In the wake of sweeping political and social changes in Egypt since 2011, the nation’s economy is showing resilient, tentative signs of recovery in the last quarter of 2013. But even as hopeful indicators appear in the form of international aid and increased domestic investment, the question remains, how will a financial recovery affect the lives of individual citizens in Egypt?
Regardless of the quickly changing states of affairs at a governmental and institutional level, the Egyptian people want to have clarity and a basic understanding of their prospects for individual economic growth and establishing savings for the future.
For example, in September 2013, Egypt’s prime minister, Hazem el-Beblawi, proposed a minimum wage increase for state employees, a decision that was meant to convey the government’s new populist policies. While the proposed increase – from 700 Egyptian pounds per month to 1,200 – was considered by some to demonstrate the government’s willingness to tackle important domestic issues, a key labour organization argued that it wasn’t enough. The Egyptian federation of independent unions (Efitu) denounced the proposal because the wage increase does not adequately account for the devaluation of Egypt’s currency. Efitu also pointed out that the increase does not address private sector workers, who represent two-thirds of Egypt’s workforce.
Arguments about minimum-wage increases aside, there are some other substantive economic changes that can ultimately affect the daily lives of the Egyptian populace. Nations of the Gulf Cooperation Council (GCC) have pledged $12 billion (Dh47.7 billion) in aid to Egypt, of which 7 billion has been received as of September 2013. This aid from neighbouring countries points to hopeful prospects in 2014, as quoted in the August 22 2013 edition of Bloomberg Business Week by Habib Haddad, chief executive of Wamda, an organization that finances entrepreneurs in the Middle East and North Africa:
“As soon as the dust settles, there is going to be a wave of reconstruction, of opportunity,” said Haddad. “Hopefully it isn’t going to take more than a few weeks or days.”
Taking into account the $12 billion in aid from the GCC, recent projections by Egypt’s Planning Minister Ashraf Al Arabi indicate spending in government projects will rise by 3.5 per cent in the 2013-2014 fiscal year (up from 2 per cent in the previous fiscal year).
In conjunction with a boost to the public’s confidence in the country’s direction, Egypt’s economy is on its way to recovery and is expected to continue improving. However, this positive trajectory will rely on the people of Egypt seeing an improvement to their daily lives, be it in the form of minimum wage rises or domestic investment in infrastructure, education and other areas that directly affect quality of life. These are the factors that ultimately give the people a sense that it’s safe to spend, reinvest, and look forward to a secure financial future.