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Key Development Challenges Facing Egypt Situation Analysis

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Key Development Challenges Facing Egypt Situation Analysis SITUATION ANALYSIS: KEY DEVELOPMENT CHALLENGES FACING EGYPT 2010 Lead Author Professor Heba Handoussa, Coordinator, Situation Analysis Taskforce This Situation Analysis is a multi-stakeholder document prepared by a Taskforce, led by Heba Handoussa, which consulted with sector-specific experts, independent advisors to government, UN Agencies and other national and international development partners in Egypt. The Taskforce also reviewed a wide array of official documents and recent development literature on Egypt. The Taskforce has gratefully received and accommodated as much as possible numerous comments on the various drafts of the report. ii CONTENTS Preface Fayza Aboulnaga, Minister of International Cooperation V Foreword James Rawley, Chair of the Development Partners Group VII Preamble Heba Handoussa, Coordinator Situation Analysis Taskforce IX Acknowlegments XI Acronyms XIII EXECUTIVE SUMMARY XV INTRODUCTION AND CONCEPTUAL FRAMEWORK 1 1. Purpose of Situation Analysis and Guiding Principles 1 2. Participation and Consultation Process 2 3. Strategic Issues Facing Aid Effectiveness in Egypt 2 4. Conceptual Framework for the Situation Analysis and the Three Pillars of Sustainable Development 4 5. Progress on the Millennium Development Goals (MDGs) 6 6. Role and Participation for the Different Stakeholders in the Implementation of the SA 9 7. GOE Strategic Objectives and Five Year Planning 11 PART ONE: KEY CHALLENGES IDENTIFIED IN THE SITUATION ANALYSIS 15 PART TWO: SITUATION ANALYSIS 25 I. PILLAR ONE: SUSTAINABLE AND INCLUSIVE GROWTH 25 I.1 Macro Policy and Stability 25 I.2 Competitiveness 28 1.3 Growth Engines 29 I.3.a Manufacturing: Industrial, International Trade and Internal Market Policies 29 I.3.b Agriculture 31 I.3.c Tourism 32 I.3.d Information and Communications Technology (ICT) 33 I.3.e Renewable Energy 35 I.3.f Construction and Housing 36 I.3.g Micro and Small Enterprises (MSE) 36 I.4 Employment Strategy for Youth 41 II. PILLAR TWO: SOCIO-POLITICAL RIGHTS 45 II.1 Egypt’s Integrated Social Policy: Changes and Challenges 45 II.1.a Safety Nets and the Welfare State 45 II.1.b Intended and Effected Changes in Social Policy 47 II.1.c MOSS Reforms and Capacity Building 50 II.2 Poverty Reduction 50 II.2.a Food Security, Consumer Price Index and the Poor 51 II.2.b Removing Energy Subsidies and Targeting the Poor 53 II.3 Gender and Youth 54 II.3.a Women: A Special Concern 54 II.3.b Youth Building the Future 58 II.4 Family, Child and Population 60 II.4.a Results of the Child Multidimensional Poverty Study 60 II.4.b The Issue of Fertility and Population 61 II.5 Education 64 II.5.a Literacy and Adult Education 64 II.1.b Education Reform at Pre-University Level 66 II.5.c Sector Analysis of Higher Education in Egypt 72 II.6 Health and Nutrition 73 II.6.a The Health Sector Reform Program 74 II.6.b Impact of Environmental Degradation 74 II.6.c Disease Burden in Egypt 76 II.6.d Female Genital Mutilation (FGM) 77 II.6.e Policy Formulation, Program Design and Implementation 77 II.7 Political Participation 79 II.7.a Governance 79 II.7.b Corruption 80 II.7.c Decentralization 82 II.7.d Human Rights 83 II.7.e Access to Justice 85 II.8 Social Protection 86 II.8.a New Pension Law 86 II.8.b A New and Universal Social Health Insurance (SHI) System 87 iii III. PILLAR THREE: ENVIRONMENT AND SUSTAINABLE NATURAL RESOURCES 88 III.1 Sustainable Agriculture, Rural Development, and Food Security 88 III.1.a Major Issues and Challenges facing Agricultural Development 89 III.1.b Government Strategic Orientation and Objectives 93 III.2 Egypt’s Water Situation Analysis 95 III.4 Policies for Promoting Renewable Energy in Egypt 98 III.3 Energy Efficiency and Renewable Energy 97 III.5 Protecting the Environment with a Focus on Climate Change 99 III.6 Water, Sanitation and Solid Waste Management 105 III.7 Urban Planning, Informal Settlements and Transport 110 ENDNOTES 114 BIBLIOGRAPHY 117 BOXES 1: Capacity Building and Mutual Accountability 4 2: The United Nations Global Compact 10 3: The Role of Civil Society in Implementing Development 11 4. Essential Messages of the GoE Strategic Objectives 12 5: Institutional Reform and Requisites 14 6. Steps Towards Reforming Egypt’s Monetary Policy Framework 27 7: New Initiatives of the Social Fund for Development 40 8. The Global Entrepreneurship Monitor Survey (GEM) 44 9: Conditional Cash Transfers 47 10: Monitoring and Evaluation of the 1000 Villages 49 11. A New Multidimensional Poverty Index (MPI) 52 12. Gender Responsive Budgeting 57 13. A Special Emphasis: Teacher Professionalism 69 14. The Cost of Malnutrition in Egypt 75 15. Institutional Development Program (IDP) 81 16: The Role of Development Assistance in Protecting the Environment 101 17. Ecotourism 102 18. Vulnerability and Adaptation to Climate Change in the Health Sector 103 19. Small is Beautiful for Egypt’s Solid Waste Management 109 20. Addressing the Problem of Land Mines in Egypt’s Western Desert 111 TABLES 1: Dimensions of Aid Effectiveness 3 2: Three Pillars of the Situation Analysis 6 3: Strategic Objectives Matrix 13 I.1a: Elements of the Egyptian Information Society Initiative (EISI) 34 II.1a: Programs and Outcomes 46 II.2a Consumption Pattern, 2008/09, by Expenditure Decile 53 II.4a: Percent of children experiencing type of deprivation, by wealth quintile, 2008 61 II.5a: Distribution of the Population by Education Status (10 years or more), in millions 65 II.5b: Estimated Cost of Programs (LE thousand) 2005/2006 67 II.5c: Average expenditure per student in Egypt compared with other countries (PPP$) 70 III.5a: Volume of Assistance by Environmental Sector, 1991-2001 101 FIGURES 1: Pillars of Sustainable Development 5 I.4a: Distribution of New Entrants by Type of First Job 41 II.2a: Poverty Rates by Region 51 II.2b: Contribution of Indicators to the MPI (Intensity) 52 III.7a: Institutional Landscape of Public Land Management 110 iv PREFAce Effectiveness Agenda’. The discussion focused on: making further progress on reducing aid fragmentation and Inconditionality; September 2008, promoting at the Accracountry High ownership; Level Forum strengthening on Aid Effectiveness, regional and I chaired South- a Spanelouth onCooperation; ‘The Unfinished fostering Aid forward, particularly in giving greater voice to developing countries, it is still the case that the aid effectiveness agendacapacity continues development; to leave and much ensuring to be greater done. Tpredictabilityhe key challenge of aid for flows. development While the partners, Accra meeting both aid was providers a step - ward and ‘put our house in order’. We know what we have to do, but in most countries we haven’t yet tackled and developing countries, is not so much technical but rather finding the political will to push the agenda for Whileobstacles the tosupport aid effectiveness of Egypt’s withDevelopment sufficient P commitmentartners has beenand urgency. much appreciated by the Government, there is - man resources invested in development have not produced the full set of results rightly expected. It was in this contextagreement that, both in early on the 2009, side I of engaged the Government in discussions and on with that the of ChairDevelopment and Co-chair Partners of the that Development the financial P andartners hu Action on Aid Effectiveness: A Mutual Strategy for Development Cooperation”, which was agreed to by August Group2009. (DPG), Mr. James Rawley and Mr. Wolfhard Behrens, that were soon translated into the “Cairo Agenda for The Cairo Agenda is an innovative concept note that addresses the key principles of aid effectiveness – namely, ownership to ensure that we set our own development priorities and strategies; alignment so that our develop- - monization to avoid assistance duplication by improving coordination and simplifying procedures; managing forment results; partners and fine mutual tune accountability their support wherebyto be consistent we and ourwith partners our strategies are accountable and use our for national development systems; results. har The Cairo Agenda for Action is in fact a translation of the Accra Agenda for Action for the Egyptian setting, pro- posing a set of specific actions in the form of “deliverables” to enhance aid effectiveness. - Soonexercise after could work also began serve on to the clarify first nationaldeliverable medium-term of the Cairo priorities Agenda, namely and propose the “Situation policies, Analysis”strategies which and invest high- lightsments the that key would development facilitate progresschallenges on facing these Egypt key challenges. over the next In this five way, to ten the years, spectrum it became of the apparent Cairo Agenda that this ex- and human. It also incorporated the dimension of South-South Cooperation where Egypt is both a recipient of pandedvaluable from cooperation aid to development from other developingeffectiveness, countries embracing as well both as national a provider and of international a range of development resources, financialservices to other countries, with a special focus on African and other neighbouring countries. The Situation Analysis also highlights some important crosscutting challenges, for which more determined ef- forts are required to improve institutional and human resource capacities; achieve better coordination across sectors and agencies as well as between central and local administrations; scale-up best practices; and upgrade data reliability to enhance transparency and accountability. With meaningful and timely support of our devel- opment partners, the Government is committed to ensuring that these challenges are successfully addressed in the coming years. The Situation Analysis Taskforce, which under the excellent leadership of Professor Heba Handoussa took the lead in preparing this document, made extensive use of existing government documents and studies, as well as in a constructive dialogue with the national and international development community, making the Situation Arecentnalysis non-official truly a multi-stakeholder documents provided nationally-owned by a wide variety document of development which I invitepartners.
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