Egypt's Long-Term Economic Recovery Plan Stalls

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CAIRO -- The Egyptian government's failure to revive the country's ailing economy is likely to be a defining issue in parliamentary elections expected to begin in October. The umbrella opposition group, the National Salvation Front, has heaped criticism on President Mohammed Morsi's administration, accusing it of poor economic stewardship, lack of vision and inability to improve life for millions living below the poverty line.

Gehad el-Haddad, one of the top Brotherhood officials charged with developing a long-term economic recovery program, conceded in an interview that progress on major elements of the plan, known as the Renaissance Project, or Al Nahda in Arabic, had stalled. He blamed a combination of government bureaucracy and internal conflicts.

The Renaissance Project envisioned an ambitious transformation of Egypt's economy from one that relied on rentier capitalism -- which is largely based on income from various forms of property -- into a productive, value-added economy that would contribute to society, according to a description of the project's main features on the Web site of the Freedom and Justice Party, the political arm of the Muslim Brotherhood. This was expected to lead to a gross domestic product of 6.5 percent or 7 percent in five years, though how this growth rate would be reached was unclear.

The project also aimed to reduce Egypt's unemployment rate by 5 percent a year and increase the budget for education to 5.2 percent of G.D.P. from 3.3 percent.

Instead, Egypt's jobless rate has risen to almost 13 percent in two years, from 9 percent, economic growth has slowed to 2 percent, from about 5.5 percent, and there are very few moves being made to restructure budget allocations.

"We miscalculated the power of the bureaucracy beast," said Mr. Haddad, one of a team of five executives in charge of the project.

"It's the idea that almost everyone has the power to stop anything by not putting pen to paper."

Mr. Haddad and his colleagues say they have been reduced to picking "low-hanging fruit" while the project, struggling against financial and personnel shortages, has been quietly put on the back burner.

The economic recovery blueprint, touted as a 20-year comprehensive program for social and economic change, was a pillar of Mr. Morsi's campaign last June. But the project quickly has become more of an incubator for grand ideas than a blueprint proposing specific measures for economic improvement.

In the early days after the uprising, the Brotherhood built a reputation in many communities for offering healthcare clinics, cheap food and education services. But they have been unable to transfer their success in grass-roots community organization to running Egypt's sprawling bureaucracy.

Under Mr. Morsi's presidency, the Renaissance team has been unable to follow through on any major project, including plans to trim the government's inefficient sprawl of 36 ministries.

"We are understaffed and neither have enough financial or human resources, but at the same time, the priorities are still there," said Mr. Haddad, an experienced administrator who was among the first to be hired for the job after years working in nongovernmental organizations.

However good its intentions, the project has become a focus of ridicule. On the social media site Twitter, a popular trend has emerged for Nahda movie title parodies -- "There's Something About Nahda, " for example, and "The Devil Wears Nahda."

Mr. Haddad, the son of Essam el-Haddad, the president's top foreign policy adviser and arguably one of the most powerful Brotherhood officials in Egypt, has been a target of the backlash because of his visible role as a leading spokesman for the Brotherhood.

Working with him is Hussein el- Kazzaz, chief executive of a business consulting firm, Skopos, and an adviser to Mr. Morsi -- a role that ensures some degree of communication between the government and the Renaissance team.

The other three members of the advisory board are Ashraf Serry, a Muslim Brotherhood economist; Ahmed Deif, a policy adviser to Mr. Morsi's presidential campaign; and Ahmed Soliman, a senior Brotherhood member.

The brainchild of Khairat el-Shater, the Muslim Brotherhood's first choice for president until he was disqualified, the Renaissance Project was trumpeted as an Islamist road map for Egypt after the revolution in 2011.

Drawing inspiration from Turkey's years of prosperity and the rise of an Islamic middle class, Mr. Shater saw Egypt's "mission as clear: restoring Islam in its all-encompassing conception."

The mission was to institute "the religion of God; the Islamization of life, empowering of God's religion," according to a transcript of a lecture that he gave in Alexandria, Egypt, in April 2011.

In reality, reconciling Islamist theories with an economy perilously close to collapse has been difficult.

Ihab el-Fouly, a businessman who is among several consultants aiding the project -- but who is not a member of the Brotherhood -- said he saw the lack of cohesion with the government as a major obstacle holding back the Renaissance Project.

"We need to have some kind of orchestrated effort. But if ministries are not properly in harmony and subscribing to the Renaissance vision, actually subscribing to any vision, forget about renaissance," Mr. Fouly said.

Close watchers of the Brotherhood are still more skeptical, questioning not only the lack of buy-in, but the essential vision of the project itself.

Alison Pargeter, a scholar specializing in political Islam and the Muslim Brotherhood, described the Renaissance Project as a "crystallization" of reform initiatives put forward by the Brotherhood over recent years.

Unfortunately, she said, like those ideas, the project was a "vague and generalized wish list that bears little relation to the reality on the ground."

It highlighted, she said, the "Brotherhood's political naïveté, with their seemingly believing that promises alone will be sufficient to bring people over to their side."

As the difficult realities of government become steadily plainer to Mr. Morsi and his administration -- and in the absence of a solid plan for which Egypt can win long-awaited financial backing from the International Monetary Fund -- short-term solutions are increasingly likely to take precedence over the project.

In the past two years, the Renaissance project team has traveled to almost 20 countries, including South Africa, Turkey, India, China, Japan and Singapore, trying to garner support and advice of international companies and experts in the fields of construction, automobiles, media and manufacturing.

On its last trip to Japan in February, Mr. Haddad said, his delegation met with eight companies, including the car giants Mitsubishi and Toyota, looking to broker prospective manufacturing deals with Egypt.

The team is also in contact with the Islamic Development Bank and the European Bank for Reconstruction and Development to identify small businesses and entrepreneurs these institutions can partner with in Egypt.

But Egypt's deepening political and economic crisis is working against it, undermining the credibility of Mr. Morsi and the government and paralyzing the country. Parliamentary elections have been delayed for at least another six months, and a long-sought agreement with the International Monetary Fund for a $4.8 billion loan has yet to be signed, despite 20 months of negotiations.

"The fabric of Egypt's political system is under great strain and we need to know which way the political situation is heading," said Nathan Brown, a professor of political science and international affairs at George Washington University. "While basic state functions still continue, it's really not a time when a long-term plan is applicable."

world

This article originally appeared in The New York Times.


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