Sunday, November 19,  2017

Economy

A Market Economy with Social Justice… How can this be Achieved?

BY Ziad Bahaa-Eldin

For all parties to use one slogan that promises happiness for all - that is neither realistic nor beneficial


The Egyptian political parties, both existing and those being formed, while differing on numerous issues, seem to have reached consensus on a magic formula in their party and electoral programs: that the economy in the upcoming period should develop and be structured based on market mechanisms but do so concurrently with achieving social justice. The various liberal camps, the Islamic current in general, much of the left-wing, the Nationalists, and even presidential candidates, all use the same words. And, they are right to all use this slogan, because the slogan is actually magical, fulfilling every party’s and every candidate’s dream by combining two positives [growth and social justice], satisfying everyone, and communicating to each voter what he/she wants to hear. 


I’m not using these descriptions to question the intentions or integrity of those who fire off this slogan. I have no doubt that they are all honest with regards to what they are proposing and are convinced that they have put their hands on what concerns voters and what they voters want to hear: that the ideal road to economic progress is in finding this difficult balanceIn so far as democracy requires the freedom to vote, it also necessitates the provision of true and accurate information regarding what is being voted on. Otherwise democracy loses its essence and value and becomes a mere spectacle between encouraging the market economy/private sector and the necessity of providing society with a safety net by having the mechanisms and systems that provide for just distribution of the benefits of growth and the provision of a minimum standard of a decent life for all. The issue is not in what is being proposed - on which everyone agrees, but rather it is in the specific details of implementing and achieving this goal.  

 

Political parties and presidential candidates must switch from this superficial magical slogan to the details that underline and demonstrate the seriousness of the matter and enable voters to distinguish between the different parties’ and candidates’ vision for achieving this goal, and what this goal means in terms of gains and losses for the different sectors and classes of society. In so far as democracy requires the freedom to vote, it also necessitates the provision of true and accurate information regarding what is being voted on. Otherwise democracy loses its essence and value and becomes a mere spectacle. Today, we are in need of greater accuracy and details with regard to the economic programs of parties and candidates, going beyond noble statements advocating combining a market economy and just distribution. Specifically, I am proposing three ideas that can raise the level of party discourse on economic affairs and deliver far more credibility to the discussion than is currently taking place.


The first idea requires firm decisions on a number of issues:  Regarding taxation, what is the specific tax policy proposed? Should it be a progressive or flat tax?  Should taxes be kept at current levels or be increased or decreased? Should real estate taxes be cancelled, kept in place, or reformed? On the issue of subsidies and social security, it is not enough to say that those receiving support and subsidization should be those that truly need that support. There has never been any disagreement on this principle since the start of the subsidy system in Egypt. The difficulty has always been in finding the mechanisms that can achieve this. There have been some writers and commentators that have suggested replacing energy subsidies with unemployment benefits; others have called for conditional financial assistance; while some have called for increasing subsidies, and yet others have called for decreasing them. What is required of all parties and candidates is that they clearly and conclusively clarify and explain their position on this complicated issue that directly affects people’s lives.

 

With regards to social justice, the concept itself must be clarified. Do parties and candidates mean that justice is in the distribution of natural resources and wealth? Or in providing equal opportunities and the right of participation? Or in guaranteeing basic rights? With regards to prices, it isn’t sufficient to repeat the slogans of regulating prices and punishing market manipulators and speculators; there must be detail and specifics in the proposals and policies that are being put forward to achieve this noble goal of social justice. And, is this goal going to be achieved through an increased role for the state in production and distribution or will it be achieved by means of leaving it to free market mechanisms? Should the state only play a supervisory role or a supervisory role plus building and creating the infrastructure to ensure equitable distribution of benefits throughout the society?  Finally, with regards to employment and unemployment, voters should know if the proposal is to lower unemployment by means of increased government investments and government hiring or through encouraging the private sector and what the proposed mechanisms are to encourage the private sector to create employment opportunities. These are some of the main issues on which parties and candidates should quickly and conclusively specify their positions. Otherwise, the discourse remains mere slogans on which no one disagrees.


The second idea is that for economic discourse to be honest, it is not enough to only proposeFor economic discourse to be honest, it is not enough to only propose solutions; the costs of those solutions, and the resources required to achieve them, must be clear, so decisions can be made and assessments carried out as to how realistic or feasible these solutions are. solutions; the costs of those solutions, and the resources required to achieve them, must be clear, so decisions can be made and assessments carried out as to how realistic or feasible these solutions are.  It is not proper democratic discourse to make promises and to issue statements on improving services, basic infrastructure, and wages without providing honesty and clarity on where the resources to achieve these improvements will come from. Will the required budget and resources come from promoting investment or increasing taxes or decreasing expenditures or borrowing from abroad? These are important choices; however, it is more important for the competing parties to present to the voters how their proposed programs will be financed. If they do not, then they are not being honest with their voters.


The third idea is that promising to give all sectors of society everything they want is impossible. Economic decisions by nature include social and class biases, and it is not shameful to admit this. For it could be that what is proposed is an economic program that is biased towards the poor but comes at a cost to the interests of the middle and wealthy classes, even if this means a decrease in private investment and therefore an increase in public [government] investment. Or maybe the proposed programs are based on encouraging increased private sector investment and activity, but with mechanisms of redistribution to, and protection of, weaker groups. These distinctions and differences of priorities are part of what make party programs more Right-wing, Left-wing, or center, allowing people to choose on the basis of their interests and their convictions. But for all parties to use one slogan that promises happiness for all - that is neither realistic nor beneficial. 


These three ideas may help increase the honesty and credibility of the programs that are put forward. It is important to point out that the phenomenon of ambiguity in electoral programs is not distinctly Egyptian or new but is part of the nature of all political campaigning. Specific choices or declared policies by any party or politician will always result in the loss of some supporters, which often leads politicians to try to satisfy all voters by being intentionally vague and general.  However, by their nature, voters don’t like ambiguity and when their patience runs out they begin to punish the parties that do not wish to accurately articulate their policies. Today, we are facing a new experience in free electoral party and political work. Thus, the electorate, and their right to vote, must be respected not only by providing ballot boxes but also by giving them the opportunity to make real and informed decisions based on clear and specific information and by politicians and political parties being honest and credible with the public. Regardless of how many votes a candidate or party may lose because of such honesty, the final gain for society is much more important.

Dr. Ziad Bahaa-Eldin is the Director of The Egyptian Initiative for the Prevention of Corruption. In 2011, Dr. Bahaa-Eldin was recently elected to the Egyptian Parliament



READ MORE BY:  Ziad Bahaa-Eldin

 

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