Meet Egypt's nominee minister of industry and trade: a liberal economist with a difference

Sara El-Eissawy, Salma Hussein, Wednesday 20 Jul 2011

Ahmed Galal is a former World Bank official who came back to his homeland in the mid-1990s with the mission of creating an atmosphere which would boost the private sector, a mission which had both successes and setbacks

Ahmed galal
The minister of industry and trade is nominated by deputy prime minister El-Beblawi and awaits the approval of the military council. (Photo: Al-Ahram)

At any seminar or academic congregation, you could find him delivering his comments in three points, sharp and short.

He is the liberal economist Ahmed Galal, who since 2007 has been the managing director of the Economic Research Forum (ERF) for the Middle East, North Africa, Iran and Turkey.

He is one of the leading Egyptian economists and has played a major role in shaping Egyptian economic policies over the past two decades. He is one of few Egyptian economists who has tackled questions concerning both the Egyptian economy and regional economies.

Galal obtained a BA in business management from Cairo University in 1973, and after graduation, he worked from 1973 to 1975 for Banque Du Caire. He supported the same bank's privatisation twenty years later.

At the beginning of his career he witnessed a turning point for the Egyptian economy - the transition from socialism to what was then called then the “open door policy”.

Such transformation saw many blundered decisions and policies at the beginning of its implementation but was “necessary” despite the disturbance it caused as it is “an inevitable phase” towards a free market economy, according to Galal.

Galal could not stand the bureaucratic restrictions of the banking business for more than two years and shifted to his favourite field; academic research in economics.

He obtained a Masters in economics from the American University in Cairo in 1980, and then moved to the United States to obtain a PhD from Boston University in 1986.

His views, along with his academic intelligence, qualified him to move to Washington DC to join the World Bank, where he worked for twenty years.

It was a period when the international institution saw its activities expanding. The Bank granted conditional loans to developing countries in crisis, spreading the economic doctrine of its major contributing states: free market economy.

Galal was staff member of the World Bank for 18 years, between 1984 and 2006. During his long tenure at the Bank, he served as industrial economist in the Europe, Middle East and North Africa region, as senior then principal economist at the research arm of the Bank and as economic advisor at the private sector development department and as economic advisor at the Middle East and North Africa Region.

He also gave economic counselling to several countries including Chile, Mexico, India, Thailand, Tanzania and Jordan.

Years of Glamour

Galal returned to Egypt in 1995, to become the director of the Egyptian Centre for Economic Studies (ECES), the first Egyptian economic research centre not affiliated with any of the state’s bodies.

The ECES was founded by a group of leading Egyptian businessmen – most notably Gamal Mubarak, former chairman of the policies committee in the ruling National Democratic Party and son of ousted president Hosni Mubarak.

The Centre was funded by USAID along with subscriptions and fees of studies carried out by the Centre for some international economic institutions.

One of the most important studies done by the centre was on the informal sector in Egypt, which the government attempted to include in the formal economy.

This attempt was led by Ahmed Galal in co-operation with Latin American economist Hernando De Soto, but was a failure, as the government only wanted to tax the informal sector, rather than develop it.

Thanks to the wise Ahmed Galal, the Centre’s research and busy seminars became an urgent reform agenda for the government.

The Centre contributed to suggesting and drafting many economic policies, and among its board of directors were many ministers and officials of Ahmed Nazif’s two cabinets since 2004, such as Mohammad Mansour, Ahmad El-Maghrabi, Rashid Mohammad Rashid, Galal El-Zorba, and some of the most prominent NDP parliament representatives, although Galal himself remained distant from any political or party conflicts, and he did not aspire to become a government official.

In fact, Galal kept rather distant from the Nazif government, criticising its performance and stressing its loopholes.

In 2010, the ERF, which he leaves now to become the minister of industry and trade, published a study entitled, "The Politics of Investment and Growth in Egypt: Towards A New Approach". It focused on  relationships between policy makers and investors, warning of the risk of abuse of such public-private interaction.

An observer of his writings would notice an ideological turn throughout the past two decades, from "market fundamentalism", to a more socially considerate set of ideas.

After believing that growth alone would advance development, and that the poor would automatically sense an improvement in their lives as a result of growth, he began in the first years of the 21st century to advocate reforming both education and health sectors, as the only way the poor can be empowered to work and share the fruits of development.

However, he remained a believer in the inevitability of privatisation in order for the state to be able to carry out its regulatory role in the economy.

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