One of the well-established ideas in our current thinking is that encouraging private investment means enabling large businessmen to acquire the country’s wealth, monopolise its resources, and reap its benefits.
This results in widening the gap between rich and poor and a deterioration in the livelihood of the majority of the population, who do not share the fruits of economic growth.
Achieving social justice would, accordingly, be incompatible with encouraging private investment or granting investors the support and incentives they are constantly demanding. It would also certainly be better, and more equitable, to direct national resources, wealth, and incentives towards benefiting the majority, not the few.
This is a view that deserves serious attention and scrutiny, not only because of its prevalence in public opinion, but also because it directly impacts public policies through the influence of the media, political and parliamentary actors, and various state agencies that are convinced of its soundness.
I personally have no doubt that growing private investment is necessary in view of its capacity to grow production, employment, and export and tax revenues for the country. With the decline in the state’s resources in current circumstances and its ability to invest at rates required to achieve the minimum level of economic development, it is no exaggeration to say that encouraging private investment is now a matter of life or death.
So, what are the sources of the widespread hostility and apprehension towards investment and investors, and the firm conviction that there is an inevitable contradiction between policies aimed at attracting investment and those targeting social justice?
It is possible that this hostility is a reaction to the neo-liberal ideology that considers the encouragement of private investment, the liberalisation of markets, and the state’s complete withdrawal from the arena as inevitably leading to an acceleration of economic growth, which in turn will lead to an improvement in welfare and people’s lives through the “trickle down” of wealth.
But while private investment will undoubtedly lead to economic growth, it is less certain that it will benefit everyone unless we have in place the right economic and social policies that are socially inclusive and supportive of income redistribution.
It is also possible that the hostility towards private investment is driven not by ideology but by practical experience. By this I refer to Egypt’s experience with private investment from the mid-1970s, which at times was marred by nepotism and excessive cosiness between wealth and political influence that unfortunately overshadowed bright success stories of economic achievements coupled with social responsibility.
The outcome, in any case, is the prevailing impression in our society that private investment is incompatible with social justice, an impression that deserves to be reviewed and corrected because the truth is that investment when accompanied by sound economic and social policies is the best way to achieve both economic growth and social justice.
Yes, private investment can contribute to achieving social justice, but only if it is accompanied by policies to encourage competition and prevent monopoly, reduce tax evasion, combat corruption and the conflicts of interests, support small enterprises, and provide advantages and incentives for the extension of industry, reduction of unemployment, increase of exports, and protection of the environment.
It is time for those who are sceptical about private investment to direct their energy, enthusiasm, and power of mobilisation away from objecting to the growth of investment and much more towards ensuring that it grows and flourishes under the right conditions and within a policy framework that will achieve wide benefit to society and social justice.
* This article also appears in Arabic in today’s edition of the daily Al-Masry Al-Youm.
*A version of this article appears in print in the 6 October, 2022 edition of Al-Ahram Weekly.