounted for
73.5% of total private sector employment in 1996, their share jumped to more than 85% in 2008. On the other
hand, medium and large enterprises witnessed a decline in their share of employment by almost half, from
26.5% to 14.7% during the same period. As is typical in developing countries, micro and small enterprises are
concentrated in the trade and services sectors. Of the total micro and small enterprises, 59% are in wholesale
and retail trade, 27% in services, and 14% in manufacture as of December 2008. Despite making up the vast
majority of firms in Egypt’s private enterprise sector, the contribution of micro and small enterprises to exports is very low–estimated at only 4% of total exports in 2008.
There is only limited participation of women in self-employment and micro and small enterprise ownership.
Women-owned micro and small enterprises make up 18% of the total number of micro and small enterprises.
As size grows, levels of female ownership decrease even further. Women-owned enterprises have lower levels
of capitalization, are less likely to employ other workers, more likely to be in retail trade, less likely to export,
and less likely to be registered. The presence of women in entrepreneurial and micro and small enterprises
activity mirrors their low participation in the labor force generally. There are over one million women in the
labor force who would like to work but who cannot find employment. Therefore, there may actually be greater
potential for women’s participation in the enterprise sector than men, proportionately. The picture is better for
microfinance, with women making up 74% of the active clients of SFD-supported MFIs. There is, therefore, significant untapped potential to encourage more women to enter the labor market and to consider entrepreneurial and MSE activity as an option. However, the many barriers they face must be addressed, including social and
cultural resistance to their economic activity; low education and literacy levels; training, business development
services, and markets; low property ownership/rights; and difficulties in dealing with regulatory authorities.
MSE Strategy43
If effectively implemented, the National MSE Development Strategy will lead to an expanding MSE sector. A
30% increase in the number of MSEs within five years (addition of close to one million) and an increase in the
average size of MSEs from 2.3 to 2.5 workers are projected to result in an additional 2.25 million MSE job opportunities over the next five years (average of 450,000 per year). The strategy also anticipates an MSE sector
more capable of pursuing increased market opportunities in higher value-added areas of activity with higher
quality and productivity. Thus, the National MSE Development Strategy will contribute towards improvement of
national priority parameters, specifically, increased GDP, employment generation, higher industrialization, enhanced competitiveness, export development, and reduction of poverty through expanded income generation.
Additionally, another set of important objectives can hopefully be fulfilled by implementing the MSE National
Strategy: Increase the proportion of formal enterprises in the total stock of MSEs from 20% to 40% over the
coming five years; increase the percentage of women-owned MSEs from 18% to 24% over the coming five
years; increase the percentage of new and existing MSE owners and employees with vocational and technical
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education and training from 3.5% to 10% ; increase the percentage of MSEs accessing business and market
information, BDS, technical assistance and entrepreneurial and management training to 5%.
The MSE sector in Egypt suffers from many constraints. These are well-known and can be categorized into:
1) demand-related constraints, arising from weak purchasing power of their primary low-income customers; more intense competition; low involvement in export activity; limited linkages to larger firms; and use of
limited, non-structured and uncoordinated marketing channels; 2) input constraints, such as low utilization of
technology; inadequate access to external finance; poor access to adequately priced inputs; and low access to
information and business development services; 3) process and management constraints resulting from lack
of sophistication of production systems and weak management know-how; 4) labor constraints due to a scarce
supply of skilled and trained workers and inability to pay high wages and cover high non-wage labor costs;
5) legal and regulatory constraints which impose heavy compliance burdens and costs on the smallest enterprises (leading to the high level of informality); and 6) entrepreneurship constraints due to an inadequately
supportive entrepreneurial environment and culture. Another example of an impediment to small business
is that NGOs that provide microcredit to MSEs are not allowed to accept savings along with handing out loans.
The number of such NGOs has been increasing and institutions such as the Social Fund for Development (SFD)
have been assigned the primary task of supporting micro-lending and assistance to microenterprises, using
intermediaries — mostly NGOs — to provide credit.
It is critically important to now put in place the proper policies, measures, actions, and coordination structures
to foster the growth of MSEs at both the national and governorate levels. Measures are necessary to alleviate MSE constraints, create a level playing field for MSEs, and address uncompetitive market structures and
market and systemic failures in the provision of financial and non-financial services. This will require input
and participation from all levels and branches of government, the donor community, NGOs, business service
providers, the financial and banking sector, the education community, and private sector corporations. Above
all, for this to take place and bear fruit, what is needed is a paradigmatic shift in economic policymaking that
positions the domestic private sector, at heart of which are MSEs, as the focus of government reforms along
more inclusive and equitable lines and establishes adequate governance structures to ensure that inclusiveness, equity and active participation are maintained.
Egypt should also look to strengthen the link between migration and SME development by encouraging productive remittance use and encouraging investment of financial, social and human capital associated with migrants’ return. Remittances are a very important source of income for the Egyptian economy (in 2008, they
represented 5.3% of total GDP), which can be linked to various sustainable and inclusive growth opportunities outlined in this report. In this context, in 2008/2009, the International Organization for Migration (IOM)
surveyed migrant-sending families in several rural governorates to shed light on the link between remittances
and local investment, with a focus on SME establishment. Approximately 80% of households surveyed did not
engage in investment however – highlighting those factors outlined below, amongst others. To address these
issues and enhance the development impact of remittances, the report recommends incentivizing migrant investment, as well as improving the business climate and reducing the perceived ‘risk’ associated with investment in the country. At the same time, the IOM is examining potential community-level activities – such as
financial literacy training for families left behind – which may help to promote productive remittance use.
Egypt’s Social Fund for Development (SFD) has now existed for 20 years. The SFD has developed its outreach
capacity through a network of regional offices covering the 29 governorates of Egypt. The SFD covers the
following areas: (i) small enterprise development; (ii) microfinance development; (iii) community infrastructure; (iv) community development; (v) human resources development; and (vi) business services. The SFD
has mobilized US$2 billion since its inception, including both grants and loans, from more than 15 multilateral
and bilateral donors. While a large majority of the loans provided to the SFD have been at concessional rates,
the SFD operates on a cost-recovery basis for sustainability purposes and does not receive a central government budget allocation. There has been no recent assessment of the Social Fund and of remaining bottlenecks
in its operation.
The Ministry for Trade and Industry (MTI) has also been responsible for supporting micro and small enterprises via the Industrial Modernization Center (IMC) in a number of ways: The development of cluster-based
technology centers to serve specific sectors such as leather or furniture in those regions where the density
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Situation Analysis: Key Development Challenges Facing Egypt
of industrial clusters is high. It has also worked to promote matchmaking between large and small firms to
promote feeder industry linkages as well as matchmaking between MSEs in Egypt and larger firms abroad,
especially in Europe. The Ministry is also pursuing vigorously the issue of vocational training via its Industrial
Training Council and its network of vocational training centers. The council is also responsible for promoting
private business involvement in the reform programs of TVET, and especially with regards to the curricula and
the supply of appropriate facilities and equipment for TVET centers.
The General Authority for Investment and Free Zones (GAFI) has also developed a comprehensive strategy to
enhance the competiveness and productivity of small and medium investments (SMIs) which encompasses
four critical pillars: entrepreneurship, competitive poles, access to finance and business development services.
GAFI has developed a new headquarters BDS unit, and will utilize its network of regional offices and its commitment to being a BDS facilitator for BDS providers. Regarding access to finance, GAFI is in the process of
selecting a licensed fund management company to run its LE1 billion fund to be launched in the near future to
promote SME growth as a means to employment opportunities. The fund will be directed to start ups and to
growth companies with promising entrepreneurs. Although the fund has, in its core, a developmental purpose,
it will be run on a commercial basis.
With respect to the new MFI law, the Egyptian Financial Services Authority (EFSA), a regulatory authority created in 2009 under the Law for the Regulation of Non-Banking Financial Markets and Instruments (the “Single
Regulator Law”), regulates securities markets and non-bank financial institutions. NGO-MFIs are overseen by
the Ministry of Social Solidarity (MOSS). A draft microfinance law expected to be passed in 2010 will create a
new category of non-banking financial institutions (microfinance companies or MFCs) and facilitate commercial micro lending under the regulation of the EFSA.
Social Fund for Development: Recent Progress
The Social Fund for Development was created by the GOE in 1991 as a social safety net mechanism aimed at
mitigating the adverse effect of the Economic Reform and Structural Adjustment Program (ERSAP). The Small
Enterprises Law 141 of 2004 reinforced the key role of the SFD in developing micro and small enterprises in
Egypt. The SFD has separate approaches for microfinance and small enterprises finance, which are outlined
below. The most notable differentiating feature between the SFD’s two approaches is that entrepreneurs are
required to register their businesses (if not already licensed) before they can receive a loan. This is the primary
reason for the high number of start-ups for small enterprise lending of 74% as of May 2009.
The SFD’s Microfinance Department supports income-generating activities and the creation of sustainable job
opportunities with the aim of decreasing poverty levels and improving socio-economic indicators. Its main objective through the provision of microfinance is raising the income of poor families, especially female-headed
households. The SFD works primarily with NGOs. Since the creation of the Microfinance Department, it has
worked with a total of 441 NGOs and community-based organizations, serving a total of approx. 802,529 clients. Reported portfolio quality is excellent, with only 1.8% portfolio at risk as of December 2008. The five
largest and also best performing NGOs that the SFD financed out of a total of 441 as of August 2009, make up
38% of the total SFD microfinance portfolio. This figure also indicates that there are a large number of small
SFD-financed NGOs. Funding contracts with NGOs are for up to five years, and require that women make up at
least 30% of loans, and enterprise start-ups are at least 10%.44
Small enterprise finance is the responsibility within the SFD of the Small Enterprise Development Organization (SEDO). The SFD provides funds to banks for on-lending to MSEs with a portfolio amounting to US$ 131.2
million. SEDO’s portfolio is over twice as large as the SFD’s microfinance portfolio, although it serves less than
a tenth of the number of enterprises. Reported portfolio quality is high for small enterprise lending, and is at
similar levels to the microfinance portfolio. The proportion of women clients stood at 27% as of December
2008 and the target is 35%. Banks are selected for SFD financing through a financial assessment and on the
basis of the quality of their portfolio, institutional capacity, and willingness and ability to leverage the volume
of credit line. This takes into account their accessibility, their branch network-outreach, professional capacity
experience and track record for finance of MSE and financial capacity such as profitability, liquidity, capital
adequacy, financial leverage, percentage of arrears, and growth ratios.45 Despite the fact that a number of banks
opened an MSE Division, showing growing interest and a more adapted approach to small businesses, the criteria for credit worthiness analysis and the requirement for the loan approval are still a problem since they are
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Box 7: New Initiatives of the Social Fund for Development
A number of new projects assigned to the SFD are evidence of diversification of its portfolio with new sources of support
as well as diversifying the types of operation engaged in, such as promoting franchising among small and medium enterprises
(SME).
1) The Franchising Sector Support Program includes debt financing to franchisees and capacity building of local stakeholders
(SFD, Egyptian Franchise Development Association, Financial institutions, consultants, lawyers, judiciary). The project is expected to create 375 franchise outlets, over 7,000 direct jobs, and will increase the number of SMEs operating in the formal sector. It
will also bring technology transfer to SMEs, foster increased productivity and export potential.
2) The project “Enhancing Access to Finance for Micro & Small Enterprises” for SFD lending to NGOs, banks and potential
MFIs is to increase and improve their lending to SMEs. This will enable SMEs to not only obtain more funds, but to access a much
broader range of financial services, including deposits, insurance, and payments, as well as Islamic financial products and mobile
banking. As a result, SMEs will be able to manage risk more effectively, secure lower-risk sources of finance, and reduce transaction costs and payment delays.
3) The Livelihoods and Economic Enhancement Project targets the economically active rural poor who have the potential
to embark on business ventures in on-farm and off-farm commercial activities. The objective is to improve the livelihood of the
smallholder farmers engaged in the production, processing and marketing of selected agricultural commodities (horticulture,
livestock and fisheries) by strengthening smallholder farmer associations (including cooperatives) and creating business linkages
between the farmer associations and the large private sector agribusinesses, in a value chain.
4) The OPEC Fund for International Development Project is the first intervention of the OPEC in the Middle East in the field of
social development. This project aims at improving the socio-economic conditions of local communities by increasing the income
of poor Egyptian households through the extension of small loans mainly via banks and NGO intermediaries. It further supports
the GOE’s efforts to increase the income of Egypt’s rural population by promoting economically viable and environmentally sustainable activities and thereby reducing unemployment through job creation and stimulation of self-employment. The project is
planned to establish and expand about 9,330 micro and small enterprises that will create about 23,300 job opportunities.
Source: Hanaa El Hilaly, Social Fund for Development
mostly the same for small enterprises as they are for larger firms, keeping high the cost of handling the dossier
and hampering small enterprises access to finance.
The SFD Marketing and Management Sector (MMS) aims to provide an integrated package of technical support
and marketing services to increase the competitiveness of micro and small enterprises in domestic and export
markets, and to support job creation. The MMS operates mainly as a service provider to micro and small enterprises through outsourcing the required services. The MMS outsourcing mechanism depends primarily on
cooperation protocols signed between the SFD and third institutional parties — universities, research institutions or training centers — and on direct commissioning of local and/or international consultants. However,
extension services of the SFD are still lagging behind its microcredit operations and have enormous scope for
expansion and improvement. As outlined in the MSE strategy, the need is to move in parallel between financial
and non-financial services to boost the productivity and marketability of MSE operations. The following business services are provided through SFD regional offices: A ‘one-stop shop’ approach to ensuring that entrepreneurs receive a tailored package of services, whether provided by the SFD or by other
organizations/firms that the SFD has agreements with, and streamlined (time and cost) business registration.
The services provided by the SFD are mostly free of charge, and are funded by donor grants and SFD interest
income. These include assisting enterprises in preparing business plans and loan applications, a service that
is particularly valued by banks. Monitoring of project activities is undertaken in the field, and reports are received from the core operational departments, such that financial services relay information from the banks;
Business services and institutional business consolidate information from their clients. The MIS department
tracks these reports and provides management information for senior management.
Despite the considerable financial resources made available by a number of donors and devoted to funding
microfinance, apparently little or no information is gathered by SFD, or by the NGOs funded through SFD, on
the impact of microfinance activities in terms of sustainable job creation, investments, enterprises mortality
rate, and eventually improved living conditions of the beneficiaries. Such an evaluation is needed on a regular
basis in order for SFD to obtain signals for guidance in improving the outcome of its activities.
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Situation Analysis: Key Development Challenges Facing Egypt
Figure I.4a: Distribution of New Entrants by Type of First Job
%
45
Public Sector
40
Work
35
Formal Private
Wage Work
30
25
Informal Private
Regular Wage
Work
20
15
Irregular Wage
Work
10
5
0
1970
1980
1990
2000
Non Wage-Work
Source: Ragui Assaad and Ghada Barsoum in “Generation in Waiting,” Brookings Institute Press, 2009
I.4 Employment Strategy for Youth
The problems faced by Egypt’s youth are rooted in unemployment, stemming from the poor economic policies of five decades ago. This was when the system of guaranteed employment was introduced and provided
an artificial sense of contentment and achievement, and when an overblown bureaucracy was considered an
engine of growth rather than an unsustainable burden on the budget. The policy resulted in the growth rate
for the wage bill for administrative personnel overtaking that for public expenditure on education, health and
basic infrastructure. At its peak, the broad public sector including administration, social services and public
enterprises was responsible for recruiting more than one third of the annual cohort of young people entering
the labor force (See Figure I.4a). Meanwhile, the performance of Egypt’s formal private sector has also been
modest. It has taken more than 20 years for formal enterprises in the private sector to double their absorptive
capacity for new entrants from 5% in the 1980s to 10% in the first decade of the new millennium.
Today, Egyptian labor does not fulfill the market requirements and it is a critical impediment to private sector’s growth and competitiveness in what has become an open and liberal economy. This is further deepened
by lack of an adequate human resources strategy at the level of firms to offer employers clear directions on
labor or hiring issues. Not all of Egypt’s youth have the same access to networks of support and opportunities for decent jobs and comfortable incomes. On one level, university-educated youth are experiencing high
unemployment rates as a result of the mismatch between their education and formal labor market needs. On a
second level, graduates of technical and vocational education and training (TVET) have also been beset by low
employment rates. TVET has held the dead-end label for those who are pushed away from general or higher
education. However, most TVET institutions are supply-driven and have a lack of clear standards for curriculum development and training delivery, and they use outdated equipment that is misaligned with technological
development. The result is under-skilled graduates who cannot fill the specialized requirement of industry,
or the upper end services sectors, and must turn to the informal sector for jobs. Evidence also indicates that,
paradoxically, unskilled labor holds an advantage in terms of employment opportunities, perhaps as a result
of a boom in construction.
There are two basic concepts that lie behind the paradigm shift necessary to turn around the current failures
in labor market mismatch; these are incentives and accountability. At every level of intervention, a clear set
of incentives must be put in place to enable education to become a viable entry point to employment. This
would include better designed curricula for those subjects with practical application to the labor market, and
a balanced package of training incentives to the business and industrial sectors. Accountability goes hand
in hand with high standards of faculty performance, in line with acceptable international standards, greater
emphasis on the acquisition of helpful market skills such as second language fluency, and for TVET, upgraded
staff and facilities and proper certification. Resolving labor market failures is a shared responsibility among
all stakeholders, which include youth, employers, federations/chambers, as well as government. The way
forward would include closer inter-linkages between education providers and employers, active involvement
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of employers via some form of scheme in the provision of curriculum content, equipment and teacher training,
with prospects of mobility for employability.
Although Egyptian youth still show a preference to work in government, a growing percentage favour entrepreneurship according to the Global Entrepreneurship Monitor. With regards youth engagement in entrepreneurial activity, the GEM results are very promising. The 25-34 age group has the highest Total Entrepreneurial
Activity (TEA) rates in Egypt (15%) as is the case for all GEM countries. So this is the most significant pool of
potential entrepreneurs from which the majority of new enterprises and jobs will be created in coming years.
The age group with the second highest TEA rate in Egypt is among the 18-24 year olds (12.3%), which is higher
than in most GEM countries. Thus, Egypt’s young population gives it a strong “entrepreneurial” advantage. The
policy implication is that considerable efforts should be made in Egypt to foster the development of entrepreneurial skills, ability, and know-how of young Egyptians. This should start early in the education system as part
of the formal curriculum and extracurricular activities. Unfortunately, Egypt has the second lowest rate among
43 countries for the percentage of the population that has received any exposure to entrepreneurship in the
education and training system (only 7.5%), and this situation must immediately be rectified. There is increased awareness in Egypt that productive employment and decent work for young people cannot
be achieved through fragmented and isolated interventions. It requires a coherent approach that articulates
supportive policies centered on an integrated strategy for growth and job-creation as well as targeted interventions to help young people overcome the specific barriers they face in entering and remaining in the labor
market. It requires partnerships for sustained, determined and concerted action by a wide number of actors.
This is indeed the general approach of the ILO’s Global Employment Agenda, also embedded in the resolution
concerning youth employment adopted by the International Labor Conference in 2005.
In this respect, it is noteworthy that in 2003, Egypt became one of the ‘Lead Countries of the Secretary-General’s Youth Employment Network’ (YEN) – a partnership between the United Nations, the World Bank and
the ILO.46 As part of its commitment as a YEN Lead Country, the GOE has embarked in the preparation of its
National Action Plan on youth employment (NAP), with the support of the ILO Sub-Regional Office for North
Africa and the Employment Sector at the ILO’s headquarters’, in partnership with the YEN Secretariat. This
NAP is a result of a thorough and comprehensive process involving many important players and stakeholders.
The process has been driven and strongly supported by Egypt’s Ministry of Manpower and Migration that has
worked in full partnership with the social partners and in close cooperation with national and international
actors, including youth organizations, development agencies and donors.
The goal for youth in NAP is to increase employment and provide decent and productive jobs for young people,
who join the labor market every year. This goal is closely related to the main objectives of Egypt’s Sixth FiveYear Economic and Social Development Plans (2007/2008–2011/2012). The main reason for relating the youth
employment NAP to the Sixth Five-Year plan stems from the fact that the plan takes into consideration the major
economic and social goals that the country is targeting The plan is based on three main pillars: the Presidential
Program that the government is adopting for the period 2005-2011; the new Social Contract for Social Participation, and the Millennium Development Goals (MDGs). NAP should also be linked to the next Seventh Five Year
Plan (2012/2013-2016/2017), since NAP’s implementation is also covered by part of this plan.
The average annual growth rate of labor force in the age group 15-30 years, during the period 2002-200747
amounted to 5%, and the labor force was estimated for the period 2010 – 2015 on this basis as well as the
number of jobs required annually during the NAP time span. This aims at reducing the unemployment rate
for youth from around 23% according to the 2006 Census to 15% by the end of the NAP. Accordingly, the total
number of jobs that should be created during the five years of the NAP amount to 3.1 million jobs with an average of 619,506 jobs annually to absorb the annual increase in the youth labor force and part of the stock of unemployed, which reached 1.9 million unemployed in the age group 15-30 years according to the 2006 Census.
In this context, international labor mobility could also play an important role in alleviating domestic employment pressure, whilst promoting Egypt’s socio-economic development. However, this requires an emphasis on
the broader higher education and TVET reform, in order to promote Egyptian labor’s international competitiveness and create new avenues for regular migration. There is a need to consider the relevance of Egyptian
workers and employees to international labor market demand, as well as encourage and facilitate interna42
Situation Analysis: Key Development Challenges Facing Egypt
tionally recognized accreditation. Furthermore, it would be essential to promote access to employment opportunities abroad, through provision of accredited and market-oriented education and training, as well as
through schemes to facilitate Egyptian jobseekers access to suitable vacancies abroad. International labor mobility could thus play an important role in alleviating domestic employment pressure, whilst promoting Egypt’s
socio-economic development.
According to the 2006 Population Census, almost 91.5% of the total unemployed were in the age group 15-30
years. In addition, the share of middle and highly educated unemployed represents 79.5% of total unemployed. It is also an insertion problem; 93% of the unemployed are first time job seekers. Unemployment hits
females more than males, as unemployment rates reached 40% for females and only 19% for males in the age
group 15-30 years. More importantly, unemployment exists among the poor, who cannot afford to remain unemployed.48 For youth with university degrees, unemployment jumps to nearly 45% for females and 25% for
males, compared to 30% for females and 12% for males among university graduates of all ages (15-64 years).
The youth employment challenge in Egypt is not only about creating more jobs. Given that the informal economy currently represents the main source of employment for new labor market entrants, the challenge is also
about creating better jobs. The 1996 Census data showed that the number of workers in the non-agriculture
private sector establishments employing less than five workers accounted for 2.5 million workers. Adding to
this, non-agriculture workers outside establishments reached another 2.5 million workers so that the total
number of workers in the informal sector amounted to 5 million workers representing 48% of private sector
employment and 86% of non-agriculture private sector employment. This means that employment in the informal sector grew by 9% annually on average during the decade between 1996 and 200649 although the 2006
census places it at the lower figure of 6% annually.
Inadequate Policies and Programs
In 2006 employment in the informal sector represented 58% of total employment in the private sector and
92% after excluding agriculture.50 There is a consensus that micro, small and medium enterprises (MSMEs)
could play an important role in job creation, in general, and for youth in particular. However, MSME development programs, such as the Mubarak Solidarity Program, the Small Enterprise Development Organization
(SEDO) affiliated to the Social Fund for Development (SFD), the Productive Family Program, Nasser Bank, business associations and credit guarantee programs which provide financial support to MSMEs, are not very effective in terms of employment creation and their impact does not go beyond the loan duration. Furthermore,
the impact of these programs on job creation is limited due to the lack of follow-up and evaluation mechanisms. The death rate of these firms is high due to insufficient expertise, lack of demand, and constrained
borrowing procedures.51
The GOE has attempted to promote MSMEs in several ways. In addition, several donors and NGOs sponsored
the development of MSMEs through financial and technical support. In 2004 the government issued the Small
Development Enterprise Law no. 141/2004, and the Ministry of Finance adopted a strategy and an action plan
to support the competitiveness of MSMEs in Egypt. In 2005, the government launched “The National Strategy
for Microfinance” with the main objective of providing financial services to poor people and micro enterprises.
The strategy also aims to establish a microfinance industry and integrate it in the development of the financial
sector. Also in 2005, the Social Fund for Development (SFD) adopted the national strategy for micro credit. In
2008, the SFD, the Ministry of Finance and the Canadian International Development Agency (CIDA) prepared a
national strategy for micro and small enterprise development for the period 2008-2012. However, the impact
of these initiatives has yet to be assessed.
Providing an enabling environment for MSMEs to start, work and grow, while reducing the cost of retreating
from the market, might encourage the formalization of a large portion of private informal firms.52 However,
despite their importance in creating jobs for youth, MSMEs should not be considered as an alternative to large
and mega projects, which could absorb a large share of employment and provide decent job opportunities.
However, employment distribution by sector of ownership according to the 2006 Census, demonstrates that
almost 27% of workers are employed in the government and in the public sector. Despite the fact that the
GOE abolished the guaranteed employment schemes many years ago, government and public sector jobs are
still more attractive for a large proportion of young graduates than work in the private sector. This could be
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Box 8: The Global Entrepreneurship Monitor Survey (GEM)
According to the 2008 Global Entrepreneurship Monitor Survey (GEM), 3 million nascent entrepreneurs in Egypt were trying to start 1.34 million new enterprises in 2008; and another 2 million early-stage entrepreneurs (TEA) owned 938,000 young
enterprises. The total incidence of entrepreneurial experience in the adult population is quite high — about a quarter of working
age adults are either currently involved in some level of entrepreneurial activity or have been in the past (37% of men and 13% of
women). Compared to 43 other developed and developing countries in the 2008 Global Entrepreneurship Monitor, Egypt ranks
11th on the level of early stage entrepreneurial activity, slightly lower than one might expect given Egypt’s GDP per capita. Thus,
there is scope for more entrepreneurial activity in the country. In fact, the percentage of Egyptians who are favourably disposed
towards entrepreneurship is well above the average for GEM countries. GEM reports that about one third of Egyptians expect to
start a business within the next three years and just over one half perceive they have the required knowledge and skills to start
a business.
Men are more than three times as likely as women in Egypt to be engaged in early-stage entrepreneurial activity. The TEA
rate for Egyptian adult men is 19% and only 6% for adult women. On an absolute basis, men make up just over 80% of early-stage
entrepreneurs in Egypt. GEM studies conclude that rapid gains in start-up rates can be achieved by increasing the participation of
women in the entrepreneurial process. Egypt’s large gender gap in the entrepreneurial activity rates of men and women is thus
an area of concern. As a matter of policy, Egypt should engage more aggressively in efforts to promote women’s entrepreneurship
and launch supporting initiatives.
Egyptian national experts were quite negative about the strength of many of Egypt’s Entrepreneurial Framework Conditions
(EFC). Their poorest assessment was of the state of R&D and technology transfer support, including financial support for new
and growing firms to acquire new technology; access to research and technology; commercialization support to engineers and
scientists with market potential technologies or applications; and the transfer of knowledge and technology from universities
and public research centers to new and growing firms. Weaknesses in the education system with respect to entrepreneurship are
reflected in Egypt’s last place standing relative to other GEM countries on the Education and Training EFC. Compared to 31 GEM
countries, Egypt placed 21st in experts’ perceptions of the availability of sufficient financing for new and early-stage growth firms,
particularly equity and venture capital financing. Framework items with very poor assessments were related to: 1) weaknesses in
the education system with respect to entrepreneurship, reflected in Egypt’s last rank relative to other GEM countries, 2) difficulty
for new and growing firms in coping with government bureaucracy, regulations, and licensing requirements; 3) lack of availability
and accessibility of government programs to support anyone developing a new or growing business; and 4) lack of effective support for new and growing firms provided by science parks and incubators.
The lack of a comprehensive government-wide and formally adopted entrepreneurship policy document, articulating a strategy to specifically promote the development of new entrepreneurs and the start-up of new and growth-oriented enterprises was
seen as problematic. Existing initiatives to promote entrepreneurship and support start-ups were seen as fragmented and disintegrated. Encouraging higher levels of entrepreneurial activity is critical to growing Egypt’s private sector. To improve Egypt’s
entrepreneurial performance compared to other GEM countries will require efforts to enhance the culture of entrepreneurship
among young people, increase opportunities to gain the knowledge and skills to start and grow successful enterprises, and improve the framework conditions to enable entrepreneurs to more easily pursue opportunities.
Source: Hala Hattab, The British University in Egypt, and Lois Stevenson, International Development Research Centre
explained by a mistrust in private sector practices which do not provide adequate work incentives for young
graduates, especially for females. It also reflects the scarcity of skilled and semi skilled technical or vocational
abilities among young people such that they are discouraged from seeking available jobs in the industrial or
large-scale manufacturing sectors.
This highlights the mismatch between labor market demand and supply, which can be explained by a number of factors. The first is that labor market policies are not aligned with macroeconomic policies in a global
framework of a national employment strategy that aims at increasing employment. In addition, the lack of coordination among existing policies and programs reduces their effectiveness, as does the insufficient funding
allocated to them. Moreover, they are most frequently short-term solutions to overcome labor market failures.
Consequently, the impact of these policies and programs on job creation should not be overstated. In addition,
the GOE has not provided enough incentives and the appropriate business environment to start a business,
or minimum wage and social insurance policies and labor laws and regulations that secure decent work opportunities.53
The most relevant labor market policies and institutions related to youth employment include minimum wage
policies and employment offices. A minimum wage should be looked as an incentive to invest in human capital;
in addition it stimulates aggregate demand.54 However, minimum wage in Egypt is still very low, is not related
44
Situation Analysis: Key Development Challenges Facing Egypt
to any economic target and, more importantly, is not enforced, especially in the private sector. Labor market
regulations in general and those related to minimum wage in particular should be enforced to ensure compliance by private sector firms. In this regard, the National Council for Wages55 might adopt a new strategy for
minimum wages, with particular emphasis on youth. The main objective of this strategy is to streamline minimum wages with other economic developments such as the inflation rate, productivity, or GDP per capita. The
strategy should establish a benchmark for minimum wages with other similar countries, and for public and
private sector firms. Minimum wages must be reviewed at least every three years to ensure consistency with
macroeconomic developments.56
Among the many aspects to boost employment in general and youth employment in particular, is to strengthen
institutional capacity in providing suitable job counseling and career guidance to job seekers while simultaneously working with employers to identify their needs, to result in a sounder matchmaking. In this regard,
career guidance services can be improved in the Public Employment Services of the Ministry of Manpower
and Migration (MOMM), in collaboration with the Ministry of Education (MOE), also entailing the possibility of
including career orientation and guidance in MOE curricula. This would allow for providing youth with better
information on job opportunities, training in job search activities, information on labor market demand and a
better understanding of job opportunities and requirements in the private sector.
Employment offices must also be reformed in the context of a decentralized strategy for public employment
services. Improving youth knowledge about labor market opportunities, wages and working conditions helps
them to find jobs. In addition, using skilled guidance and counseling helps rectify the mismatch between labor
demand and supply. Upgrading employment offices and raising their technical capacities would help bridge
the gap between labor market demand and the supply of skills. Employment offices must be able to provide
training for jobseekers in job search skills and assist them in writing and updating resumes, preparing applications, and organizing for interviews. It could also give better assistance to young people in times of economic
crisis. Encouraging the establishment of private recruitment agencies will have an important role, especially in
those governorates or districts where public employment offices do not exist. n
II. PILLAR TWO: SOCIO-POLITICAL RIGHTS
II.1 Egypt’s Integrated Social Policy: Changes and Challenges
Egypt has effected significant policy changes over the past decade. The impressive gains in growth achieved by
pro-investment liberal economic policies that included the simplification and reduction of taxation schemes,
facilitation of investment procedures, the restructuring of the banking sector and the privatization of some
public sector industries have yielded some gains to the Egyptian economy. High growth levels have also had
some effects on the labor market with the creation of some jobs for the millions of youth entering the labor
market. Despite these gains there are persistent social problems that require policy changes. The missing piece
of the Egyptian story concerns social policies and the public goods that they secure.
Over the past two years the relatively young Ministry of Social Solidarity (MOSS) has devoted some attention
to the task of the reorganization of Egyptian social policy and social spending. The Ministry, however, is not the
only player in the dynamics of social policy. Philanthropists, civil society, politicians, and professionals all have
parts to play. However, the state is the single most important player and partner in the provision of social protection. There are three possible sources for development solutions. There are market-based solutions such
as increased employment, investment and innovations. There are community-based ones that rely on private
individuals/groups and agencies to address local problems, and the third are state based policy solutions that
address the needs and entitlements of society as a whole. This distinction is an important analytical one that
helps put social problems and solutions in perspective. This section focuses on state led efforts.
II.1.a Safety Nets and the Welfare State
The welfare regime in Egypt is now changing but a new social model has yet to appear. Although the Egyptian
Constitution has been modified to accommodate political reforms in the past decades, such as direct election
of the president, the social terms of engagement between citizens and the state have not changed in either
letter or structure. Yet there has been a remarkable deterioration in the content and substance of these social
services. The problem that Egypt faces is that despite increased social spending such as the increases in social
45
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Part Two: Situation Analysis
n
Table II.1a: Programs and Outcomes
Program
n
n
n
School allowances
Social security pensions
Food ration cards
Micro-credit
Increasing capacity of
institutions for social protection
n
n
n
n
Poverty targeting
Food subsidy efficiency
Outcomes
n
n
n
600,000 beneficiaries
1,800,000 beneficiaries
63,000,000 beneficiaries
Increased beneficiaries and loans
Building homes, orphanages,
better services at social units,
training social workers etc.
n See text below
n See text below
n
n
Notes
40 LE/month allowance given
to children of those on social
security benefits
n LE amount has been increased by
20%
n Increased subsidized food items
and quantities (LE 9 billion)
n
Source: Ministry of Social Solidarity
allowances and the extension of health insurance to all school children, the current package of services and
rights has not stemmed the increasing fact and perceptions of poverty and impoverishment. What was once
a generous and effective social system has been weakened by lack of review, innovation, support, and citizen
empowerment. Had citizens been empowered by this system they would have defended it and ensured its
continued viability. As such, the system of public goods and social expenditures has been pilfered, starved of
resources, ignored and neglected, yet it remains a dear chimera of Egyptian citizenship. And indeed one could
argue that things could be much worse were it not for the vestiges of this model.
Nascent Policy Directions
The Ministry of Social Solidarity (MOSS) is mandated with food subsidy and cash transfer programs as the
main tools for its poverty alleviation strategy. There is increased pressure on the Ministry to come up with
foolproof targeting criteria to make these tools effective and less wasteful. Less is expected from the Ministry
in terms of a social policy that integrates various programs and creates a balanced strategy that weighs the
needs of different social classes and groups in Egypt. Targeting or ‘finding the poor’ can only work if it is part
of a policy reformulation and a new way of delivering entitlements and protection. The MOSS has nurtured a
process of policy reformulation that resulted in a concept paper on integrated social policies.
The main features of this draft concept note are:58
•
Economic growth alone does not guarantee social wellbeing and development;
•
Human development is the real motor of growth; and
•
Some individuals will remain vulnerable and marginalized in the context of growth and development and these individuals require special protection and enhanced entitlements.
The paper then suggests concrete changes at the level of:
•
Economic policies: Ensuring that policy and reforms are not harmful to the poor: for example, noting
that inflation harms the poor more than it does the rich so interest rates need to be considered not only
as a tool of fiscal policy but also as a decision that has social consequences;
•
Services and public goods: By transcending the current focus on access to services and coverage, to consider questions of equity and quality. Services need to be effective since education, health, water and
sanitation and housing are anti-poverty interventions and are tools to forge social integration and equity;
•
Social protection programs: By improved targeting, introducing better and more effective protection,
and securing entitlements to rights and property.
The mechanisms suggested to make operational this policy are to:
•
Initiate a public process of consultation and information sharing to create a momentum and amass a
critical public opinion and consensus around a new integrated social policies agenda. Mechanisms suggested include a social observatory to monitor and research social changes and the efficacy of services,
an annual forum that brings together stake holders from civil society and government, and local level
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Situation Analysis: Key Development Challenges Facing Egypt
Box 9: Conditional Cash Transfers
A sustainable national development campaign to reduce poverty requires partnerships across the national spectrum, working together towards a common goal. Well-defined roles for government, civil society and the private sector would eliminate
duplication, create synergies and reduce waste in allocating or using resources. Broadly, these suggestions were put forward in
the Egypt Human Development Report for 2005, in the proposal it made for a “new social contract.” In addressing the specific issue of poverty, it argued for effective and integrated partnerships across ministries and social sectors. It suggested a conditional
cash transfer (CCT) program for poor families as a vehicle to insure poverty eradication: one that forges a contract between state
and individuals using the intermediary of Civil Society Organizations (CSOs) whereby the state supports families financially and
in return each family commits to using existing state and non-state resources to realize developmental goals.
One practical suggestion was to test a pilot project in Egypt based on a successful experience in Chile. The Chilean Solidario
program uses conditional cash transfers for ultra poor families as a vehicle to ensure poverty eradication. The deal is that in return for an increased sum of welfare transfers, the family keeps its children in schools, registers in existing capacity building programs, illiteracy eradication or employment schemes, registers its property to get full rights and entitlements. It should however
be noted that CCT programs can only act as a complement to other existing social safety net programs, such as food subsidies, at
least in the medium term.
The current model in use in Egypt is one where the MOSS decides on its programs and projects and recruits community development associations and large CSOs to implement this vision without engaging the latter’s critical and creative input. This model
has enjoyed limited success. It tends towards philanthropic services, or the distribution of benefits rather than promote capability-building or developmental goals. It also relies on social workers that are poorly trained and provide ineffective monitoring.
For example, while some CSOs in Cairo’s slum Ain el-Sira neighborhood have a better relationship with clients, they been subcontracted by the ministry under ministry conditions, while others have a similar relationship with donors (whether individual or
institutional) whereby they are asked to apply a preset menu of activities — usually as service providers or as middle-men.59
For conditional cash transfers to work in Egypt, the MOSS needs to accept CSOs as civic partners with a wider role than simple
implementation. The key to success for conditional cash transfers globally has been the quality of implementation (bureaucratic
cooperation and well-trained social workers) as well as the degree to which there is consensus built around the conditions. Civil
society can be the partner that ensures that the program is not just another state resource that will be usurped by well meaning
elites without accomplishing its purpose.
The state can realize this partnership if there is the political will to do so. CCT are not simple transfers of resources to the
poor in the guise of service or cash, but an investment of money into the process of building capabilities. Families are provided
with cash transfers in return for their commitment to invest in the development of their human capital through regular school
attendance, growth monitoring and health care. At the end of a designated period of time during which families have attained
the capabilities that will help rid them from the handicaps of poverty (illiteracy, drug dependence, ill-health) the payments are
decreased and families are helped to gain access to credit, jobs, and shelter depending on their needs and achievements. After
another period of time (usually two years) payments are terminated.
Source: Hania Sholkamy, Social Research Center, AUC
•
councils that craft social agendas for intervention;
Revisit the current institutional framework and infrastructure for social policy and services through the
creation of a cabinet level task force to ensure political will and remove political obstacles to change.
The paper also recommends creating better capacity at the level of the executive in various ministries
to insure more effective quality services and enhance the policy making and monitoring capabilities in
government.
II.1.b Intended and Effected Changes in Social Policy
The MOSS has prepared a number of policy briefs in preparation for the annual conference of the ruling National Democratic Party. These documents give an account of actual and intended interventions and initiatives
in the field of social policies and services. This section presents the information given in these papers but will
then frame this information in the context of this emerging social model and illustrate the implications of this
model to basic social and economic rights and entitlements.
Two of the listed initiatives deserve careful reflection and recognition:
1. The Poverty Targeting Project:
n The Problem: Expenditure on the poor in Egypt is not well targeted. There is no database of families/individuals that can enable delivery of benefits to those who deserve them. The current system relies on the identification of categories that are deserving. Individuals who can prove that the rules of eligibility apply to them
can make claims for benefits. There are three problems with this system:
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Part Two: Situation Analysis
•
•
•
The criteria for eligibility are old, mainly demographic, and do not reflect current hardships and needs;
The amounts paid are too small;
The system is corrupt due to the ease of supporting false claims (by getting fake medical certificates etc.).
The Response: To review the current situation of poverty in Egypt and to extend social security and protection
to those who most need it, the MOSS has undertaken a vast initiative to determine a poverty index that can
be applied to families to determine if they are eligible for state support or not. These criteria include place of
residence, education, crowding, ownership of assets, etc. The Ministry has cooperated with national research
centers to undertake a household survey of all households in two pilot governorates to arrive at a formula that
approximates poverty relying on clear and transparent criteria. The formula is derived from the survey results
and should be an efficient and transparent method for determining priority and burden of need.
n
The door-to-door household survey is complemented by the poverty maps compiled for Egypt. There is now
a database that covers nine governorates and which enables the MOSS to identify those who are most in need
of different forms of state support.
There are also poverty maps that identify the 1000 villages in Egypt that have 50% or more poverty and which
are deprived of basic services and infrastructure.
The Outcome: A proxy means testing index to identify families eligible for state support has been developed.
In addition geographic targeting methods have identified the 1000 villages that need investments in infrastructure, services and social security and protection programs.
n
2. Food and Energy Subsidies
The Problem: Currently in Egypt there is near consensus among major domestic political actors that food and
energy subsidies are an important social safety net, but one which can be improved to better target the poor.
n
The food subsidy system presently covers baladi bread and flour, (both being a universal untargeted subsidy),
and commodities subsidized for ration card holders (sugar, rice, cooking oil and tea). Food subsidy costs in
Egypt account for 1.8% of GDP in 2008. Their absolute cost remains high, totaling LE 21.5 billion in FY 200809. Baladi bread and baladi wheat flour alone account for more than 75% of food subsidy costs, and in 2008,
the cost to the GOE to cover bread alone was LE 16.2 billion. The price of a loaf of bread has remained fixed
at 5 piasters per loaf since 1989 while its cost to the GOE is between 19-20 piasters per loaf. It has been long
recognized that the subsidized bread program is not as efficient as it could be. Findings of the joint TNT/WFP
study estimated that 39% of subsidized flour is lost via wastage and leakages throughout the supply chain.
This corroborates the findings of another study conducted by the World Bank (“Egypt’s Food Subsidies: Benefits and Leakages”, forthcoming) that estimates leakages in the baladi bread system at 31% and in the ration
card system at 26% on average. Eliminating these leakages would save up to LE5.5 billion of the public spending in FY09 (0.5 percent of GDP). The study also shows that the richest 20 % of the population receive 30.5% of
total food subsidies (or 43% of benefits received by beneficiaries after taking into consideration the leakages),
and the richest 60% of the population receive 45% of the total food subsidies (or 64% of benefits received by
beneficiaries after taking into consideration the leakages). Targeting the poorest 40% of Egypt’s population
can save thus 40% of total subsidies.
The total number of Ration Cards distributed for other food commodities is twelve million with 63 million beneficiaries. Although the Ration Card program has improved, it still suffers from many problems; the program
is poorly targeted as a safety net, leakages are significant, the registration process is still difficult for the poor
to access due to lack of documentation, and the quantity and quality of commodities delivered have not been
adjusted from a nutritional standpoint.
Liquefied gas cylinders benefit from a universal subsidy. They are used by small industries and businesses
and are therefore often difficult to find for household consumption. Moreover the SFD has been supporting
schemes of cylinder distribution whereby youth are encouraged to buy the cylinders at the source for the
highly subsidized price of 4 LE and sell them for up to LE 11, thus pocketing a substantial part of the state
subsidy. Leakage, pilfering, attrition and corruption are features of the production and distribution of these
energy essentials.
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Situation Analysis: Key Development Challenges Facing Egypt
Box 10: Monitoring and Evaluation of the 1000 Villages
In the context of its commitment to address poverty, the GOE has declared its intention to target the poorest 1000 Villages
identified on the basis of Egypt’s poverty map and which accommodate 10-12 million citizens in nine governorates. The initiative
aims to create a sustained improved livelihood for the residents of these 1000 villages by increasing the availability of and accessibility to basic services as well as improving service delivery that is affordable and equitable.
The GOE has embarked on implementing Phase-I of the initiative in 151 villages with a total investment of around LE 4.3 billion. These villages are administratively located in 24 local units in the six governorates of Sharkia, Beheira, Menia, Asyut, Sohag
and Qena. The 151 villages accommodate 1.5 million citizens. The full implementation of Phase-I will extend over three years
(2009-2011). The initiative will be jointly administered and implemented by twelve relevant line ministries and governmental
bodies. A national committee at the Ministry of Housing and Utilities is coordinating and overseeing the progress of the initiative under the supervision of the Minister of Housing in his capacity as the coordinator of the Social Development Cluster of the
Cabinet.
Phase-I includes investment in an integrated package of twelve main programs: formal education infrastructure, literacy
classes, health facilities and ambulance services, new housing units, sanitation facilities and networks, new roads, new/improved
waste management facilities, Fire Brigade services, youth and sports facilities, provision of micro loans through the Local Development Fund and the SFD, new and improved Social Solidarity services, and postal services. Some of the programs will include
capacity building/training for doctors, nurses and administrative staff in health units, local development staff, facilitators of literacy classes, and staff in Social Solidarity units. The M&E System of the Government Initiative: The Social Contract Center of IDSC, together with a team of international experts, have developed the M&E System of Phase-I of the initiative. The objective of the proposed system is to provide evidencebased programmatic policy advice and recommendations with regard to the initiative concerning: Effectiveness, as measured by
the impact of the initiative on achieving the ultimate goals related to poverty reduction and improved livelihood; efficiency in
terms of timely utilization of available financial resources to implement planned activities, and achieving preset milestones and
end-of-project activity results and related finance targets; equity and sustainability, according to indications of the economic,
social and environmental requisites to sustain the results achieved.
The Impact Evaluation Component of the M&E System: The impact evaluation component of the M&E System asks the following: “Had the government initiative not existed, what would have been the situation in the social and economic conditions of the
population in the initiative villages in 2011 and beyond?”
The proposed research design for the evaluation of the impact of the initiative is both a “before and after” and a “with and
without intervention” design; consequently, in addition to the 151 intervention/initiative villages a group of 35 control villages
were selected from the same six governorates where Phase-I is currently underway. These control villages belong to the 1000
poorest villages. A panel design is proposed whereby the same households sampled and interviewed (in both initiative and control villages) in the baseline study should be interviewed toward the end of 2011.
The baseline study and, the successive round of the impact monitoring round, will each have three sub-components: The first
is a qualitative component to a) assure the participation of the residents of these villages by helping them to identify their needs
and problems, and the social, economic and human resources available in their communities; and b) monitor and evaluate the potential impact of the initiative in terms of the extent to which the government’s interventions meet the actual needs of the citizens
of these villages. The second and third are quantitative community and household surveys that aim to a) estimate the difference
in output, outcome and goal levels indicators in both the initiative and control villages before and after the implementation of
the initiative; and b) provide evidence-based policy recommendations by providing (before and after the implementation of the
initiative) answers to the following questions:
• How poor and/or vulnerable- the households in these villages are and what are their living conditions?
• What is the level of economic empowerment of these households and what hinders/facilitates their access to markets?
• What are the prospects of the younger generation in these villages to escape poverty?
• To what extent poor households in these villages benefit from social and health programs that exist already?
Source: Sahar El Tawila, Social Contract Center
The Response: An attempt has been made to make the production and distribution of subsidized baladi bread
less wasteful and more effective by separating production from distribution and attempting to sell ready baked
bread from distribution points rather than distribute flour to bakeries which then can pilfer the flour, sell most
of it on the black market and make too few loaves of very poor quality. The MOSS realizes that the supervision
of bakeries is practically impossible and is attempting to change the way bread is produced since the response
so far has been to police the bakeries. There are areas where large government-run bakeries (built and operated in some parts by the army) are producing bread that is then distributed door-to-door in ten loaf packages.
n
An ongoing process of introducing rationed goods on Smart Cards for all eligible families, with better targeting,
is expected to reduce leakage of food commodities. The registration process for cards is still difficult for the
poor to access due to lack of documentation and the quality and quantity of commodities delivered have not
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been adjusted from a nutritional standpoint. A suggestion has also been made to issue coupons for the distribution of liquefied gas cylinders to all those who do not have piped gas connections. The plan is to issue one
coupon per month for a family of up to five persons and two for households with more than five people. This
plan is yet to be piloted, and if accepted could be fully implemented in five years.
The Outcome: To date the only indicators available to evaluate any innovations/experiments in rationalizing
subsidized goods and products are the queues one sees on the streets of Egyptian cities and the levels of complaints and disputes over these frequently scarce subsidized commodities.
n
II.1.c MOSS Reforms and Capacity Building
The MOSS has been restructuring its programs, training its front-line social workers, building new institutions,
upgrading old ones (such as orphanages and homes for young offenders) and opening up to international
cooperation. There is also an admirable initiative in cooperation with UNDP to provide comprehensive and
integrated services for disabled citizens that is still in the planning phase.
There is also a commitment to better monitoring and evaluation as well as to communication. There are plans
for a social communication strategy in cooperation with The World Food Program as well as a number of hotlines for citizens and a plan to place all service points on the web using geographic information system technology. The information technology experts at the Ministry have also established an internal information sharing
system for all departments and extension/satellite service points. A new family file that contains information
on beneficiaries of social pensions, transfers and services and which is the building block of a complete database has also been developed by social scientists and will be used with all clients as of 2010.
Challenges and Points of Contention
It is hard to conclude this listing of “do’s” and needs without reflecting on gaps and omissions. There are three
main problems that appear to face social policy making in Egypt:
1. Protection, Distribution and Growth. The liberal economic policy adopted relies on investment and market mechanisms to create growth, wealth and jobs. This has led to 8% annual growth. It has however
failed to distribute equitably the dividends of development, and a proliferation of studies and reports
have shown the rampant poverty in slums, cities and villages.
2. Implementation and Collaboration. A real challenge is the ability to implement policy. For example the CCT
pilot in Ain-el-Sira highlighted poor pay, lack of interest, very poor training, and inability to divert from
the narrow and well-trodden path of past service delivery among social workers. Their training and that
of the ministerial committee overseeing the program took two month of all day training and continuing
support for more than a year. On the other hand, good ideas and stories of success abound. The Ministry
has succeeded in upgrading its records, its points of service, and in creating teams of change agents; social
workers who show particular talent and interest, at the governorate level to train their peers in how to
provide better services. But the real test is how to work within the current framework without stumbling
over the hurdles of cynicism and lack of interest or ability. Even more serious is the rift between upper
level management who form a parallel system that pays well and that encourages innovation and risk, and
lower level administrators and social workers who have had little training, with almost no investment in
their upgrade, and who are subject to extremely rigid strictures and administrative decrees and protocols.
3. Politicization of Social Policy. The lack of a rights-based approach that defines the universal rights of citizenship and thus transcends politics has encouraged Egyptians to claim poverty so as to make some gains
while at the same time foregoing their rights as citizens. People do not participate as they could in consultations around social policy making. Poor families value the monthly pensions or cash transfers they
get from government, even if the amounts are small. They are a welcome relief but not a sufficient source
of social protection. There are countless ‘good’ philanthropists willing to feed, clothe, educate, medicate,
and train the poor. But these efforts are not sustainable and do not add up to a developmental leap. The
fear is that such efforts could merge into a contest for popular support and that social protection becomes
everyone’s ticket to the ballot box rather than part of a long-term national policy to eradicate poverty and
underdevelopment.
II.2 Poverty Reduction
While Egypt has experienced reductions in the levels of poverty, the risk of poverty did not fall at the same rate
for all Egyptians during the period between 2005 and 2008. Approximately 1.8 million people moved out of poverty between February 2005 and February 2008, most of whom were located in urban areas; the extreme poor,
50
Situation Analysis: Key Development Challenges Facing Egypt
50
45
40
35
30
25
20
15
10
5
0
Figure II.2A: POVERTY RATES BY REGION
Feb -05
Feb -06
Metropolitan
Lower Urban
Lower Rural
Upper Urban
Upper Rural
Total
Source: World Bank (2009). “Arab Republic of Egypt - Economic Growth, Inequality and Poverty: Social Mobility Between 2005 and 2008”
however, who consume less than the cost of the subsistence food basket, grew by 1.1 million.60 Children remain
an especially vulnerable group; the number of children living in poverty grew to reach more than 7 million.
Economic growth is the strongest driver of poverty reduction, but growth in Egypt has not resulted in immediate improvements in the living conditions of its people. During the 2005-2008 period, inequality increased
significantly, and the Gini Index rose by two percentage points to 30.46.61 Economic growth was fast in urban
areas as compared with the rural, but the effect on poverty (in percentage reduction terms) due to growth
was lower – this can be attributed partly to unequal distribution in urban areas, which reduced the effect that
economic growth can have on poverty reduction. The effect of growth on the living standards of the poor was
greatly reduced, and regional disparities even widened in some cases. Moreover, the positive effect of growth
on poverty will further be reduced if inequality continues to increase, which is the case for Egypt.
Factors such as the sectoral growth pattern and the characteristics of the labor markets and labor force can
explain somewhat the varied impacts of economic growth on poverty reduction. During the 2005-2008 period,
job quality worsened (in terms of productivity and regularity of income), which is associated with a higher risk
for poverty. Agriculture and the informal sector were the main vehicles to reach reduction in poverty, where
over half of all the movements out of poverty during the three years were those employed in agriculture.62 Additionally, while the coverage of safety nets has widened, there is still a lack in the targeting of resources to the
poor. The poor are still largely uncovered, leakages are significant, and the amounts received are too small to
have a significant effect on lowering the risk of poverty.
The Sixth Five-Year Plan has the goal of reducing the percentage of the population living in poverty from 20%
in 2006/2007 to 15% by 2012 – to do so, the number of households benefiting from cash support would be
doubled to reach two million households during the five year period, with a gradual introduction of a shift in
social protection measures for the poor from commodity support to cash support.
II.2.a Food Security, Consumer Price Index and the Poor
Global food price increases had affected the cost of living through two main channels by increasing the prices
of imported final goods and by increasing cost of domestic goods and services and the cost of production. The
Consumer Price Index (CPI) in Egypt has risen rapidly and increased and peaked in August 2008, especially for
food. Prices of the average food basket amounted to 1.427 times the price levels of Jan-2007, while the overall
CPI increased by 29.2%. As of October 2008, commodity prices have fallen slightly. However, since late 2007,
commodity prices were rising steeply to reach 1.686 and 1.458 times the price levels in Jan 2007 for food and
all commodities, respectively. The impacts of higher food prices on welfare are strongly influenced by the patterns of household incomes and expenditures.
Consumption Patterns by Decile63: Food is the dominant item in total expenditure for every decile whether they
live in urban or rural areas. Expenditure on food represents 44.2% of total expenditure for the whole population, and food share decreases as we move from the poorest decile (52.6%) to only 33% for the richest decile.
Difference between poorest decile and the richest in terms of the budget shares allocated to food is about
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Box 11: A New Multidimensional Poverty Index (MPI)
The Oxford Poverty and Human Development Initiative (OPHI) and UNDP have together launched a new and comprehensive
poverty measure that provides a multidimensional image of people living in poverty, paving the way for more effectively targeting
development resources. The innovative Multidimensional Poverty Index (MPI) is a supplement to traditional income and expenditure related poverty lines and measures, and will be featured in the forthcoming 20th Global Human Development Report. The
MPI assesses the severity of ten forms of deprivations (as depicted in the pie chart below) at the household level, which, taken
together, provide a more detailed picture of acute poverty than simply measures of the family’s income and expenditure. It reveals
the scope of poverty at levels of the household, within regions, the nation and internationally. The MPI is the first international
measure of its kind and can help policy makers target resources and design policies more effectively.
Data from 104 countries was studied, which account for 78% of the world’s population; of the 5.2 billion people analyzed,
one third (1.7 billion) were found to live in multidimensional poverty, exceeding the 1.3 billion people who in those countries
are estimated to be in extreme poverty and live on less than US$1.25 per day. Some countries, including Egypt, are found to have
significantly higher rates of extreme poverty as compared to the simple measures of household income or expenditure used to
calculate the national or the food poverty line, while others were found to have less.
The MPI is a composite indicator that is calculated by multiplying the incidence of poverty by the average intensity across
the poor, where people are identified as poor if they are deprived in at least 30% of the weighted indicators. For Egypt, based on
data from the 2008 Demographic and Health Survey (DHS), the MPI was found to be 0.026. This is the product of an incidence of
severe poverty of 6.4% (MPI poor) and the average intensity across the poor (the average number of deprivations faced by each
household) of 40.4%, amounting to 5.1 million people. The MPI can be broken down to see how much each indicator contributes
to multidimensional poverty. The below figure shows the composition of the MPI, where each piece of the pie represents the percentage contribution of each indicator to the overall MPI of Egypt. The larger the contribution, the larger the weighted share of
the indicator to the overall poverty. As can be seen, Egypt suffers relative to other countries particularly due to education-related
variables, where nearly half (48.4% of the intensity) comes from the schooling/education of the parents and child enrolment
indicators.
Figure 11.2b Contribution of Indicators to the MPI (Intensity)
Drinking Water
Electricity
Sanitation
Floor
Assets
Schooling
Nutrition
Cooking Fuel 0.0
Child Mortality
Child Enrolment
Source: Defne Abbas, based on Sabina Alkire and Maria Emma Santos. 2010. Multidimensional Poverty Index: 2010 Data. Oxford Poverty and
Human Development Initiative. www.ophi.org.uk/policy/multidimensional-poverty-index/.
twenty percentage points. Thus, increasing food prices at a higher rate compared to other expenditure items
has its adverse impact on poorer groups, as they will allocate larger shares of their budgets will be spent on to
food items or they will consume cheaper and nutritionally unbalanced diets. This has resulted in the serious
increase in the manifestations of malnutrition observed among women and children during the period between 2005 and 200864. The second most important expenditure group is housing followed by clothing, this is
applied to all expenditure groups, as per Table II.2a. The bias towards the well off is reflected in per capita expenditure experienced by each expenditure group. The average consumption of persons in the poorest decile
is LE 1466; less than half of the national average and only 15% of consumption of persons in the richest decile.
As poverty prevails more in rural areas, and as agriculture is the main income generating activity for the majority of these people, there is a need to invest more in modernizing the agriculture sector and in achieving
household food security as defined through its four pillars, namely, availability, stability, access and utilization.
As the income of the rural population increases, they will be in a better position to demand better health, education and other social services and pay for them in the longer run. This will add to the sustainability of providing these services and reduce the burden on government’s budget. Meanwhile, the rural population through
increasing farm and off-farm income will be able to invest in the maintenance and improvement of the scarce
natural resources such as land and water.
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Situation Analysis: Key Development Challenges Facing Egypt
Table II.2a Consumption Pattern, 2008/09, by Expenditure Decile
Commodity Group
1
2
Food and Beverages
52.6 52.0
Drinks and Tobacco
3.1 2.9
n Clothes, Textiles and Shoes
6.6 6.6
n Residence and its Accessories
16.7 16.8
n Furniture, House Equipments/
House Maintance
3.3 3.2
n Health Care and Services
3.9 4.3
n Transportation
2.3 2.6
n Teecommunications
1.3 1.5
n Culture and Entertianment
0.9 1.0
n Education
1.5 1.9
n Restaurant and Hotels
44.8 4.4
n Miscellaneous
3.0 2.9
n n Total
100 100
3
4
5
6
7
8
9
3.4
6.0
3.7
2.6
1.8
3.0
4.2
2.9
3.6
7.2
4.2
3.0
1.9
3.7
4.3
3.0
10 Total
51.3 50.6 49.9 48.7 47.7 46.3 44.0 33.0
2.3
2.9
2.9
2.7
33.0 2.9
1.5
3.1
5.8
6.1
6.2
6.0
6.5 6.3
4.9
6.2
16.8 17.2 17.2 17.3 17.4 17.3 17.3 19.7
3.2
44.5
2.7
1.7
1. 0
2.0
4.3
2.8
100
3.2
3.2
4.6 44.9
2.9
3.2
1.9
2.0
1.2
1.3
2.2
2.3
4.1
4.1
2.8
2.7
100
Source: HIECS
100
3.2
5.3
3.2
2.2
1.6
2.6
4.1
2.0
100
3.3
5.7
3.4
2.4
1.5
2.6
4.1
2.9
100
100
100
4.2
9.1
7.6
3.6
4.1
5.5
3.9
2.9
100
44.2
2.5
5.8
17.9
3.6
6.5
4.5
2.6
2.1
3.4
4.1
2.0
100
The overall CPI is created from a series of separate prices covering different goods and services and these are
then weighted into an average ‘basket of goods’ which is revised from time to time. However, different household expenditure groups consume different basket of goods and hence they experience different impact on
their living standards as prices change. As food prices have increased more rapidly than the CPI as a whole,
and on account of the fact that low expenditure groups spend a higher proportion of their income on food (as
well as other essential commodites), the lowest expenditure group is likely to have been hit disproportionately. In order to demonstrate this fact, we constructed CPI for each quintile based on the actual commodity
basket consumed. Thus, price changes reported by CAPMAS in its monthly bulletin were weighted by commodity basket of each quintile and thus CPI for each quintile was calculated.
The poorest deciles experienced faster decline in their living standards due to changes in prices. More precisely, in March 2010 for the bottom quintile, CPI inflation (Jan 2007 is the base) is running substantially higher
at around 43.5%, while the richest quintile experienced price increases by 39%. It should be noted that; CPI
for the poorest two quintiles are almost identical, the third and fourth quintile suffered lower impact price
increase and the CPI of the richest quintile experienced the smallest impact of price changes. One problem
that still lingers is that of non-registration of the birth of children, with the registration at 93%. This situation
deprives a large part of the poorest communities from having access to basic social, economic, and health services, or even taking advantage of loans and social security. Actions should be taken to spread the message of
the importance of birth registration through local community-based organizations and NGOs in order to create
a public awareness and generalized culture of the right to identity.
II.2.b Removing Energy Subsidies and Targeting the Poor
A fiscal policy that relies on subsidies and transfers to protect vulnerable groups yields only short-lived protection. It ignores investing in the human capital and thus relinquishes the future permanent payback in terms
of jobs, growth and poverty reduction that guarantees its sustainability. The focus on the use of fiscal policy
to reduce poverty is based on the premise that it is a major tool that can be used actively and innovatively to
foster human development through the influence of public spending levels, their composition and efficiency on
improvements in productivity and competitiveness (Development Committee, 2007).
Energy subsidies are estimated to account for anywhere between 60% and as much as 96% of the full cost
recovery price. The size of the energy subsidy in Egypt is larger than the entire fiscal allocation towards education and health. In FY 2008 and FY 2009, overall subsidies amounted to LE 84.2 billion and LE 93.8 billion, respectively. It has also been estimated that the richest quintile in Egypt accounts for a disproportionately large
share of the energy subsidy and that compensating the poorest two quintiles would only cost a tiny fraction of
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the entire energy subsidy. It is therefore important to introduce measures and tools to revise the pricing policy
for energy products and reorient support and compensation towards the two or even three lower expenditure
quintiles in Egypt.
As described earlier, MOSS is working on new social safety net arrangements. In collaboration with the Ministry of Administrative Development, an extensive and integrated database is being developed that will be able
to track the type and level of support being received by households under the different types of assistance and
various social safety net programs available in Egypt. This will help alleviate the current problem of overlapping beneficiaries and the lack of a coordinated mechanism for delivering assistance to low-income households. The ongoing pilot and roll-out of “smart cards”, which is intended to replace the ration-card system and
be used to administer the food subsidies, can also be used to deliver other forms of assistance (including cash
compensation) to eligible persons. It is therefore hoped that Egypt will soon have in place an effective system
of targeting and delivering assistance to needy households — a system that is designed to clearly contribute
towards improving household food security. The cost of establishing these systems will be spread over several
programs including the conditional cash transfer as well as removing the energy subsidy (refer to section II.1).
II.3 Gender and Youth
Gender equality implies that the interests, needs and priorities of both women and men are taken into consideration, recognizing the diversity of different groups of women and men. Equality between women and men
is seen both as a human rights issue and as a precondition for, and indicator of, sustainable people-centered
development. Women’s empowerment, on the other hand, refers to increasing the political, social or economic
strength of women within communities and organizations. It also involves the empowered developing confidence in their own capacities
Egypt has experienced some of the earliest successful social women’s movements. More recently, the speed
with which girls have accessed education over the past three decades is impressive. And yet there seems to
be more difficulty for women to enter the workforce and gain employment. In fact, the latest statistics show a
regression in the female participation rate to less than 20%.65
The problems that Egypt’s youth are facing in this new millennium relate to failure at the national level in the
management of overall economic policy and its channels of interaction with social equity and inclusion. The
two common features of disadvantage for youth are first, their level of unemployment which has persistently
been the highest in the world for the past two decades, and second, the prolonged “waithood,” with delays in
family formation and setting up independent households as compared to a decade ago. The youth bulge now
means that Egypt has almost 20 million young men and women in the age group 18-29 that represent both a
risk and an opportunity.66
II.3.a Women: A Special Concern
Family Law Reform
Egypt has witnessed a number of significant Family Law reforms that have enhanced the legal rights of women
in the domain of marriage and family. In 2000, the Egyptian Parliament passed Law No. 1 of 2000 that aimed
at facilitating and expediting the litigation process in family disputes. This was an important achievement since
female litigants suffer most from the lengthy periods of time that divorce and maintenance/alimony cases take.
Further, to afford women easier access to divorce, Article 20 of Law No. 1 of 2000 gave women the legal right to
initiate a Khul divorce. According to this article, women who file for Khul can be granted divorce in exchange for
renouncing their financial rights and repaying the dowry, given to them by their husbands upon marriage, and
after an arbitration period of 90 days. Also, Article 17 of the same law gave women who are in urfi (i.e. unregistered) marriages the right to file for divorce. Additionally, in August 2000, a new marriage contract, whereby
the couple could insert their stipulations, was issued and in November 2000, Egyptian women were granted
the right to travel without their husband’s permission. Also, Law No. 10 of 2004 regarding the establishment of
the Family Courts was passed. The idea behind the Family Court is to create a judicial system that is accessible,
efficient, affordable, and attentive to the best interest of families and children. Furthermore, in 2004, Law No.
11 regarding the establishment of a family insurance and alimony fund was passed. The fund relieves women
of the financial burdens that they frequently encounter during divorce. It serves as an emergency financial
instrument that carries the women through until due process of their alimony is made, whether by locating
the husband, or by expediting the disbursement of the alimony from the Nasser Social Bank to civil servants.
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Situation Analysis: Key Development Challenges Facing Egypt
Additionally, in 2008 the Child Law was amended thereby criminalizing Female Genital Mutilation, and raising
the minimum age of marriage for boys and girls to 18 and giving children born out of wedlock the right to bear
their mother’s last name.
Discriminatory Practices
Despite advances in laws to eliminate legal gender discrimination, Egypt’s Family Law or Personal Status Law
(PSL) has problems. The legal structure considers men to be the sole providers who should enjoy certain privileges that accompany this role, such as their wife’s obedience. While Egyptian men have a unilateral right to
divorce, never needing to enter a courtroom, Egyptian women must resort to the courts and navigate through
countless substantive and procedural obstacles to have the Khul. Furthermore, there is the right of the husbands to divorce their wives at will with only oral renunciation and to evade compensating them financially for
sudden divorce, a father’s automatic guardianship of children, and the expulsion of the divorced wife from the
marital residence if she has no children or if the children are beyond the age of custody. Egypt does not have a
law specifically criminalizing domestic violence. Such cases are dealt with through the Penal Code which renders it difficult for women to prove such incidents occurred as the law requires a medical report from a public
hospital attesting to the (physical) injuries endured in addition to the testimonies of two witnesses, which is
often not feasible within the context of married life. Police response and the fear of stigma also prevent women
from filing complaints. The Ministry of Social Solidarity established four shelters for survivors of domestic
violence in Egypt in addition to one run privately by a women’s rights NGO. Despite this, shelters remain underutilized as police and medical workers are unaware of their existence and if aware, seldom refer women to
them, and if referred, those women are stigmatized.
Application of the Law
One problem is with the application of the law. Access to justice is a problem for many women, and the cost
of hiring lawyers is high, the time spent in court long, and there are many cultural loopholes with regard to
the implementation of laws. The majority of judges are men although thirty women judges were recently appointed in addition to the one at the Supreme Constitutional Court. Men also dominate the police force. Provisions of the Penal Code also discriminate against women. Egyptian law imposes harsher penalties for women
committing adultery than men. A wife is penalized for two years, whereas a husband is penalized for no more
than six months. In addition, while a wife is penalized for committing adultery anywhere, a husband must do
so in the marital home in order for such an act to be considered adulterous. The murder of a wife (but not a
husband) in the act of committing adultery is considered an extenuating circumstance, thereby commuting the
crime of murder to the level of a misdemeanour.
Additionally, for many women, simply walking down a city street or in public transport — any time of year
— can lead to a barrage of unwanted and humiliating sexual remarks. Can women live with this? How does
society view a harassed woman? Is she the victim or to blame? What are the tools with which to combat the
many forms of sexual harassment, sometimes leading to rape? Lately, an Ombudsman for Gender Equality was
established at the National Council for Women (NCW) to receive and investigate complaints related to discrimination against women. But the onus is on applying the letter of the law as clearly provided in the Penal Code.
The Egyptian Penal Code: Articles on Sexual Harassment
Section Four: Public Exposure and Corruption of Morals
•
Article 268: Anyone who uses force or threats to rape or attempt to rape another person shall be liable
to a penalty of three to seven years in prison with hard labor. If the victim of the offence was under
16 years of age and if the author is one of the persons referred to in paragraph 2 of article 267 (is an
ascendant, a guardian or a supervisor of the victim, a person in a position of authority over her, or a
servant employed by her or by any of the aforementioned persons), the penalty may be increased to the
maximum prison sentence with short-term hard labor.
•
Article 278: Anyone who commits a public obscenity offending the modesty of a woman shall be punished either by imprisonment of up to one year or a fine not more than LE300.
Section Seven: Slander and Divulging Secrets
•
Article 306: Any person offending the modesty of a woman, whether verbally or physically, shall be
punished either by imprisonment of up to one year or a fine that not less than LE200 and not more than
LE1000, or both; in cases where the modesty of a woman is offended via telephone, the author shall
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be punished either by imprisonment of up to one year or a fine not less than LE200 and not more than
LE1000, or both; if the author of the crime commits the same type of crime within one year of the sentence date of the first crime, the offender will be punished with imprisonment or a fine at least LE500
and not more than LE3000 or both the punishments.
The articles lack the precise definition of the concept of sexual harassment. The National Council for Women,
in partnership with the Egyptian Center for Women, defines sexual harassment as “unwanted sexual conduct
deliberately perpetrated by the harasser, resulting in sexual, physical, or psychological abuse of the victim regardless of location, whether in the workplace, the street, public transportation, educational institution, or even
in private places such as home or in the company of others such as relatives or colleagues, etc.” In addition, both
organizations presented draft suggestions for amendments of the law to the parliament. In absence of a clear
law prohibiting harassment and a security force that does not have a legislative framework to provide secure
streets for women and girls, the problem is aggravated. The need for protection and security makes the need
for a legislative intervention even clearer. While stressing the importance of enforcing a clear definition, or even
presenting a new law, there should be support and encouragement to all women who are subjected to sexual
harassment to report the incident immediately, to be confident that all law enforcement officials are both willing and able to tackle the issue of sexual harassment, and to insist that their rights be recognized. It is necessary
to demand that the Egyptian Parliament immediately issue legislation addressing sexual harassment in all its
forms — whether it be committed by individuals or groups, in the street or in the workplace — to ensure that
law enforcement officials are fully supported by the law as they work to eliminate this phenomenon.
The Social Sphere
To date, there is not a great deal of information, data, time series, and opinion polls and attitudes surveys on
the full battery of indicators that relate to women’s position in the economic sphere as well as in the political
and the social arenas. All of the social indicators show progress, especially on the education and health fronts.
However, economic indicators point to a serious plateauing in terms of the representation of women in labor
markets. Political and even judicial institutions also show slow progress.
Current unemployment levels, especially for women, are high on account of very protective labor laws, the
lack of enforcement of decent work conditions in the private sector and the absence of those facilities that
make women’s work possible such as nurseries for preschool children, employer-sponsored childcare, or safe
options for travel over long distances. What is also documented are serious instances of extraordinarily long
hours, exploitative wages, and sexual harassment.
Egypt’s 2010 Survey of Young People (SYPE) shows that in terms of time use, young women spend much longer
hours doing housework than their male counterparts. In terms of leisure time, young men spend more hours
than girls of the same age everyday meeting friends or playing sports. Access to the Internet is everywhere
biased in favor of males who in Egypt spend twice as much time as girls using it. Moreover, in the age group
18-29, 49% of young girls believe that they should obey their brother even if he is younger.67 This evidence is
further supported by our knowledge of genderized attitudes that are being inculcated in young boys and girls,
whether by parents, school and/or the media. Again, this needs further investigation on the roots of such discrimination especially in the school curriculum, teacher training and media messages.
A review of trends in the development experience of Egypt shows that three factors can help reduce the problems
of youth exclusion as well as support women’s progress in claiming their right for equality with men at home, at
work and in their community at large. These three factors are government efforts on demography and population
control, government efforts in access to quality education, and government efforts at poverty reduction.
Strategies for Women’s Empowerment
Elements of a strategy for empowering women, youth and the poor can also be classified into two groups. 1. The first are simple and straightforward sectoral programs to develop and promote better access to high
quality education, health and sanitation, housing and environment. If innovative public private partnerships can be introduced, these are the most appropriate to capitalize on the strength of our culture and
its traditional family support systems. So far, Egypt has made a solid start to integrate the tools of gender
budgeting, and of targeting specific groups of beneficiaries. What is needed is allocating resources to
scale up existing best practices and to pilot new ones.
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Situation Analysis: Key Development Challenges Facing Egypt
Box 12: Gender-Responsive Budgeting
Gender-responsive budgeting (GRB) refers to the analysis of actual expenditure and revenue on women and girls as compared
to men and boys. As such, it is a significant mechanism in ensuring gender parity since it helps governments and donors decide
how policies need to be adjusted, and where resources need to be reallocated, providing an indicator of commitment to address
women’s specific needs and rights to health care, education, employment and other development issues. The main development
objective of the GRB in Egypt is to engender macroeconomic frameworks and economic institutions to increase women’s choices
and opportunities and to strengthen women’s economic capacities, rights and sustainable livelihoods.
In this respect, Egypt’s National Council for Women (NCW) has taken a leadership role. In partnership with the Ministry
of Finance and the Ministry of Economic Development it has exerted a number of efforts since 2002 in regard to planning and
budgeting, including — jointly with the Ministry of Economic Development — operational frameworks to mainstream gender in
the planning process in the Five Year Socio-Economic National Plan for 2002-2006 and 2007-2012, with the support of UNFPA.
In cooperation with UNIFEM, it has developed the Gender Equity National Indicators, and advocated for planning and budgeting
processes that are more inclusive of gender equality and participation of women throughout the process. Further, in partnership
with the Ministry of Finance and with the support of UNIFEM and the Netherlands Embassy, NCW has worked on engendering
the budgeting process from planning to execution. Finally, women parliamentarians with the support of the NCW have been introduced to gender responsive budgeting and the national budget process so as to play an effective role in the discussion of the
national budgets in the parliament.
As a result of these initiatives, the Ministry of Finance amended the budget circulars for 2008, 2009, and 2010 to reinforce the
integration of women’s and children’s needs and ensure gender justice in the planning of the national budget and the allocation
of resources. It has amended budget templates to ensure gender sensitive allocations; and it has amended the Statistical Financial
Report to include sex-disaggregated data.
Challenges remain, including lack of systematic tracking mechanisms and tools that can allow for tracking domestic resource
mobilization efforts and ODA allocations in support of implementation of policies, laws and programs related to gender equality
and women’s empowerment. There is also insufficient attention given to monitoring and reporting on development results to
demonstrate that development efforts can, in fact, translate into positive impacts on women’s empowerment and gender equality.
Evidence based research is limited, as is knowledge of the funding gaps for addressing women’s issues.
Some recommendations on GRB include the following:
• Institutionalize the GRB in the Ministry of Finance and gender sensitive planning in the Ministry of Economic Development;
• Apply GRB to both the donor and the national processes for planning and budgeting;
• Support the development of approaches to applying the GRB at sectoral and local levels for allocations and spending;
• Develop a gender marker for the ODA and development partners to make gender equality a cross cutting theme in all sectors
of development aid;
• Harmonize government and donor activities and support for gender equality and women’s empowerment;
• Conduct gender-sensitive progress assessments, performance monitoring and indicators for aid effectiveness across ministries and in civil society, including systematic audits for GRB;
• Develop gender and women empowerment specific national budget classification code.
Source: Maya Morsy, UNIFEM Egypt
2.
The second set of proposed initiatives is under the heading of empowerment through participation. The
set of programs suggested here include those for civil society to expand and take up the underutilized
energy of women and youth. The most important avenue for participation is the promotion of youth-led
and youth-run voluntary projects that target MDGs and other national goals. Such voluntary youth activities help to build interpersonal and social skills and strengthen self-respect and trust in others. These
activities can range from the eradication of illiteracy all the way to combating drug abuse or juvenile
delinquency. For women, the bulk of these programs would be community-based and build their capacity
to help themselves and other women in both the social sphere and the marketplace. The youth skills that
are most in need are management, organization and leadership in order to partner with local government in service delivery as well as to become a major source of monitoring for good governance.
Institutionalizing Gender Reform
The Egyptian Constitution guarantees the rights of all its citizens, where Articles 8, 11, 13, 17, and 40, among
others refer to the state guaranteeing the same respective rights to men and women. However, gender discrimination remains a reality, and the GOE has adopted various initiatives and implemented policy to eliminate this.
The National Council for Childhood and Motherhood, and the National Council for Woman (NCW) (created
in 1988 and 2000 respectively) have both provided an institutional framework to address gender issues and
support women’s participation in the development process. The former is the highest government authority
entrusted with policymaking, planning, coordinating, monitoring and evaluation of activities in the areas of
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protection and child development. The latter is the first political institution to focus on the female-related mandate that includes women’s empowerment, monitoring, and implementation of the international convention,
and the national laws affecting women’s lives. Since its inception, it has established 27 local branches in governorates across Egypt, and it has engaged actively in implementing strategies to improve the lives of women.
On the legislative front, the NCW has promoted the Egyptian Nationality Law, which was amended to provide
equality to any child born of either an Egyptian father or mother, such that the child can obtain the Egyptian
nationality without any restriction. Additionally, a wife may be granted Egyptian nationality at her request if
her husband is Egyptian or acquires the nationality, and an Egyptian woman who marries a foreigner remains
Egyptian even if she wishes to acquire her husband’s nationality. Finally, a law was issued for the establishment of a Family Court to assure women’s rights and quick resolutions to disputes.
Other achievements of the NCW are on the legislative front: The amendment to Article 62 in the Constitution
to increase women’s participation in Parliament; the amendment to the electoral law and a quota to ensure 64
women in the 2010 election; the khul’a law, which facilitates divorce proceedings for women; and a campaign
to increase the number of women judges (to date, they now number 30).
On the institutional front, the NCW has also been responsible for the creation of: a media watch; the Ombudsmen Office; Equal Opportunity Units in all ministries; the Civic Education Training Center; the Women’s Business Center; the Convention for the Elimination of All Forms of Discrimination Against Women (CEDAW) unit;
and the Women’s Parliamentary Forum on Public Policy and Gender Mainstreaming.
As to NCW’s achievements on the processes front, it has succeeded in: development of a national planning
methodology that has facilitated the mainstreaming of gender issues in the Socio-Economic National Five-Year
plans for 2002-2007 and 2007-2012; development of a strategic framework aimed at achieving the third MDG
on gender equality by 2015; introduction of gender responsive budgeting techniques from planning to execution; and development of Gender Equity Indicators for Egypt.
II.3.b Youth Building the Future68
Youth hold the power for change and for fulfilling a new social contract between citizen and state. Egypt stands
at the crossroads whereby its youth bulge, ages 18-29 numbering 19.8 million, is larger than ever before and
will either turn into a window of opportunity or an unemployment curse. There is a great need for enabling
environments and policies for the youth bulge to translate to growth, employment, and social inclusion. Youth
exclusion leads to ‘waithood,’ a period during which young people simply wait for their lives to begin. They
wait in long periods of unemployment, living with parents, and are unable to pursue marriage or home ownership. It is harder for younger men to find opportunities, and there are very few opportunities for young women to participate in public life. There is growing evidence of regression in attitudes of tolerance and respect of
the other, whether directed at religious or gender affiliation. There are a number of negative community values
that currently prevail among youth, including extremism, intolerance to others’ opinions, absence of a sense
of belonging and passiveness.
Youth and Education: Education shall serve as a tool for inclusion, social empowerment and competitiveness.
Empowering youth through education means it should instill values of citizenship to transform society in
a democratic manner. There is a great need and importance to focus on reform off vocational training and
skill building. Private sector firms and local businesses should be encouraged via incentive schemes to absorb
the youth bulge. More emphasis should be placed on entrance requirements that line up with market needs,
specifically language skills, and outputs of the education system need to be aligned with demand in the labor
market, and there should be a review balance across subjects’ skills and disciplines, and upgrading of technical education. Review of the curricula for each subject should instill problem-solving skills, entrepreneurship
and management capacity, and the value of self-employment and computer skills. The Egyptian labor market
still lacks technical and skilled workers in terms of number and competence. There is a need to synchronize
all government agencies currently working in isolation from each other, particularly through the formation
of common grounds in training standards and certification requirements. There is also a need to overcome
young people’s reluctance and the social stigma labeling the technical route as a poor, second-chance option.
Awareness campaigns can demonstrate career rewards and financial benefits of TVET.
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Situation Analysis: Key Development Challenges Facing Egypt
Youth and Poverty: Deprivations come in many forms, including basic opportunities and choices, such as living a long, healthy and creative life, with a decent income, enjoying freedom, dignity, self-respect and respect
of others. Large regional disparities exist in Egypt with rural Upper Egypt being the most deprived (43.7%
of its residents are income poor). According to SYPE, whereas rural youth account for 59% of Egypt’s total
youth, they account for 85% of Egypt’s poor youth. What is obvious, therefore, is that being poor is very much
a characteristic of residing in rural Egypt and thus having less access to public goods and services. There is a
two-way interaction between poverty and its attributes- Lack of education and skills, and absence of decent
jobs maintains poverty. There is an urgent need for geographic targeting of poor household with on-the-job
training, literacy and income generation. National initiatives like the 1000 Villages model should integrate
schemes for employment-generating activities that are tailor-made for marketing in both local communities
and outside the villages.
Youth and Job Creation: Egypt is rated number 120 among 128 countries on gender gap measurement. Female
participation in the labor market is among the lowest in the world. For example, young women (aged 18-29)
represent 18.5% of the Egyptian workforce compared to more than 50% of men. Also according to the survey,
only 1% of girls spend their time in voluntary activities compared to 3% of men, and only 11% of young women participated in the last election, compared with 30% of men. The informal sector currently represents the
main source of employment for new labor market entrants. It is a highly gender-discriminated labor market.
Therefore, the challenge is to improve the quality of jobs. Active labor market policies are needed, including:
1) enforcement of minimum wages; 2) contribution to social security payments for new jobs for youth (EHDR
2005); 3) employment services; 4) education and TVET reform to meet labor market demands; 5) legislation
that can reduce the gender gap in wages and opportunity in private sector. There are employment opportunities for achieving the MDGs in Egypt. Human resources are urgently needed in areas such as literacy campaigns, pre-school education, and social work in the 1000 Villages and other poor areas.
Youth and Entrepreneurship: Compared to 43 other countries in the 2008 Global Entrepreneurial Monitor,
Egypt ranks 11th in early stage entrepreneurial activity. There are some 2 million youth under 30 years of
age who have setup a business, however modest. As the age groups 18-24 and 24-34 have the highest entrepreneurial rates of 12% and 15% respectively, Egypt’s youth give it a strong entrepreneurial advantage that
has the potential to create the majority of jobs and enterprises in the coming years. Efforts should be made
to foster the development of entrepreneurial skills and to promote creativity, personal initiative and independent thinking among young people as part of the curricula and extra-curricular activities in the formal education system. There is a need to improve the business environment and reduce bureaucracy, facilitate access
to funding and marketing services, as well as skills training through dedicated programs to support young
entrepreneurs in the start-up and early stage growth process. The introduction of SMEs and franchising as
more “flexible” business models, as well as micro-enterprises for youth with simpler educational background
through awareness campaigns could inspire and spread the culture of entrepreneurship among young people
in Egypt. Breaking the land constraint with a national scheme, ‘project land’ proposes the distribution of parcels of land to youth in Egypt’s new regions such as the desert fringes (zaheer sahrawi), along the Nile Valley,
the coastlines, and new cities and urban development’s. The conditions are that youth beneficiaries will settle
the lands and engage in innovative projects in small-scale tourism, eco-friendly agriculture, and other high
value-added activities such as ICT, transport and housing. Entrepreneurship needs to start from ownership of
some asset in addition to human capital and providing youth with physical capital assets will thus open new
avenues of employment and prosperity; the purpose is to introduce a key element that caters both for distributive justice and for good investment fundamentals.
Youth Participation in Socio-Political Life and the Public Sphere: There is absence of an enabling political, social
and economic environment for the participation of youth. There is a need to: Establish the culture of participation among youth through educational institutions, civil society organization and media; expand programs of
political education and develop programs on leadership skills, which will enrich youth knowledge, enhancing
their participation in socio-political life and enable them to exercise the rights and duties of citizenship; support early participation of youth – starting of the primary school – in the process of decision making in order
to create a generation capable of taking responsibility, independent thinking and decision-making; encourage
youth to express their opinions, instead of controlling them in the framework of a patriarchal system that
undermines their abilities; and activate secular forums and platforms for the integration of youth in sociopolitical life so as to enhance their sense of belonging, loyalty and citizenship. This is meant to cope with the
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religious polarization of society resulting in part from the tendency of youth to participate in religious institutions which eventually promotes religious loyalty at the expense of citizenship; There should also be a stop
to intimidating youth when expressing their opinions or engaging in political activity, as well as ending the
surveillance and arrest of bloggers. Reform of government performance in the framework of a rational system
for human resources management based on efficiency, both in recruitment and promotion is important, as is
effective implementation of decentralization polices, particularly in its political dimension, which will open
new platforms for socio-political participation at local levels.
Youth and Migration: Migration broadens young people’s opportunities and offers them a way to earn higher
income and gain skills. Therefore, the state should support migration under a holistic and institutionalized
approach dictated by Egypt’s current human resource structure. Egypt’s education and skills formation programs should cater for host countries’ labor market demands based on studies of future prospects, particularly
those of Europe and the emerging oil economies. The state should also negotiate labor movements with host
countries on the basis of temporary migration (4-5 years) and terms that are win-win for all concerned. A best
practice is tailor-made programs for young trainees to acquire specific skills needed in Italy’s labor market.
II.4 Family, Child and Population
II.4.a Results of the Child Multidimensional Poverty Study69
Children under the age of 15 represent one third of Egypt’s population and more than one fifth of those children live in poverty. The most recent and detailed study of the multidimensional aspects of child poverty
provides a serious diagnosis of the problems and challenges to be addressed across sectors and across regions.
Increased investment in children is needed for maintaining the pace of the Egypt’s continued progress and
development. Analysis of the state budget shows that budget allocations directed to childhood development
have increased in absolute terms during last decade, but decreased in relative importance. Child outcomes and
the fulfillment of children’s rights are strongly influenced by public policy. Sustained pro-poor and pro-child
growth not only requires a commitment to build the physical capacity of a nation but also to develop its social
infrastructure. This is especially relevant to investments in children whose quality of life determines the future
of the country. Children are Egypt’s future.
Child poverty, like any form of poverty, is multidimensional, and its alleviation is the result of complex interactions between household structures, job market conditions, government support and other factors. The most
successful policies, therefore, are those that tackle child poverty on multiple fronts. They combine a universal
approach (such as child income support) with measures targeting the most vulnerable (such as childcare in
deprived areas) and facilitating access to the job market and various services (education, health, and housing).
At the same time, successful policies tackle child poverty directly and do not rely on indirect effects on child
wellbeing. The key recommendation of the report is therefore the endorsement of an integrated National Plan of
Action for Children and multi-sector coordination: policies and strategies to reduce child deprivation should be
an integral component of the coordinated and multi-sector national development framework effectively coordinated by the mandated Ministry of Family and Population. Following the Second Decade for the Protection and
Welfare of the Egyptian Child (2000-2010), an integrated National Plan of Action should be developed, which
particularly addresses regional disparities. The successful design and implementation of such an integrated Plan
of Action depends on the creation of a forum for maintaining a sustained trans-sector multi-disciplinary dialogue
at the policy level between all stakeholders and that has the power of decision on resource allocation.
Another key recommendation is the building of effective and efficient social protection: Cash transfers and
family support subsidies that directly benefit poor families represent only a small proportion of total subsidies
and grants, and a very small share of total social spending. Presently, subsidies do not constitute a substantial
contribution to a poor family’s income. In addition, in part due to the inefficiency of the administration of
these programs, the poor do not benefit proportionally from the existing social protection measures. What is
therefore needed are the following: Both the coverage and the transfer amount of social protection programs
directed to poor families and their children should be increased; the composition of budget allocation for government subsidies, grants and special benefits should be revised to accommodate an increased budget of social protection programs for poor families and their children; soft loans aimed at increasing family productivity and integration into the labor market should be closely monitored to ensure these are used for the intended
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Situation Analysis: Key Development Challenges Facing Egypt
Table II.4a: Percent of Children Experiencing Type of Deprivation,
by Wealth Quintile, 2008
Wealth Index Quintiles
Total
Quintile 1 (poorest)
Quintile 2
Quintile 3
Quintile 4
Quintile 5 (richest)
Shelter
Shelter
Food
Education
Info.
Health
14.8
50.10
14.29
2.54
0.54
0.03
2.20
6.80
2.17
0.57
0.40
0.03
17.0
16.3
17.4
16.0
17.9
17.6
3.21
9.08
2.95
1.13
0.55
0.81
2.41
10.20
0.18
0.04
-
2.4
3.6
2.5
2.0
1.9
1.8
Sanitation Water
4.15
8.29
4.52
4.29
2.34
0.32
UNICEF and Cairo University. (2010). Child Poverty and Disparities in Egypt: Building the Social Infrastructure for Egypt’s Future
2.84
7.21
3.47
1.97
0.47
0.17
purposes. Families benefiting from such support should also receive technical and marketing assistance; and
an administrative reform program should be initiated including establishment of clear and transparent eligibility criteria, streamlining of administrative procedures, constitution of integrated packages, and increasing
of capacity and rewards for social workers.
On the cultural front, practical recommendations are: An inter-Ministerial effort to initiate a national program
to spread the culture of sports, physical exercise and a healthy life style for girls and boys of all ages; and the
establishment and expanded coverage of community libraries, community centers and other safe places for
children to exercise and express themselves should be an important element in national policies and programs
on youth.
On another front, the problem of working children remains a serious challenge. Evidence has shown that
working children usually come from large, low-income families and the wages of the working children represents almost a quarter of the total household income. A large portion of working children in Egypt is found in
the agricultural sector, where they are hired for the cotton harvest. Children also work in a number of sectors
considered hazardous by the GOE, such as leather tanning, fishing, glassworks, blacksmithing, working metal
and copper, construction, carpentry, mining, auto repair, textile manufacturing, and brick making. Some studies estimate that 2.6-2.8 million children are working on the streets, but accurate data concerning domestic
child workers is lacking.70
Child domestic work is also a phenomenon that still exists in Egypt and is defined as work carried out by a
child or an adolescent in the household of a third person in exchange for some kind of remuneration, a salary
or board. It is estimated that 99% of domestic child workers in Egypt are girls sent to these households out
of economic necessity. The prevalent idea among the poor is that a young girl is more readily capable of performing household chores without any training, because she does it at home as well. It seems to be the case
that child domestic labor is excluded from laws and policies that address other forms of child labor and child
domestic labor does not seem to be acknowledged, regulated or addressed. In fact, domestic work is not legally
recognized as work and is therefore excluded from the protective dispositions of the child work law. Actions
should therefore be taken to scale-up programs and projects in order to enhance Egypt’s efforts in tackling
the child labor issue, and in supporting the reintegration of working children in the education system and in
developing measures for preventing school drop-outs.71
II.4.b The Issue of Fertility and Population
Population issues and dynamics and their three main dimensions — population increase, population distribution, and population characteristics — continue to be a major challenge to Egypt’s development efforts. The
population growth rate, at around 2%, with more than 90% of the population living on less than 10% of the
land, puts a considerable pressure on the country’s environment, water resources, agricultural land, and infrastructure, as well as on the quality of the educational and health services. The most challenging population
characteristics are educational attainment, health, employment opportunities, marketable skills and overall
economic standards.
In spite of the noticeable delay in the age of marriage among young people in the past years, the decline in the
total fertility rates (TFR) have been quite slow, especially in urban areas, where it has almost plateaued in the
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past 15 years, causing concern at the highest political levels. The population age structure, coupled with the
continued relatively high rate of population growth indicates that the “demographic window of opportunity”
in Egypt will be flat and stretched. Taking advantage of this “opportunity” would depend primarily on three
factors: Future levels of fertility; participation of women in the labor force; and educational attainment and
skills of the working age population required for various sectors of the economy.
President Mubarak’s decree to establish the Ministry of State for Family and Population (MOFP) in March 2009
reflects the vision of the political leadership, that considers the empowerment of the family as the basis for addressing issues of society and population. The MOFP is the national institution responsible for planning, policy
making and coordination of the state’s efforts to enhance the status of family and population and address
relevant issues. The Ministry activates the role of its affiliated entities and coordinates their roles to ensure the
integration of efforts among the following entities: the National Council for Childhood and Motherhood; the
National Population Council; the National Council for Drug Control and Treatment of Addiction; and the Fund
for Drug Control and Treatment of Addiction.
The MOFP commenced its mission by assessing the current situation through consultative meetings with governors, academics, economists, businessmen, bankers, population, family and NGO experts working in the fields
of population and family, as well as religious institutions.72 The purpose was to extrapolate the strengths and
weaknesses and build on past experiences in order to formulate a vision for the future. Moreover, given the
importance of decentralization and the crucial role of regional governors, the ministry held four forums that
included all governorates during summer of 2009, to follow up on their issues with family and population.
The National Population Council
During the period 2008-2010, the most important achievement of the National Population Council was activating the National Strategic Population Plan for the period up to 2012. The MOFP is reviewing the plan and
modifying the strategy based on a local plan from each governorate with realistic targets that could be implemented and measured in an agreed time frame. In this context, the Ministry held the first regional conference
on the issue of population control in Northern and Central Upper Egypt, which was preceded by workshops for
the preparation of executive plans to control population growth in the governorates of Fayoum - Menia - Beni
Suef and Asyut. Similar work is underway in other governorates.
The National Council for Childhood and Motherhood (NCCM)
NCCM, over the years, created a cultural climate and supportive public opinion for children, especially the most
vulnerable. It has significant achievements at the policy level, motivating and activating the legislative environment as well as developing the legal framework that ensures the rights of the child and mother.
NCCM works through a wide network of national and international partners on the implementation of all its
programs. One its most significant accomplishments has been in advocating the importance of adopting a child
rights approach, and raising awareness on damaging social phenomena such as street children, child labor,
and violence against children and promoting legislation to protect marginalized children. To these ends it has
spearheaded a number of important legislations and publications, among which are:
•
•
•
62
Child Law 126/2008 amending Law 12/1996. Here, NCCM succeeded in making a qualitative change in
ensuring the rights of children, especially marginalized groups. Amendments extended the concept of
protection of children, affirming that the state guarantees - as minimum - the rights included in the Convention on the Rights of the Child and other international conventions in force in Egypt. The principles
upon which the amendments were based have been committed to Islamic law and are in line with the
social culture. In addition, the preparation of these amendments depended on a participatory community approach. A draft of the bylaws under this law to facilitate its implementation, have followed the
same participatory approach;
Preparing and submitting Egypt’s third and fourth periodic reports to the United Nations Committee on
the Rights of the Child on the implementation of the Convention on the Rights of the Child;
Preparing Egypt’s first two reports which were submitted to the Committee on the Rights of the Child
(CRC) in Geneva covering the measures taken by Egypt to implement the articles of the Optional Protocols to the Convention on the Rights of the Child on the sale of children, child prostitution and child
pornography, and the protocol on the involvement of children in armed conflict which reflect Egypt’s
Situation Analysis: Key Development Challenges Facing Egypt
•
•
•
•
•
•
•
commitment to the two protocols;
Amending the Civil Law and raising the age of marriage to 18 years for girls while committing the applicants for marriage to be subjected to medical tests;
Criminalizing the sexual exploitation of children via the Internet to protect children from all forms of
sexual exploitation and sexual abuse;
Establishing the Child and Maternity Care Fund;
Signing a protocol with the Ministry of Education in 2008 to disseminate the curricula of active learning
in public schools;
Finalizing the national plan to combat children trafficking. The MOFP has been working to prevent
Egyptian unaccompanied minors’ irregular migration – a phenomenon which continues to render an
alarming number of youth vulnerable to exploitation and abuse in transit and destination countries –
by raising awareness on associated risks and promoting safe and local alternatives;
Cooperating with all regional governors for the issuance of executive decisions to establish general
protection committees and sub-committeesas in Law 126/2008 for the Protection of the Child;
Cooperating with the ministries of the Interior, Justice and Social Solidarity to train judges, prosecutors,
police officers and social workers to ensure the enforcement of the Child Law.
Communication Mechanisms
Child Help Line 16000 is a free line that was launched by the First Lady of Egypt in June 2005. It is available 24
hours/7 days a week, covers all governorates of Egypt and provides services to protect children. This service
plays an important role in monitoring violence against children.
A ‘children with disabilities’ line (080088/86666) was launched by the First Lady of Egypt in September 2003.
The line provides free medical, legal, and educational consultation and other information about the services
provided by the state or by NGOs.
A free family-counseling line (16021) works at the national level. It is a means to provide advice and facilitate
access to services needed by the family. The line provides family counseling, warns about child marriage and
has a service for reporting on child marriage.
Drug Control and Treatment of Addiction
A comprehensive national strategy against drugs was prepared by the National Council for Drug Control and
Treatment of Addiction in collaboration with the Fund for Drug Control and Treatment of Addiction and was
launched by the Prime Minister in 2008. The Council, in partnership with the Fund, issued a number of scientific researches and practical guides, examples of which are a medical guide for treatment of addiction, a guide
for religious leaders to raise awareness on the danger of addiction and drug abuse, and a guide for NGOs on
the issue of abuse and drug addiction.
The Fund has organized several training workshops to build the capacity of 40,000 persons, including; social
workers and psychologists in schools, social defense clubs, local and community leaders, civil society institutions, media specialists, prosecutors, students at nursing colleges and religious leaders. The fund also organized - in cooperation with the Ministry of Health — medical convoys in 26 governorates to disseminate
awareness messages, and to help identify early detection and treatment services, particularly in remote areas
and among disadvantaged groups.
In partnership with the National Financing Fund for Children, Youth and Sports, it prepared a media campaign
against drugs, which includes TV spots, radio, Internet and outdoor advertising, scheduled to be launched in
May 2010 and over a period of five years. A hotline provides guidance services and reception and curative
services through several hospitals. The Ministry has also begun to provide the line service to all governorates,
starting in 2010.
The crowning achievement of NCCM is the recent creation of the Egyptian National Observatory for Child
Rights (ENCRO), which is a tri-partite initiative between IDSC, NCCM and UNICEF. The Observatory aims at
establishing a scientific research mechanism through which the NCCM can base its monitoring and evaluation
regarding the progress made in the field of childhood and motherhood development. The initiative intends
to contribute to the improvement of the situation of children in order to protect, respect and promote their
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rights. The Observatory generates timely and accurate strategic information on the wellbeing of Egyptian children for evidence-based policies and it aims at establishing an exhaustive Monitoring and Evaluation System
for the National Plan of Action for Children and for NCCM interventions. The Observatory project will hopefully
strengthen the NCCM and its ability to coordinate, monitor and advocate for more transparent and participatory public policies for children.
II.5 Education
Egypt’s political leadership considers education a foundation of national security. The education system in
Egypt is one of the largest in the world with around 43,000 schools, 1.6 million personnel (teachers, administrators and other staff), and over 16 million students at different levels of education. Reform efforts have been
ongoing and much work has been exerted by the government — in particular the Ministries of Education and
Higher Education — to improve the status of education and its quality in order to reach the Education for All
goals and the MDGs by 2015.
Even though there is evident and notable progress, there are still many challenges facing education. These
include illiteracy that is still prevalent, in particular among women; an increasing number of school dropouts;
a low rate of enrollment at the pre-school level; and a high number of unemployed graduates due to lack of
linkages between education and the job market. This section will discuss some of these challenges and discuss
the reform initiatives implemented in an effort to meet them, as well as the strategies and some priority areas
to be considered by the government in the future.
Education is a right guaranteed by the state in the 1971 Constitution, is compulsory at the basic (primary
and preparatory) levels, and is free at all education stages. While higher education in particular plays a large
role when it comes to national prosperity by creating a skilled workforce, illiteracy, at the lowest end of the
spectrum, perpetuates the cycle of intergenerational poverty73 and stifles growth. The census carried out by
Egypt’s Central Agency for Public Mobilization and Statistics (CAPMAS) in 2006 revealed that the number of
illiterates was 16.8 million persons, or close to a third of the adult population. There is concern over consistently high figures since.
II.5.a Literacy and Adult Education
There is a high correlation between poor persons and illiteracy (UNDP 2008) with rural areas, especially in
Upper Egypt, the most vulnerable. According to the recent and comprehensive 2010 Survey of Young People in
Egypt (SYPE), among those who come from the poorest households, 29% never enrolled in school, and 24% of
those who did dropped out before finishing basic education.
In the age bracket 25-65 years, illiteracy is as high as 40%. The illiteracy rate in rural areas reached 62% compared to 27% in urban areas. Furthermore, the female illiteracy rate is greater than the male illiteracy rate reaching 69% for females and 31% for males according to the UNESCO/Egypt National Report on Literacy and Adult
Education (2008). The number and rate of female illiteracy is generally more extensive in rural than urban areas.
Legislative Framework
Education is a right guaranteed by the state and is compulsory at the basic primary and preparatory stages
and the 1971 Constitution emphasizes the state commitment to provide it free at all levels To achieve this, Law
8/1991 was promulgated to clarify the responsibility of government, private and civil society organizations, in
developing literacy and adult education programs in line with national plans. Presidential Decree 422/1991 concerned the organization of GALEA - the General Authority for Literacy and Education of Adults(which has now
become the General Authority for Adult Education). Authority concerns are literacy/numeracy and literacy and
life skills. It promotes community and civil society organization participation; implementation and evaluation
for accountable and transparent mechanisms; decentralization and local management responsibility for implementation of literacy programs; quality control of the educational process; creating new learning options for illiterates; integration between plans for literacy and adult education and preventing dropouts in basic education;
and community accountability through the national literacy report submitted to different legislation councils.
Financing Adult Education Projects and Programs
There has been controversy over whether to support adult education or to provide budgets for mainline rather
than adult education programs. Nevertheless, the GOE is committed to financing adult education and a great
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Situation Analysis: Key Development Challenges Facing Egypt
Table II.5a: Distribution of the Population by Education Status
(10 years or more), in millions
Region
Urban
Rural
Total
Total
pop.
10+ yrs
Mil
25.1
32.2
57.3
Illiterate
Mil
5.1
11.7
16.8
%
20.0
36.6
29.3
Literate
Mil
2.7
4.4
7.1
%
10.9
13.6
12.4
Under
intermediate
degree
Mil
5.2
6.6
11.8
%
20.6
20.5
20.6
Intermediate
degree
Mil
7.0
7.2
14.2
%
28.0
22.5
24.9
Above
intermediate
degree
Mil
1.1
0.7
1.8
Source: Raafat Radwan (General Authority for Literacy and Adult Education – GALAE)
%
4.5
2.1
3.2
College
degree
or above
Mil
4
1.5
5.5
%
15.8
4.7
9.6
increase in the budget of adult education and literacy has been achieved in the past ten years, growing from
LE 109 million in 1997 to LE 192 million in 2006. In addition, bodies participating in the execution of projects
finance activities themselves. However, adult literacy programs are still weak and need to be scaled up substantially to achieve a critical impact.
Targeting Programs for Increasing the Participation Rates
The last ten years have seen a significant increase in admission to literacy and adult education classes as a
result of new techniques and the focus on specific categories. The annual numbers joining classes increased
from 486,000 in 1997 to more than one million people in 2006 with a rise exceeding 130%. A variety of literacy programs target specific categories of the population, identified by preliminary studies to define their
requirements. These are aimed at illiterate women by creating women’s associations with literacy programs
via technology clubs available in the governorates; they target prison inmates and those with special needs
such as the deaf and blind; industrial sector workers and participants in vocational training centers are other
targets as well as young men in the armed forces and police; they seek youth in youth centers at the country level; and provide self-learning programs through tapes and textbooks for dropouts from literacy classes.
Other noteworthy examples include the grassroots project titled ‘Egyptian Village Free from Illiteracy.’
Additionally, numerous experiments and programs in literacy and adult education have been conducted in
cooperation with all stakeholders at the local level. Several are applied together with international partners.
Following are three of these experiments and their achievements: It is clear that they can act as models in scaling up successful programs.
1. One international agency, in cooperation with the Damietta Governorate, has implemented an integrated
project to eradicate illiteracy, with decentralization to the governorate on decisions for running the project.
Results have demonstrated the effectiveness of this approach and cooperation protocols have been signed
with two other governorates to execute literacy programs under the complete management of local units, using plans and finance from the agency. These include conducting field surveys, identifying the study locales,
setting up data banks, appointing teachers; opening classes and supervising them; determining the financial
system and preparing the financial regulation of incentives for employees in the local administration; field
observation of classes and coordinating for exams. The agency trains teachers; provides books and learning
tools; it follows-up, guides and evaluates; sets exams; and issues certificates for successful students.
2.Another initiative at the national level has successfully used university students in literacy programs,
based on the success of UNESCO’s UNLED project. In this context, a leading pilot project was implemented in cooperation with Zagazig University, in collaboration with UNESCO to use each third year student
in elementary education to educate five illiterates in the village or district where he was resident, assigning five marks and LE 50 per student for every illiterate freed from illiteracy. Additionally, the ‘Illiteracy
Eradication and Adult Education Center’ was created in the university’s college of education, where training and rehabilitation courses are run for students to become literacy teachers. Procedures are currently
being adopted to develop this successful initiative in other universities.
3. An experimental initiative to use teachers from the Ministry of Education over their summer vacation has
also been very successful, exploiting their high social status in rural areas to reach students. A model was
applied in the governorate of Al-Gharbiyah, whereby the Minister of Education assigned every teacher
to a class (or gave them a contract to educate five illiterates), as a condition for renewing their ministry
contract the following year. This project resulted in an enormous increase in the numbers of literates in
the governorate, reaching 34% of the year’s target. The direct cost per student declined to less than LE 80.
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Outlook for the Future
Adult education programs should not just target literacy but must also promote contemporary thought, critical
thinking, adaptation to the changing marketplace, tolerance and acceptance of the other, and integration with
the technology of this era. These attendant goals are likely to impact directly on content and method of teaching. Institutions working in adult education must build criteria and standards to upgrade quality and direct
more attention to specific groups and deprived areas; university faculties of education and teacher-training
colleges must give more focus to adult education.
Overall, there is a need to deepen the principles of equality and non-discrimination, and to develop pedagogical and implementation frameworks that would better reflect the interests of different social categories.
Specifically, the emphasis should be to organize and guide local institutions’ work in adult education, provide
funds for those neglected, develop the mechanisms of cooperation with the appropriate partners, especially
in the governorates of the South to benefit from successful experiences, and to create new mechanisms for
corporate funding from the private sector and multinationals. Feedback and regular studies and research are
needed to evaluate the outcomes of the adult education and literacy campaigns in order to scale up those successful programs.
II.5.b Education Reform at Pre-University Level
About 22% of Egypt’s population is in school age, that is, between the ages of six and seventeen, with 9 million
enrolled in primary education (6-12 years old), 4 million in preparatory education (13-15 years old), and 2.2
million in secondary education (general and vocational). The Egyptian pre-university education system is thus
considered one of the largest in the region. It encompasses more than 43,000 schools, some 1.6 million personnel (teachers, administrators and other staff) and about 16 million students. It is one of the most important
social services in which Egypt has invested heavily, improving access to and raising the level of schooling of
the population substantially from a low base in the 1970s. Indeed, in regard to basic education, total gross
enrolment rates including public, private and Al-Azhar schools in both primary and preparatory stages has
surpassed 100%.
However, quality of education remains a major challenge. There remains the need for reform in order to move
from a system with over-concentration on memorizing content, passive pedagogies and inadequate facilities
and equipment, to a system where students are active participants in the learning process, with access to good
teachers, suitable learning material for knowledge, life skills and social capabilities. The essential ingredients
for change will be teacher training and reward, as well as giving schools a measure of autonomy through the
process of decentralization from the central authorities.
Addressing these concerns has been at the heart of the comprehensive National Strategic Plan for the Reform
of Pre-University Education 2007/8-2011/12. The NSP plan has three fundamental policy goals: i) ensure high
levels of quality education performance by strengthening quality, relevance, social outreach of education; ii)
ensure efficient system of management, effective community participation through decentralization, mediumterm finance planning, result-focused planning and implementation monitoring; iii) Ensure equal education
access for all; this includes increased net enrollment rates, especially in deprived areas, and strengthened
community participation.
The plan identifies 12 priority programs that are being addressed as part of the pre-university educational
reform process. They are classified into three interrelated groups;
1. Quality Programs, with school based reform as the core program in this group, and curriculum reform
and human resource development as supportive programs that will ensure the success of school based
reform.
2. System Support and Management Programs, which provide technical support for system reform. This
group includes the institutionalization of decentralization, ICT for management, modernization of the
monitoring and evaluation system, and school-building construction.
3. Level based Programs, which are centered on levels of schooling. They are: Early Childhood Education,
Basic Education, Modernization of Secondary Education, Education for Girls and Out-of-School Children,
and Children with Special Needs.
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Situation Analysis: Key Development Challenges Facing Egypt
n
Table II.5b: Estimated Cost of Programs (LE thousand) 2005/2006
Program
1 ECCE
2 Community Based Education
3 School Based Reform
4 Decentralisation
5 ICT
n General Secondary
n Technical Secondary
n Total Secondary
7 M&E
8 Based Education Reform
9 Curriculum
10 HRD
11 Special Needs
Total Cost
12 Construction
No. of
Annual
Activities Average Cost
Total Cost (Including Construction)
12
17
27
67
41
46
70
116
91
57
40
45
30
543
Total Cost
(million)
255
285
437
3
725
3
452
455
1
159
188
398
63
2,970
1,733
4703
Source: Ministry of Education
Program Cost as
% of Total Cost
1,276
1,425
2.187
13
3,625
14
2,259
2,273
5
796
941
1,991
317
5.42
6.06
9.30
0.05
15.42
0.06
9.61
9.67
0.02
3.39
4.00
8.47
1.35
23514
100.00
14,850
8,663
63.16
36.84
Program Cost
by LE
1275569891
1425416889
2187440380
12735300
3625944000
13705025
2259182600
2272887625
4708950
796457400
941400600
1991202852
316941256
14850705143
8662930000
23513635143
Major Outcomes of Reform
It is clear that the NSP recognizes that, in particular, the program requires a restructuring of the MOE with
increased autonomy and greater community participation for schools. Here, special attention is paid to the
particular needs of girls and other vulnerable children. The issue of quality is being addressed through the
introduction of standardized testing and teacher training. Sector public finance management regarding the
medium-term expenditure framework, program-based budgeting, some form of fiscal decentralization, and
public expenditure tracking are other important elements. The implementation of a public expenditure tracking survey is already taking place, and education public finance reforms are ongoing in three pilot governorates.
Support provided by major donors to the NSP, consequent funds, and interventions have been channeled into
the program. However, there remain challenges with regard to human and financial resources for the successful outcome and sustainability of the program in the long term.
Decentralization of the education sector is a key issue in the plan, implementation of which is intended to
ensure expanded participation and increased effectiveness of stakeholders at the planning stage as well as
during their subsequent implementation. Accordingly, the plan calls for consultation with other line ministries (MSAD and MOF) and support from national and international agencies to devolve authority, responsibility, and accountability for education governance to governorate education offices (muddiriyas, idarras,
and schools). The MOE is also now taking the lead in the application of decentralization, working jointly with
relevant stakeholders to activate the decentralization program and set basic pillars of gradual transformation,
and pilot decentralization in three governorates (Fayoum, Ismailia, and Luxor).
However, since its inception in 2007, school-based reform lies at the core of all education reform in Egypt,
consisting of important integrated quality targeted areas and allowing schools exposure to a continuous improvement cycle, including self-evaluation and the development of a school improvement plan. It is expected
that schools will have a great deal more autonomy and will be accountable for their processes and results. But
a comprehensive system of educational assessment, monitoring and evaluation is needed. Within that context,
the Ministry of Education in collaboration with international partners has developed standardized tests that
provide benchmarks for progress in education, such as CAPS (Critical Thinking Achievements and Problem
Solving Test), SCOPE (Standards based Classroom Observation Protocol of Egypt) and MAP (Management Assessment Protocol).
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Central to the success of education reform also is the move from effective access to education to an education
of quality for all. To this effect, the criteria for accreditation based on the Egyptian Standards for Quality in
Education has been designed, and a new teachers’ cadre was established in 2007 and followed by the creation
of the Professional Academy for Teachers. A 2006 law also established the National Authority for Quality Assurance and Accreditation of Education (NAQAAE) to assess both the instructional process and institutional
capacity of schools for accreditation.
Teachers and the teaching profession have received significant consideration during this educational reform
review period (2003-2008) through different laws, decrees and incentive mechanisms. The MOE has been giving great attention to training and capacity building of its most important change agents – teachers. There is
an ongoing shortage of teachers nationally. The result is that a considerable number of teachers – some with
no pre-service training - are recruited by the MOE as contractual agents. This has lowered standards and the
response has been to instruct a total number of 1,832,568 trainees to date in different education levels and
fields. The process continues.
Under an initiative by the First Lady of Egypt, Suzanne Mubarak, and as part of the national educational reform
project, the 100 Schools Project, began with the physical upgrade of 100 public schools at various educational
stages in the lowest income areas of Cairo. After the success of this stage, three other reform stages have been
advanced for 2008-2010 to include an additional 208 schools that serve more than 300,000 students. Expansion is underway to include two additional governorates (Giza and Luxor) as part of the reform plan’s school
physical rehabilitation program.
With regards ICT, the overall goal is to develop, create and maintain the infrastructure and technical support
needed to implement and sustain modern pedagogy, effective education management and planning, while
the objectives are modernizing and strengthening the technology infrastructure in all schools, and activating
the role of information system management in the educational process. To date, over 300,000 PCs have been
provided in schools, 25,800 schools connected to the internet, and the number of specialized initiatives such
as the Egyptian Education Initiative schools increased to 2000 preparatory schools, the ‘Smart’ Schools to 173,
with teachers trained on ICDL to 240,000, ICT teachers to 44,000 and teachers trained on the ICT ‘Learning for
Future Program’ to 266,000.
Future plans include to continue effective access to an education of quality for all, to harmonize technical and
general secondary education, enhance literacy – the first step towards lifelong learning – expand provision of
different educational delivery systems, institutionalize effective decentralization and accountability, and introduce a systemic transformation of leadership, capacity building and continuing professional development.
Challenges Facing Pre-University Education Reform
The major challenges to the reform of pre-university education in Egypt fall under three headings: cultural,
financial and vocational training.
1. Cultural Challenges
Community Participation
School-based reform requires the development of wide-scale community participation based on a culture in
which the values of volunteerism are embedded, and where there is community belief in the importance of
participating in school affairs. To this end, a legislative framework has been developed — the ministerial decision regulating school boards of trustees - as an organized tool for community involvement, with elected parents and teachers, as well as public figures from outside the school. This is expected to have a positive impact
on school leadership, administration and management, service delivery and transparency.
n
Further, high levels of community involvement and effective voluntary work are the cornerstone to decentralization in the education sector. Hence there is need for a strong campaign for the preparation of community
participation at the school level, a review of regulations and decisions governing the work of the Board of
Trustees of each school to facilitate community participation, and the enhancement of civil society experience
and skills in the school management process to achieve governance capable of rational policy-making, planning and implementation of reform plans and policies.
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Situation Analysis: Key Development Challenges Facing Egypt
Box 13: A Special Emphasis: Teacher Professionalism
A key factor in providing an education of good quality is to enhance the quality and motivation of teachers. To this end, the
MOE has established a special teacher cadre as one of its reform strategies in the national education strategic plan. The Teacher’s
Special Cadre Decree 155/2007 was issued to amend Education Law 139/1981. It covers all those who practice school teaching,
administration, supervision, and school social, psychological, and technology specialists, as well as school journalism, media, and
library specialists. In the new special cadre salary and incentive scale are correlated with the entire quality performance of the
teacher. The law also creates a professional academy for teacher training.
There are five promotion levels: Teacher, Senior Teacher, Senior Teacher A, Expert Teacher, and Master Teacher. It is anticipated that in the course of teachers’ promotion along this sequence of professional levels, teachers will be able to develop and
improve their knowledge, and skills through continuous development. The cadre law explicitly states that teacher placement
would be based on two requirements: years of experience and score on a placement test. This type of test has been a first time
challenge in the Egyptian context, starting January 2008, and piloted on 21,000 teachers. A total of 990,400 teachers then registered online on the Ministry of Education website to sit for the placement tests. Over 800,000 teachers actually sat for the tests
in August 2008.
Source: Nadia Touba, American University in Cairo
Modernizing a Traditional Culture
School based reform also aims to move from the teaching traditionally based on rote learning, with teachers
as the carriers of authority and knowledge, and students as passive recipients. The reform pedagogy sought is
an active learner-based pattern; it respects learners’ interests, dialogue and democratic relations in the classroom to develop thinking skills and creativity, based on respect for children’s rights and interests, tolerance,
freedom of thought, and the creativity of the teacher and the learner together.
n
The absence of such values limits and impedes reform efforts within the classroom. Promotion of these values
would create a culture supportive of the efforts of the new reform. It should take place on a number of levels
starting with curriculum content, teacher training, evaluation that rewards innovative problem-solving, and
carefully constructed incentives that reward cultural activities outside of the traditional syllabus.
2. Funding Challenges
The education budget increases yearly in terms of absolute numbers, with an annual average of 7%. The education budget in 2006/2007 was about L.E. 27.5 billion, equivalent to 4.1% of GDP. By 2008/2009 it had increased by more than 10.4%. However, expenditure did not exceed 3.3% of GDP.
The ratio of public wages of workers in education has in many years exceeded 80% of the total education
budget. This means that the financial allocations for education do not reflect the real growth in the increasing
needs for more education quality. This also means that little is spent on the materials and needs of the educational processes that are directly related to the students themselves. The per student cost in Egypt (materials,
textbooks, and school meals, etc) range from 6% to 7% of the education budget . The estimated per pupil cost
is L.E.1.7 thousand, which is low compared even to spending on students in countries with similar economicconditions to Egypt.
Egypt’s Household Survey on Education 2005/2006 indicates that a household’s annual expenditure on children in primary school reached LE 357, for preparatory school students LE 599, and LE 950 for high school
students. Naturally, these are averages and there are discrepancies, according to factors such as poverty, or
rural-urban residence. Nevertheless, expenditure on private tutoring represents a large proportion of what
families spend on their children, reaching up to 41% of the total family expenditure for primary school children. Pupils in preparatory and secondary education consume up to 61% of total family expenditure. These
indicators suggest that funding is still far from meeting the needs of education.
The National Strategic Plan (NSP) for the Reform of Pre-University Education in Egypt (2007/2008 – 2011/2012)
shows that the implementation of the plan to achieve quality education, the fairness of access as well as the efficiency of the system needs financial support up to a total of approximately LE25 billion in the five-year plan in
addition to the estimated state budget for education, according to the 2006-2007 prices. This identification of
the financial needs to develop education means an increase in the growth rate of education spending from 3.3%
of GDP to 6.5% of GDP in order to fund the plan in the twelve programs for educational development.
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Table II.5c: Average Expenditure Per Student in Egypt Compared With
Other Countries (Purchasing Power Parity Dollar)
Country
Jordan
Malaysia
Peru
Philippines
Chile
India
G19 (WEI)
OECD
Egypt (PSPU estimation)
Year
2004
2003
2004
2003
2004
2003
2003
2003
2004/05
Educational Stage
Pre -Primary
797
439
427
64
2,470
82
707
4,508
372
Primary
846
1.830
454
500
2.139
368
1,066
5,450
282
Preparatory
859
2,920
639
504
2,124
375
1,119
6,560
405
Secondary
856
2,920
639
521
2,281
1,182
1,275
7,582
394
Source: National Strategic Plan For Pre-University Education Reform In Egypt 2007/08-2011/12:p343. Based On UNESCO and MOE/PSPU Statistics
This shortfall in funding has led to a deficiency in the implementation of major aspects of the NSP. This is
clearly evident in the following points:
•
The Ministry of Education’s inability to achieve significant accomplishments in community education
programs targeting nearly half a million children who are out of the educational system (not enrolled
or dropped out) to give them a second chance for education. It was also intended to implement this
program through community participation and by non-traditional methods;
•
An inability to achieve high levels in the implementation of a program for the comprehensive integration of people with special needs. The MOE has not been able to expand this program and has only created 20 schools with the support of donors;
•
An inability to meet all plan objectives to achieve better quality in 10% of the schools out of
43,000schools, and to qualify them for accreditation in the first year of implementation (2007/2008),
which is equivalent to about four thousands schools. Due to lack of funding the MOE could only rehabilitate about one thousand schools in 2007/2008;
•
An inability to eliminate high densities in schools by building new schools. The NSP reform targets building 70,509 classrooms at an estimated cost of LE 8.7 billion in 2005/2006 at the rate of 14,100 classrooms per year. The financial means available since 2007 are only sufficient to build 8000 classes.
Development Challenges
The NSP envisages the need for a human element capable of good management, both at the operational level
and at the level of educational and administrative leadership. This goal is the most important challenges facing
the MOE. To develop leadership at various levels, it needs:
•
School administrators for 43,000 schools as well as support leaders at the rate of two assistant headmasters (wakeel) for average sized schools, one for small schools, and three for large schools;
•
Directors and heads of educational departments, as well as educational directorates in different governorates;
•
The preparation of human cadres for planning, policy development, monitoring and evaluation;
•
The preparation of members of school boards of trustees to stimulate the development of community
participation to ensure efficient performance and good governance;
•
The preparation and development of cadres in favor of change and development for the dissemination
of the new culture.
The MOE must still fully achieve the objectives of professional development and build cadres capable of managing development. It has succeeded in the application of Phase I and II of the staff and placement of teachers
in their respective levels in the five level system under the 2007 law governing teachers’ scale of payment.
Costs are approximately LE 5 billion, but the dilemma is to provide the various and sufficient training programs needed to match the criteria and job descriptions of teachers, administrators, inspectors, and other varied personnel. The National Strategic Plan estimates financial requirements for this component in the amount
of LE 1.9 billion during the five-year plan and according to 2005/2006 prices.
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Situation Analysis: Key Development Challenges Facing Egypt
For the future, some recommendations include:
•
The creation of an Egyptian Examination Board independent of any government organization, to set
up the capacity to develop and administer teacher certification/promotion tests that are aligned with
national and international standards. In addition, it would be responsible for the development and administration of all performance assessments needed for certification/promotion;
•
The Minister of Education heads the Board of Directors for the Professional Academy for Teachers (PAT)
and there have been no provisions made for the teachers practicing out of the Ministry system. It is imperative that any technical decisions about certification and promotion are dealt with by an external and
objective body;
•
Some investment in research is needed to analyze the abundant data provided by all the teacher cadre
test results. The data includes information about teachers at all levels and in all the governorates in
Egypt. This data can help in making final decisions on the training teachers need in different locales and
circumstances.
3. Technical and Vocational Education and Training
Technical and Vocational Education and Training (TVET) has held the dead-end label for those who are pushed
away from general education, but this is slowly changing in some sectors. Nevertheless, the Egyptian economy
still lacks the critical mass of skilled workers needed with the necessary training and enhanced skills.
Egypt’s TVET system is dominated by a number of ministries and government agencies that operate in isolation, though there exist sporadic islands of excellence. Several rounds of surveys have arrived at similar
conclusions: most TVET institutions are supply-driven rather than driven by market demands; public funded
with insufficient annual budgets factored against previous year’s expenditure rather than overall actual performance; lacking clear standards for curriculum development and training delivery; lacking practical ‘hands
on’ training; using outdated curricula; and experiencing shortages of modern and advanced specializations.
Within the context of broader TVET reform, there is a need to consider its relevance to international labor market demand, as well as introduce internationally recognized accreditation, where possible. There are a number
of on-going programs and projects that contain elements of excellence, such as Don Bosco, which has existed
in Egypt for nearly a century. The Italian Cooperation for development is supporting Don Bosco through the
provision of capacity building for teachers and trainers. Moreover, Italy is financing a project that will, among
other activities, renovate two vocational training centers in rural Egypt, update their curricula (based on Italian labor market demand) and train pedagogies in line with the Don Bosco model. The Italian Cooperation for
Development is also financing the design and implementation of a higher education TVET project related to
the concept of technological clusters, the mechanical TEC in Amreya.
Another TVET project of excellence is the Mubarak-Kohl Initiative (MKI), particularly with regard the involvement of private sector partnerships and firms’ after-training job offers. The MKI is considered the first successful initiative that links technical education with industry/labor market requirements. The initiative has
aimed to enhance the market relevance of technical secondary school graduates’ qualifications. The National
Skills Standards Project, originally funded through Egypt’s Social Fund for Development (SFD), in cooperation
with employers, has not only established skill standards but also the procedures for testing and certifying
trainees. For sustainability, and further to an Industrial Training Council/SFD protocol, the manufacturing sector’s skills standards have been handed over to Egypt’s Industrial Training Council (ITC) in early 2007, while
those related to tourism and construction were handed over to the respective federations.
The Skills Development Project (supported by the World Bank) and the EC-TVET projects are perceived as
companion projects, as they were designed around the same time as a natural development of the TVET Policy
Statement of 2002. More recently, leading private sector firms have been engaged in upgrading a number of
training centers. Another more established model is that of the private Don Bosco Institute, which offers a
clear path to employment, decent pay, and career progression that are the very same elements lacking in the
majority of the public TVET institutions.
It is clear, however, that successful programs such as these need to be scaled up to have the required impact.
There are two interventions that are needed to reform the public TVET system: incentives and accountability,
such that (i) a clear set of incentives – upgraded curricula and equipment, cost-sharing for training and tax
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incentives to employers, or job openings – must be in place to enable technical and vocational education and
training to become a viable option for youth; and (ii) accountability goes hand in hand with the introduction
of proper certification, based on recognized and preferably internationally based standards of performance. The way forward would include: close linkages between TVET providers and employers in curriculum content,
equipment, and training of trainers, with close support from training councils; international branding of trainees and prospect of mobility for further education and employability; employer-driven packages of training
and training related services; and accredited training organizations within an integrated system for quality
assurance and certification.
II.5.c Sector Analysis of Higher Education in Egypt
The transition of students from the general and vocational/technical tracks of upper secondary education to
higher education in universities, colleges, and other tertiary institutions is one of the most significant challenges for education reform in Egypt. This transition is problematic because its structure and processes are
not flexible enough to enable young people or adults to navigate the passages between schooling and work at
various stages of their lives, and in the long-term, it affects economic and social wellbeing.
According to the 2009-2010 estimate records of the Ministry of Higher Education, the current higher education sector in Egypt is a public-private mix that caters for an aggregate of around 2.8 million students, 80% of
whom enrolled in public state universities and the remaining 20% enrolled in private universities and higher
education institutions. The system comprises 17 public universities that include six branches and enrol nearly
1.1 million full-time undergraduate students in addition to about 500,000 t in part-time and open education
study programs and nearly 200,000 graduate students. The Islamic Azhar University has scattered campuses
all over Egypt including 43 colleges for male students and 25 colleges for female students enrolling around
320,000 t undergraduate and nearly 16,000 graduate students. Technical education caters for around 120,000
students enrolled in eight technical colleges spread geographically all over Egypt and includes 45 middle technical and health institutes.
Private higher education includes 17 private universities (three others are in the pipeline) enrolling nearly
60,000 undergraduates and around one thousand graduate students (some private universities such as the
American University in Cairo and the Egyptian Japanese University for Science and Technology have special
status as they follow special agreements between respective governments). In addition, 117 private higher institutes enrol about 400,000 undergraduate and about 550 graduate students as well as eleven private middle
technical institutes enrolling around 24,000 undergraduate students.
The Egyptian higher education system is highly centralized, across segmented agencies and multiple layers of
control, and has highly interventionist powers. By international comparisons, institutions have extraordinarily
limited discretions and incentives for performance improvement and responsiveness to changes in student
demand and labor market needs. Budget allocations are not linked to the respective roles and needs of individual institutions. Employment and staffing policies in the sector mirror those of the public sector, fostering
problems of overstaffing, promotion by years of service, and poor remuneration. Private institutions are also
subject to many of the same regulatory controls imposed on public institutions, thereby negating the benefits
of a strong and innovating private sector.
For public universities, there are widespread concerns about continuing reliance on the secondary school
examinations as the sole basis for admission to higher education and the issue is still under debate. Surveys
also indicate insufficient choice of field of study relevant to career preference; inadequate preparation for
employment as a result of curriculum irrelevancies; and limited practical skills formation because of an overconcentration on memorizing content, passive pedagogies and inadequate facilities and equipment. Reform
measures for higher education are under consideration, and are being guided by OECD and World Bank situation and gap analyses which focus on a range of issues related to access, funding, governance, autonomy,
mobility, internationalization and quality. This review was requested by the Minister of Higher Education to
push for and better address reform.
R&D Innovation
In Egypt, only 0.2% of GDP is allocated to R&D and about 95% of spending comes from the government. The
recent establishment of the Higher Council for Science and Technology provides the basis for high-level coordi72
Situation Analysis: Key Development Challenges Facing Egypt
nation and prioritization of R&D aligned with national development goals and strategies. The new Science and
Technology Competitive Fund and the EU-Egypt Innovation Fund provide incentives for raising research quality and linking research activity with industry development needs. However, one major structural impediment
to the development of future capability is the separation of research from university education and knowledge
exchange and the continuing predominance of a supply-driven approach to research and innovation. Countermeasures to remedy these weaknesses are under consideration in the reform initiatives.
Current Reform Initiatives
Egypt is transitioning in its approach to quality from a control model to a more decentralized and combined
quality assurance and enhancement model. A platform for progressing reform has been built up through the
development of a long-term strategic plan (2002-2017) to be executed in three five-year consecutive phases
adopted through the Higher Education Enhancement Project (HEEP). This confirms that issues of quality and
relevance need to be addressed, as do quality assurance and accreditation procedures, with improved institutional capacity for strategic planning and implementation management, including the articulation of institutional learning objectives as a basis for revising curriculum, pedagogy and assessment, and for reporting on
educational outcomes.
II.6 Health and Nutrition
Health is viewed in this analysis as a developmental goal that is a condition sine-non-qua for the realization
of development goals as it determines the quality of life and the social functioning and productivity of the human capital of the country. The latter is recognized as being the main asset and the foundation for sustainable
human development. “Improving the health of households is what the health sector is about.74 ” The nature of
interdependent health problems calls for a holistic vision and the capacity to conceive integrated approaches
and programs to deal with them. The institutional weakness of the health sector in this area tends to limit its
intervention to a health alone vision, with more emphasis on services that on integrated preventive measures
than address root causes of ill health and involve other sectors.
Egypt has made significant advances in improving the health of Egyptians over the past decades as is evidenced by improvements in the health indicators, in particular the progressive decrease in the child mortality
rates from just over 240 per 1000 births in 1967 to 28 per 1000 births in 2008.75 The improved MOH capacity
to deal with major national health problems is more evident when special resources are mobilized in favor of
vertical programs that address priority health problems such as the viral hepatitis control program.
Health financing in Egypt is mainly borne by families, with out of pocket expenditures representing 60% (up
from 51% in 1994). The Ministry of Finance contributes only 35.3%, which translates to LE201 per capita.
Meanwhile, the donors’ share has declined from 2.9% in 1994 to 0.6% in 2007. It is the MOH that administers
most preventive and public health programs, whereas the other public sector facilities, such as the Health Insurance Organization (HIO) and teaching hospitals and institutes, provide primarily curative care. The overall
distribution of care in public vis-à-vis private facilities has not changed significantly since 1994-95, with public
facilities consuming 43% of expenditures in 2002 and private facilities accounting for 54%. Households spend
most of their out of pocket (OOP) expenditures (42%) seeking care at private clinics, followed by spending at
independent/private pharmacies (34%). This represents a shift of spending from that of 1994-95, when most
expenditure was made at pharmacies (63% of household expenditure). Care at MOH facilities is either free or
highly subsidized and, therefore, it is not surprising that only a small proportion of OOP expenditures are made
at MOH facilities. The public health importance of the recent downward trend in health seeking behavior that
was observed among poor families in the wake of the avian influenza epidemic ban on poultry home breeding
remains to be validated.76 Reduced incomes from poultry breeding further diminished as a result of the rise in
food prices. This compromised household food security and limited the coping capacity of households.
In Egypt, health services continue to be financed primarily through government budgets or by individual patients who pay directly out-of-pocket for services. This pattern of dual health financing system is typical of
most low and middle - income countries where the only organized form of health financing occurs through the
government budget system. In 2001-02, Egypt spent nearly 6% of its gross domestic product (GDP) on health
care, an increase from 3.7% in 1994-95. The total health care expenditure (THE) in Egypt for 2001 –2002
amounted to approximately LE23 billion, a 207% increase since 1994-95. Looking at the sources of health
financing in Egypt, it is clear that private sources, primarily households, shoulder most of the burden of health
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financing. Comparing the sources of funding between 1994-95 and 2001-02 rounds of National Health Accounts (NHA), reveals that the public contribution declined from 46% to 32%. This decline in public spending
is compensated by the substantial increase in the contributions of households, which by 2002 grew to 61%.77
Part of this large increase can be attributed to the escalation of health care costs in Egypt and increased demand for private sector services.
II.6.a The Health Sector Reform Program
Full national coverage by the health sector reform program (HSRP) initiated by a preparatory phase in the mid
1990s has not yet been achieved. In the meantime, the MOH underwent a re-organization and restructuring
process to support the policies introduced within the HSRP and to strengthen the Ministry’s regulator function. The HSRP introduced a new policy on staff incentives backed by a supervisory program, and established
a contractual relation between the health care provider and the payor. The restructuring process served to
integrate some of the vertical programs into mainstream activities, establish criteria for the quality of services,
upgrade the performance of the health personnel, upgrade the health information system, and grant more
autonomy at the decentralized levels. The HSRP national standards for quality health care delivery that have
been developed and accredited internationally are being progressively applied in renovated facilities following a retraining program for their health personnel following their accreditation. Though full coverage was
limited to the few governorates that initiated the HSRP at the beginning of the reform process, a rolling plan
for application of quality criteria and accreditation of health facilities has now covered the public primary
care provider services. Policies guiding the evolution and functioning of the active Egyptian pharmaceutical
production sector provide substantive support to the HSRP. Some services such as the emergency and blood
transfusion services have been upgraded and modernized, other such as the food safety directorate continues
to be in need for more strengthening to enable the MOH to assume its lead normative role and technical mandate in this field. Following endorsement of the National Investment Fund for the upgrading of more than 2000 Family Health
Units, the national scale implementation of the Family Health Model, through which the eventual universal
coverage by social health insurance will be implemented, awaits finalization of managerial details, in particular the financing mechanisms, before qualifying for replication on a national scale. In the meantime, the
purchaser capacity of the Health Insurance Organization (HIO) was strengthened to satisfy the requirements
of its role within the health insurance reform plan. The endorsement of a new organization chart and an
intensive training program are some of the capacity building measures undertaken in preparation for implementation of the reform. A new health insurance law has been prepared and an actuarial model developed
in collaboration with the Ministry of Finance (MOF). The MOF prepared long-term fiscal forecasts in order to
explore the fiscal sustainability of the new model and to anticipate its fiscal consequences on the state budget.
A field test of the new model is being piloted in the Suez governorate and includes an enrolment of the poor
as identified by the MOSS. II.6.b Impact of Environmental Degradation
The HSRP was designed in the 1990s in response to the health problems that occupied the forefront of concerns at that time. Since then, the past decades have witnessed the impact on the health of Egyptians of an
epidemiologic transition and an increase in the environmental burden of disease. The policy for increased
industrialization and for intensification of vertical agricultural production have resulted in an increase in
the practice of discharge into nature of untreated industrial wastes and in the load of chemical fertilizers and
pesticides that find their way into drainage canals and the irrigation network. This has led to an increase in
environmental health risks. Indiscriminate evacuation and discharge of untreated raw sewage into waterways
and in fields (CAPMAS 2006 Census figure for national sanitation coverage is 24.3% for rural areas) further
increases environmental degradation. The added burden of water scarcity and climate change are expected to
further complicate the picture through the introduction of a new list of health hazards.78
The unhealthy environments of the growing number of informal settlements and the millions living in them
under unhygienic conditions with minimal or no basic infrastructure services further increase the magnitude
of the health hazards and the environmental insults to which Egyptians are exposed. In such communities (for
example, Kilo Araba wa Nus), environmental health hazards often associated with rapid urban growth have
been further aggravated by the high rate of internal and international migration and lack of commensurate
planning for basic infrastructure services. The alarming number of road accidents and injuries, accidents in the
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Situation Analysis: Key Development Challenges Facing Egypt
Box 14: The Cost of Malnutrition in Egypt
The Situation
In spite of the significant advances made in improving the health of Egyptians over the past half a century as is evidenced by
lowering of under five years child mortality rates from just over 240 per 1000 births in 1967 to 28 per 1000 births in 2008 (DHS
2008), it is the quality of life of the surviving child that is now at stake. DHS 2008 revealed that the downward trend in malnutrition has reversed in recent years and that malnutrition is one of the few childhood indicators that have shown deterioration. The
survey results suggest that while the nutritional status of young children in Egypt remained relatively unchanged during the period between the 2000 and 2005, the prevalence of stunting — a manifestation of long-term chronic undernutrition — was found
to have increased in 2008. National figures for malnutrition show that 29% of children under the age of 5 are stunted, 6% are
underweight, and 7% are wasted (Egypt DHS). These averages mask wide regional disparities in the prevalence of undernutrition,
stunting being lower in Upper Egypt and twice as high in Lower Egypt reaching 39.3%.
Undernutrition is not a problem of poverty alone, but is also the outcome of a number of other factors that include (though not
limited to) food habits, caring practices and the high disease burden. The incidence of stunting and anemia rates was not confined
to the poor but was found to cross socio-economic barriers and affect all wealth quintiles. Children are at risk of micronutrient
deficiencies because of insufficient intakes of iron, vitamin A and zinc as revealed by various food intake studies. While 79%
of households consume iodized salt, nearly half a million children remain unprotected from iodine deficiency disorders. Egypt
has also seen an increase in adult obesity. Up to 70% of age 15 and over are overweight or obese, and more than one in eight of
children are born with a low birth weight, rendering them at greater risk of chronic diseases such as diabetes and heart disease
than children that start life well nourished. This “double burden’” of undernourishment and overweight, can be attributed to poor
public health systems and slow progress in improving community basic infrastructure, especially in rural areas and in crowded
informal settlements. A sedentary life style and changing food habits with adoption of diets rich in refined carbohydrates saturated fats and sugars are blamed for the increase in obesity and nutrition related chronic diseases. The above figures show that
Egypt will not be able to meet the MDG1 Target C for halving 1990 rates of child underweight by 2015.
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n The Cost of Malnutrition
Most of the irreversible damage due to malnutrition in Egypt happens during pregnancy and the first 24 months of life. If
it continues as business as usual and no action is taken, it is anticipated for Egypt to lose a cumulative $1.3 billion to chronic
disease by 2015, according to The Lancet (2007). The children who are malnourished from birth to age two years are at high
risk for impaired cognitive development which adversely impacts on the educability of the child and the country’s productivity,
economic growth and development. The economic costs of undernutrition and overweight include direct costs such as the increased burden on the health care system, and the indirect costs of lost productivity. Childhood anemia alone is associated with
a 2.5% drop in adult wages. Annually, World Bank (2009) and UNICEF (2004) figures suggest that Egypt loses over $814 million
in GDP to vitamin and mineral deficiencies, while the cost of scaling up core micronutrient nutrition interventions is estimated at
$55 million per year. The approximate return on investment of various key interventions to address malnutrition can vary. The
highest return is from universal iodization of salt estimated at 3000% and the lowest being from fortifying staple foods with iron,
estimated at 800%.
No More Business as Usual
Updating and adapting the national nutrition strategy and policy to the imperatives of the current situation will also need to
be accompanied by raising the operational capacity for scaling up actions in nutrition. Preparations are currently underway for
UNICEF to lead a landscape analysis of the country’s readiness to accelerate action in nutrition which will reveal the strengths,
weaknesses and in particular assess the operational capacity and gaps in scientific nationally representative data required to
serve as a basis for evidence-based policy and strategy formulation. Interventions aiming to stop the progressive degradation in
the nutritional status of Egyptians will need to replace the dominantly health approach that looks a single, simple solutions to
defined problems in isolation from their underlying causes and interdependent developmental linkages. Well-targeted inclusive
interventions are urgently needed to protect the country’s human capital and to avoid compromising the important advances
made in the economic growth front.
n
Source: Habiba Hassan-Wassef. Adapted from World Bank Briefs on Nutrition in Egypt (2010):
Solutions to Primary Causes of Malnutrition, and Nutrition at a Glance: EGYPT
workplace, as well as the continued increase in tobacco intake also add to the environmental health hazards.
Studies for estimating the environmental burden of disease have identified an indicative value for environmental attributable fractions by specific environmental risk factors.79 In Egypt, the cumulated impact of the exposure to environmental hazards has reached critical levels and is manifested by a group of disease conditions
that can be attributed to environmental risk factors. The commonest example is repeated diarrheal disease
— followed by intestinal nematode infections, trachoma, malnutrition, kidney diseases, and several types of
cancers, respiratory diseases, nervous system impairment (often caused by exposure to chemical pollutants),
skin diseases, and allergic manifestations. However, neither scientific research initiatives nor causal analyses
are able to keep abreast of the growing manifestations of the environmental burden of disease in Egypt so as
to be able to apply a risk identification and management approach. Instead, the gravity of the conditions and
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the magnitude of the demand may have been behind the curative service response that has triggered the multiplication of dialysis centers and cancer hospitals in lieu of a policy for risk identification, risk communication
and risk management to lower exposure of Egyptians to environmental risks.
II.6.c Disease Burden in Egypt
The disease burden for Egyptians is gradually shifting from a predominance of infectious and parasitic diseases to non-communicable diseases. This is the outcome of improved control programs for communicable
diseases, of modernization of Egyptian life styles, and of an increase in life expectancy. This double burden of
disease places a great toll on the health and economy of the people and the nation as a whole. Strategies are
needed to address current and future evolution in the disease burden. At present, deaths are mainly due to
non-communicable diseases. Essential hypertension and liver cirrhosis top the list and are the two most common causes of deaths. Together they made up to 13.7% of deaths in 2007.80 Meanwhile, deaths due to diarrhea
and gastroenteritis which reached up to 2.6% of deaths in 2001 are no longer in the top leading causes of
deaths in 2007 although these are still of serious concern.81 In parallel to, and related to, Egypt’s demographic
transition, Egypt is currently undergoing an epidemiological transition that is characterized by: (i) Reduced
mortality rates among infants and children from diarrhea, preventable childhood diseases and respiratory
infections, and (ii) Rising prevalence of risk factors such as obesity, smoking and hypertension, responsible
for chronic diseases and (iii) a changing socioeconomic environment leading to, inter alia, unbalanced and/or
deficient dietary intakes, the adoption of sedentary lifestyles, increased industrialization, and increased road
accidents. As a result, non-communicable and nutrition related chronic diseases are now emerging as major
causes of death.
Hepatitis B and hepatitis C at present constitute a major health threat in the country. HBV infection in Egypt is
of intermediate endemicity, ranging from 2% to 8%. Screening of blood in 2006 has revealed that 1.1% of collected blood bags all over the country were HBV positive. Egypt is facing an HCV epidemic and has higher rates
of HCV infection than neighboring countries as well as other countries in the world with comparable infectious
control measures. Nationally, 9.8% of the total population has active HCV infection on PCR-RNA test. The incidence is highest in the age group 50 and above, and declines to 4% among 15-19 year-olds. HCV is prevalent
in all governorates, where Lower Egypt shows the highest prevalence at 11.5%, Upper Egypt has 10.2%, and
the lowest prevalence is in urban governorates at 6.2%.
There is evidence that Egypt’s HIV epidemic is changing from low prevalence in the general population (<1%)
to a concentrated epidemic (>5%) among some groups (see MDG 6 under Section 6 of the Introduction). Inadequate knowledge on HIV and AIDS especially among women and young people, evidence of high level of
risk behaviors coupled with very low use of condoms, low usage of services for counseling and testing and for
preventing mother to child transmission, are all areas that need to be addressed urgently. Strategies proposed
for the protection of housewives from the risk of exposure to infection through their husbands is behind the
recommendation for mainstreaming aids prevention and control activities in MCH (mother and child health)
programs.
It may also be pertinent to highlight the vulnerability of Egypt’s migrant communities to HIV and other infectious diseases. It is estimated that, of 2,612 HIV/AIDS cases detected in Egypt between 1986 and 2006,
722 were amongst foreign nationals – predominately from countries in Sub-Saharan Africa. In 2009, to gain a
better understanding of this situation, IOM commissioned qualitative research to analyze HIV-related vulnerabilities amongst undocumented Sudanese in Cairo.82 The study found that the majority of HIV-positive Sudanese in Egypt had contracted the virus prior to arrival, with an almost exclusively heterosexual transmission
pattern, and recognized undocumented migrants’ socio-economic experiences in Egypt — where they often
struggle to access healthcare and other services, and live in crowded urban environments — render them at
increased risk of exposure to HIV. In parallel, HIV-positive migrants in Egypt face considerable barriers to accessing sexual and reproductive health services, including confidential HIV testing and treatment.
However, it is found that stigmatization of the disease is an important barrier to progress. Attention to other
infectious diseases is also warranted. After having improved in recent decades, there has been an increase in
the incidence of tuberculosis attributed to poor socio-economic conditions and rising malnutrition. Moreover,
Egypt needs to remain vigilant in terms of avian influenza, which has become endemic in the country’s poultry
industry and thus remains a significant threat to animal and human health, as well as having serious consequences for the livelihoods and nutrition of millions of people. There is a need to improve capacities to obtain
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Situation Analysis: Key Development Challenges Facing Egypt
and use good quality data for surveillance and effective response to reduce the threats posed by animal and
pandemic influenzas, as well as other emerging infectious diseases arising at the animal-human-ecosystem
interface. Likewise, longer-term strategies and interventions for sustainable control of these diseases are required to reduce the ongoing threat to health, livelihoods, food security and nutrition.
The benefits of the recent progressive economic growth did not reach those in need and only served to increase income disparities. The increase in food and fuel prices and the avian influenza epidemic that are superimposed on the existing poverty and unemployment has heightened Egypt’s vulnerabilities and exposed
its weaknesses, diminishing the coping capacity of families with limited incomes. This means that the usual
community based preventive programs addressing health education and information needs required for promoting preventive action and healthy lifestyles will remain unheeded as the capacity of households to act upon
health advice is curtailed by the critical poverty levels. Health seeking behavior is affected by limited incomes
as well as household food security, the latter being affected both in quantity and quality. Recent successful
initiatives for improving community level health and nutrition relied on the implementation of concomitant
income generation and women empowerment programs aiming at raising the coping capacity of households
for healthy living. Overcoming the present crisis and deterioration in the health of the children in vulnerable
households cannot be guaranteed without a social protection program that targets the families in need. The
preparatory phase of the MOSS program for Conditional Cash Transfer (conditions covering the health and
education of the child) has been completed and a field application is underway in Cairo and in Upper Egypt. Recent scientific evidence has identified that it is the period from gestation to 24 months of age that is critical
as it is the foundation that determines the health outcomes in adult life. More needs to be done in this respect
building on the legal framework provided by the recently updated Child Law (2008) and on the coordination
mandate of the Ministry of State for the Family and Population to rally the concerned stakeholders around
this subject. Investing in such a program contributes to the realization of the full developmental potential of
children and represents an investment in the human capital of the nation.
Scientific evidence has shown that nutritional problems of early childhood are at the origin of most of the nutrition related chronic non-communicable diseases (NCD) of adult life such as obesity, type II diabetes, cardiovascular diseases, or cancer.83 Strategies and interventions for the protection and promotion of the outcome
of pregnancy and the health of early childhood can protect the human capital of the nation and significantly
reduce the incidence of chronic NCD in later life. This will more importantly reduce the health insurance bill
once the new social health insurance system becomes operational.
II.6.d Female Genital Mutilation (FGM)
The 1995 Egypt Demographic and Health Survey (EDHS) was the first national-level survey to include questions on the practice of FGM. According to the most recent EDHS of 2008, FGM prevalence has decreased from
97.3% in 2000 to 96% in 2005 to 91.1% in 2008, of the ever-married women aged 15-49 interviewed in the
EDHS. EDHS data further reveal that the prevalence of FGM among girls age 15-17 has decreased from 76.5%
in 2005 to 74.4% in 2008.
Recent developments in Egypt indicate a clear commitment on the part of the government and decision makers to promote a supportive environment to track and abandon all forms of violent practices against children,
including FGM. Data from the 2008 EDHS indicate that 77.4% of FGM is performed by medical personnel. The
MOH has issued decree No. 271 of 2007 banning all doctors, nurses and other health providers from performing any cutting of any natural part of female genitalia. The Egyptian Medical Syndicate also issued a statement
warning physicians from performing FGM whether in hospitals, clinics, or in the home. In addition, a fatwa
(religious edict) was issued in 2007 prohibiting FGM as a practice against Islam. In June of 2008, the Egyptian
parliament approved the criminalization of the practice of FGM through national legislation rendering the
practice a punishable offence. Article (242 BIS) of the penal code was added to ban FGM, criminalizing the
practice and penalizing the practitioner by a fine and/or imprisonment.
II.6.e Policy Formulation, Program Design and Implementation
Currently, the institutional setup and mechanisms for supporting joint policy formulation and program design
and implementation are not always conducive to successful outcomes as the common practice is for each sector
to remain within the boundaries of their respective domains. Intra-sectoral hierarchical channels of commu77
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Part Two: Situation Analysis
nication, of management of financial and other resources and of technical information feedback are managed
vertically, and usually obstruct and run counter to broad based trans-sectoral collaborative work at the peripheral or even middle level. This will need to improve in view of the nature of the interdependent multi-causal
health problems that call for a broadening of the health sector’s understanding of the underlying determinants
of population health. The complex, composite, and long acting processes impacting on health are ill suited to
single sector action and require a high amount of inter-sectoral collaboration (ISC). Examples of such interdependent health conditions include drug addiction, road accidents, and the management of disabilities.
The design and implementation of multi-disciplinary inter-sectoral programs that cut across the compartmentalization of individual sectors necessarily require a supportive environment basic to which are transparency
and the free exchange of information, starting with a policy level dialogue between the sectors and joint conception/planning of integrated strategies. Implementation is facilitated by adopting an institutional design/
structure that can allow for effective collaboration that crosses sectoral boundaries at all levels of implementation. Good governance and accountability are basic ingredients for success. Identified channels for communication of jointly agreed decisions that are binding to all partners as well as a management model to facilitate
the management and reporting on the use of financial resources by each partner contributing to the national
program will greatly enhance the building of synergy between all partners thus maximizing the impact of their
respective inputs for improving the health of Egyptians.
National priorities and programs and domains of action that can have a positive impact on the health and well
being of Egyptians are the responsibility of several sectors other than the health sector. They include sectors concerned with family and population affairs, social protection, education, agriculture, youth and sports,
urban planning, water and sanitation, housing and basic infrastructure services (including transportation),
environment, industry and trade, local government, as well as civil society organizations. Some of the actions
that benefit family and child health and wellbeing include: well targeted social protection programs and safety
nets; poverty reduction programs and strategies; community extension work to support the coping capacity
of households; strategies for improvement of household food security; enforcement of environmental protection rules and regulations and alternate solutions for maintaining the health of environments. Accelerating
the establishment of the Food Safety Agency and a Food Law for Egypt and attention to the issue of making
available opportunities for physical exercise (PE) to all Egyptians can have a direct impact on their health and
nutritional status.
Though under discussion for some time now, no action has yet been adopted for aligning medical education
with the health profile of Egypt so as to reflect the evolution in health systems and accompany the advances
made in medical practice. Though health research into health problems may be well advanced and internationally renowned on a number of fronts, it is health system research that remains to be developed. The
extensive research and studies undertaken in preparation for the Health Sector Reform Program - initiated
in the mid-nineties - did not form the basis for a continuous and ongoing health system research program. A
research program that is built around the analysis and interpretation of regular and timely health information
feedback from the field is needed. Once fully operational, the health system research outcomes provide the
evidence base for policy and strategy formulation to guide the further evolution of the system, solve problems
and identify needs for complementary investigations. This could be attributed to the pending completion of
the program for strengthening of the national health information system once the health sector reform model
is fully implemented in all the governorates.
The case was made in all the above to draw attention to the fact that the deterioration in the health of Egyptians - the human resource that is referred to by economists as an asset for Egypt – cannot be reversed and/
or improved with a health-only vision and strategies that are based mainly on improving the quality, coverage and accessibility of health services. A better understanding of the mandate and respective role of each
partner will increase the value of collective efforts for improving the health of Egyptians. The functions and
contribution of the Supreme Health Council created to serve as the highest health coordinating body for the
Health Sector Reform Program may need to be reviewed and activated. Initiation of policy dialogue among
the sectors and partners as the first step towards formulation of integrated health promoting policies and the
design of holistic multidisciplinary approaches for inter-sectoral collaboration is one of the responsibilities of
the Supreme Health Council. Effective inter-sectoral coordination is enabled by the generation and exchange
of timely and validated information through channels accessible to all partners, by good governance and ac78
Situation Analysis: Key Development Challenges Facing Egypt
countability and by administrative procedures, institutional set up and management models that can facilitate
and enhance joint and integrated actions. Mechanisms to support truly integrated approaches have to gradually replace the current ‘coordination’ practice that stops at the creation of central level ‘coordinating committees’ that bring together representatives of the involved sectors. With no power for making policy decisions or
for allocation of resources, the operational coordination function of such a committee is minimal.84
Updating of the normative and legal frameworks that facilitate implementation of all the above is one of the
first tasks to be undertaken by all partners. Also, the MOH will need to be able to forecast and manage the
health implications of policies and strategies of other sectors. In the same manner that the environment sector
imposes an assessment of the environmental impact of policies, projects and investment plans for all sectors
— there should also be an assessment of the projected health impact for the same. This may even extend to
include assessment of the negative impact on health of some of the public media programs.
II.7 Political Participation
Egypt still has a highly hierarchical governance system, and participation is consequently low. There are a
number of mechanisms that can help raise participation levels, but these are still few within the overall Egyptian governance context and that of the public authorities in particular. They include decentralization, democratization, transparency, and accountability to the general public. Whereas participation in the General Elections was, at the last count, less than 20% of those eligible to vote, the governing National Democratic Party
monopolizes 311 of 454 (69%) of the seats in Parliament. Community participation is also very weak and local
councils are dominated by the ruling party.85 Broader political participation appears essential if there is to be
involvement of local communities in the implementation of development programs.
II.7.a Governance
Social and economic systems alike cannot run smoothly with the absence of an effective civil service. From
developing policy to service delivery mechanisms, good institutional capacity is critical to sustaining progress.
A first priority in Egypt is reform of the civil service. Namely, there needs to be “a revival of the ethics and
values that promote honesty and integrity (which) can only come about if the causes of laxity and corruption
are addressed.”86 The civil service sector should once again be seen as providing honorable work – it should be
merit-based, emphasize hard work, reward discipline, and regard honesty highly.
Currently, and at national level, public service employment has been highly regulated. General government employment falls under Public Law 47/1978, unlike private sector employment, which falls under other, mainly
labor laws. This public service has statutory employees in national government, statutory employees in local
government, contracted employees, employees of the education sector, and employees of the health sector.
The legal framework for government employment provides guarantees for life-long employment (tenure), sets
rules for recruitment and termination, provides specific human resource rules to guarantee a career path, applies specific promotion and mobility rules, and offers special benefits including social security and pension.
Civil Service Reform
Main directions towards change have been in increasing managerial flexibility and the enrichment of core values associated with civil service rights and reform. The Presidential election program of 2004 and the ‘Eight
Strategic Goals’ of the GOE have various goals on both the political and administrative levels: to provide an efficient, effective and agile public service capable of adjusting to change, managing resources wisely, providing
distinguished services to citizens and continuously interacting with them. In addition, decision-making should
be a function of the municipal level, and women and political party representation in parliament enhanced.
These reforms were to be introduced to attain more civil liberties, transparency in decision-making, and freedom of expression through liberalizing the media.
The program has aimed to improve the incomes, and pensions of civil servants, especially those in prior need
of support, through new pay frameworks, which work on minimizing the gap between highest and lowest
salaries pertaining to the same job position. In addition, during the last six years, the program adopted a 100%
increase in lower level civil servant salaries, and a 75% increase in higher-level employees’ salaries. It also
raised the minimum incentive reward of 25% to become 75%, as well as developing incentives and reward
systems. Over 400,000 employees have so far been promoted and benefited from salary raises.
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Pillar One: Sustainable and Inclusive Growth
Main Legislative Accomplishments
There is currently a joint effort between the Central Agency for Organization and Administration (CAOA) and
the Ministry of State for Administrative Development (MSAD) that represent central government bodies responsible for public human resource management. CAOA is affiliated with the prime minister and possesses detailed
competencies as per its founding Law 118/1964. In addition, MSAD is mandated to develop civil service reform
as per Presidential Decree 323/2004. Both MSAD and CAOA work together in finalizing all issues related to the
civil service and reviewing the new Civil Service Law. The new law rests on competence and efficiency in the
occupation of civil service positions, setting a real personnel performance-appraisal system, and empowering
the competent authority with the necessary rights. This is to manage government operations such that public
services are offered at the least time and cost possible, along with a proposed new salary table for civil servants.
CAOA works in cooperation with other key entities along with the MSAD, the Ministry of Finance, Salaries
Committee, Ministry of Manpower and Immigration, and the Ministry of State for Economic Development. Its
tasks include:
•
Supervising workforce planning and management;
•
Creating HRM rules and principles (regulations);
•
Deciding on the level of public employment in government;
•
Deciding on the wage bill limitations.
The MSAD’s mandate includes institutional development and capacity building of the government workforce,
as well as developing and implementing new mechanisms for efficient and effective government work procedures (the E-government Initiative). This mandate is implemented through the execution of four main programs. Special emphasis is placed on the Institutional Development Program (IDP), which plays a vital role in
availing the necessary institutional framework, and work environment to implement the other three programs
(Governmental Services Development; Enterprise Resource Planning; and Integrating National Databases).
II.7.b Corruption
Egypt has signed the UN’s ‘Global Compact’ agreeing to play an active role in fighting corruption and money
laundering. It has further signed and ratified the United Nations Convention against Corruption (UNCAC). Government, opposition newspapers and television are active in revealing corruption at all levels in a move forward to enable the media to play an active role in creating a more responsible and responsive public.
However, many impeding factors such as deficiencies in the legal administration, law enforcement provisions
as well as a culture enabling certain corrupt practices are limiting the impact of government efforts to reach all
sectors. The Transparency and Integrity Committee (TIC) for Anti-Corruption was setup in 2007 and includes
in its membership a number of representatives of the civil society and non-governmental organizations. The
establishment of TIC marks an important step by the GOE in its fight against corruption. Proper handling of
corruption complaints through setting up an “Ombudsman tool”, increasing transparency of the national budget, building the capacity of local councils on good governance related issues, developing a code of conduct for
the Egyptian civil service, identifying national indicators for assessing corruption, are all noteworthy steps to
mention rather than dated laws and reports.
A periodic report is presented to the prime minister on accomplishments and updates on anti-corruption efforts
and challenges. The first report was issued at the end of October 2007 and addressed the various definitions of
corruption. It reviewed the most significant international experiences in combating corruption, as well as indicators established at the international level for measuring corruption. The second report issued in August 2008,
addressed the status of transparency, integrity, and efforts to combat corruption in Egypt. In both, the Committee
aimed to gradually move from a general to a more specific approach by offering an overall vision on the various
definitions of corruption, its forms and aspects, along with examples from successful international experiences
to combat it. It also touched on the relationship between the government programs to limit and combat corruption. But much more appeared to be needed to disperse the perception and the reality that corruption is a serious problem. The third report was issued in 2010. It is divided into six sections/themes, some of which have a
technical perspective while others a more general direction. Six recommendations are offered. These are:
•
Reinforcing the legal framework related to the achievement of transparency and integrity;
•
Creating mechanisms to fill the gaps in the legislations on the protection of witnesses and reporters
(whistle blowers);
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Situation Analysis: Key Development Challenges Facing Egypt
Box 15: Institutional Development Program (IDP)
The IDP aims to develop modern management structures by adjusting the salary and incentive systems, enhancing the work
environment, as well as developing human resources and training employees working in the State’s administrative system on
modern management systems. The IDP’s main mission is to align governmental institutions with national strategies and directions to radically improve institutional performance and create an effective and efficient government apparatus. This it does by
setting and executing an integral program established on clear implementation plans for an increase in the effectiveness of the
state administrative authority within and between government units.
The IDP reform campaign has succeeded in scanning horizontally the following major governmental sectors in Egypt that
undergo restructuring and process re-engineering projects: education, health and population, agriculture, transportation, justice,
social solidarity, and commerce and industry.
Government Services Development Program
The program aims to provide citizens and investors with facilitated services throughout the country, in an effective and convenient manner. It provides more than 100 online services and 700 public facilities in addition to providing an e-Payment facility
through the e-government portal. The latter provides services through different applications: internet web; Wireless Application
Protocol (WAP) on mobile phones; Short Message Service (SMS); Interactive Voice Response (IVR) and a Public Service Call
Centre. Services target citizens, businessmen and foreigners and include issuance of birth certificates; enquiry and payment of
landline telephones; online university enrollment; receipt of tourist complaints; traffic services; as well as legal information.
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Enterprise Resource Planning Program (ERP)
The program aims to enhance government work processes and reduce government spending via the automation of public
bodies through the usage of ICT. It involves automation of government accounting units, warehouses, and purchasing departments; compilation of government lands and buildings; as well as electronic archiving and information exchange across government entities. To date it has achieved automation of 508 accounting units; automation of warehouses in 179 government entities;
electronic archiving in 36 government entities, as well as automation of 47 districts in 11 governorates.
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Linking and Integrating National Databases Program
The program involves applying a family card system; linking national ID data with databases of the health and insurance sectors; development of real estate property registration; and creation of a national ID for economic establishments. The program
has increased distribution of food subsidies through the use of smart card application. By December 2009, a total of 6.8 million
families had received subsidies through the new application in 20 governorates.
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Source: Ashraf Abdel Wahab, Deputy Minister, Ministry of State for Administrative Development
•
•
•
•
Developing new mechanisms to mobilize the management and handling of citizens’ complaints in cooperation with monitoring entities;
Raising the efficiency and competence of the state’s administrative apparatus by reviewing current
institutional conditions and problems related to organization;
Focusing on field research to identify the values of transparency and integrity among Egyptians and the
role of media in preventing corruption;
Enhancing international cooperation in the field of transparency and integrity, to spread knowledge
and information on current international directions and expertise in fighting corruption.
Some progress has already been made. The Central Audit Agency is the public auditor; other authorities also
play an oversight role on civil servants’ conduct (Administrative Control Agency, Administrative Public Prosecution, Public Prosecutor’s Office, State Council). In all cases, regulations are usually strictly implemented. Public
servants’ wages improved considerably over the last three years but this effort needs further consideration to
reach satisfactory levels in the fight against petty corruption. Some key public servants have been tried and
jailed in high profile cases. Egyptian businesses and companies are obliged to use the Egyptian Accounting Standards, and these are almost fully compatible with international standards and discourage corrupt practices.
Listed companies and SOEs are encouraged to use independent directors, while strict regulations regarding
transparency, insider trading and conflict of interest have been introduced by the Single Regulator Authority.
Another initiative is the establishment of the Transparency Center in the Ministry of Investment — which
is promoting transparency and fighting corruption so as to improve the business climate. The burden is on
private companies to aid the GOE in promoting integrity with a code of corporate ethics that is observed and
updated. Both the government and the corporate sector must agree upon clear consequences in case of violations. Media coverage of violations and their punishment are useful as disincentives to unlawful practices.
Ethics and transparency should be taught at school and university level.
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II.7.c Decentralization
In November of 2007, the National Democratic Party (NDP) and the Egyptian government produced the Decentralization Policy Paper outlining their strategic vision on decentralization. The following year, in November of 2008, the NDP and the government issued a second Policy Paper following the launch of the National Decentralization Program in three governorates in Egypt (Fayoum, Ismailia, and Luxor). The government decided
in July 2009 to expand decentralization in all governorates. The Ministry for Local Development (MOLD) has
produced a Decentralization Strategy Statement for the coming ten years (May, 2009).87 The Decentralization
Support Unit has been established by the MOLD and three units were put in place in the three governorates to
support at the local levels the implementation of the National Decentralization Program. In July of 2009, the
Ministry established the Steering Committee for Decentralization to include eight ministries.
The vision of the National Strategy for Decentralization is based on ensuring the rights of local communities
in deciding on their own needs and priority and securing their own future. This is done through expanding
the roles of local executive bodies and creating an enabling environment for participation, transparency and
accountability. The mission is to “reach a strong and effective local administration through a comprehensive
identification of local administration roles and the coordination between those roles and roles of central bodies in order to achieve full and sustainable development, meet citizens’ daily needs, and enhance the provision
of public services.”88 Capacity building also is an absolute necessity, because lower administrative levels are
frequently lacking the capacities to perform new functions. There is a need for stronger control systems to assess performance and to prevent corruption in each sector, along with training and capacity building of local
officials as well as members of elected Popular Councils.
Political decentralization is essentially associated with democracy and participation. At present, citizen participation in local or national elections remains very low. The culture of voice, political competition and accountability need to be restored, and optimally, should be based on competence and local leadership. Civil society
organizations (CSOs) are often regarded as a significant form of popular participation, while cooperatives,
workers’ syndicates, political parties, human rights organizations, and the media can also play an important
role in spreading the culture of participation. More broadly, civil society must be considered as the legitimate
arena in which citizens increasingly participate in the transition to a democratic society. CSOs should be encouraged to enter into more diverse fields of activity for community empowerment and collective action.
The 2003 Egypt Human Development Report (EHDR) called for increased public/private partnerships in a
variety of sectoral endeavors, as well as for more voice from stakeholders at the grassroots level. The 2004
EHDR advocated for decentralization and the 2008 report was subtitled “The Role of Civil Society.” A more
democratic and decentralized system is thus slowly being promoted. There is also a growing demand for increased autonomy at the regional level. This is driven by the awareness of the wide gap in access to and quality
of services across and within regions. An important pilot example of decentralization is in water user associations and the participation of farmers in sharing irrigation water at the Miska level.89 Pressure also exists from
some senior members of government, largely for reasons of efficiency gains in local governance.
Although the Ministry of Finance is currently developing a fiscal decentralization plan, it is still the case that “local councils cannot raise revenues or create other sources of revenue collection without Cabinet permission.” 90
Under the current situation, local government is discouraged from raising funds, as these are appropriated by
the central government. Budgets locally prepared are often over-estimated due to lack of trust and cut-down
expectations. However, fiscal decentralization can lead to better budget prioritization and is associated with
people’s ability to identify their own needs. Allowing local government to retain higher shares of some taxes,
such as corporate taxes, would provide an incentive at the local level not only to collect the taxes but also to
support the private sector and promote economic activity and diversification in each governorate. Spending
decisions are transferred to the local governments and local communities are able to share in costs through the
mobilization of local resources. There is also more accountability in the implementation and operation of certain projects; in basic service sectors such as health and education, the mobilization of local financial resources
help local governments retain qualified providers.
The necessity for truly localizing Egypt’s development process is imperative. There is at present an absence
of a comprehensive assessment of MDG-based needs at the regional level, and there is a need for delineated
authority and responsibility across authorities and between the center and the periphery, including in budget
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resourcing. There is also a need for an assessment of the capacity of sub-national jurisdictions to formulate,
execute, and report programs, particularly public expenditure programs. Finally, there is a need for dialogue,
representation and consensus building to guide the process of prioritization at the local level.
II.7.d Human Rights
Egypt has ratified the core human rights instruments and is committed to meeting its international obligations
and to stepping up its collaboration with the international human rights mechanisms. In January 2010, the
Committee on the Elimination of All Forms of Discrimination against Women (CEDAW) reviewed Egypt’s Sixth
and Seventh Periodic Reports on implementation of CEDAW recommendations, and in February 2010 Egypt’s
State Report to the Universal Periodic Review (UPR) was discussed by UN Human Rights Council. Recently,
Egypt has also submitted its Periodic Report to the Committee on Economic, Social and Cultural Rights and
in 2009 and 2010, Egypt received visits by the UN Special Procedures namely: a) the UN Special Rapporteur
on the Promotion and Protection of Human Rights while Countering Terrorism (April 2009); and b) the Independent Expert on The Issue of Human Rights Obligations Related to Access to Safe Drinking Water and Sanitation (June 2009); and the Special Rapporteur on Trafficking in Women and Children (April 2010). In the February 2010 State Report to the Universal Periodic Review (UPR) Egypt pledged to:
•
Review some reservations it has entered to human rights treaties to consider withdrawing them;
•
Consider acceding to the International Convention for the Protection of All Persons from Enforced
Disappearance, the Optional Protocol to the International Covenant on Economic, Social and Cultural
Rights and the Optional Protocol to the Convention on the Rights of Persons with Disabilities;
•
Finalize the text of a balanced counter-terrorism law;
•
Review the definition of torture in Egyptian law in order to ensure consistency with the Convention
against Torture;
•
Consider amending the Code of Pleadings and Criminal Procedures with a view to preventing criminal
and civil prosecutions of third parties that could lead to curbs being placed on freedom of thought and
creativity;
•
Meet regularly with civil society organizations involved in human rights activities as partners in the
promotion of these rights;
•
Create more human rights curricula for the different stages of education, including university education;
•
Improve the human rights capacity-building program and step up efforts to promote and raise awareness of these rights.
During the UPR interactive dialogue, 119 recommendations enjoyed the support of Egypt. Among these were
the recommendations to uphold international obligations relating to refugees, and to implement a program to
adequately integrate the refugee populations into Egyptian society, taking into account the generosity that has
historically characterized the country in this field. Both recommendations were considered by Egypt to have
already been implemented or in the process of implementation. However, Egypt has not accepted 14 recommendations; found 7 recommendations not to be accurate and agreed to examine 25 recommendations. The
Outcome of the Review for Egypt was adopted during the 14th Session of the Human Rights Council in June
2010 where Egypt accepted fully and partially 21 additional recommendations which brings the total UPR
recommendations accepted by Egypt to 140). Egypt expressed its commitment to the national plan to follow
up on the implementation of all the UPR recommendations it has adopted. The National Council for Human Rights
The National Council for Human Rights (NCHR), which was established by Law 94/2003, is affiliated to the
Shura Council (Upper House) and is accredited “A” status, that is, compliant with the Paris Principles for
National Human Rights Institutions (NHRI). Within the framework of its mandate and advisory role to promote and protect human rights, NCHR is monitoring human rights violations, promoting the principles of
citizenship, economic and public rights; combating torture; and ensuring the respect of human dignity. The
Council set up an Ombudsman Office and deployed mobile units to reach out to citizens in all governorates.
The Council submitted its independent report to the Universal Periodic Review (UPR) for Egypt held in February 2010 and submitted a written statement for the June 2010 Session of the Human Rights Council for the
adoption of the outcome of Egypt’s review. To strengthen outreach and networking with NGOs, the Council
organized several consultations and conferences with NGOs to discuss several topics such as citizenship, hu83
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man trafficking, the NGO law etc. And in preparation for the Council’s independent report for Egypt UPR, the
Council held hearing sessions with NGOs to solicit their feedback on the situation of human rights in Egypt
and the role of NCHR. The Council set up an Elections Monitoring Unit to support elections monitoring by
NGOs and to organize training on elections monitoring/observation with a view to build a national cadre of
qualified election monitors. In preparation for the Shura Council elections in June 2010, the Council organized
for the first time a meeting for NGOs with representatives of the High Election Committee (HEC) to voice their
concerns and queries on the roles and duties of election observers. The Council issues on an annual basis its
report on the situation of human rights and the activities of the Council in light of its mandate. However, it
must be emphasized that CSOs still require more space to act as channels between citizens and government
to promote increased participation, ownership and empowerment of the people, and to make all voices heard
in decision making.
The National Council for Women
The National Council for Women (NCW) was established in 2000 to support women’s advancement and to
strengthen the role of women in society. In line with its mandate, the Council prepared the National Strategic
Orientation for the Advancement of Women, and strongly advocates for women’s rights, economic empowerment of women, women’s political rights and women’s access to justice. Major achievements by the NCW
include gender mainstreaming in the National Socio-Economic Plans; the Women’s Business Development
Center; the amendment of the Nationality Law by Law 154/2004; the law allocating 64 seats for women in
parliament; the new tax law (91/ 2005) that removed discriminatory articles and set taxpayers’ exemptions
without discrimination between men and women; setting up the National Center for Civic Education to build
a national cadre of women for a career in politics; establishment of the Forum for Women Parliamentarians,
and the establishment of the Ombudsman office. The NCW prepared the Sixth and Seventh Periodic Report to
the CEDAW Committee through a consultative process with NGOs and line ministries and lead the delegation
of Egypt during the review in January 2010.
The National Council for Childhood and Motherhood
The National Council for Childhood and Motherhood (NCCM) was established in 1988 to recommend public
policies on children and mothers and to devise a draft national plan to improve the situation of children and
mothers in various spheres, particularly in the areas of social and family welfare, health, education, culture
and information, and social protection. The Council succeeded in addressing complex issues, notably the issue of street children; girls education; early marriage, rights of the disabled, and the problem of female genital
mutilation (FGM) where it has achieved tangible results in terms of the number of villages that are declared
FGM-free, and capacity building for NGOs and the promulgation of the Child Law which criminalizes the practice of FGM. The Council has gained international recognition for its experience in these areas as a model to
be emulated.
The National Human Rights Action Plan
In accordance with its mandate, the NCHR prepared in 2007 the National Action Plan for the Promotion and
Protection of Human Rights, in consultation with several line ministries and NGOs. This step responds to one
of the recommendations of the Committee on Economic, Social and Cultural Rights (CESCR) in May 2000 in
connection with Egypt’s Periodic Report submitted in 1997. NCHR is working closely with representatives of
national authorities and NGOs to integrate the human rights component in the implementation of the national
development plan; to ensure that access to services are recognized as basic rights and that ministries will allocate funds for this purpose from their regular resources.
The NCHR has noted the need to protect migrants’ human rights — within the context of international migration from, as well as to/via Egypt. In 2006 and 2007, Egyptian Ombudsman’s Office received 215 complaints
from citizens residing abroad and, during the first semester of 2008, a further 172 complaints were lodged by
Egyptian migrants. The NCHR’s 2008-2009 Annual Report recommended “to enhance the role of the Ministry
of Foreign Affairs and relevant authorities to improve the handling of problems of Egyptian’s abroad.” The report also called for “a comprehensive multifaceted strategy involving the participation of all relevant authorities to combat illegal immigration.”
The Rights of Migrant Communities in Egypt
It is important to note that migrant communities in Egypt have special rights to protection under international
law. These communities are highly vulnerable to poverty and associated issues due to their protracted stay
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and limited access to lawful employment (as well as essential services). Although important progress has been
made and many are likely to benefit from the expanded safety net and subsidy program, the most vulnerable
continue to face difficulty accessing essential subsidized food and services. For example, there is a need for
action to improve access to quality pre-university level education amongst Egypt’s migrant communities. For
instance, while Sudanese children are entitled access to primary education through Egypt’s public system, in
accordance with Decree No. 24 issued in 1992 by the Ministry of Education, it is necessary to present documentation (a birth certificate, a valid passport/identity card, etc.) to enroll, which migrant families are oftentimes
unable to obtain. Nor can they meet the annual cost of private tuition. Another problem is that there is often a
distinct lack of community cohesion in the informal settlements where migrant communities reside. The situation can thus fuel resentment and suspicion, resulting in a high degree of segregation and xenophobic incidence.
Capacity Building in Human Rights
Several national authorities are developing their visions and strategies to promote the culture, awareness and
education of human rights. The Ministry of Education has developed a comprehensive vision of how human
rights can be integrated into the curricula for the primary to secondary education; the Higher Council for Universities has developed a vision for integrating human rights in the curricula for higher education; military
colleges have already integrated human rights in their curricula and the Ministry of Information developed
a plan to raise awareness of human rights via radio and television programs, while the National Council for
Human Rights continues to promote a human rights culture. The Human Rights Capacity Building Project (BENAA) implemented by the Ministry of Foreign Affairs has trained and raised awareness on human rights within
law enforcement (approximately 12,000 police personnel; 4,000 members of the judiciary and prosecution),
the media (1000 media personnel), 1,100 lawyers and 150 parliamentarians.
Challenges
Despite the efforts exerted, there is still the need to realize a marked change in attitudes and culture towards
the protection and respect for human rights; to build a national cadre of human rights specialists; to develop
human rights curricula, manuals and training methodology and to implement strategies to integrate human
rights in the education system. The conclusions and recommendations for Egypt within the UPR has acknowledged government efforts to raise awareness on human rights but has recommended the enhancement of human rights education and strengthened capacity building programs for the general public.
To further promote and protect human rights, there is also a need to
•
Further strengthen the capacity of the national human rights institutions, especially ombudsmen, to
further ensure the protection of the rights of women, children, the disabled and citizens at large;
•
Continue to review national laws to ensure that they are in line with international human rights law
obligations;
•
Develop national governance indicators including national indicators to measure the attainment of economic and social rights;
•
Formulate national and local development plans, public policies and programs that are guided by human rights principles and the human rights-based approach to accelerate progress towards achievement of the MDGs;
•
Follow-up on Egypt’s periodic reporting to the UN treaty bodies and strengthen follow-up to their recommendation, including those of the Universal Periodic Review;
•
Integrate human rights knowledge, principles and values in the education system;
•
Strengthen capacity building in human rights for law enforcement bodies;
•
Strengthen capacity building for NGOs in human rights;
•
Strengthen skills in election monitoring and establish standards for election monitoring and observation.
II.7.e Access to Justice
Justice and integrity are key cornerstones of development and the protection of human rights. The rule of law
can only be established when all individuals, organizations and institutions, both in the public and private sectors, are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated
through an institutional framework governed by the principles of transparency, integrity and accountability.
The well established and advanced judicial system in Egypt is comprised of almost 10,000 judges and prosecutors and the affiliated criminal and civil courts; specialized courts (economic and family courts) as well as
environmental, labor and commercial benches. This is in addition to the Council of State and the Supreme
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Constitutional Court. The main challenge to the Egyptian justice system is the ever-increasing number of court
cases examined per year, which can reach thousands. The justice system requires a strengthening its capacity and performance through better-trained judges and prosecutors; continuous update and amendment of
legislation and procedures to enhance the capacity of justice practitioners to respond to the growing needs.
Institutional and ongoing international cooperation in criminal matters with neighboring states and other
countries should continue to develop.
Of particular importance is the role of judicial information centers where the automation of court works is
needed to simplify and facilitate litigation procedures, provide information and statistics to support the justice
system, and achieve greater transparency in the system. The administration of justice should be at the center
of justice reform by providing institutional support and technical assistance to the existing judicial training
institutions and by emphasizing the importance of the specialized judiciary. Capacity building should target
non-judicial staff at all courts, to integrate all professions directly linked to the justice system. This would also
include creating an effective legal defense and legal aid system. The process would include all stakeholders,
especially from civil society (legal-aid NGOs, lawyers’ syndicates and academics).
Justice for Children
There is a need to build a child-centered approach to offences committed by children through decriminalizing the status of such offences, and include legislative changes; promote separate approaches, policies and
institutions to deal with children in conflict with the law; introduce multi-disciplinary approaches to capacitybuilding of personnel in contact with children; upgrade data and file management to increase the efficiency
of criminal justice responses; provide alternatives to imprisonment and restorative justice; design and implement practical policies and protocols to avoid re-victimization and trauma among child victims and witnesses,
as well as programs to support rehabilitation and reintegration of child victims and offenders.
II.8 Social Protection
11.8.a New Pension Law
Based on country experiences worldwide, Egypt is introducing and enforcing a new fully funded pension system based on defined contributions. Tying pension benefits closely to contributions stimulates individuals
to comply and continue to work for the longest period possible. To encourage compliance, the new pension
system reduces the contribution rates to 11% for the insured individual and 19.5% for the employer. The new
pension system is based on a unified law that targets all segments of the population. Additionally, the new system provides protection against several risks, most importantly old age, disability, work injury, unemployment
and death at a lower cost than the current pension system, especially for low and medium wage earners. This
is achieved by introducing professional and innovative methods of management and establishing solidarity
accounts to fund these risks through a portion of the contributions collected from the insured individuals and
their employers. Casual and informal workers are encouraged to contribute to the system and benefit from its
pension benefits. The new system covers:
•
Old Age Pension Benefits: The system aims at increasing the retirement age gradually to 65 years to accommodate the increase in life expectancy and hence the financial commitments of the system. Based
on the defined-contribution principle, an individual’s pension benefit replacement rate will represent
75% to 88% of the value of his/her last net wage before retirement, disability or death.
•
Unemployment Insurance: In the event of unemployment for a period of six months through no fault of
the individual, he/she will be compensated monthly by 60% of his/her last total covered wage (that is,
75% of the net wage). This compensation will be decreased by 4% of this wage monthly.
•
Casual and Informal Workers Pension Benefits: With a 25% partial matching contribution before the age
of 65, the new system provides protection to casual and informal workers and their families from the
risks of old age, disability and death.
•
Basic Pension Benefits: For social solidarity purposes the new system provides a minimum pension for
every 65 year-old resident citizen in Egypt that does not receive a pension from the state.
•
Inheritance of Pension Benefits: The new pension law clearly specifies the pension benefits’ eligibility
criteria for widowers, sons, daughters, parents, sisters and brothers.
•
Maintaining the Real Value of Pensions: The new system allows for the indexation of pension benefits to
the annual inflation rate. This will automatically help maintain the real value of pensions.
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The system is expected to help improve economic efficiency. Setting pension benefits based on the defined
contributions method establishes a closer link between individual’s contributions throughout his/her years
of service and the individual’s pension benefits. Thus, participants will be encouraged to work and save more.
When an individual regards his/her contributions as savings to be recouped in the future in addition to the
market rate of return on their accounts, rather than a tax, he/she will be induced to pay the due contributions
based on his/her real salary; continue to work for the longest period possible in order to get a higher pension;
and search for the most efficient means of investing such savings.
The gradual implementation of the new pension system will help reduce the financial burdens incurred by the
public treasury; enhance the system’s fiscal sustainability; maintain the role of the state in income redistribution; improve economic efficiency; and develop the capital market. However, the new system transfers the
burden of risk management from the government to individuals. To successfully implement the new system, it
is essential to enhance public trust in the government’s ability to honor its long-term commitments at retirement and not to excessively use pension funds in financing the budget deficit.
11.8.b A New and Universal Social Health Insurance (SHI) System
Currently, Egypt’s public health system uses a combined strategy of providing free services and targeted insurance schemes.
Primary health care services are offered free of charge including the medications at primary health care facilities. In addition, hospital services in public hospitals are free for the non-insured. Changing this established
expectation as a ‘right’ will be met with resistance from both providers and beneficiaries. The fact that a large
proportion of people seek care at private facilities and that both poor and rich pay significant amounts out of
pocket for health services does not automatically mean that they would be willing to pay for public facilities.
There is a need to change the public’s attitude towards free public health services if these are to continue. This
can only come about if the services themselves are upgraded and brought up to a standard that cancels the
necessity of using private services.
Egypt’s health insurance system is meant to provide financial protection through risk pooling and protection
from catastrophic illness that can push people into poverty. The many regulations for health insurance include
five laws and one ministerial decree. Further, insurance does not cover the whole population and leaves out
the most vulnerable. Insufficient revenues for the HIO, the main body responsible for insurance, constrain it
from providing adequate services to its members, and these deficiencies in service provision push the insured
to pay out-of pocket for private services.91 The annual health insurance budget deficit is estimated at LE 200
million. Budget deficits are likely to increase with Egypt’s changing demographic profile and the expected
increase in the elderly population. The HIO acts both as a financier and provider of services. This dual responsibility increases managerial costs and does not allow for proper monitoring, with consequent administrative
loopholes and petty corruption as a result of poor supervision.
Current political thinking proposes to cover the whole population with a social health insurance system, under
a unified law aimed at achieving equity in access to and financing of health care through the elimination of
existing disparities in health outcomes and the provision of quality services to the whole population, especially disadvantaged groups. The ruling National Democratic Party (NDP) proposed as early as 2004 universal
health insurance for those not covered by HIO or any other system at an estimated cost of LE 23.3 billion.92 This
would cover about 50% of the population, create 23,000 jobs of which 50% would be for women, according to
a proposed vision for health by the EHDR 2005. Serious reform ambition was articulated in the Presidential
Program and the government is therefore working to implement a plan that will offer a baseline minimum
of health care for all Egyptians and underwrite a long list of basic health procedures. Citizens are expected
to contribute to costs (annual subscriptions or tax contributions) against receiving the service. All or some
medication is sometimes subsidized for target social groups.
A 10-year phased plan will roll out a partnership between the public and private sectors to provide more universal healthcare. Introducing the poorest citizens into an SHI system via government subsidy is undoubtedly
a step toward greater equity by which all citizens are treated fairly according to their needs, not their income
level. The insurance industry as a whole would play an important supporting role in this systemic transition.
Even though 84 private companies currently offer health insurance in Egypt, according to the Health Mainte87
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nance Organization’s Union, only about 1.2 million people subscribe. The industry will be on uncertain ground
for the coming years as it tries to walk through the challenges of the new healthcare system, but industry executives are confident in their ability to grow, as reported in a 2009 Egypt Insurance Conference.
A key dimension of the new SHI system is the separation of the payor function from the provider function
within management structures for SHI. Others dimensions include performance-based contracting of both
public and private health providers; case management approach; and a shift to electronic case-management
and claims management systems that should reduce the incidence of medical errors, fraud, etc. The World
Bank has recently approved a project (also ratified by Parliament) to establish the electronic business and
information systems to manage and operate the payor function in SHI. With regards piloting of SHI, it would
seem that only the Suez governorate pilot is so far advanced, whereas only preparatory activities are underway
in Sohag and Alexandria.
Health insurance is seen as an essential financing mechanism that uses public-private partnerships for funding
and service delivery. Financing for the new universal insurance system is from three main sustainable sources:
•
Contributions from Employers and Employees: The principle of solidarity requires income-related contribution rates. This is an important difference from private health insurance, which sets premium rates
according to health risks. The principle of income-related contribution would apply to the population
with a regular and/or assessable income. Contributions are usually shared by employers and employees on the principle of shared responsibility, with employers generally paying a higher share. The
rationale is that employers have a greater economic capacity than individual employees.
•
Co-payments: The primary objective of co-payments is to reduce moral hazard among the beneficiaries
(i.e. reduce the likelihood of unnecessary or excessive use of health services or products) and cost
containment, rather than as an instrument for raising revenues. Co-payments are usually applied as a
percentage on outpatient drugs and selected diagnostics and consultations with specialists.
•
Dedicated Tax: In addition to the direct contributions made by the participants of the labor market,
some countries have introduced dedicated taxes to finance health. These are often earmarked taxes on
types of products that are seen as harmful to individual and population health; hence they are sometimes referred to as ‘sin taxes’. For example, a dedicated tax on a product like tobacco is two-fold: to
raise additional revenues for health promotion or other public health activities and to deter the use of
the particular products that have harmful public health effects. In the long run a tobacco tax and the
anti-smoking activities funded may lead to reduced revenues from this particular source as less people
smoke, but the loss of revenues from tobacco industry is expected to be recouped through lower health
care costs and a healthier and productive population, and also growth of other industries where people
would use the disposable income saved from tobacco use.
Pilot programs are now underway in the governorates of Suez, Sohag and Alexandria. n
III. PILLAR THREE: ENVIRONMENT AND SUSTAINABLE
NATURAL RESOURCES
III.1 Sustainable Agriculture, Rural Development, and Food Security
The link between environmental and sustainable agricultural and rural development (SARD), enhancing food
security, and reducing poverty is a central issue for achieving economic and social development in Egypt. The
contribution of the agriculture sector in Egypt is around 15% of the Gross Domestic Product (GDP) and over
30% of employment opportunities. Meanwhile, about 57% of the total population in Egypt lives in rural areas,
where poverty prevails. About 70% of the poor and very poor live in rural areas and of the 25% of the population living in upper Egypt, about 66% are extreme poor, 51% poor and 31% near poor. Within these realities
of the Egyptian economy, enhancing sustainable agricultural and rural development as a means to reduce
poverty and food insecurity within the expected climate changes is a prerequisite for sustainable social and
economic development and hence should be considered as a social and political priority for Egypt.
In Egypt, agriculture is recognized not only as a way of life and as crucial for national socio-economic development, but if received the due attention, also as an engine for growth, as presented in Pillar I. This has been recognized globally by the World Bank (the 2008 Annual Report was devoted to agriculture), the World Summit
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on Food Security (Rome, 2009), as well as by the Egyptian Government Strategy for Sustainable Agricultural
Development to 2030, and the National Democratic Party in 2009.
There is a strong correlation between economic growth and the reduction of hunger. Countries without economic growth or even a decline of GDP per capita were not able to reduce the number of the malnourished
in their country and often even faced a considerable increase. Hence, the economic growth rates of countries
that have low food consumption levels and a significant incidence of undernourishment are likely to fall short
of what would be required for significant poverty reduction by 2015.
There is also a strong link between poverty and food insecurity. Most of the poor are either under-nourished
or food insecure. As detailed in Section II.2, lower income households spend a large share of their income to
purchase food. They are particularly vulnerable to variations in food prices and food scarcity during periods
of conflicts, political disturbances or natural disasters. Under-nourishment is also a constraint to economic
growth. As people are not able to work and their body and intellectual capacities are affected by under-nourishment, the overall potential for economic growth is curtailed. Some 70% of the poor or food-insecure live
in rural areas and a large share of these people depend very much on agriculture for their food supplies (produced locally) and for generating incomes. Economic diversification starts at the farm household, and agricultural and non-agricultural development reinforce each other. Pro-poor policies and strategies must emphasize
food security, access to land and water, agriculture and rural development.
III.1.a Major Issues and Challenges facing Agricultural Development
Food Security or Food Self-Sufficiency
There is often confusion between the concept of sustainable food security with its four major pillars and food
self-sufficiency. The concept of food security is built on: (1) food availability – from local production when
comparative advantage prevails or from imports; (2) stability of food supply and its prices; (3) access to food
by all income classes and capacity to buy food from the market; and (4) food utilization where food safety and
nutritional needs for all age and gender groups are accessible. This differs from food self sufficiency which
could be costly to the society and damaging to the limited natural resources and its sustainability for the upcoming generations.
Agricultural Development within an overall Strategy for Rural Development
The agriculture sector employs 30% of the active population. There is a strong contrast between the sector’s
large workforce and its contribution to the country’s economy, which tends to underline a low level of productivity. Large numbers of rural households depend on agriculture and farming (production) but it is rarely
the main income contributor. According to sources, farm incomes (crops and livestock) account on average for
about 25–40% of total rural income; agricultural related off-farm incomes account for an additional 20–35%;
and non-farm revenues — including wages — account for about 40% of rural household incomes. The situation is similar for the rural poor, who derive on average 25.7% of their resources from agriculture, while 42%
come from wages and salaries.
Increasing Water Use Efficiency in Irrigation
The Nile Water Agreement signed by Egypt, Sudan and Ethiopia in 1959 gives Egypt a quota of 55.5 billion
m3 per year. Through the adoption of several water treatment projects, water authorities have been able to
increase water supply to some 1.2 billion m3 in 2007. For this purpose, substantial quantities of agricultural
drainage water have been treated and reused in agricultural fields that are not harmful to humans or plant and
animal health. Total renewable water resources available amount to 58.3 billion m3, out of which 55.5 billion
m3 is external renewable water (Nile) in addition to 1.0 billion m3 rainwater and flash floods, and 1.8 billion
m3 is internal renewable. Average precipitation per year is 51 mm-rains are concentrated in the north coastal
area (surface and ground water). The renewable water resources represent 85.4% of the total water use (68.7
billion m3). Agriculture absorbs 86.4% of water uses.
Increased Fragmentation and Scattering of Agricultural Holdings
The last two decades have witnessed increased fragmentation and scattering of agricultural holdings. The
percentage of holdings of less than 3 feddans has increased from about 2.29m feddans in 1980 to about 3m
feddans in 2000, according to the latest agricultural census. Also, the average area of the holding decreased
from 6.3 feddans in 1950 to 2.1 feddans. The percentage of dwarfish holdings (less than one feddan) in89
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creased to 43% of total agricultural holdings in 2000, up from 21.4% in 1950. Because of this fragmentation,
an estimated area of 12% of the most fertile agricultural lands is lost as boundaries and partitions between
holdings, a situation that weakens the ability to modernize agricultural activities and increase productivity.
Deteriorating Land Efficiency (Classification of Land Resources)
Total agricultural land increased from 5.87m feddans in 1980 to approximately 8.44m feddans in 2007, and
cropped area increased from some 11.1m feddans in 1980 to 15.18m feddans in 2007. Areas of the first grade
lands in 2001–05 have declined to less than one third of what it was in 1996–00, while the percentage of
the second grade lands has increased from about 33.6% to 41.8% during this period. The third and fourth
grade lands have also increased from 1.455m feddans to 2.936m feddans. This phenomenon underlines the
importance of reviewing government policies in the field of land maintenance and putting land improvement
programs and projects as a top priority in the coming years.
Human Resources and Capacities in Agriculture
Inhabitants of rural areas increased from about 22.7m in 1980 to about 41.9m people in 2007, an increase of
85%. In Egypt, agriculture and agricultural-related and complementary activities constitute the main source
of income for the great majority of rural inhabitants. Parallel with this great increase in rural inhabitants during the last two decades, the working force in agriculture increased from 4.15m in 1980 to around 6.89m in
2007. Agricultural development programs have been able to create about 2.74m job opportunities over the
last 27 years, at a rate of 100,000 jobs per annum. Agricultural and Veterinary Science education increased
in number but with lower skills. As to secondary agricultural education, there are 185 schools scattered in all
governorates, with about 302,000 students in the different specializations. The educational level of the secondary agricultural schools is considered too poor in comparison to today’s international levels. Improvement
of education in these schools and universities is essential for any future development for Egyptian agriculture.
Role of the Government and Institutional Capacities to Manage SARD
There is an imbalance between the responsibilities of government agencies, represented by the Ministry of Agriculture and Land Reclamation and its institutions, and the actual practices. The following three kinds of institutions are active in the field of agriculture: Ministry of Agriculture and Land Reclamation (MALR), and related
institutions; agricultural cooperative organizations; and civil society organizations. The institutional structure of
the MALR is highly complex and duplicative. Examples where government crowds out the private sector and civil
society include the Central Seed Department, the General Department for Veterinary Services, the Mechanical
Cultivation Units, the Central Department for Cooperation, and the Principal Bank for Agricultural Development
and Credit. Meanwhile, the participation of civil society organizations in rural development has been increasing.
Agricultural Research, Technology Transfer, and Potentials to Enhance Productivities
Based on present and planned research programs contained in the agricultural sector strategy to 2030, as well
as the wide potential of using bio-technology, the projected land productivity by 2030 is expected to increase
(cereal crops: 3.6 tons for wheat, 5.2 tons for rice and 5 tons for maize; sugar crops: 65.4 tons for sugar cane
and 35 tons for sugar beet; fibre crops: 1.8 tons for cotton; fodder crops: 50 tons for perennial clover; fruit
crops: 15 tons for citrus crops, 4 tons for grape and 10 tons for mango; and vegetable crops: 30 tons for tomatoes and 14 tons for potatoes). Such improved yields will require more support for the agricultural research
centers, contrary to current budget allocations, which have been reduced.
Although wheat, maize, and rice production has more than doubled since 1990, this overall increase has been
primarily driven by an increase in crop areas rather than an increase in yields. The yield improvement rate was
significant in the 1980s. However, from 1990 to 2000, yields grew at just above 1% per year for maize and rice
and around 0.5% for wheat. Wheat and maize yields reached a plateau in 2000. Cereal supply has been a major
issue for Egypt. According to MALR, per capita wheat consumption is around 180 kilos per year. Though domestic
production has grown substantially over the last two decades, it covers only 55% of the country’s requirements.
Over the recent period, Egypt imported 6.5% of the wheat traded worldwide or around 7.15 million tons annually.
Exploiting Information and Communication Technologies
Utilization of Information technology has increased, but not enough. Databases and expert systems have been
introduced under the Rural and Agriculture Development Communication Network (RADCON) and other platforms/supporting networks.
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Competitiveness of Agricultural Products throughout the Value Chain
It is well known that any endeavor to develop and improve the competitiveness of Egyptian agricultural products in local and international markets would require serious efforts at the different levels: The national level, the agricultural sector, as well as at the level of all productive institutions. The government endeavors to
strengthen competitiveness at the national level, through economic reforms and the improvement of investment environment, financial and monetary macro-policies, and external trade policies. However, greater efforts have to be exerted in light of international competitiveness indicators.
Preparing the Agricultural Sector for Adapting to Climate Change
(Vulnerability and Adaptive Capacity)
Climate risks to development (depending on available assumptions) includes: i) drought (although flooding
needs to be considered, it is not expected due to the presence of the High Dam); ii) temperature stress (higher
and more variable, affecting productivity and seasonal pattern); iii) water stress (precipitation patterns —
increased evaporation and water consumption); and (iv) coastal flooding (affecting the Delta region and the
northern lakes of Egypt).
The potential direct impacts (scale of risk from climate change varies with assumptions about future development) include:
•
Agricultural and rangeland failure (increases in aridity-water availability varies for crops, livestock, and
fisheries, i.e. reduce wheat productivity by 18%, barley and maize by 19%, and rice by 17%; marginal
agricultural areas would be negatively affected, and desertification rates would increase);
•
Displacement (to South, high land, and East-West Delta, regional niches), socio-economic effects of labor migration from marginal and coastal areas; a 1-2-meters rise in sea level would compel some eight
million inhabitants to migrate from the Delta to other areas;
•
Poverty, reduced GDP (high vulnerability consequence on low levels of income, economic losses due to
changes in production and trade); and
•
Food insecurity (availability: stability; access; utilization). The potential indirect impacts include social
services/sectors such as deterioration of health and reduced education opportunities, while poverty
leads to reduced capacities to sustain these services in the long run.
The link between climate change, SARD, and poverty should be recognized and highlighted. Impacts on agriculture production mainly come from reduced productivity of crops, livestock, and fisheries, as well as area reduction leading to reduction in on-farm income generating activities (income to sustain the payment for maintaining social services). Inhabitants of rural areas increased from about 22.7m in 1980 to about 41.9m people in
2007, an increase of 85%. Agriculture and agricultural-related and complementary activities constitute the
main source of income for the great majority of rural inhabitants. Rural development through displacement
impacts on regional inequality, health, education, other social activities, supporting services, and off-farm income generating activities leading to more relative and absolute poverty; impacts on food security are through
the availability (production and trade), stability (droughts and temperature stress, trans-boundary diseases,
etc), access (incomes and poverty), and nutrition/utilization (targeted groups, adoptive strategies). Impacts
on productivity could be reduced in the long run.
In 2010, a ‘thermometer’ gene was isolated that helps plants sense temperature, and this could provide a
shortcut to creating plants that fruit in any temperature. Temperature is a key environmental signal regulating
plant development, but the mechanisms by which plants sense small changes in ambient temperature have
remained elusive.93
Better Utilization of Farm Residues
In recent studies (AOAD 2006), the annual production from agricultural residues was estimated to be about
59.0 million tons. Meanwhile, food-processing wastes, which are generated through preparing and packing
vegetables and fruits, were estimated to be around 1 million tons per year. The average production of crop
residues ranged between 1.13–3.05 tons/feddan for straw, while it ranged between 1.18 and 2.30 tons/feddan for stalks. The greenhouse residues were estimated at 14.0 tons/fed, while the vegetable straw generated
in the field were evaluated at 3.0 tons/fed. The traditional utilization of agricultural residues in rural Egypt
includes animal feed, compost production, farmyard manure (FYM), and direct fuel. The amount utilized as
dried animal feed was estimated to be 10 million tons/year, equivalent to 30% of total crop residues. The agri91
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cultural residues which are converted to organic fertilizer, compost and/or farmyard manure were estimated
to be 9.4 million tons/year, or 28% of total crop residues. The remaining 14 million tons/year equivalent to
42% of total crop residues were utilized as direct fuel in primitive stoves and/or direct burning in open area.
Improving the utilization of farm residues will have health, environmental (black cloud), income, employment,
and gender implications.
Fisheries Below Their Potential
Egypt has several sources for fish production, with total areas of 14m feddans of water bodies. Fish production
in Egypt depends on capture fisheries (seas, lakes, the river Nile and its branches) as well as on aquaculture.
Fish production has greatly increased from approximately 243,000 tons in 1980 to some 970,000 tons in 2007.
Fish is the cheapest source of animal protein. Local fish production meets most of the local consumption needs.
Imports are estimated at 215,000 tons, representing 18% of total consumption, estimated at approximately
1,175,000 tons in 2007, including processed fish. The fishery sector has been identified as the immediate
provider of high quality of animal protein. At present, the annual per capita consumption ranges about 16 kg/
capita, which comes close to the world average.
Sea fisheries contribute around 12.3% of total fish production, while inland fisheries, lakes and the Nile, contribute around 26.4%, and aquaculture contributes the greater part, with about 61.3% of total production.
Capture fisheries production has decreased during the recent years due to the increase in the number of fishing vessels, the use of fishing nets and gear that are illegal and destructive of the fish stock, as well as increased water contamination resulting from the disposal of agricultural and industrial drainage water in the
northern lakes and the Mediterranean. The contribution of aquaculture to total fishery production has steadily
increased. Aquaculture production has increased from 12,400 tons in 1977 (8.3% of total fish production) to
surpassing capture fishery and aquaculture and amounted to 693,000 tons representing about 60-65% of
total fish production in 2008. Of particular importance is the declaration of some lakes in Egypt as protected
areas. Lake Qarun and Rayaan Depressions were declared protected in 1989, while Lake Burullus was declared
protected in 1998. These resources have special international importance because of their role in wintering
aquatic birds.
Potential for Strengthening International/Regional Collaborations (With Emphasis on South-South)
A review of the activities of the Egyptian Fund for Technical Cooperation with Africa (EFTCA) and the Egyptian
Fund for Technical Cooperation with the Commonwealth of Independent States and European Islamic States,
both operating under the aegis of the Ministry of Foreign Affairs, indicates extensive and productive SouthSouth cooperation with a large number of sister developing countries-mostly on the bilateral level but also at
times embracing sub-regional activities. A striking feature of the cooperation is the sheer diversity and scope
of the activities and facilities supported by the two funds. Also, most interventions seem to be small-scale in
nature. Egypt already has some experience with triangular cooperation aimed at supporting sister developing
countries including the collaboration of the EFTCA with the Norwegian Agency for Development Cooperation (NORAD), the Japan International Cooperation Agency (JICA), the Islamic Development Bank (IDB), the
Arab Fund for Technical Assistance to African States, and with three governments, namely, the Czech Republic,
Greece, and the Republic of Korea (ROK). In similar vein, the Ministry of Communications and Information
Technology has ongoing cooperation with the Canadian International Development Agency (CIDA), and potential triangular cooperation involving the African Development Bank (ADB) and the European Union (EU) is
currently being explored. Another Egyptian agency that has employed triangular cooperation to assist other
southern countries, in both Africa and the Arab region, is the Social Fund for Development.
Regional Development Based on Comparative Advantages
There is a great need to achieve more balanced rural development by considering the niches and comparative
advantages of the different geographical agro-ecological zones in Egypt. This need would be even greater if, as
appears likely, climate change generates displacement of population from the Delta region. Five geographical
regions should be considered, taking into consideration the distinctive features of the agricultural regions.
They are: Upper Egypt (Asyut, Sohag, Qena, Aswan, and the New Valley governorates); Middle Egypt (Giza,
Beni Sueif, Fayoum, and Menia governorates); Middle Delta (Qalubiya, Menoufiya, Gharbiya, Dakahliya, Kafr
el-Sheikh, and Damietta governorates); Eastern Delta (Sharkia, Port Said, Ismailia, Suez, Northern Sinai, and
Southern Sinai governorates); and Western Delta (Beheira, Alexandria, Nubareya, and Matrouh governorates).
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III.1.b Government Strategic Orientation and Objectives
The strategic objectives of the government for achieving sustainable agricultural development to 2030 are:
1. Sustainable use of natural agricultural resources:
1/1: Increase efficiency of water use in agriculture
1/2: Sustainable increase in areas of reclaimed land
1/3: Sustainable development of the productivity of land and water unit
1/4: Maximizing sustainable return from rain-fed agriculture
1/5: Soil conservative and protection
2. Developing agricultural productivity per unit of land and water:
2/1: Directions for development of crop productivity
2/2: Directions for develop productivity/animal unit
2/3: Directions for fisheries development
3. Supporting competitiveness of agricultural products at local and international markets:
3/1: Available opportunities
3/2: Elements of competitiveness capabilities and facing challenges
3/3: Major directions to support the competitiveness capabilities
3/4: Achieving high levels of food security in strategic commodities
4. Achieving high levels of food security in strategic commodities:
4/1: Increase the rate of self sufficiency of the strategic food commodities
4/2: Develop consumption patterns to improve nutritional levels
4/3: Reduce market losses in food commodities
4/4: Improve quality and safety of food commodities
4/5: Develop social security network.
5. Improving agricultural investment environment;
6. Improving livelihood of rural inhabitants:
6/1: Justification and available opportunities.
6/2: Main elements for improving living conditions of rural inhabitants.
Constraints and obstacles include those related to: agricultural policies, such as limited agricultural investments, inflexibility of credit policies, and capacity to formulate, analyze, and monitor policies; agricultural
institutions and coordination; the imbalance between the development of production and the improvement of
marketing services and food quality/safety; poor information system; and discrepancies between export agriculture and small scale farming. Implementation programs have been designed by the Ministry of Agriculture
in cooperation with FAO and IFAD to achieve the above strategic objectives. The implementation programs
include capacity building initiatives at the technical and administrative levels for existing personnel working
in the agricultural sector whether public or private institutions. The strategy calls for building a new generation of employees according to international standards.
Proposed Criteria for Selecting Priorities
In terms of methodology, a number of criteria were used to select ten major priorities (detailed below) from
among the 21 priorities in the government’s agricultural strategy. The criteria include 1) multiple effects on
strategic objectives; 2) clarity of institutional responsibility; 3) human and absorption capacities; 4) sequencing prerequisites for other programs/groups; 5) continuation of on-going programs; and 6) availability of
funds. Based on these six criteria, the ten priorities can be grouped under a) efficient utilization of natural
resources, b) enhancing productivity and competitiveness of agricultural products, c) institution and human
capacity building, and d) poverty reduction.
Major Priorities and Areas of Action
Efficient Utilization of Natural Resources
1.
Enhancing Efficiency of Irrigation System. One of the main components of the agricultural development
strategy is to achieve a gradual improvement of the efficiency of irrigation systems to reach 80% in an
area of 8m feddans, and to reduce the areas planted to rice in order to save an estimated 12.4 billion cubic
meters of water by 2030. The objectives include: meeting the needs of land reclamation plans; achieving
an appropriate rate of vertical agricultural development; effecting a voluntary change in the cropping
pattern; and improving environmental conditions and public health in rural areas.
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2. 3. Maintaining and Protecting Agricultural Land and Expanding Reclaimed Areas. As regards protecting
Egypt’s cultivated fertile areas, there is a strong need to avoid further encroachment on the best quality
soils available for cultivation. Serious intervention of the government is needed to stop the damage of
the land most suitable for agriculture production, especially eliminating corruption of government employees, who turn a blind eye to infractions. A related problem is the severe shortage of available land for
urban expansion, which can be relieved through well designed urban planning at the central and local
levels. In relation to expanding reclaimed areas, this is one of the main components of the agricultural
sector strategy. This can be achieved by using the quantities of water that should be saved through developing field irrigation systems to reclaim new areas estimated at 1.25m feddans by 2017 and about 3.1m
feddans by 2030. Agricultural land in the Delta and the Nile Valley regions suffers from two important
problems, namely, continued encroachment on agricultural land and diverting it from agricultural to nonagricultural uses at an annual rate of 20,000 feddans, as well as continued degradation of soil fertility in
many agricultural areas. Dealing with these problems would require periodic soil surveys to be taken
as a basis for establishing determinative fertilizer use rates, continued restoration and maintenance of
agricultural drainage systems, and establishing drainage systems in the areas lacking such systems. The
objectives include: (1) increasing the capability of adding new lands through effective and less costly
methods; (2) ensuring that the newly reclaimed areas are used for agricultural production; and (3) securing conditions for establishing viable settled agricultural communities in the newly reclaimed areas.
Adapting to Climate Change (Vulnerability and Adaptive Capacity): covered in Section III.5 of this report.
Enhancing Productivity and Competitiveness of Agricultural Products
4. Enhancing Productivity and Competitiveness of Agricultural Products throughout the Value Chain. At the agricultural sector level, there are many elements and areas that have to be targeted for improvement. Strategic
priority areas include: (1) establishing quality standards for agricultural products; (2) keeping abreast of
modern and advanced techniques that support the economic efficiency of agricultural production; (3) using modern information and communication techniques that serve the agricultural sector; (4) developing
marketing facilities and services and agricultural markets in general; (5) developing pre- and post-harvest
practices for improving product quality; (6) applying modern techniques in monitoring, analyzing, and forecasting natural, technical and marketing risks, through a special unit for the management of agricultural
risks; (7) linking farmers, particularly small farmers, with markets, including the development of marketing
systems and channels; (8) activating and strengthening the role of the government in exercising supervision
on quality standards of both inputs and outputs, banning monopoly and adulteration, and consumer protection; (9) strengthening institutional and organizational mechanisms that support the linkages between
local and external marketing; and (10) reducing losses throughout the value chain
Fisheries Development. The remarkable growth of the fishery sector, especially aquaculture, is expected
to continue to reach the national production plan of 1.5 million tons of fish by 2017. In regard to capture
fishery, achieving maximum sustainable yields should be targeted. Moreover, wise use of underutilized
resources such as deep-sea fishery should continue. More development is expected to take place in aquaculture. The followings are key areas that should be considered for the development of the fishery sector: (1) intensifying and diversifying aquaculture practices where intensification consequences should be
considered, especially environmental impacts; (2) the narrow production basket from aquaculture should
consider the diversification of farmed species; (3) enhancing high quality seeds; (4) adopting environmentally friendly aquaculture that incorporates an Environmental Impact Assessment upon the licensing
of aquaculture projects, as well as establishing an enforceable environmental monitoring program for
operating aquaculture projects. Adopting the principles of “Integrated Coastal Zone Management”; (5)
ensuring that the quality and safety of fish from capture fishery or aquaculture meet national and international standards for quality and safety; and (6) revisiting and amending legislations, taking into consideration the dynamic nature of fishery sector – especially aquaculture.
5
Institutional and Human Capacity Building and Policy Environment for Managing Agricultural Development
6. Institutional and Human Capacity Building for Managing Agricultural and Rural Development. The main
objectives for this priority include: (1) upgrading the scientific and technical skills of research, extension,
and technology transfer staff; (2) upgrading the scientific and technical skills and expertise with specific
attention to the fields of agricultural policies formulation, analysis, monitoring and evaluation; (3) modernizing agricultural education programs in all educational institutions and at all levels; (4) strengthen94
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7. 8. ing linkages between agricultural education programs and the requirements of the labor market; (5) sensitizing farmers leaders of the importance of monitoring agricultural developments, and (6) encouraging
rural leaders to share their experiences and knowledge with other farmers.
Improving the Climate for Agricultural Investment. Improving the agricultural investment climate requires greater attention from the Ministry of Agriculture and Land Reclamation, in collaboration with
other concerned ministries, in order to eliminate bottlenecks limiting agricultural investments. The major objectives include: i) facilitating the allocation of newly-reclaimed areas, through the establishment
of a single administration comprising representatives from all concerned ministries with which investors
and businessmen are in direct contact; ii) reviewing land allocation laws and procedures and reviewing
credit and lending policies; and iii) MALR is to prepare a clear investment map for agriculture.
Enhance Research Based Technology Transfer. The main objectives of this priority action area includes:
i) establishing close coordination between agricultural research institutions, under a national research
plan defining research areas and budgets; ii) improving the income levels of researchers; iii) establishing
the closest possible coordination and cooperation between universities and specialized research institutions; and iv) enabling the younger generation of researchers to interact with their counterparts at the
international level, in order to improve their research capabilities.
Poverty Reduction
Reducing Regional Disparities. There is a disparity in the level of development between the different geographic regions of Egypt. Each region has its own niche and comparative advantage that needs to be utilized efficiently. It is noteworthy that there are many indicators that underline the distinctive attributes
of the different regions in Egypt, where the milk and rice production belts are concentrated in northern
Delta, while the vegetable production belt is concentrated in the governorates surrounding the greater
Cairo region, the medicinal and aromatic plants production belt in middle Egypt, and the sugar cane and
the dry- and semi-dry dates production belts in Upper Egypt. In spite of the differences between the different regions in natural resources and climatic conditions, these differences have not been taken into
consideration in polices regulating the use of land and water resources, as well as fertilizer application
policies for the different crops, marketing policies, and polices for localizing agricultural technology. To
address this situation, it would be necessary to know the attributes of the different regions, as well as the
problems and bottlenecks facing the developmental efforts, and recognize development opportunities in
each region. This would help achieve two main goals, namely, establishing development strategies and
goals on objective bases and laying executive plans in such a way that could exploit the distinctive features
of the different regions and address the regional problems and determinants that hinder development.
10. Off-farm Income, Employment with Emphasis on Better Utilization of Farm Residues. Numerous advantages could be achieved from utilization of agricultural residues and industrial by-products in particular,
including: (1) creation of new small agro industries in the rural and pre-urban areas; (2) generation of
new job opportunities in rural communities; (3) use as compost for land reclamation, contributing to
addition of new cultivated areas; (4) rationalization of water irrigation, for water needed of reclaimed
lands; (5) fostering organic agriculture, thus promoting export; (6) reduction of both chemical fertilizer
and pesticides; (7) substitute for fodder production, thus reduce imports of feedstuffs; (8) reduce the
costs of animal and poultry feed stuffs; (9) generation of new and renewable energy sources like biogas,
bio-fuel, ethanol, etc.; and (10) protection of environment from pollution.
9. III.2 Egypt’s Water Situation Analysis
Egypt is currently under the water scarcity limit internationally known as 1000 m3/capita/year of renewable
water resources to adequately cover a country’s domestic, agricultural, industrial, and other basic developmental water needs. Egypt depends mainly on the Nile water with a share of 55.5 billion m3 per year as indicated
in its Nile Water Agreement with Sudan in 1959. With a continuously increasing population since then, the
per capita share of renewable water resources in Egypt has been decreasing from 2500 m3/capita/year in the
1950s, to currently 750 m3/capita/year, and it is expected to reach 250 m3/capita/year in 2050. The increasing
gap between the available renewable water resources for Egypt and the water needs reflected by the need to
meet the water scarcity limit has been fulfilled by water reuse, use of non-renewable groundwater, desalination,
and imports of virtual water embedded in many food products such as wheat, meat, maize, table oils and others.
In what may be considered a model for participatory planning, all water related sectors in Egypt have participated for three years under the umbrella of the Ministry of Water Resources and Irrigation (MWRI) to develop
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a National Water Resources Plan (NWRP) for 2017. The required investment costs for implementing this plan
from 2003 to 2017 reached LE 145 billion, with recurrent costs for operation and maintenance of about LE45
billion. The plan is now under implementation, but because of weak inter-ministerial coordination, may not
be fully realized. As per the NWRP for Egypt, agriculture uses 85% of its renewable water resources, industry
uses 9.5%, and domestic uses amount to 5.5%. The current annual water uses from the different direct and
indirect water resources are divided as follows: 55.5b m3 from the Nile water; 1.0b m3 from rainwater and flash
floods; 6.5b m3 in renewable groundwater; 5b m3 in agriculture drainage water reuse; and 0.7b m3 treated
wastewater reuse.
The plan for meeting annual water needs in 2017 was set to develop the different conventional and unconventional water resources in the amounts as follows:
•
57.5b m3 from the Nile water (if Phase 1 of Jongli Canal in Sudan is jointly implemented);
•
1.5b m3 rainwater & flash floods (if flash-flood dams are constructed);
•
8b m3 renewable groundwater;
•
8.5b m3 agriculture drainage water reuse;
•
2b m3 treated wastewater reuse (if corresponding wastewater treatment plants are constructed);
•
3b m3 (if adjustment to cropping pattern and reduction of high water consumption crops is implemented);
•
4b m3 savings from irrigation improvement projects.
In addition to meeting future water demands in Egypt, there are several other challenges faced by the water
sector, which is the limiting factor for the development of Egypt in the future. These challenges include the increasing population densities near the waterways, which eventually affect the available cross sections for water
flows, and the quality of water due to potential wastewater disposal in these waterways. The continuous urban
encroachment on existing agriculture lands indirectly affects the water sector due to the lost investment in
the existing irrigation and drainage infrastructure, which includes several barrages, pump stations, and about
100,000 km of canals and drains.
To compensate for the lost agriculture lands and associated irrigation and drainage infrastructure, an alternative system for agriculture in the desert lands in the future will require huge infrastructure, operation, and
maintenance investments to deliver and pump the Nile waters for irrigation away from the Nile’s main course.
Nevertheless, the direct effect of urban encroachment on the old fertile agriculture lands is devastating and
cannot be easily compensated by desert lands to reach its agriculture productivity without large investments.
Pollution of waterways and groundwater due to domestic and industrial wastewater and solid wastes disposal is another challenge that reduces the availability of appropriate quality water for use. The competition
between development sectors on water and between users of the same sector is growing and is expected to
create water conflicts. The number of irrigation water complaints due to water shortages is known to have
increased recently. Due to the limited water resources, the irrigation water shortages are exacerbated by illegal water intakes and violations of cultivating more than the allowable areas of high water consumptive crops,
such as rice. The 2008-2009 national trade policy to ban the export of rice due to its increasing price in the
local market has fortunately resulted in the decrease of the areas cultivated by rice to about 1.7 million feddans
in 2009. The allowable area for cultivating rice is about 1.1 million feddans, which is more than enough to
meet the local market demand, but it has been reaching over 2.0 million feddans as rice is a profitable crop for
farmers, especially if exported. The recent relief of the ban on exporting rice in Egypt is expected to result once
again in the increase of cultivated areas of rice and will eventually result in more water shortages for other users. Striking a balance between the need to increase Egypt’s exports and the need to reduce the cultivation of
high water consumptive crops will remain a challenge that requires a strong political will, coordinated sectoral
policies, and a clear vision on national priorities.
Improving irrigation efficiency to meet some of the water needs of the agriculture expansion plan of 3.4 million
feddans between 1997 and 2017 is one of the challenging pillars of the 2017 NWRP. This is expected to reduce,
on average, the agriculture water demand from 4850 m3/feddan/year in 1997 to 3900 m3/feddan/year in
2017. Any agriculture expansion beyond 2017 will reduce the available agriculture water per feddan to unfavorable levels, unless there is more dependence on non-conventional water resources such as treated wastewater.
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The uncertainty of climate change impacts on the water resources of the Nile River poses another challenge on
the limited water resources currently available from the Nile for Egypt. The water sector is also facing other
challenges currently, such as the allocation of funds required for flash flood protection and water storage, and
the funds needed to increase the current wastewater services coverage while maintaining the current level of
domestic water services coverage for the increasing population. The cost to meet the MDG target for sanitation
by 2015 in Egypt is estimated at LE 120 billion, which would still leave a population of about 28 million people
without improved sanitation services.
In 2008, the Ministry of Water Resources and Irrigation drafted a strategy for facing water scarcity to the year
2050. It conducted a workshop in early 2009 where alternative strategies and options were presented to explore innovative means for meeting Egypt’s water demand until 2050. Some of the information presented indicated that the water demand for an expected population of about 170 million people in Egypt will have to be addressed by serious measures. These measures include possible reallocation of Nile waters from the agriculture
and industry to the domestic sector, while developing alternative water resources for agriculture and industry.
Planned urban expansions have to be out of the Nile Valley and Delta to protect the existing agricultural lands
and associated irrigation and drainage infrastructure and network from urban encroachment. Stronger law
enforcement mechanisms are needed in this regard. Coordination between sectoral policies including trade,
agriculture, water management, domestic water supply, and urban development need to be efficiently implemented, making use of incentive systems and economic tools to support water management policies.
Treated wastewater is expected to be the renewable water resource for agriculture expansion in the future if
no additional share of Nile waters is mobilized, therefore the existing Egyptian code for treated wastewater
reuse in agriculture will need to be implemented. Coastal cities will have to opt for seawater desalination for
their domestic and industrial uses. Non-renewable groundwater will have to be directed to domestic uses
and water bottling. Water conservation measures in all sectors will have to be effectively implemented by
new building codes for use of household water-saving devices, improved surface and pressurized irrigation
systems, and volumetric water services cost recovery mechanisms.
MWRI has been exploring the potential for increased participation by water user associations on branch canals
for many years. At the extreme, these associations could be entirely self-managed, with services supplied entirely
from the private sector, thus reducing the need for direct MWRI and MALR involvement at the operational level.
This would benefit the MWRI, which has severe staff shortages, and give farmers more control over investments in
local water management infrastructure and distribution. The MWRI is also looking at major institutional reforms
to adjust to its future role as manager and regulator of the sector, but the absence of decisions in this regard means
little action has been taken to date. These ideas need to be explored in depth, but until there is coordinated planning among ministries, headed by a powerful National Water Council, they remain unlikely to be achieved.
III.3 Energy Efficiency and Renewable Energy
The Supply/Demand Challenge
Hydrocarbons (oil and gas) represent over 90% of Egypt’s energy resources, a situation that is expected to
continue for at least the next 20 years, with natural gas slowly replacing crude oil. Egypt’s reserves have been
increasing at an average of 5% per year during the last five years and natural gas reserves accounted for most
of this growth, while crude oil and condensate reserves remained relatively constant. Domestic consumption,
however, has been rapidly increasing as a result of ongoing economic growth even during the global economic
downturn. Recent and forecasted consumption patterns signal an alarm to those responsible for the country’s
future economic development and energy security. Energy efficiency and renewable energy resources are
expected to play a critical role in facing this challenge.
The Subsidy Challenge
Subsidizing energy end-use prices for an extended period to maintain social justice has resulted in a major
pressure point on the government budget, as it has to bear the difference between the costs of production and
the subsidized end-use prices. In the 2007-08 budget, the energy subsidy bill was almost twice the government’s spending on defense and national security and almost four times its spending on health and education.
Keeping the subsidy to its current level (approximately 70 billion EGP annually) and format will threaten
Egypt’s economic growth and energy security.
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Energy Efficiency in Egypt Over the Past 25 Years
Past activities in energy efficiency were significant in volume and were mainly supported by bilateral and multilateral donor organizations with limited engagement from the GOE. Unfortunately, after more than 25 years
of ad-hoc programs and activities, no sustainable impact or true market transformation can be cited. Three
main reasons are responsible for the lack of success and resistance to energy efficiency. First, subsidized enduse energy prices provide a disincentive to end-users to invest in efficiency upgrades in existing facilities, or to
incur the incremental investment necessary to raise efficiency in new buildings above commonly used levels. Second, the institutional and legislative environment within the energy sector does not drive the market toward higher efficiency. There are neither mandates (law, regulation, acts, etc) to ‘push’ the market to seek efficiency solutions, nor market options and solutions to ‘pull’ or encourage end users toward efficiency. There is
a lack of coordination between ministries related to energy efficiency, mainly the ministries of petroleum and
electricity. Third, as a result of the institutional void, the level of awareness, information, and capacity among
the energy users about efficiency applications is certainly limited.
Current Priorities
The business-as-usual scenario cannot and should not be tolerated for future planning. A set of key issues need
to be urgently dealt with including: 1) restructuring of energy pricing to protect against abuse and inefficiencies
- the challenge remains how to rationalize subsidies while protecting the poorer sections of society, 2) rationalizing energy consumption in the demand sectors without reducing the service levels or negatively impacting
economic development targets, 3) diversifying the energy supply resources by increasing renewable resources
such as wind, solar and bio energy, and 4) allocating the country’s natural resources in a manner that maximizes
the economic and social development mandates. To this end, energy efficiency and renewable energy are now
becoming critical to Egypt’s energy resource planning, and if properly designed and applied, energy efficiency
can be the most cost-effective tool to managing demand, deferring future energy supply investments and mitigating the threat of climate change.
The government has pledged to produce 20% of the generated electricity from renewable resources by 2020
and has also adopted some specific targets for total reduction in energy consumption. The recent establishment of an Energy Efficiency Unit at the Cabinet of Ministers to support the Supreme Energy Council certainly
signaled high-level government attention to the subject.
A National Agenda for Energy Efficiency and Low Carbon Economy
The following are considered key elements to having a national agenda for efficiency and shifting dependency
toward cleaner and low carbon energy sources:
•
A clear vision on the main objective for efficiency. This clarity will help defining responsibility and accountability as well as clarify the mandate to develop the proper policies and supporting market tools. It
will help define the most effective approaches to market implementation and target segments, and will
certainly be a key factor in setting targets. If the main reason is to meet future demand with less capital
investments, then it is a resource option and the energy ministries should be the driver. If in fact, it is a
climate change mitigation tool, then the focus should be on reducing carbon emission;
•
An effective institutional framework. Energy efficiency potential exists in most sectors of the economy
and therefore, it is recommended to adopt an institutional model that is better suited for multiple agency cooperation. The recently established Energy Efficiency Unit at the Cabinet of Ministers is expected
to pave the way to developing a sustainable institutional structure with authority and mandate to be
recognized by all relevant stakeholders;
•
Develop an implementation road map linking energy resources to economic development with macro
and micro sector-specific indicators that directly link to GDP growth. This will set the stage to developing the most effective operating plans and the relevant policy initiatives.
III.4 Policies for Promoting Renewable Energy in Egypt
Egypt is endowed with plentiful natural resources, amongst which wind and solar energies are proved by
many detailed resource assessment studies concluded by Egypt’s wind and solar atlass. However, there are
important and expensive investments needed to exploit these renewable resources. In pursuit of harnessing
such potential, Egypt has established a series of wind power plants that constitute the largest grid-connected
wind farm in the region of 430 MW at Zafarana area on the Gulf of Suez. The projects have operated in successive phases since 2001, in cooperation with Germany, Denmark, Spain and Japan. Another 120 MW is in the
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construction phase to be operated by mid-2010. Meanwhile, several new wind farm projects are in various
phases of preparation.
Several solar pilot projects including solar heating and photovoltaic systems are in operation in different applications. However, the most important project is the 140 MW integrated solar combined cycle power plant
with a solar share of 20 MW that is currently under construction, to be operated by end of 2010. The project is
partly financially supported by Japan and GEF. It is worth mentioning that a key element of Egypt’s vision is focused on tapping its solar energy, through a series of solar power plants developed over a long-term plan, and
this will begin with a concentrating solar thermal power project of 100 MW capacity and 20 MW photovoltaic
projects that will be developed during the next Five Year Plan (2012-17).
In February 2008, the Supreme Council for Energy approved an ambitious plan to satisfy 20% of the generated
electricity from renewable energies by 2020, including 12% from wind energy, translated into about 7200 MW
of wind farms installed capacities, and 8% from other renewable resources, mainly hydro and solar energies.
Such a plan gives enough room to private investments to play a major role in realizing this goal. Polices to foster increasing private sector participation consist of two phases: First, to adopt a competitive bids approach
through issuing tenders internationally requesting the private sector to supply power from wind energy projects for a period of five years, and second, a feed-in-tariff system will be applied taking into consideration the
prices achieved in phase one.
The international Invitation for Pre-Qualifications for the first private wind power plant of 250 MW was issued
in May 2010 based on the Build Own Operate (BOO) scheme. Thirty-four offers were received and the shortlist of ten qualified developers was announced at the beginning of November 2009. The experiences gained
through a series of competitive bids for private wind energy projects will pave the way to develop a commercial framework for wind energy in Egypt.
The GOE supports the projects implemented by the private developers as follows:
•
More than 7,600 square kilometers of desert lands have been earmarked for future wind projects;
•
All permits for land allocation are already obtained by National Renewable Energy Authority (NREA);
•
A Land Use Agreement for the area assigned to the project will be signed with the investor for free (only
expenditures will be paid after the beginning of the project operation through 3-5 year installments);
•
An Environmental Impact Assessment (EIA), including a bird migration study, will be prepared by
NREA in cooperation with an international consultant;
•
Financial risk for investors is reduced via a long-term Power Purchase Agreement (PPA) for 20-25
years;
•
The GOE will guarantee all financial obligations during the period of this PPA agreement;
•
The PPA will be in foreign currency with a small portion of local currency to cover local costs;
•
Exempting renewable energy equipment from customs duties (zero);
•
The project will benefit from carbon credits;
•
The project company will receive license for power generation from Egyptian Electricity Regulatory
Agency.
III.5 Protecting the Environment with a Focus on Climate Change
The challenge facing Egypt in the 21st century is to balance the needs of a developing nation with the protection of its environment and natural resources. Environmental problems have been increasing at an accelerated
rate largely as a result of the country stretching its limited resource-base to accommodate the economic needs
of its rapidly growing population. The National Environmental Action Plan (NEAP) represents Egypt’s agenda
for environmental actions for fifteen years (2002-2017). It complements and integrates with sectoral plans for
economic growth and social development. The plan describes the state of environment in Egypt for air, water
resources, land, marine environment, biological diversity, waste, and biosafety, with proposed actions for tackling each of those problems. The corrective action as proposed by the NEAP in different areas aims at creating
job opportunities for unemployed people, especially women, youth and marginalized groups.
One major issue that should be highlighted is that of achieving high rates of economic growth with minimal
damage to the environment. A potentially important issue is related to assessing the environmental damage
that is likely to take place as a result of accelerating economic growth. Also, the areas where such damage is
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expected to be greatest must be identified. This automatically will help set priorities as to which area should
receive immediate attention. Egypt also faces challenges when it comes to identifying the right mix of policy
instruments that can best be employed to reduce pollution. So far Egypt mainly relies on command and control
to reduce pollution while many countries including US as well as others in Europe rely on a combination of
command and control, taxes, subsidies and tradable permits.
Protecting the Environment
There are a number of cross-cutting institutional and systemic challenges that are interlinked, allowing for
weakness in the environment sector in Egypt. Environment is not a standalone sector responsible for cleaning up wastes generated from other sectors. The MSEA and its executing arm EEAA should be overseeing the
integration of environmental policies in other sectors and coordinating the different environmental activities,
which is already a huge task to fulfill. This results in an inconsistency in the set of national indicators with
available data for monitoring the progress scattered between different national institutions. In 2009, the GOE
updated its vision, objectives, and policies in consultation with relevant line ministries and entities. Although
there is a section for environmental policies under the strategic objective of “protect national security and
ensure the right of future generations for fruitful benefits of development,” there are a number of cross cutting
environmental policies that are related to other ministries.
Protected Areas
As for the sustainable management of natural resources, Egypt is obliged to declare 15% of its land as protected area by 2017, as foreseen in the government’s ecotourism initiative of 2003. MSEA/EEAA is the main
entity responsible for the coordination, implementation, monitoring and follow up on protected areas. The
EEAA’s Nature Protection and Nature Conservation Sector (NCS) was established in 1995 and is responsible
for the management of protected areas (PAs), the implementation of conservation measures therein, and the
enforcement of environmental law within the PAs. It is entrusted with policies, programs, studies and other
actions to ensure compliance with the habitat and species protection legislation and commitments to international conventions for the conservation of nature. The NCS is comprised of two sub-departments: Protected
Areas and Biodiversity. The former oversees the National Protected Area Network, while the latter provides
studies and researches, information and other services. The NCS’s mandate is to “protect, manage and develop
Egypt’s wild resources, by conserving the nation’s biological diversity, preserving representative samples of
the country’s natural heritage, and ensuring that the management and use of resources are sustainable and
economically productive.” The establishment of PAs is one of the main instruments of Egypt’s strategy for
conserving biodiversity and other natural and cultural resources. The creation, development and management
of national protectorates is part of the overall environmental and development strategy of Egypt. Since the
1980s the Egyptian government has undertaken initiatives to preserve significant portions of natural habitats
from resource depletion and human disturbance. The legislative basis creating the legal framework of protected areas is Law 102/1983.94
There are current institutional, financial, and technical challenges facing the management of already declared
protected areas. Thus, it would be very difficult to assume the availability of resources to manage the new ones.
The management of the PAs varies in degree over a wide range. Some have well developed infrastructure systems, staffing, and programs, while others still have very limited management activities occurring on the ground. The better-developed PAs often are the results of individual donor-funded, site-specific Protected Areas projects.
Another problem is that natural resources are managed from a sectoral perspective, which in some cases can
be conflicting with the national interest. This has resulted in no crosscutting sectoral mechanism at the national level for the oversight of natural resources management, which should again be among the responsibilities
of MESA/EEAA. Egypt has exceptional wild resources that underpin the economy and offer it a comparative
advantage in the massive and growing nature-based tourism industry, including coral reefs, spectacular desert
landforms, rich fossil deposits, and vast bird migration.
Many efforts have recently been exerted to promote ecotourism (matching local environmental, cultural, and archaeological and social aspects) which may indicate a nascent trend for the future. In addition, eco-architectural
models for infrastructure inside PAs have already been developed. It is hoped that these structures, in particular
those in Wadi el Hitan, will serve as a demonstration model for sustainable building techniques and heighten
awareness of the possibilities for environmentally sensitive design and fabrication elsewhere in Egypt.
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Box 16: The Role of Development Assistance in Protecting the Environment
An assessment report entitled “Ten Years of Donors Experience in Environmental Management in Egypt” (EEAA, FES, 2005)
was developed by the Ministry of State for Environmental Affairs/ Egyptian Environmental Affairs Agency (MSEA/EEAA) in cooperation with a national consultancy firm. The report aimed at assessing the support of donors to environment-related issues
from 1992 -2002. This period covered the development of the first National Environmental Action Plan (1992) and the second
National Environmental Action Plan (2002). The underlying causes for assessing such a period was to discern how much donor
support was fulfilling the national priorities identified in the national plan. Between 1991 and 2001, the total amount of donor
funds allocated in the field of the environment and coordinated through EEAA and its affiliated Technical Cooperation Office for
Environment (TCOE) reached the equivalent of nearly LE 2.4 billion and was distributed among 51 environmental programs and
projects. This figure encompasses only the bilateral and multilateral donor funds that were coordinated through EEAA/TCOE;
bilateral assistance amounted to approximately LE 1.8 billion while multilateral assistance amounted to approximately LE 0.5
billion, a ratio of nearly 75% to 25%.
Table III.5a: Volume of Assistance by Environmental Sector, 1991-2001
Enviromental
Sector
Projects/
Programs
Policy Support
Industrial Pollution Abatement
Air Pollution Abatement
Protection of the Ozone Layer
Instutitional Support and Capacity Building
Natural and Cultural resource Management
Enviromental Monitoring
Land and Water Resource Management
Enviromental Awareness and support to NGOs
Coastal Zone Management
Solid and Hazardous Waste Management
Total
4
5
3
1
13
7
2
5
2
5
4
51
Vol. Of Assistance
(equivalent in LE)
1, 025,226,400
367, 311,720
257,487,300
165,600,000
149,022,808
139,718,448
90,663,320
60,225,960
56,194,200
41,188,417
39,942,127
2,392,580,700
Source: Yasmine Fouad, Ministry of State for Environmental Affair
% of Total
Assistance
42.9
15.4
10.8
6.9
6.3
5.8
3.8
2.5
2
1.8
1.8
100
The main economic activities for populations living in and around most PAs are traditional activities, such as
livestock herding, fishing, and medicinal plant collection, in addition to agriculture, and to varying degrees,
activities within the tourism industry. Fostering the sustainable socio-economic development of the local communities surrounding the Protected Areas should be considered as a clear objective. Strong and effective partnerships between the Protected Areas Management Units, local authorities, CSOs and CBOs, interests groups
such as tourism agencies, should be actively pursued.
Climate Change
Despite Egypt’s relatively limited greenhouse gas (GHG) emissions (0.7% of global GHG), it is subject to potential impacts of climate change, including sea level rise, inundation of the Nile Delta and associated social
and economic effects. Egypt’s GHG emissions grew to 193,000 Gg of carbon dioxide (CO2) equivalent in 2000
from 116,608 Gg of CO2 equivalent in 1990. The energy sector is the main source of GHG emissions with
92% of the country’s energy demand met by using fossil fuels. Nevertheless, 58% of the Egyptian population
lives in rural areas, considered more vulnerable to climate change with an expected shortage of basic food
items.
There are number of general challenges associated with climate change in Egypt. Mainstreaming of climate
change actions in national development plans is the primary challenge in Egypt. Moreover, the country lacks
an integrated carbon finance program which is essential to move the country to a low carbon economy. Adding to that, there is lack of financial resources for implementation of climate change actions in different sectors.
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Box 17: Ecotourism
The Ecotourism Society defines ecotourism as responsible travel that conserves natural environments and sustains the wellbeing of local people. According to industry sources, ecotourism is the fastest growing segment of the travel industry. It is estimated that the demand for ecotourism is growing by approximately 20% annually in the international market. Travelers are
becoming sensitive to issues concerning the environment and protected areas are becoming a major reason for selecting a travel
destination. Knowing that eco-tourists do not always seek quality food and lodging although they can afford it, it is a challenge for
any country to provide all facilities and safety measures to this type of travelers. Their preferences reflect a belief that the facility
where they are staying is not destroying the natural resource.
Recognizing the need for developing and promoting ecotourism in line with the MDG, Ministry of Tourism (MOT) is working
to promote eco-tourism as a new product, attracting the high-end segment so-called niche markets, and where many sites will
necessarily cater to high-end nature lovers such as national conservation areas: These include Fayoum, North and South Sinai, in
addition to the Western and Eastern Desert, with their remarkable oases and some of the oldest cave paintings in Egypt.
In a related product, adventure tourism, the Adventure Tourism Development Index Report 2009 indicates that Egypt was
one of the biggest movers in ranking from 2008 to 2009, moving up 19 spots, and benefiting from high evaluations of its safety
and cultural resources. Egypt’s rich history of ancient civilizations and the long-standing symbols of those empires are worldrenowned but Egypt’s geography dominated by the Nile River, and the vast desert lands and coastlines create a huge opportunity
for safari excursions, sailing the Nile and scuba diving in the Red and Mediterranean Seas.
Despite the variety of potential areas, eco-tourism in Egypt it is still underdeveloped. MOT must ensure that development of
this product is achieved in a sustainable way. Two main aspects are considered when creating ecotourism: 1) hard infrastructure
to welcome adventure-seeking travelers, such as roads, airports, lodging facilities, and trails; and, 2) soft infrastructure such as:
trail maps, accessible information on heritage and culture; ground operators/outfitters; training programs for providers including guides/interpreters, eco-lodges, regulations, etc.
To attract higher segments Egypt is trying to reposition itself by maximizing the value of current segments and refocusing on
green growth. Many projects are under implementation: eco-compatibility is a first driver of decision making (e.g., energy, waste
management, organic food); assuring balanced economic exploitation and environmental control; optimizing beach use through
leasing, with public access; and, creating core aggregation areas for socialization and recreational activities. But o achieve economic, social and environmental sustainability many steps still have to be undertaken, such as to maximize proportion of visitor
spending retained locally, strengthening quality of local jobs created and supported by tourism by involving local community
in future development of touristic areas with the respect of the natural and historic heritage, culture and tradition, supporting
conservation of natural areas, and finally, ensuring minimizing pollution by reducing all types of emission and controlling solid
waste management .
Source: Adla Ragab, Ministry of Tourism
Egypt embarked on the development of a clean development mechanism (CDM) strategy in 2000 and a Designated National Authority for CDM approval process. The strategy selected types of CDM projects that have
the potential to reduce GHG emissions by approximately 1.5–3 million tons of CO2 equivalent under different
scenarios until 2010. However, there is a current underutilization of CDM as a tool for reduction of GHG and
a source of finance to climate change projects. This is related to the low level of awareness and weak institutional capabilities to get CERs for clean energy projects for the business community.
Climate change is closely linked to the health sector, with increases in morbidity and deaths as a result of extreme weather changes, food insecurity and nutrition related non-communicable diseases, disasters, zoonosis
and vector-borne diseases. Regarding communicable diseases, there is an expected striking change in the geographic distribution of the schistosoma species in Egypt, with recent emergent cases in Sinai and Red Sea governorates. This could be attributed to population movements from endemic regions and to irrigation systems
that bring Nile waters to agricultural development projects in newly reclaimed lands. Climate change may also
contribute to facilitate the reemergence of old diseases, such as tuberculosis (TB). The emergence of TB reflects
various changes in human ecology that are secondary to climate change, such as population migration resulting in high-density peri-urban poor crowded slums, changes in personal behaviors, and malnourished persons.
The main challenge facing this sector is that there is no adaptation strategy for Egypt to cope with the different direct and indirect impact of climate change on health, much of which is still in the domain of ‘forecasting.’ Moreover, the lack of institutional capacity to apply adaptation and mitigation measures may worsen
the situation, leaving the country with a strategy but no available trained capacity for its implementation. It
is expected that climate change impacts will change the distribution map for poverty and for vulnerability to
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Box 18: Vulnerability and Adaptation to Climate Change
in the Health Sector
Egypt is one of the countries at a potential risk to climate change. Egypt suffers a pressing problem of the high rate of population growth, and despite control programs, the population is expected to be 99 million in 2025 and 121 million in 2050. With a
limited share of clean water and agricultural land, Egypt will be facing a marked shortage of water, agricultural land and food.
Currently, 58% of the Egyptian population live in rural areas, and they are considered to be more vulnerable to climate change.
Broadening of the geriatric segment of the population, land subsidence, sea level rise, excessive erosion rates, saltwater intrusion,
soil salinities, and ecosystem pollution and degradation will enhance the problem.
Direct impacts of climate change are perceived to include heat strokes and heat related phenomena, skin cancers, eye cataracts,
injuries and deaths. Indirect impacts are perceived to include factors like demographic dislocations, socioeconomic disruptions,
and regarding communicable diseases, there is an expected change in the geographic distribution of schistosomiasis in Egypt as
well as a recurrence of malaria. Moreover, the WHO has reported that people in the Nile Delta region are also at risk of liver flukes
(fascioliasis). Climate change poses threats for water-borne diseases, food-borne diseases, and marine and coastal problems, including harmful algal blooms and ecological disruption. Egypt has an increasing burden of non-communicable diseases mainly high
blood pressure, diabetes and cardiovascular diseases climate change is likely to aggravate deaths from cardiovascular diseases
through direct and indirect mechanisms. Seasonal variations in the incidence of rheumatic fever also closely mimic variations in
streptococcal infections. Additionally, changes in precipitation, temperature, humidity, and wind may influence the occurrence of
bacterial agents and the survival of viral pathogens that cause increases in the vulnerability of acute respiratory infection, as well as
variations in the geographical distribution and production of the allergenic pollen species that cause allergic diseases.
Adaptation includes strategies, policies and measures to reduce potential adverse health effects of climate change. The primary objective is to reduce, with the least cost, the burdens of diseases, injuries, disabilities, and deaths related to climate change.
It is important to note that activities required for enhancement of adaptive capacity are essentially equivalent to those promoting
sustainable development. In Egypt, these activities include: improved access to safe water and sanitation; improved education
and information; and improved institutional capacity and efficiency. Equity of access to health care, improving ambulance services, public health infrastructure, adequate expenditures for health care and preventive programs are fundamental needs for
adaptation to climatic change.
Disasters may not be completely preventable, but with proper planning and preparedness, their negative impacts can be
decreased. Focusing on continued refinements to public early warning systems, improved engineering for disasters control, and
enhanced zoning and building codes can help reduce the risks. Raising societal awareness and preparedness by informing the
public about the risks and possible consequences of climate change is one of the most important approaches to support climate
change strategies and policies. However, education, public awareness and training on climate change issues in Egypt are insufficient, and much still needs to be done.
Source: Madiha Khattab, former Dean, Faculty of Medicine, Cairo University
food insecurity, especially for the Nile Delta region with resultant population migratory movements. The establishment of early warning systems can enable the government and civil society in planning for appropriate
coping strategies.
Priorities include establishing a multi-stakeholder coordination mechanism through the creation of an authority affiliated to the cabinet of ministries to coordinate between different entities, which could be responsible
for the promotion of best practices and lessons learned. Moreover, the development of a national mechanism
that permits creative and innovative ideas derived from staff to be piloted within each institution (especially
governmental entities); developing a national sustainable development strategy with clear roles and responsibilities to ensure the balance between the social, economic, and environmental aspects; integrating environmental aspects in educational curriculum at the theoretical levels and follow up with pilot projects to ensure
application of theoretical concepts; strengthen the role of the media, NGOs, and civil society protecting the environment and promoting best practices; and developing sustainability criteria for all environmental projects
to ensure the continuation of the project after the end of the available either national or international funds.
Coastal Zones
Climate change will also have an adverse impact on coastal zone management in Egypt. The most important
impact of sea level rise is on the Nile Delta region and could involve inundation of about 10-12% of the northern low land of the Delta. This will affect important economic and urban areas such as parts of the cities of
Alexandria, Damietta and Port Said. The main challenges include excessive salination of more than half of Nile
Delta, which will cause displacement and immigration of more than 5 million people, increasing unemployment, and extending various types of diseases.
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The Nile Delta coastal area is habitat-rich and provides 65% of Egypt’s total fish production. This area will be subjected to a number of impacts due to climate change, with temperature rise and saline water penetration caused
by sea level rise converting current lakes into shallow saline lagoons and bays. The Red Sea coral reefs, arguably
among the most spectacular in the world, boast a high level of biodiversity and serve as a habitat for almost a
quarter of all marine life and are extremely sensitive to long-term climate change. There are over 1,000 named
species, of which 270 are not known in other parts of Egypt and 39 are unique to Egypt. Corals will be severely
affected by sea surface temperatures, which could lose the algae providing them with nutrients and colors.
Egypt needs to set its national priorities in the environment and climate change-related sectors together with
identifying cross-cutting priorities. Those priorities, if handled properly, will provide an enabling policy environment to secure the use of the available natural resources. There are number of general national priorities
needed to tackle the adverse impact of climate change at the individual, institutional and systemic levels. At
the individual level: Enhancing the national capacity of different line ministries and civil society to deal with
climate change. At the institutional level: full operationalization of the new institutional structure of the Climate Change Central Department in the Ministry of State for Environmental Affairs as being the focal point for
the UNFCCC. At the systemic level: establishing the Supreme Council for Climate Change, headed by the prime
minister and membership of the relevant ministers. The Minister of State for Environmental Affairs will be
the coordinator of the Council. This would include a Science & Technology Committee that includes Egyptian
scientists in the field of climate change and the related areas.
Mainstreaming Climate Change
For mainstreaming climate change in all sectors’ plans, there is a need to develop a national strategy for adaptation to climate change and national strategy for low-carbon economy through a multi-stakeholders approach
with national and international representation. There is a current opportunity to include a section on climate
change in the upcoming national sustainable development strategy that is expected to be produced by 2011.
Prime Ministerial Decree 1537/2009 concerns the formation of the National Committee for Crisis/Disaster
Management and Disaster Risk Reduction, which will assume the roles and responsibilities of the National
Platform for Disaster Risk Reduction (DRR) as set out in the United Nations International Strategy for Disaster
Reduction (UNISDR) and the priorities of Hyogo Framework for Action.
According to this framework, it is also important to promote the integration of risk reduction associated with
existing climate variability and future climate change into strategies for the reduction of disaster risk and adaptation to climate change. This would be part of the responsibilities of the National Platform for DRR, in order
to enhance the national coordination mechanism and avoid duplication of efforts, and taking into account the
need to address climate change concerns within disaster risk reduction strategies as part of the Hyogo Framework for Action: 2005-15. The responsibility for the preparation of national strategies and related scenarios
and plans for climate change adaptation to the National Platform for DRR has been delegated to the Information and Decision Support Center (IDSC) of the Cabinet.
For health related issues, identification of the probable scenarios drawn from prospective studies of the health
implications of climate change and the resulting health hazards will necessarily guide the type of resources
and programs that need to be mobilized to cope with them. Basic to success of the response to the health impact of climate change is equity of access to health services, emergency services that are operational, efficient
public health measures and well-designed preventive programs, as well as the capacity for rapid mobilization
of resources when the need arises.
For coastal zone management and as part of the adaptation strategy, there is a crucial need to build systematic
observation systems, databases, capacities, and awareness. Strong enforcement is needed for developing strategic and environmental impact assessments before implementation of any project, including public hearings,
especially for the vulnerable groups of society.
Energy
Energy needs and energy consumption will continue to grow and in just five years demand will be almost
150% of production. The only ways to close this gap over the next ten years is to increase oil imports or find
new alternative sources of energy. Additionally, there is a subsidy challenge. As part of government policy
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to maintain social justice especially for the poor, the government has kept a subsidy on energy prices. In
the 2007/08 budget, the energy subsidy bill was almost twice the government expenditures on defense and
national security and four times that on health and education. This is definitely a threat to economic growth
and energy security. Finally, there is the problem of energy efficiency. There is a lack of sustainable impact or
market transformation in energy efficiency technologies. This is related to the government subsidy, which has
strongly discouraged end users to invest in energy efficiency. Institutional and systemic challenges in that regard are coupled. With regard the former, the institutional and legislative environment to push towards higher
efficiency is weak. As for the latter, there is little awareness and information among the energy users about
energy efficiency applications.
Renewable Energy
There is a massive untapped potential and very little commercialization of renewable energy installed capacity. This includes low expansion of solar energy application (solar thermal or solar photovoltaic). There is little
promotion of biomass technologies in Egypt for their cost effectiveness in the long term, and no effort to commercialize the technology has been made. However, a conservative estimate is that about 20% of the biomass
resources can be easily collected and used for energy production in the short term. This could generate about
4 million ton/year. There is also a weak financial management structure for renewable energy technologies,
although there are financial resources available in the banking sector. This starts with the lack of experience
in the banking sector on evaluating a renewable energy proposal, and the high cost of the system components
that are not exempted from tariffs until they reach the stage where there is no after-system maintenance.
These challenges prevent end users from investing in renewable energy technology. Lack of awareness remains a vital challenge. This includes the lack of information on the benefits of renewable energy to the different categories of society and the appropriate and suitable application for each category — even at the level of
households in rural areas, where the use of biogas units would be appropriate.
Measures for Energy
In the energy sector, there are number of policy measures that need to be adopted at the national level, followed by other sectoral measures within each sector. These include: i) restructuring energy pricing through
the gradual removal of the subsidy while still protecting poor and marginalized groups; ii) rationalizing energy
consumption in the demand sector; iii) increasing the renewable energy sources such as wind, solar, and bioenergy for future use; iv) establishing an effective institutional framework that can serve multi-agency plans
and targets; and v) developing an implementation plan linking energy resources to economic development,
with macro and micro economic sector-specific indictors that are directly linked to GDP growth.
In the renewable energy sector, a number of measures need to be adopted by the Ministry of Electricity and
Energy in coordination and agreement with other related ministries such Environment, Investment, Finance.
These include: i) expanding the use of solar photovoltaic technologies that are suitable for use in rural and
remote areas for electricity generation and groundwater pumping; ii) introducing competitive bids to allow
private tenders to supply electricity to the grid from RE sources and enable long-term power purchase agreements; iii) the creation of a feed-in-tariff as well as the creation of a renewable energy fund to offset the difference between the RE cost and market prices; iv) developing awareness campaigns based on market surveys to
target the appropriate segments, especially targeting schools and universities and the private sector; v) taxes
and customs on imported components of RE systems should be removed or greatly reduced; and vi) greater
investments in the research and development of RE applications are necessary.
III.6 Water, Sanitation and Solid Waste Management
In the past four years, and as a commitment from the GOE to fulfill its obligations stated in the President’s
Electoral Program in 2005, substantial effort and resources have been directed to improving access, reliability,
and quality in water services as well as initiating a structured plan to prioritize investment in public sewage
collection and treatment systems, both in urban and in rural areas. While much of the progress made in these
two basic infrastructure service areas over the past few years can be attributed to consistent mobilization of
public funds, progress can also be attributed to complementary policy measures that are both managerial as
well as institutional in nature.
The main policy change in water and sanitation projects management, instituted in 2006, relates to the allocation of an important annual investment budget to launch new projects in the sector and to finance the
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decision to give priority to the completion of projects that have already been initiated. This approach relies on
the results-oriented objective of making the service available to citizens and not on the amount of expenditure
or number of projects under construction as relevant performance indicators. In addition, this approach emphasizes transparency and the willingness of the government to commit to completing a specified number of
projects each year. The commitment to produce a declared quantity of drinking water output (and/or collection and treatment capacity in the case of sanitation services) reduces the perception by the beneficiaries that
public expenditures allocated to these projects are diverted to cover local government’s political expenditures.
Institutional policy directions adopted can be grouped under three categories: i) involving the People’s Assembly from the very early stages in setting expenditure priorities and in realizing the tradeoffs involved in the
attribution of resources allocated to water and sanitation projects; ii) strengthening the role of the National
Holding Company for Potable Water and Sanitary Drainage and its affiliated subsidiaries, the public sector
water, and wastewater utilities operating at governorate level in monitoring the, coverage, and other aspects
of service provision for both water supply and sanitation services; and iii) initiating Egypt’s first public-private
partnerships in the establishment of plants for both drinking water supply schemes and sanitation collection
and treatment systems in new communities and in the newly urbanized Greater Cairo region.
Water and Sanitation Services: Coverage, Capacity, and Investment Cost
Over the past five years, the GOE completed 1,669 water and sanitary services projects that cost LE 50 billion.
These projects resulted in almost 100% coverage of the population by drinking water supply services to at
least less than 15 minutes walking distance from the home and solved quality and reliability issues. Reporting
separately on each service, the GOE established 1,225 water plant and network projects that increased the
amount of drinking water produced by 8 million m3/day; reaching 27.1 m3/day by the end of 2009. Seventyseven water production and network projects are currently under construction and are expected to be completed by the end of 2010, adding another three million m3/day, reaching a total added production over five
years of around 40% of the amount produced in 2005. The total cost of these projects exceeds LE 21 billion.
Despite priority being made for water projects, the government completed 257 sanitary service projects that
added 2.5 million m3/day of capacity for collection and treatment of sewage and wastewater until the end of
2009. The cumulative cost of these projects is over LE15 billion. The bulk of the current budget is allocated to
sanitary service projects, where a total of 96 projects are expected to be completed in cities and in peri-urban
areas around cities, adding some 1.6 million m3/day of sanitary service capacity. The total capacity of sanitary
services will be 15.3 million m3/day, representing some 68% of the capacity currently needed (based on a
calculation relating the amount of water produced to the required capacity of a public sanitation collection
network and treatment systems.).
Typically, sanitary service coverage in rural areas receives more attention and is constantly highlighted both for
political and human development reasons, but sanitary services in urban centers need major improvement in
both coverage and quality, and have received greater attention, moving from 75% coverage of municipalities (230
towns and cities in total) by public sanitary services in 2006 to 88% covered currently, with a 100% coverage
expected by the completion of ongoing projects. Some 25 towns and cities in 10 governorates will receive public
sanitary services for the first time by the end of 2010. As of 2009, the total sanitary services capacity needed is 21
million m3/day and current sanitary services capacity is 13.7 million m3/day, representing 65% of required capacity. This ratio will increase to 68% after the completion of water and sanitation projects by June 2010.
The policy governing expansion of coverage or rural areas by water supply and sanitation services continues
to give priority to expansion of coverage by potable water supply and sanitation services as an expansion from
urban systems to service nearby rural areas.95A major challenge to maintaining the quality of the drinking water supply systems is the degradation of the quality of raw water at the source which caused by the increased
load of organic and chemical pollution of the country’s water bodies which comes from continued direct discharge into waterways of untreated sewage and industrial wastes, in addition to pollution from excessive use
of chemical fertilizers and pesticides. The fact that initial efforts for achieving full coverage of drinking water
supply networks to rural areas did not include facilities to safely dispose of the consequent increase in wastewater flows is at the root of the present rural sanitation crisis as the existing household toilets and traditional
vaults or bayaras cannot cope with the increased wastewater outputs. Given that programs for improved rural
sanitation facilities rely more on on-site solutions and safe disposal of sewage and wastewater rather than on
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large-scale public networks and treatment plants, it must be acknowledged that such community based on-site
programs must run parallel to and in a complementary manner to the important mobilization for provision
of large-scale public sanitation services. The integrated rural sanitation framework adopted by the WB supported integrated rural sanitation project (see above) links, for the first time in Egypt, access to investment in
rural sanitation services to quantifiable water quality (and health) improvements in a given hydrologic basin.
With the objective of reaching 100% coverage of houses with improved sanitation services, the project aims at
discontinuation of the practice of discharging untreated domestic wastewaters into waterways and providing
cost effective measures for solid waste management.
Water Quality Assurance
While major investments have been made to ensure sufficient quantities and access of over 99% of the population to acceptable sources of water, emphasis has been put simultaneously on strengthening the regulatory
infrastructure that guarantees the quality of water. This objective is addressed by a network of agencies that
ensure that water quality is regularly monitored and that sufficient oversight is exercised from the responsible
regulatory entities at various stages of potable water production.
The main entities that are required by law to monitor the quality of water are the Ministry of Health for drinking water, the Ministry of Water Resources and Irrigation for untreated water at the source, and the Holding
Company for Potable Water and Sanitary Drainage and its affiliated companies, operating under the auspices
of the Ministry of Housing, which controls the quality of potable water produced by the water treatment systems. In addition, the Egyptian Water and Waste Water Regulatory Authority (EWRA), established in 2005,
represents the primary regulatory and consumer protection agency in this area, coordinating the respective
roles of the various competent technical quality control entities.
The Ministry of Water Resources and Irrigation is responsible for monitoring the quality of the Nile waters in
300 centers for monitoring at the source. In addition, the Ministry of Water Resources and Irrigation has 230
centers that monitor the quality of underground water used in supplying some areas with drinking water. The
Ministry of Health’s responsibility starts with the drafting and setting of the standards on the quality of water
suitable for human consumption, and the critical values of minerals, organic substances, physical characteristics (color, odor), heavy metals, and so forth. These standards are then incorporated — similar to all foodrelated standards — into the set of Egyptian standards that bind all food-producing public or private entities.
These standards are then enforced through inspection of the water produced by various water companies.
Samples are collected from production and distribution sites and analyzed in Ministry of Health laboratories.
Some 7,500 samples are collected and inspected weekly from companies and networks all over the country.
The Holding Company for Potable Water and Sanitary Drainage, as the overarching agency under which (almost) all water companies operate, conducts its own internal inspection of the quality of water through 19
laboratories situated in various governorates as well as 850 on-site laboratories in water treatment plants and
165 mobile laboratories. Results and methods are calibrated by reliance on one calibration laboratory in the
Holding Company. This exercise produces some 1.4 million samples drawn and analyzed and necessary measures are taken in cases of lack of conformity with relevant standards.
The Egyptian Water and Waste Water Regulatory Authority’s primary role is to set the process standards that
guarantee the safety of drinking water. To conduct this role, EWRA collects its own random samples from production and distribution locations. It conducts on-site inspection of water company laboratories to enhance the
efficiency and accuracy of inspection thus reducing both errors as well as unnecessary tests that increase the
cost of inspection.
Rural Sanitation: A Remaining Challenge
Taking into consideration the fact that the population almost doubled from 42 million in 1981 to 76 million
in 2009, the quantity of drinking water produced increased four-fold from 5.8 million m3/day to 27.4 million
m3/day. The increase in sanitary services capacity is even more pronounced for the same period, from one
million m3/day to over 13.7 million m3/day. These numbers do not only indicate a higher per capita consumption of properly produced drinking water, but they also indicate a higher share of waste water being properly
channeled and treated (less than 20% in 1981 to 65–68% currently), with all the expected repercussions
on the environment and water sources, especially in rural areas. However, it should be noted that per capita
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consumption of potable water is extremely high in Egypt, with an estimate of 30.1 m3 per day for 84 million
people in 2010. This translates to 356 lcd of which 40–60 lcd may be accounted for as losses. By 2050, drinking
water abstraction at this rate would amount to 20b m3/year, almost 40% of the inflow of Nile waters to Egypt.
In addition to the system of water quality management at the national level, recent problems in 414 villages
stemmed from high concentrations of iron and manganese because of dependence on underground water
sources. These villages will be connected to surface water sources and/or iron and manganese removal plants
will be constructed. The pledge made in the Presidential Program to increase the number of villages covered
by sanitary services from 4% in 2005 to 11% in 2011 has been achieved, and 13.6% of villages will have access
to sanitary services by June 2010. A major challenge is to expand coverage of rural sanitation to reach 100%
coverage of villages. To finance full rural coverage, it is estimated that a total of LE 60 billion will be needed
and it is expected that it will require three five-year plans to complete the task. To create a balance between
this time frame, making available the necessary resources, and protecting the environment, soil, and water
sources, the government has had to prioritize villages that will be serviced.
Priority Criteria for Villages in Sanitary Services
Technical experts from various ministries have produced clear and transparent criteria for choosing the first
villages to qualify for the provision of sanitary services as resources become available. These are ranked as i)
villages close to water streams; ii) those with high levels of ground water that can be contaminated with sanitary effluents; and iii) population size (in descending order).
By applying these criteria, it was found that 508 villages qualify under rank 1, and that an additional 600 villages qualify under rank 2. In addition, 316 villages from the remaining lot have projects that are currently underway and therefore will take priority in completion irrespective of the population size indicator. This means
that, de facto, there is a prioritization list of 1,424 villages to be serviced.
Simultaneously, priority will be given to any required expansions in the capacity of existing plants to accommodate added flows of waste water from two sources: i) new villages connected to the national network of
waste water collection and treatment as a result of projects implemented in the past few years; and ii) spatial
expansion of cities and villages that are already serviced by existing plants but will have to be strengthened
to absorb added waste water flows. Subject to the availability of resources, progress will be made towards
expanding service to the remaining villages according to the priority order mentioned above.
Overall Medium-Term Outlook
While access to public finance remains an important component of any medium-term outlook for completing
full coverage of rural sanitary services, it is necessary to address other structural and policy issues that stretch
beyond the availability of resources for public projects in this sector and relate more to the overall framework
of service provision for both water and sanitary services. These issues include:
•
Expanding the reliance on public-private partnerships in water and waste water plants as a mechanism
for reducing the demand on the government budget, whenever feasible, and laying down the regulatory
foundations necessary for ensuring the efficiency of these partnerships;
•
Devising a national plan that incorporates both the necessary levels of service provision in different
regions as well as the amount of subsidy targeted for some regions and/or groups of consumers thus
increasing economic efficiency of these services’ provision without compromising the social dimension
of universal access;
•
Mobilizing the role of civil society in various facets of design and implementation of water and sanitary
services, including project selection, implementation, and monitoring of service aspects;
•
Ensuring the protection of huge investments made in this sector in the past few years through emphasizing the importance of making funds available for operation and maintenance, and ways to make
these resources available without continued reliance on the government budget;
•
Expanding the perspective by which access to sanitary services is evaluated to include, in addition to
citizens’ access to the service, all related environmental, health and general developmental impacts
linked to this sector and to synchronize all policies in agriculture, industry, as well as sanitary service
provision to ensure efficient utilization of the whole country’s natural resources;
•
Emphasizing the importance of society’s participation in setting capital expenditure and the subsidy
burden required for the provision of some services in the wider context of subsidy allocation across
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Box 19: Small is Beautiful for Egypt’s Solid Waste Management
Studies and surveys provide evidence on the informal recycling sector’s ability to generate employment in a manner that has
yet been unmatched by any other sector – seven jobs for every ton of materials discarded – and thus provides a tremendous employment opportunity, particularly for the unskilled and semi-skilled, and especially for the illiterate. Investments in that recycling
sector in the small and medium enterprise economy have surpassed US$50 million and constitute a growing dynamic economic
growth sector. South-South cooperation between Egypt and countries in Africa have been thriving through donors, as well as on
their own, with Cairo acting as the incubator of recycling groups which have begun mushrooming all over sub-Saharan Africa.
Waste problems can have a plethora of solutions – there is no blueprint that can be applied to all contexts. The proposed
action would be to select a solution which is most appropriate for the following Egyptian realities: High unemployment among
youths; indicators of persistent high poverty levels; low levels of literacy and high drop-out rates among school students; low
technical skills level among labor pool; high imports of materials for the recycling industry; high degree of failure of centralized
waste systems; poor ability and willingness to pay for waste service by residents; little technical know-how in managing complex
waste equipment; poor ability to monitor international operators and international contracts; and low level of accountability and
professionalism among official staff charged with waste management in municipalities.
The system of solid waste management (SWM) is designed in a piecemeal manner neglecting holistic aspects necessary to
produce a coherent, functional operational system. In order for solutions to have long lasting effects and be successful they need
to spring from stakeholder assessments and consultations so as to reflect interests and capabilities (win-win solutions). A value
chain approach to waste management focusing on composting and recycling can preserve scarce resources and reduce green
house gases. Experience with multinational companies for garbage collection in Cairo and Alexandria have not been successful. Keeping service provider entities small and labor intensive as well as closer to the waste generation source reduces cost of system
and reduces the burden of fees on residents. It also reduces the carbon footprint of the overall system.
Cairo’s experience with large SWM centralized systems – be they governmental or multinational – has failed. Experience
shows that the following aspects would probably lead to successful systems for large cities as well as small towns:
• A system based on small to medium entities which operate locally and which are licensed officially by the government to
provide the service;
• A system that provides unemployed youths with jobs and increased sustainable economic opportunities;
• A system that enables youths to utilize new and appropriate technology that is inexpensive, easy to maintain, financed by
local banks and/or the Social Fund for Development, ongoing technical assistance and business support, monitoring on a small,
community based basis by neighborhood groups;
• A system that upgrades health and safety standards by requiring protective gear, sanitary handling methods, and so on. Source: Laila Iskander, CID Consulting
•
•
•
•
•
uses, sectors, regions, and particular social groups;
Encouraging the adoption of public-private financing models for small projects, especially in rural areas;
Strengthen the capability of the Ministries of Agriculture, Health, Environment, and Housing to conduct
integrated socio-economic-environmental studies that:
Adopt an elaborate social and developmental cost-benefit analysis for various projects and policy directions;
Account explicitly for the short- and long-term impact of policies on the long term strategic goal of
environment conservation and protection, as well as efficiency of water and other natural resources
utilization;
Enact the necessary policy and enforcement mechanisms that produce rationalized investments, and
cost and return distribution among the government agencies involved as well as between producers
and consumers of these services in both public and private domains.
Solid Waste Management (SWM)
Solid waste is a large sector causing pollution in Egypt. In a study by the SFD in 2000, it was revealed that
SWM constitutes a first priority for 19 governorates.96 Rural areas have no strategy for waste management,
and solid waste is thrown in the drainage and water canals or left in the open. Solid waste in urban areas is
handled by traditional and mechanized means at both the initial collecting phase and in the final processing
phase (through composting, recycling, landfills or incineration). This system has been unable to fully cope with
population growth and increased urbanization. The services of foreign SWM companies has been controversial but from the perspective of the consumer, the problem remains of street bins raided by scavengers who
select what is useful and scatter litter around the bin which attracts stray animals and rats. Public health needs
to be protected but only poverty alleviation schemes for scavengers will eliminate this phenomenon.
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Figure III.7a: Institutional Landscape of Public Land Management
g
g
g
Ministry of
Agriculture
Ministry of
Industry
Ministry of
Petroleum
Ministry of
Defense
Ministry of
Interior
g
New Urban
Communities
Authority
(NUCA).
General
Authority for
Industrial
Development
(GAID)
n
Specialised
Co. for
Petroleum
and Natural
Gas
Several
Holdings Co.
g
Supreme Council
for Antiquities
(SCA)
Tourism
Development
Authority
(TDA)
g
Ministry of
Investment
g
g
West Delta and
South Valley
Development
Holding Co.
Ministry of
Tourism
Main entities with power to dispose of public land
g
Ministry of
Environment
g
g
Ministry of
Housing
g g
g
Ministry of
Irrigation
g
g
Ministry of
Culture
g
n
State
Specailized
Authorities
n Suez Canal
Authority
n Railroad
Authority, etc
n General Authority for
Reconstruction on Projects and
Agricultural Development (GARPAD)
General Authority for Fish Wealth (GAFW)
n Agrarian Reform Authoriity (ARA)
26 Governorates (State Asset Protection Agency)
Outside Zimam: Control by Central government
(along sectrol lines)
Inside the Ziman: Contol by local Government
(along geographic lines).
Source: Ministry of Housing
Challenges associated with the SWM sector are mainly related to systemic, institutional, and individual constraints within the government’s overall system. The administrative structure in charge of waste management is complex, fragmented, and dispersed in numerous government agencies. Government staff members
in charge of solid waste management are frequently not qualified to undertake their jobs. Setting fee-for-waste
services has not been based on sound financial models and the system has not exploited the potential impact
of civic educational programs ((use of plastic bags, or sorting of “wet” organic garbage at source). Government
investments in composting plans, for example, have proved to be financially not viable, as mixed waste does
not lead to the production of marketable compost and raises operational costs of composting plants. If organic
waste were source segregated at negligible cost, composting plants would be rendered more financially viable. There is a market for quality compost from the organic fraction of waste. The same is true for other waste such
as paper, metal and plastic.
The formal recycling industry is therefore not accessing valuable resources available in waste streams and
thus has to import costly inputs. A major paradigm shift has to occur in order to capture industry inputs from
the materials emanating from municipal sources generating the waste. The Ministry of Local Government —
which is responsible for financing SWM at the national level, together with local administrative and planning
units, needs to raise finance towards upgraded capacity and potential cost recovery, and to provide incentives
to private industry to reuse waste (in paper, metals and plastics, for example). Creating an informal commodities market for certain types of waste has also been suggested, to increase the demand value at the level of the
governorates. Providing low-interest loans towards developing better public competencies, such as in a successful scheme in Qena governorate, using the informal sector. This sector needs to be formalized, upgraded
and drawn into new, formal structures for SWM.
III.7 Urban Planning, Informal Settlements and Transport
Land in Egypt is a critical resource for economic growth and development. Yet, access to public land — the
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Box 20: Addressing the Problem of Land Mines in Egypt’s Western Desert
Egypt has the second highest concentration of land mines in the world, estimated at 105 million mines planted during World
War II, representing 21% of total planted land mines in the world. These mines are spread over an area of 248,000 hectares,
which represent 22% of Egypt’s land area. The region extends all the way from the governorate of Matrouh to the governorate
of Alexandria. The GOE in 2000 created a National Committee for Overseeing the Removal of Mines and the Development of the
Northwestern Shoreline. The committee includes a number of relevant ministries, authorities and governorates and has prepared
a development plan with investments estimated at LE60 billion ($10.6 billion) including projects for developing the infrastructure
for developing agriculture, industry, environmental tourism and housing.
The first stage of the plan, which ended in 2009, focused on creating a technical secretariat to oversee implementation. To
date, Egypt’s armed forces have cleared about 3 million mines on a surface of 38.7 thousand hectares of the Western Desert at
a cost of $27 million borne by the budget. In November 2006, the Ministry of International Cooperation and the United Nations
Development Program agreed on a project to clear land mines and develop the regions that have been impacted. The Secretariat
has also invited the five largest international firms with expertise and specialization in the production of mine detectors to work
on identifying what the most appropriate detectors for Egypt’s soil and climate would be.
Source: Ministry of International Cooperation, Egypt, 2010.
large majority of land available for development in Egypt — for investment purposes represents today one of
the most critical development challenges facing the government. Confronted with the presence of the vast majority of the population on a small portion of its national territory (about 5.5%), while the remainder is desert
land that is publicly owned and for the most part undeveloped, Egypt has tried to enable better exploitation of
this unutilized land and expand the settled area through relying on a sectoral development model. Under this
approach, independent sectoral authorities affiliated with the ministries of agriculture, tourism, industry, and
housing were each assigned control over large areas of public land outside the so-called zimam (the boundary
of historically surveyed agricultural lands). This has created a set of segmented and isolated land markets that
are more supply-driven.
Accordingly, the problem is not of limited supply of public land for investment. Instead, it is the scarcity of suitably located, properly serviced and adequately priced land that is adapted to the needs of development. The
reliance on the sectoral development model has resulted in a complex and fragmented institutional landscape
for public land management, characterized by an unusual split between multiple central government authorities controlling public land outside of the zimam, divided along sectoral lines, and local governments controlling
public land within the zimam, divided along geographic lines. This situation is the result of the accumulation
of layers of legislation over the past four decades, with more than 40 directly and indirectly related laws and
decrees that are not harmonized and are often conflicting. This situation reflects the absence of a coherent
land policy framework and a failure to revisit past policies in light of today’s challenges and competitiveness
demands. The problem is further compounded by complex and arbitrary procedures related to public land allocation, pricing, and development controls together with the lack of a coherent public land information system.
Thus, there is a need for a clear and comprehensive public land policy that reasserts the role of the market in
public land allocation and then puts in place a rational framework of planning and incentives that reflect current needs and priorities. Such a policy framework would balance the government’s objectives of efficiency,
equity, and environmental sustainability, and emphasize a market-based allocation of public land assets except
for clearly defined policy objectives such as affordable housing and environmental conservation, as well as a
demand-driven approach to land use planning. Finally, given that the fundamental role of the public sector is to
create the enabling environment to attract private investment/interest in developing the land and real estate
markets, the improvement of public land asset management will need to take place within an integrated and
comprehensive effort to build the market regulatory foundations that are needed for the land market to function efficiently. This will also require addressing such challenges as reforming the dysfunctional systems for
land and property registration and taxation.
Egypt 2050: The Need for a National Urban Development Plan
Egypt’s continued high rate of natural population increase, if not reduced could result in a population of 140
million inhabitants by 2050. This challenge calls for the need to develop a new vision for Egypt that mainly
aims to:
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•
•
•
•
•
Achieve balanced urban development by focusing on the development of small and medium-sized cities, especially in Upper Egypt, to eradicate poverty and improve the socio-economic status within those
deprived areas;
Redefine the roles of existing poles such as Cairo, Alexandria, Port Said and others in an overall policy
framework that focuses on building on the regional competitiveness potentials of each pole and how it
can be integrated within the overall new urban development policy;
Increase the inhabited area from 5.5% to 15% of the total area during the next four decades through
establishing new urban centers that are well connected with efficient road networks and national public
transportation systems. Each center would work as a catalyst for the development of its surroundings
and attracting a defined number of the increasing population with a clear economic basis and activities;
Deal with the potential link between climate change (including SLR, water scarcity and desertification)
and human mobility (including displacement) in Egypt. Given its potential magnitude, environmentallyinduced migration could impact adversely upon various human development issues (for example, rapid
urbanization and associated environmental health issues) and undermine the important progress outlined in this report;
Support the decentralization of management, planning and implementation.
The Supreme Council of Urban Planning and Development headed by the prime minister, and created by Building Law 119/2008, has been commissioned to take over this crucial task that would be used for planning the
coming five-year development plans, especially with the presence of the Ministers of Economic Development,
Investment, Housing and Local Development acting as key members, together with several public figures and
representatives of civil society and private sectors.
Issues in the Transport Sector
In the context of urban planning for the future, it will be important to establish a coherent strategy for the
transport sector. Given Egypt’s relatively high density of population in metropolitan areas such as Greater Cairo
and Alexandria, it will be essential to introduce or extend the metro system. Existing plans for Cairo project a
third metro line that will ensure 17% of the city’s public transport demand. The first phase of the third line is
currently under construction between Attaba and Abbassiya (4.2 kilometers and five stations). The project’s
second phase will link Abbassiya and Heliopolis (7.12 kilometers and four stations). The project will relieve the
congestion caused by a total of 20 million daily motorized trips in the city. The expected cost of the project is
Euro 498 million.
Egypt’s transport sector has seen other key developments over the past two decades, such as expanding maritime ports and airports, as well as an extension of road network, including bridges, metropolitan ring roads
and highways. There has been a more recent concentration on developing the railway system and river transport. However, sustainable social and economic development requires a comprehensive transport strategy
and action plan that is in close harmony with the strategy for urban planning and new settlements. A sustainable transport strategy must take into account all related sectors such as tourism, including the environment
and air pollution, energy conservation, traffic congestion, and passenger safety.
The GOE is keen to prioritize public (mass) means of transport, in order to reduce the use of private vehicles
and the related congestion. Currently, and in spite of considerable development in the road network, congestion has been on the rise. The third underground metro line in Greater Cairo is expected to provide some relief
from road congestion in the city, and a fourth line is being studied. Also under study is the introduction of a
rapid tramway system to link dense urban communities, especially in the Greater Cairo region. A complete
rehabilitation of the railway system, including its extension to new cities such as Sadat and Borg el Arab is also
underway.
Good transport is linked to tourism, a key sector. Requirements must take account of road infrastructure, including main highways and secondary roads into cities, tourism sites, coastline resorts and other tourist destinations. Technical specifications for quality roads as well as their maintenance is necessary, together with
appropriate measures for road security, cleanliness and environmental protection. Transport plans must also
include expanded facilities for a variety of means of transport from the capital to tourist sites or between tourist sites so as to achieve a smoother flow of traffic.
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With regard to pollution abatement, a number of programs have been put in place to reduce vehicle emissions, including introducing natural gas to fuel public mass transport, improving fuel specifications, testing for
vehicle emissions, replacing aged vehicles, notably the fleet of ancient taxis with new ones, using appropriate
incentives and tariff exemptions.
The challenges now facing the transport sector are:
•
Inadequate policies or poorly integrated plans for the achievement of a sustainable transport sector,
with weaknesses in the institutional and organizational frameworks (with a multiplicity of ministries
and authorities responsible for transport, with little cohesion between them);
•
Implementation mechanisms fall short as an outcome of financial limitations (insufficient budgets).
Further, transport projects require large investments while financial returns are not attractive to the
private sector;
•
Inadquate technical knowhow and limited capacity-building and awareness programs;
•
Absence of data and information necessary for planning programs in the sector (especially information
related to development projects to be served by the transport sector. n
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End Notes
ENDNOTES
1. Please refer to the full list of identified Challenges in Part One of this Report.
2. According to World Bank classification, there are a total of 97 MICs of which 56 are considered as Low MICs and 41 as High
MICs. A country is considered as a Low MIC if the GNI per capita is between US$996 and US$3,945. It is considered to be a
High MIC if the GNI per capita is between US$3,946 and US$12,195. Egypt is one of the 56 Low MICs, in 2009, with a GNP per
capita of US$2,070. This is according to the World Bank’s Atlas method, which ranks Egypt as 147 out of 213 countries, or 30
out of the 56 Low MICs.
3. Five main criteria are used to measure and monitor a developing country’s performance in achieving aid effectiveness: ownership, alignment, harmonization, managing for results and mutual accountability. (For further details, see section 3 “Strategic
Issues Facing Aid Effectiveness in Egypt”)
4. See Section 7 and Table 3 (Strategic Objectives Matrix) in this Introduction for details on the Eight Objectives
5. United Nations Development Assistance Framework. (2006). United Nations Development Assistance Framework: 2007-2011
Egypt. United Nations Egypt. The UNDAF report supports projects and programs that will help Egyptians improve their quality of life and individual welfare through better social services, as well as the state and institutions in their improved duties in
pursing the fulfillment of the MDGs.
6. The Development Partners Group (DPG) is currently composed of twelve multilateral organizations (African Development Bank,
EU, FAO, IFAD, ILO, UNDP, UNFPA, UNICEF, UNIDO, UNODC, WFP, World Bank), twenty seven bilateral organizations (Germany,
Argentina, Australia, Belgium, Brazil, Canada, Finland, France, French Development Agency, GTZ, India, Ireland, Italy, Japan,
Japan (JICA), KFW, Korea (KOICA), Mexico, Netherlands, Norway, Russia, Spain, Sweden, Switzerland, Turkey, UK, USAID), and
two foundations (Ford Foundation and Population Council). DPG meetings are often attended by government representatives.
7. The UN Development System is composed of the following twenty three resident UN agencies, funds, and programmes: FAO,
IFAD, ICAO, ILO, ITU, UNAIDS, OCHA, UNDP, UNESCO, UNFPA, UN-Habitat, UNHCR, UNIC, UNICEF, UNIDO, UNISDR, UNIFEM,
UNODC, UNOPS, UPU, UNV, WFP and WHO in addition to the IOM, the World Bank and the IFC. It also consists of the following
eight non-resident entities: the IAEA, OHCHR, UNCDF, UNCTAD, UNECA, UNESCWA, UNEP, and UNWTO. UNRWA and UNTSO
have liaison offices in Egypt.
8. For more details, refer to the Egypt Chapter of the 2008 OECD/DAC survey
9. Another important area where reform is needed is the need to minimize expenditure from aid flows on fixed costs, including
fees and salaries on donor experts.
10. Two examples can be given here. The first is agriculture which features as a potential engine of growth under Pillar I and appears again in Pillar II under poverty reduction for rural communities, and finally, under Pillar III in terms of the many threats
and risks the sector faces, especially water scarcity and climate change. A second example is the energy sector with renewable
energy appearing under Pillar I as a promising engine of growth. Energy pricing is again a key policy element under equity
and poverty reduction, given the importance of reducing energy subsidies that favor the rich and impede efficient targeting
of the deserving poor. Energy scarcity is also a serious threat to sustainable resources and is therefore listed under Pillar III.
11. United Nations Development Programme. (2006). How To Guide to MDG-Based National Development Plans. New York, NY,
USA, May 2006.
12. The report is a joint effort of the United Nations Development Programme and the Ministry of Economic Development.
13. The incidence of poverty is the percentage of the population that lives below the poverty line. The food poverty line for the
extremely poor is constructed by using the cost of a food bundle that is consistent with consumption of poor households and
reaches minimum calorie requirements. The MDG target of eradicating extreme poverty at US$1 has been adjusted to US$1.25
to allow for inflation. The national poverty line is constructed by augmenting the food poverty line with an allowance for
expenditure on essential non-food goods. In Egypt in 2008, a person who spent less than LE 1,648 per year is considered extremely poor and one that spent less than LE 2,223 is poor (lower poverty line). The upper poverty line is LE 2,801 per capita
per year, with a slightly higher allowance for non-food goods. The extreme poverty measure is very close to US$1.25 per day
(MDG 1), whereas the upper poverty measure is very close to US$2.5 per day. The equivalence is calculated at a purchasing
power parity (ppp) exchange rate of US$1=LE3.1 for 2008/2009.
14. 2008 Labor Force Sample Survey
15. Egypt Demographic and Health Survey, 2008
16. The World Health Organization estimate for MMR are to 130 per 100 thousand births, which is much higher than the national
figure. This estimate is obtained from adopting a model and both need to be validated.
17. National AIDS Program (2008) and Ministry of Health (2009)
18. Egypt’s 2005 Human Development Report has the theme of Choosing our Future:Towards a New Social Contract, and Egypt’s
2008 Human Development Report has the theme of Egypt’s Social Contract: The Role of Civil Society.
19. Ministry of Investment and UNDP. (2007). Business Solutions for Human Development
20. UNDP and Institute of National Planning. (2008). Egypt Human Development Report, 2008: Egypt’s Social Contract – The Role
of Civil Society. Cairo, Egypt.
21. The Ten Principles of the Global Compact are: Businesses should uphold: 1) Respect for the protection of internationally
proclaimed human rights; 2: Make sure that they are not complicit in human rights abuses; 3: Freedom of association and the
effective recognition of the right to collective bargaining; 4: The elimination of all forms of forced and compulsory labor; 5: The
effective abolition of child labor; 6: The elimination of discrimination in respect of employment and occupation; 7: A precautionary approach to environmental challenges; 8: Undertake initiatives to promote greater environmental responsibility; 9:
Encourage the development and diffusion of environmentally friendly technologies; and 10: Work against corruption in all its
forms, including extortion and bribery.
114
Situation Analysis: Key Development Challenges Facing Egypt
22. For an overview of Egypt’s participants: http://www.unglobalcompact.org/participants/search?commit=Search&keyword=
&country%5B%5D=53&joined_after=&joined_before=&business_type=all&sector_id=all&cop_status=all&organization_type_
id=&commit=Search (or www.unglobalcompact.org)
23. Egyptian National Competitiveness Council (2009). The 6th Egyptian Competitiveness Report. Beyond the Financial Crisis:
Competitiveness and Sustainable Development. Cairo, Egypt, June 2009.
24. ibid
25. The goals of economic development also include raising investment from 20% to 24% of GDP, and FDI inflows from $7 billion
to $14 billion in 2007.
26. The goals of social and human development also include increasing the female contribution to total labor force from 19% to
25%, establishing 415 thousand housing units for low-income groups, three thousand schools and 800 nursery classes.
27. For a more detailed version of the contribution on Macro Policy, see Amina Ghanem, Chapter 2 in The 7th Egyptian Competitiveness Report. Green Egypt: A Vision for Tomorrow. Cairo, Egypt, May 2010.
28. Data from Ministry of Investment
29. World Bank estimate
30. ECES (2010), Egypt’s Recent Macroeconomic Performance and Statistics, forthcoming.
31. ibid
32. For the purpose of this piece, “inclusive growth” is used interchangeably with other terms such as “broad-based growth”,
“shared growth” and “pro-poor growth.”
33. Al-Mashat, R. (2007). “Monetary Policy in Egypt: A Retrospective and Preparedness For Inflation Targeting,” ECES Working
Paper No. 134 (Cairo: Egyptian Center for Economic Studies).
34. Mishkin, F. (1999). “International Experience with Different Monetary Policy Regimes.” Journal of Monetary Economics 43:
579–605.
35. The World Bank, IFC and Palgrave MacMillan (2009). Doing Business 2010. Washington, D.C., USA.
36. Egyptian National Competitiveness Council (2010). The 7th Egyptian Competitiveness Report. Green Egypt: A Vision for Tomorrow. Cairo, Egypt, May 2010.
37. Egyptian Competitiveness Strategy: Draft White Paper. May 2010
38. Egyptian National Competitiveness Council (2010). The 7th Egyptian Competitiveness Report. Green Egypt: A Vision for Tomorrow. Cairo, Egypt, May 2010.
39. American Chamber of Commerce in Egypt (2007)
40. CAPMAS (2009)
41. MCIT (2007)
42. Egyptian National Competitiveness Council (2010) The 7th Egyptian Competitiveness Report. Green Egypt: A Vision for Tomorrow. Cairo, Egypt, May 2010.
43. Mobilizing Egyptian Micro and Small Enterprises in Egypt (2009-2013) from National Strategy for Micro and Small Enterprise
Development and Blueprint for Initiatives
44. SFD loans to NGOs vary between US$ 35,000 and US$ 900,000, and are made in local currency. Loans are disbursed in tranches
dependent on the rate of disbursement and loan portfolio quality. The SFD applies commercial interest rates to its loans to
NGOs, at 10.5%–10.8% recently. This covers an estimated average cost of funds for SFD (on soft loans from donors for example) of 2.9%, SFD overheads, and currency risk. However loan terms offered by SFD-funded NGOs vary according to each
NGO’s own policies and objectives. Interest rates are typically at or near market rates, with effective interest rates—annual
percentage rates (APR) might reach up to 27%
45. The financial assessment is based on three years of financial statements and includes indicators for profitability, liquidity,
solvency, risk, and growth. This assessment is reviewed annually to ensure that the financial position of participating banks
has not deteriorated.
46. MoMM and ILO (2009). Egypt Youth Employment National Action Plan. May
47. Selection of period was based on data availability (Calculated used data from the Labor Force Sample Survey (LFSS) issued by
CAPMAS, several issues).
48. El-Ehwany and El-Megharbel (2008)
49. Kamel Rizk (1999)
50. Central Agency for Public Mobilization and Statistics (2008)
51. De Gobbi and Nesporova (2005)
52. Kamel Rizk (2007)
53. World Bank (2007)
54. International Labour Organization (2004) and Auer et al. (2005)
55. The National Council for Wages was established in 2003, according to the Labor Law no. 12 for 2003 and the Prime Minister’s
Decree no. 983 for 2003. The main objectives include determining the minimum wages at the national level in light of the cost
of living and striking a balance wages and prices; as well as reviewing the minimum wages every three years. The Council
is headed by the Minister of Planning (currently Minister of State for Economic Development) and its members include the
Ministry of Local Development, Finance, Trade and Industry, Manpower and Migration, the National Council for Women, businessmen associations and members of the General Labor Union. Despite being established for more than five years, the Council
has not been active so far.
56. Helmy (2006)
57. Betcherman et al. (2004)
58. Ministry of Social Solidarity, Drafting Committee on Integrated Social Policies.
115
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n
PillarNotes
One: Sustainable and Inclusive Growth
End
59. Egypt is piloting its first CCT program in Ain–el-Sira, with 200 families enrolled. There is, as yet, no evaluation available for its
impact. The MOSS will scale-up the experiment into 40 villages in Upper Egypt in 2010, employing an experimental design to
test impact on poverty.
60. World Bank. (2009). Arab Republic of Egypt – Economic Growth, Inequality and Poverty: Social Mobility in Egypt between
2005 and 2008. Cairo, Egypt. 21 April 2009.
61. ibid
62. ibid
63. Deciles and quintiles are based on ranking population according to their per capita expenditure.
64. World Food Program (2008) and Egypt Demographic and Health Survey (2008).
65. Population Council/IDSC (2010), Survey of Young People in Egypt.
66. INP/UNDP (2010). Egypt Human Development Report 2010.
67. Population Council/IDSC (2010), Survey of Young People in Egypt.
68. United Nations Development Program and Institute of National Planning. (2010). Egypt Human Development Report, 2010:
Youth in Egypt: Building our Future. Cairo, Egypt.
69. UNICEF and Cairo University. (2010). Child Poverty and Disparities in Egypt: Building the Social Infrastructure for Egypt’s
Future
70. Information provided by the Italian Cooperation Office in Egypt
71. ibid
72. Summary of Report on Achievements of the Ministry of State for Family and Population (2008-2010). January 2010
73. Various recent studies on child poverty have confirmed that educational level of the mother is a strong determinant of the risk
that their children live in poverty.
74. World Bank (2004). The Millennium Development Goals for Health: Rising to the Challenge.
75. Egypt Demographic and Health Survey, 2008.
76. Food and Agriculture Organization (FA0), 2009
77. NHA, 2005
78. Madiha Khattab, Climate Change and Health, 2010
79. WHO (2006). Preventing Disease through Healthy Environments: Towards an estimation of the Environmental Burden of Disease.
80. NICHP report (2007)
81. NICHP report (2001)
82. Study commissioned by IOM
83. The Lancet, 2007
84. Disiree Labib, Ministry of Health
85. UNDP and INP (2004). Egypt Human Development Report: Choosing Decentralization for Good Governance. Cairo, Egypt
86. EHDR 2005
87. Abdel-Latif, Lobna, National Coordinator for Decentralization, Senior Advisor for the Minister of State for Local Development.
(2009). Presentation for the EU-Egypt Second Meeting of the Subcommittee Political Matters: Human Rights and Democracy
– International and Regional Issues. The National Program for Decentralization: Progress Report June 2009. 6 June 2009.
88. ibid
89. United Nations Development Program and Ministry of Economic Development (2005). Egypt Human Development Report
2005. Choosing our Future: Towards a New Social Contract.
90. According to an amendment of Law 43/1979, further amended in 1988
91. EHDR 2004, National Household Survey 2002, and Governorate of Suez Survey 2004.
92. NDP Policies Council (2004).
93. Kumar and Wigge (2010) now reveal that eviction of the histone variant H2A.Z from nucleosomes performs a central role in
plant thermosensory perception.
94. Since its passage, 27 PAs have been declared to date throughout Egypt: 1 - El Omayed Protectorate; 2 - Lake Burullus Protectorate; 3 - Ashtum El Gamil Protectorate ; 4 - Zaranik Protectorate; 5 - Alahrash Protectorate; 6 - Siwa Oasis Protectorate; 7 - The White Desert Protectorate; 8 - Wadi El Rayan Protectorate; 9 - Lake Qarun Protectorate; 10 - El Hassana Dome
Protectorate; 11 - Maadi Petrified Forest Protectorate; 12 - Wadi Digla Protectorate; 13 - Wadi Sannur Cave Protectorate; 14
- Taba Protectorate; 15 - Abu Galum Protectorate; 16 - St Katherine Protectorate; 17 - Nabq Protectorate; 18 - Ras Mohamed
Protectorate; 19 - Wadi El Asyuti Protectorate; 20 - The Nile River Islands Protectorate; 21 - Saluga-Ghazal Protectorate; 22 Wadi Gemal Protectorate; 23 – Gebel Elba Protectorate ;24 - Wadi El Alaqi Protectorate; 25 - Gilf Kebir National Park; 26 - The
Northern Red Sea Islands; 27 – Umm El-Dabadib Protectorate
95. World Bank Report No. 32230-EG (2005): “Arab Republic of Egypt — Operational Framework for Integrated Rural Sanitation
Delivery.
96. Data from the Egypt Human Development Report, 2005.
116
Situation Analysis: Key Development Challenges Facing Egypt
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