Three different regimes ruled Egypt in the last decade every one of them claimed that he had the magic stick to skip the dilemma of the suffered economy and frankly speaking all of them worked with the same polices, methods, and most of the time same players, anyone watching Egypt from Mars would be scratching his head!!
From 2004 to 2008 Egypt aggressively started economic reforms to attract foreign investment and increase growth rate that reached 7.2 %. Despite the relatively high levels of economic growth in recent years, living conditions for the average Egyptian remained poor and contributed to public discontent plus the iron-fisted of the dictator Hosni Mubarak for 30 years led to the Revolution erupted in January 2011, the Egyptian Government stepped back the economic reforms, drastically increasing social spending to heal public dissatisfaction, but political uncertainty caused economic growth to slow significantly, reducing the government's revenues. Tourism, manufacturing, and construction were among the hardest hit sectors of the Egyptian economy, The government drew down foreign exchange reserves by more than 50% in 2011 and 2012 to support the Egyptian pound and the Call of foreign financial assistance as the unsuccessful negotiations with the International Monetary Fund over a multi-billion dollar loan agreement which have dragged on more than 20 months that could have precipitate a budget crises in 2013 then after June 30 the gulf's governments injected the economy with Aids, pumping the Central bank reserves by almost 12 Billion dollars to support the new regime and help the government to secure the needs of strategic goods and energy for a decent time, But still a vitamin shot, not a cure. Gulf cash stabilizes Egypt for now.
The economy is not showing any signs of returning to normal, tourism revenue that presents 11% of the GDP, providing 19% of the foreign currency, and 12% of the employment fell off a cliff after the revolution affected by the turmoil in the political view, unemployment among young people is 25%, growth is anemic, and new investment has fallen off dramatically and a budget deficit in a very dangerous territory for mid-income country with an already huge debt burden, add to the list the wasteful subsidies given to energy and food products abusing more than 30% of the budget., All these obstacles led credit rating agencies to slash Egypt's rating, discouraging foreign direct investment.
Getting to the point, there is plenty of room for reform, we have the tools but we just need to make it profitable and when we get there we have to think how to make it "more profitable", What we need from the new leadership is to think with the mentality of an investor for the benefit of the people and has a good appetite for economic reforms.
"The government must provide the context to restart the engines of economic recovery; and policies should serve as growth accelerators by providing development gateways for the energetic young, the restive poor, and the pressured middle class." Mohamed A. El-Erian CEO of PIMCO said.
Improve the public revenues through the financial policies which attempt to rationalize the government expenditure and expand its revenues, then, transferring the public expenditure to the infrastructure and the productive sectors and from consumption to investment.
How?!! … Increasing revenues by traditional methods Taxes and Tariffs need to be reconsidered to deal with the circumstances of the revolution, it's not right to levy more taxes on businesses because Egypt is currently short on investments and in the same time collecting money from the rich and channeling it to the poor will solve the problems, but it's a short-term strategy!. So we need a new definition of Social justice that is creating a strong economy that provides jobs for the population and makes it easy for small enterprises to grow. It's about to do what's right instead of doing what's the right for the moment.
Attract capitals is the answer, create jobs, boost GDP, bring new high levels for growth, stabilize the currency, it's like a loop, but first we should start to change and improve the legal environment for business enterprises and foreign investors and make it healthy based on trust, worthy for the both sides, give the free hand to the man of authority to set agreements according to a flexible law. Then give more advantages in investing in service sectors that we need (Education-healthcare-infrastructure), Private sector'll clean this mess up and make the quality better.
Brain storming and adding more items to the list, a new report, conducted jointly by Ericsson and Chalmers University of technology in 33 countries, showing that doubling the broadband internet speed for an economy increases GDP by 0.3% which is 650 million dollar for Egypt,
prices decontrol for oil is a priority, we'll not decrease the consumption if we didn't match it to the international equivalent, the government shouldn't pay for your gas they should pay to make the traffic better, they should provide facilities not aids.
Rationalize the government spending is a way to get out the current economic crisis, millions are wasted every day due to the lack of wisdom in spending, data from state-run statistics agency CAPMAS showed that " Egypt's public sector comprised 2,846 enterprises and institutions have around 5.8 million people working in public administration and around 835,000 employees of public-owned companies and The average Egyptian public sector worker is paid LE657 ($108) a week, around a third more than the LE397 ($65) earned by a private sector employee and Egypt's public-sector workforce rose 2% in 2012/13 "!! 6 million and we still have vacancies in the public sector, weird! , And In a very basic level decreasing the number of consults in the government which is 73 thousands!! Yes, It's a true number don't read it again! With LE 2.5 billion salaries discussed to be reduced in 2012 parliament, simply Public sector is shrinking in Egypt. No clues ahead.
End of story, political reforms must come first, then economic and financial revival will surprise, Problems are big, and reform takes time before it takes place, but we should stick to a model, don't leave things for coincidences, Egypt is not a country where economic sectors and population can succeed despite the government, we just need to set the rules before picking good players, since the beginning of the revolution we choose wrong paths and hope to meet Santa in the end, Stop regretting the past and the question should be how to turn stones into bread instead of who killed Bruce-lee, hopefully 2014 would show any sign of progress economically and politically because we have nothing to trade but hope, yet.