Egypt Pulse

Egypt’s Cabinet reshuffle disappoints

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Article Summary
Several politicians expressed their dissatisfaction with the recent Cabinet reshuffle in Egypt, which excluded economic portfolios.

CAIRO — On Feb. 14, the Cabinet of Sherif Ismail went through its second reshuffle since he took office Sept. 12, 2015, and it likely will not be the last one. Last month's long-awaited reshuffle, expected since August, was disappointing to many politicians and analysts.

The new ministers include Abdel-Moneim Abdel-Wadoud as minister of agriculture and land reclamation; Omar Arafa as minister of legal and parliamentary affairs; Ali Meselhy, the former minister of social solidarity in the era of Hosni Mubarak and head of the parliamentary Economic Committee, as minister of supply and internal trade; Mohamed Zein el-Abidin as minister of local development; Hala al-Saeed as minister of planning and administrative reform; Khaled Abdel Ghaffar as minister of higher education and scientific research; Tarek Jalal as minister of education; and Hesham Arafat as minister of transportation and communication. The ministries of investment and international cooperation were merged together and headed by Minister Sahar Nasr.

Former Ambassador Mohamed Orabi, the chairman of the parliamentary Foreign Relations Committee said in a press statement to Masr al-Arabia news website Feb. 15 that the reshuffle was disappointing but that the prime minister should not be blamed since many ministerial candidates rejected the portfolios Ismail had offered them.

Orabi said, “The government's economic policies were not changed. No new ministers with the ability to solve Egypt’s crises were nominated to assume economic portfolios while the current economic ministers have yet to announce a clear program to solve these crises,” he said.

On Feb. 13, one day before the reshuffle, Atef Abd al-Gawad, a member of parliament's Housing Committee, told Al-Monitor, “The economic ministries group, including the ministries of finance, investment, trade and industry, tourism and the newly created ministries of state-owned business sector and small enterprises, had no notable achievements to have kept them in their posts after the reshuffle.”

Khalid Abdul Aziz Shaaban, a member of the parliament’s Manpower Committee, described the performance of the economic ministries group in Ismail’s government as very weak. He said, “The economic ministers have proved that they should not be assuming any portfolio as they have failed in managing Egypt’s economic crises, reducing the [high] unemployment rate, bridging the budget deficit or even limiting external borrowing. This has increased the burden placed on ordinary citizens."

Member of parliament Mohammad Fouad, the spokesman for the Wafd Party parliamentary bloc, said in a statement Feb. 12 that the government's failure in the fields of investments, education, supply, health, local administration, tourism, culture and financial policies necessitates the departure of Ismail himself.

The Egyptian economy has been suffering from a tough crisis since early 2016, which led to the collapse of the Egyptian pound exchange rate. The US dollar currently trades at around 16 Egyptian pounds; in November, this was 8.88 Egyptian pounds.

The rise of the US dollar against the pound inflated the prices of several commodities such as fuel, food, medicines, electrical appliances and cars. This increase also took its toll on the price of public services, such as transportation. This commodity price inflation was heavily felt among Egypt's middle and low-income classes.

Many ministers who took over economic portfolios were brought to the Cabinet as part of Ismail's first Cabinet reshuffle on March 23, 2016, and included Amr Garhi as minister of finance, Dalia Khurshid as minister of investment, Mohammad Yahya Rashid as minister of tourism and Mahmoud Kadri Charkaoui as minister of the newly created Ministry for the State-Owned Business Sector.

The reshuffle of 2016 kept Tarek Kabil as minister of trade and industry.

The 2016 reshuffle took place while Egypt’s economy battled an escalating crisis with declines in tourism revenues, the volume of foreign direct investments, Suez Canal returns and remittances from Egyptians abroad. This shrunk Egypt's US dollar reserves, forcing Egypt's Central Bank to devalue the pound against the dollar by more than 14% just nine days before the ministerial change.

According to official statistics from the Central Agency for Public Mobilization and Statistics, the new government pledged to curb inflation, which had climbed to 10.6% by the end of 2015, and to fight the 12.8% unemployment rate.

However, some figures and statistics indicate that the ministers of economy criticized by many parliamentarians have not failed but rather that a number of government policies to increase foreign investment have been fruitful. In 2016, Egypt ranked fifth in global foreign direct investment inflows, up from 15th in 2015, according to The Financial Times classification, while foreign direct investment recorded a net inflow of $6.8 billion in 2016.

Despite the crushing economic crisis and the shortage of cash reserves, Kabil said in a phone call on the "Hona el-Asema" TV show Feb. 18 that his ministry had managed to increase Egyptian exports by 23% in 2016.

On Feb. 1, Reuters quoted an anonymous government source as saying that Egypt’s imports fell by 10.6%, reducing the trade deficit by 17%.

The Egyptian Finance Ministry obtained the approval of the IMF Board of Executive Directors on Nov. 11, securing a $12 billion loan. In a press statement Nov. 12, Ismail said the loan reflects the new trust of the international community in Egypt’s economy.

It seems that the crisis cannot be attributed to the performance of the economic ministries group but rather can be traced back to the service ministries concerned with food prices, such as the Supply and Internal Trade Ministry, as well as the Health Ministry, which is in charge of the prices of medications; the Transport and Communication Ministry; and the Manpower Ministry, which is responsible for creating jobs.

But it also seems that the majority of members of parliament who criticized the reshuffle had made up their minds based on the impact of the economic crisis on the Egyptian people, without analyzing the role of the ministries responsible for the deteriorating situation and without any regard to the achievements made at the level of the Egyptian economy in general.

The recent Cabinet reshuffle, which included many service ministries, reflects the political regime’s determination to ease the burden on citizens. Nevertheless, the newly appointed ministers face a major challenge, especially since the Egyptian economy has not fully recovered.

Found in: egyptian pound, exchange rates, members of parliament, egyptian economy, cabinet, egyptian parliament, egyptian politics

Amr Mostafa is an Egyptian journalist who has worked for several newspapers, including Youm7, and focuses on diplomatic and legal issues.

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