To what extent will the government's planned expansion of social spending achieve social justice, asks Mona El-Fiqi
Social justice was one of the main demands of Egypt's 25 January Revolution. Yet, two years on, not only has social justice failed to materialise, but living standards in the country have even further deteriorated.
According to World Bank figures, more than 40 per cent of Egypt's population lives under the poverty line of $2 per day.
In an admission that the state welfare system should be expanded to raise the living standards of millions of people, last week the government announced that a new programme of social spending would be implemented that has already been included in the draft budget for fiscal year 2013/2014 that awaits discussion in the Shura Council.
The new social programme would include a package of measures, including increasing subsidies to farmers by 19 per cent to reach LE2.97 billion, the additional funds being used to increase the delivery prices paid to farmers for their crops and to provide them with easier loans.
The programme also targets a 20 per cent increase in the funds allocated for the medications provided to citizens within the framework of the health insurance system.
LE600 million will be allocated to developing the governorates of Upper Egypt, and 50 per cent of the revenues from property taxes in the next fiscal year will go towards upgrading informal housing and improving local administration.
The new programme will also provide LE1.1 billion in support for low-income housing projects and raise the number of social security pension beneficiaries to 1.5 million.
The income tax exemption ceiling will be raised to LE12,000 from LE9,000 per year. More temporary workers will be hired under the programme, and minimum and maximum wage limits will be reformed.
"The strategy follows President Mohamed Morsi's programme announced during the presidential elections," minister of planning and international cooperation Ashraf Al-Arabi was quoted as saying.
There have been various reactions to the programme. Some have described it as a positive step towards achieving social justice, while others believe it is just paying lip service to the demands of the revolution.
Gamal Abdel-Hamid, a farmer in Daqahliya governorate, said that "farmers are used to hearing good news about additional subsidies, but nothing ever comes through. We do not see any changes, and we live with the same hardships. Farmers have been suffering neglect by the government for years."
Abdel-Hamid added that the problem was that officials did not follow up on whether decisions were applied or not in the field.
Some experts believe that the social programme includes rosy promises that might not be able to be applied due to the slowdown in Egypt's economy.
Karima Koryem, professor of economics at Al-Azhar University, said that the government could not realistically announce such an optimistic programme when its budget was suffering from an unprecedented deficit, estimated at LE197.5 billion in fiscal year 2013/2014.
"The programme itself is good, but its implementation will be difficult," Koryem said.
The Egyptian economy currently faces many problems that will hinder the programme's implementation, including an absence of job opportunities, a lack of foreign investment, an expanding budget deficit, and a severe decline in foreign currency reserves, Koryem said.
"When these economic indicators improve, then one can trust the government to be able to achieve social justice. Otherwise, it is simply misleading the public."
While a lack of confidence in the government's ability to achieve its aims were expressed by some, others preferred to give it the benefit of the doubt.
Ahmed Mahmoud, an employee at the Ministry of Culture, said that "it is too early to know if the programme is applicable or not. We should give the government a chance to work, bearing in mind the difficult circumstances Egypt is currently experiencing. The government might be able to achieve its programme. It is better to wait and see."
Hamdi Abdel-Azim, former chairman of the Al-Sadat Academy for Administrative Sciences, said that the programme was comprehensive and a step towards achieving social justice.
"It supports farmers, who are a very important part of the population yet have been suffering from low standards of living for years. Nevertheless, they have never staged a sit-in or strike," Abdel-Azim said.
He would have preferred to see the ceiling of income tax exemption moved up to LE18,000 per year though, he added.
In order to help poorer people satisfy their basic needs, Abdel-Azim said that the social security pension provided to people who have no other source of income should also be increased from LE300 to LE500 per month.
Though the programme is good in terms of maximising benefits to poorer people, it adds to the financial burdens of the state. Abdel-Azim said that the government could offset these by implementing measures to increase state revenues, such as raising taxes on commodities like cigarettes and beverages.
A reduction in the subsidies bill would also help to provide savings that could be directed towards social projects, he said.
To help the government implement its social-justice programme, Koryem said that a team of experts should be formed to recommend solutions for pressing economic problems.
"Promises to the public will never solve these problems on their own," Koryem said.
© Al Ahram Weekly 2013
