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Wheat, energy, and 4G

Ziad Bahaa-Eldin , Tuesday 27 Sep 2016
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Views: 3557

In the last few weeks, three important government policies have run into a hitch or been reversed entirely. The disarray this reflects should give us pause, especially since the policies had ramifications for the economy, which is at a critical point and cannot withstand more government ambiguity and unpredictability.

The first, and most important, policy was a decree requiring wheat imports to be entirely free of the ergot fungus. After international commodity firms refused to bid on government wheat tenders and several foreign markets embargoed Egyptian produce, the government announced last week that it would allow imports of wheat with ergot below half per thousand.

The second policy was a tender for 4G licenses announced by the Ministry of Communications. None of the three mobile operators in Egypt placed a bid, saying the price was far too high and the technical specs and frequencies on offer wouldn’t permit the provision of quality service.

The ministry will now need to revise the terms of the tender and try again.

The third policy concerned investment in renewable energy. After months of studies and negotiations with more than ten Egyptian and foreign firms and international finance institutions, the Ministry of Electricity declared that it would not accept international arbitration as a contract condition.

When participating companies proved unwilling to conclude the contract without this condition, the ministry reconsidered, declaring its willingness to start a new round of talks based on new terms that might include international arbitration.

Ordinarily, each individual case could be seen as part of the normal negotiating process between government ministries and agencies and local and foreign firms. But these are not routine decisions. They are vital state policies in crucial sectors like food, communications, and energy.

And these aren’t minor commercial contracts, but international agreements worth billions of dollars. It’s also unusual to see several such lapses in the space of a few weeks. And whatever the outcome of the changes, the impact locally and internationally will undermine the credibility of government decision making.

Some view these three cases as illustrative of the pressure imposed by multinational corporations. Others attribute the reversal to a conflict of private and public interests within state agencies. And of course, those prone to conspiracy theories are certain some fifth column is blocking the government at every term and fomenting a climate of unjustified pessimism.

I claim no technical knowledge of either mobile frequencies or acceptable environmental and health limits on ergot contamination, but the technical aspects of these three policies don’t concern me.

The issue for me is how these cases reflect the volatility of decision making within the government administration — an administration in which I worked in various capacities for ten years.

Based on my own experience, the common feature of all these cases is the growing disconnect between, on one hand, decision makers at the highest levels and, on the other, state technical agencies and experts in both the private and civic sectors.

Discussions of the state administration typically focus on the well-known laundry list of complaints: the bloated workforce, poor incentives, low productivity and efficiency, and bureaucracy.

That’s all true, though it varies starkly from one ministry or public agency to the next. But the state administration is not only a collection of idle bureaucrats holding back the economy and production. It’s a repository of experience, methods, and processes, which though often seen as a hindrance, at times provide guarantees and lines of defence that ordinary citizens don’t perceive in their daily interaction with the bureaucrats sitting behind their desks.

I fear that the standard view of the state civil administration as weak, corrupt, and undependable, along with a growing reliance on reports from security and regulatory bodies when making technical decisions and the disregard of viewpoints in the private sector and civil society, will ultimately cut off senior decision makers from reality on the ground, the reservoir of expertise in the civil administration, and alternatives proposed by the private and civic sectors.

As the circle of decision makers narrows, they are more likely to produce unworkable policies and decisions that don’t respond to social and economic needs. The result is that misguided policies are retained to avoid a loss of face, or are hastily rescinded at the last minute.

***
I offer my condolences to the families of those who drowned seeking a better future and hope the public directs its anger at the traffickers, holds those responsible for this catastrophe to account, but spares the victims and their families further blame and insult.

Perhaps the President's words of condolence yesterday will put an end to the discourse of hate broadcast in some media, which has only compounded the tragedy.

*The writer holds a PhD in financial law from the London School of Economics. He is former deputy prime minister, former chairman of the Egyptian Financial Supervisory Authority and former chairman of the General Authority for Investment. This article was published in Arabic in El-Shorouq newspaper on Monday, 26 September.

 

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