The main reason for disparities in income and consumption between different regions inside Egypt is differences in returns on assets individuals possess, a recent World Bank report states.
Entitled “Reshaping Egypt’s Economic Geography: Domestic Integration as a Development Platform," the report looks into Egypt’s regional economic growth patterns and the reasons behind geographically uneven development. It proposes policy options to turn uneven growth into inclusive development.
The report divides Egypt into eight regions: Upper Rural, Upper Urban, Upper, Lower Rural, Lower Urban, Lower, Alexandria, and Cairo. The largest gap in consumption is between Cairo and Upper Rural Egypt and smallest between Cairo and Alexandria.
The gap between consumption in Lower and Upper Egypt in overall region comparison remains at 25 per cent in the favour of the former in 2009 and only increased slightly since the last survey in 2000. The gap between urban areas in the two regions, however, showed a significant increase.
Improvement in incomes in Lower Egypt’s Urban Areas is also shown in the decreasing gap between the latter and Cairo and Alexandria. The gap with Upper Egypt is, however, another story.
The report explains the increase in consumption gaps in favour of Lower Urban Egypt as associated with a “growing share of tradable activities, from 50 per cent of GDP to 55 percent between 2000 and 2008.” Lower Urban Egypt includes mainly cities along the Suez Canal and the Mediterranean coast.
Recommendations to close consumption gaps between regions are presented in the report, including reducing obstacles to factor and goods mobility. Among other measures proposed is improving the coverage and quality of education and ensuring labour mobility. Egypt’s internal migration rates are very low compared to international levels, but this generally increases with education.
The same goes for improving capital mobility, through improving public land management and “the functioning of Egypt’s many industrial estates.”
To read the full report, please click here.