CAIRO // The Egyptian government has implemented some of the world's most consistently enthusiastic business regulatory reform over the past several years, according to a global study made public by the World Bank last month.
The bank's Doing Business 2010 report, which evaluates and compares the ease of doing business in 183 countries worldwide, placed Egypt in its top 10 list of business reformers for the fourth year in a row, despite ranking it at 106 among the 183 economies it studied. The UAE placed 73rd.
Egypt's ruling party has in the past cited the Doing Business report as evidence of its commitment to restraining its own heavy-handed bureaucracy, which experts say has hampered entrepreneurship and private enterprise since centrally planned economic policies were implemented in the 1950s and 1960s. That Egypt's economy has seen unprecedented growth over the past four years is further proof, government supporters say, that Egypt's ambitious reform agenda is working.
But economists and political theorists are divided as to whether such reforms benefit the majority of Egypt's people, while others wonder if the four years of positive survey results paint an accurate picture of Egypt's business landscape.
"It all boils down to what's meant by reform," said Gouda Abdel Khalek, a professor of finance at Cairo University and a member of the leftist Tagammu Party. "In the eyes of the World Bank, reform means something quite different from what reform means in the eyes of the vast majority of people in Egypt, for example. I'm not talking about economists or politicians, but the layman on the street."
The study's authors specifically commended Egypt for making it "easier to deal with construction permits by - eliminating most pre-approvals". The report also praised new specialised commercial courts, which have improved the state's power to enforce contracts, as well as expanded access to credit information and the removal of minimum capital requirements for new companies.
Prof Khalek pointed to the bank's evaluation of construction permits and contract enforcement as evidence of the report's big-business bias. Even as streamlined bureaucracy has simplified securing construction permits for large, well-established businesses, that process remains difficult and time-consuming for poor Egyptians, particularly in rural areas, he said.
As for contracts, the Egyptian government is often "the first to breach contract when it comes to their advantage", Prof Khalek said.
"The trouble is that once the World Bank [says] that, the Egyptian government turns and says, 'Look, we're on the top of the list of world reformers'. That puts the people who are in public debate in a corner because the government can have the prestige of the World Bank on its side in the eyes of people who don't know any better."
The authors of the report, however, were careful to state the limitations of their analysis. While Doing Business is one of the world's only "fact-based measurements of business regulation", said Dahlia Khalifa, a World Bank senior economist, the report does not consider such important factors as macroeconomic policy, government transparency, protection against corruption or the strength of regulatory institutions.
Instead, it relies on a set of standard surveys of about 8,000 business professionals that compare, for example, the time it takes to register a new business across nearly 200 economies. Such reforms should not be controversial, said Ahmed Galal, managing director of the Cairo-based Economic Research Forum, who said that some critics of Doing Business tend to harbour an ideological opposition to the World Bank's perceived wider agenda, which many economists have associated with the "Washington Consensus" policies of fiscal austerity, subsidy reduction and free trade.
But unlike reducing barriers to trade or privatising public sector companies, freeing the private sector from red tape benefits all sectors of the economy simply by improving efficiency, Mr Galal said.
"These indicators are referring to measures that reduce transaction costs," he said. "Transaction costs are a waste of resources in any society. Poor or rich, Washington or Cairo - these are legitimate improvements from the point of view of saving resources that would have been wasted."
But for the more than half of Egyptians who are employed in the country's vast informal sector, substantial hurdles remain to securing capital, starting a business and enforcing contracts, experts said.
The informal sector is also a place of refuge for small businesses - which constitute about two-thirds of Egyptian companies - to avoid redundant and invasive bureaucratic regulations. "Inefficient government bureaucracy" was the "most problematic factor" to doing business in Egypt, according to a global survey of business executives published last month by the World Economic Forum.
As such, Ms Khalifa said, Doing Business can encourage governments to set policies that are more welcoming for small firms.
"If you make regulations transparent, if you implement them efficiently and you allow them to be accessible to all those who need them, then you encourage more and more people to operate in the formal space," Ms Khalifa said. "The benefit of that obviously is that you have more access to finance, your workers then have the protection of the law, and your tax base is widened. In other words, the impact on the economy is much greater."
Despite its focus on regulatory policies that affect high-capital companies, the report still reflects genuine improvement, said Magda Shahin, the director of the trade-related assistance centre at the American Chamber of Commerce in Cairo.
But the report's perspective speaks to only one side of the story, she said. Egyptian regulators would now do well to lift the bureaucratic burden on Egypt's largest commercial sector: the grey market.
"I can vouch for this [report] and I can vouch for this from the business people themselves," Ms Shahin said. "Yes, the government is responsive to the business community's demands and requests in a sense. However, what I am dealing with here is only the big businesses and this is certainly different for the SMEs, which are handicapped."
mbradley@thenational.ae
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- Technology expert in robotics and automation: Dh20,000 to Dh40,000
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- Data-driven supply chain management professional: Dh30,000 to Dh50,000
- HR leader: Dh40,000 to Dh60,000
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- Project manager: Dh55,000 to Dh65,000
- Senior reservoir engineer: Dh40,000 to Dh55,000
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- Field engineer: Dh6,500 to Dh7,500
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Famous left-handers
- Marie Curie
- Jimi Hendrix
- Leonardo Di Vinci
- David Bowie
- Paul McCartney
- Albert Einstein
- Jack the Ripper
- Barack Obama
- Helen Keller
- Joan of Arc
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THE BIO: Martin Van Almsick
Hometown: Cologne, Germany
Family: Wife Hanan Ahmed and their three children, Marrah (23), Tibijan (19), Amon (13)
Favourite dessert: Umm Ali with dark camel milk chocolate flakes
Favourite hobby: Football
Breakfast routine: a tall glass of camel milk
More from our neighbourhood series:
Joker: Folie a Deux
Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson
Director: Todd Phillips
Rating: 2/5
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Jumanji: The Next Level
Director: Jake Kasdan
Stars: Dwayne Johnson, Kevin Hart, Karen Gillan, Jack Black, Nick Jonas
Two out of five stars
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Ain Issa camp:
- Established in 2016
- Houses 13,309 people, 2,092 families, 62 per cent children
- Of the adult population, 49 per cent men, 51 per cent women (not including foreigners annexe)
- Most from Deir Ezzor and Raqqa
- 950 foreigners linked to ISIS and their families
- NGO Blumont runs camp management for the UN
- One of the nine official (UN recognised) camps in the region
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Gender pay parity on track in the UAE
The UAE has a good record on gender pay parity, according to Mercer's Total Remuneration Study.
"In some of the lower levels of jobs women tend to be paid more than men, primarily because men are employed in blue collar jobs and women tend to be employed in white collar jobs which pay better," said Ted Raffoul, career products leader, Mena at Mercer. "I am yet to see a company in the UAE – particularly when you are looking at a blue chip multinationals or some of the bigger local companies – that actively discriminates when it comes to gender on pay."
Mr Raffoul said most gender issues are actually due to the cultural class, as the population is dominated by Asian and Arab cultures where men are generally expected to work and earn whereas women are meant to start a family.
"For that reason, we see a different gender gap. There are less women in senior roles because women tend to focus less on this but that’s not due to any companies having a policy penalising women for any reasons – it’s a cultural thing," he said.
As a result, Mr Raffoul said many companies in the UAE are coming up with benefit package programmes to help working mothers and the career development of women in general.
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Why does a queen bee feast only on royal jelly?
Some facts about bees:
The queen bee eats only royal jelly, an extraordinary food created by worker bees so she lives much longer
The life cycle of a worker bee is from 40-60 days
A queen bee lives for 3-5 years
This allows her to lay millions of eggs and allows the continuity of the bee colony
About 20,000 honey bees and one queen populate each hive
Honey is packed with vital vitamins, minerals, enzymes, water and anti-oxidants.
Apart from honey, five other products are royal jelly, the special food bees feed their queen
Pollen is their protein source, a super food that is nutritious, rich in amino acids
Beewax is used to construct the combs. Due to its anti-fungal, anti-bacterial elements, it is used in skin treatments
Propolis, a resin-like material produced by bees is used to make hives. It has natural antibiotic qualities so works to sterilize hive, protects from disease, keeps their home free from germs. Also used to treat sores, infection, warts
Bee venom is used by bees to protect themselves. Has anti-inflammatory properties, sometimes used to relieve conditions such as rheumatoid arthritis, nerve and muscle pain
Honey, royal jelly, pollen have health enhancing qualities
The other three products are used for therapeutic purposes
Is beekeeping dangerous?
As long as you deal with bees gently, you will be safe, says Mohammed Al Najeh, who has worked with bees since he was a boy.
“The biggest mistake people make is they panic when they see a bee. They are small but smart creatures. If you move your hand quickly to hit the bees, this is an aggressive action and bees will defend themselves. They can sense the adrenalin in our body. But if we are calm, they are move away.”
The biog
Favourite food: Fish and seafood
Favourite hobby: Socialising with friends
Favourite quote: You only get out what you put in!
Favourite country to visit: Italy
Favourite film: Lock Stock and Two Smoking Barrels.
Family: We all have one!
