Tag Archives: reform

Maximum Wage in Egypt: Who Pays the Bill?

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Photo: Muhammad Mansour

Hiba Safi is a CIPE-Atlas Corps Think Tank LINKS Fellow at the Tahrir Institute for Middle East Policy.

This post originally appeared on the Tahrir Institute for Middle East Policy blog

Over the course of the past several months, a revolt has taken place in Egypt’s banking sector. Seeking better opportunities and higher salaries in private sector banking jobs, hundreds of banking officials have resigned in protest since July 2014 legislation placed a cap on salaries for employees in Egypt’s public sector. While most public servants had little cause for concern, the law also applies to those working in state-owned companies. Suddenly executives at Egypt’s many state-owned banks would earn a maximum monthly wage of 42,000 Egyptian pounds (roughly US$6,000)—a mere fraction of their earning potential.

Former Minister of Finance Samir Radwan has spoken out against the implementation of a maximum wage, stressing that such an approach deprives public servants of their rights and does not meet demands for social justice. On February 17, a Cairo administrative court sided with workers from the Housing and Development Bank and the Export Development Bank of Egypt, ruling the maximum wage law to be unconstitutional. Tasked with fulfilling revolutionary calls for social justice and repairing an Egyptian economy on the ropes since the January 2011 uprising, President Abdel-Fattah El Sisi’s decision to cap a maximum wage at “no more than the president earns” aims to promote equality and social justice, halt the growth of income inequality, and bolster the middle class. But the actual impact of a maximum wage merits more consideration: Should there be a maximum wage in Egypt? Would the economy really be better off after capping earnings, particularly given the landscape of public and private ownership of many key sectors in the Egyptian economy?

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Politics – a Family Business?

President Benigno Aquino III with "Team PNoy" candidates (Photo: Yahoo)

President Benigno Aquino III with “Team PNoy” candidates (Photo: Yahoo)

The recent mid-term elections in the Philippines brought both change and continuity. At stake were 12 of the 24 senate seats, 229 district seats in the House of Representatives, and more than 18,000 local posts, including mayors and governors. President Benigno S. Aquino III and his political allies, Team PNoy, gained important wins, notably in the Senate. This augurs well for the advancement of the President’s anti-corruption and economic growth program of the “straight path” or “tuwid na daan.” Many credit these policies for the March upgrade of the country’s sovereign borrower rating to an investment grade by Fitch for the first time in history. But is the top-level commitment to make government more effective through good governance and economic reforms enough to affect change on the ground? The peculiar kind of continuity in Philippine politics poses that question.

The election results indicate that, as in the past, the biggest winners were the political dynasties and their often questionable tactics involving “guns, goons, gold, and glitter” to mobilize voters. There were, however, some significant upsets by candidates who ran on a good governance platform and won against entrenched political dynasties. Leni Robredo’s win of the congressional seat in Naga City ended the 35 year reign of the Villafuertes family, and Rolen Paulino’s mayoral win against Anne Marie Gordon in Olongapo City ended the quarter-century rule of the Gordon family. But many other dynasties still continue to dominate.

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The Serbian Experience in Transition

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One of the most famous opening lines in all of literature comes from the great Russian novel Anna Karenina: “Happy families are all alike; each unhappy family is unhappy in its own way.” With that, Tolstoy encapsulates a simple truth: dysfunction takes myriad forms. That’s not to say that one cannot learn from another’s experience. Indeed, some of the most important lessons can come from those who have already tried and failed. Experience is singular, but patterns can illuminate.

It is in that same spirit that Boris Begović writes the latest Economic Reform Feature Service article, which offers Serbia’s lessons in democratic transition to countries currently in flux. Dr. Begović, a longtime CIPE partner who was a chief economic adviser to the federal government of the Federal Republic of Yugoslavia for 15 months during 2000-2002, examines the approaches that worked for Serbia—and those that didn’t. Read the full text of The Serbian Experience in Transition.

Stop Tinkering and Start Integrating

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We continue to suffer profound institutional gaps on the local, national and international levels – especially in the areas of property rights, access to credit and effective governance. I attended the CIPE Democracy that Delivers for Entrepreneurs conference in Chicago on April 9-10 and shared views with thought leaders from Egypt, Kenya, Lebanon, Pakistan, the Philippines and Venezuela. While it may seem that citizens in such developing economies suffer more from institutional paralysis, the pain felt by the local start-up dealing with banks, bureaucracy and back room deals is just as real and just as prevalent on the south and west sides of Chicago.

Organizations decline when leaders and workers focus on function rather than mission. Across the wide spectrum of our global community, too many have lost sight of the core principles that make democracy work, including the right to associate economically, the right to own and finance property, and the right to have government work for everyone, not just the connected elite. The only way to dislodge this entrenched bureaucracy is to make noise – to make our voices heard. We have to demand that government at every level stop tinkering with half-measures and start integrating new thought, new technologies, and the next generation into our institutions.

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How Does Inclusive Economic Growth Support Democratic Participation?

Participants at the workshop on economic and social inclusion, with moderator Jean Rogers (center). (Photo: Staff)

Social and economic inclusion have become priority themes in ensuring that democracy delivers for all. On October 16, CIPE organized a workshop on economic inclusion at the Lima Assembly of the World Movement for Democracy to explore possible routes to inclusion and the implications for giving a voice to excluded populations.

The first presenter, Selima Ahmad, founder of the Bangladesh Women Chamber of Commerce and Industry, said that in Bangladesh entrepreneurship has given women a voice. Women entrepreneurs have gained the ability to make decisions within the family, and men are even joining their wives’ businesses. The women’s chamber advocated successfully for women entrepreneurs to be able to get loans without collateral. Members of the chamber who have done well now create jobs and provide help to other micro entrepreneurs.

In Peru, entrepreneurship provides the only route to move up in life for many who lack formal education. Daniel Cordova, president of Instituto Invertir, described the EmprendeAhora program, which educates young Peruvians under age 25 on democratic and market concepts. This program engages youth by addressing their personal and professional interests. The key to the success of the program is giving them a concrete, entrepreneurial activity, such as starting a business or a non-governmental organization.

Osama Mourad from Egypt, CEO of Arab Finance, noted that the Arab people protested for the sake of their freedom and dignity. However, an economically empowered citizen is a citizen who cares about the future of his country. The revolution in Egypt made people feel empowered to determine their own future and to start businesses. Key issues for them are access to capital—which can be provided effectively through cooperative associations; reform of bankruptcy laws; and non-financial services.

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Youth Take on Democratic Transitions

If you’ve been following CIPE’s activities centered around Democracy Day, you’ve seen a lot of young people making their opinions heard. Indeed, young people are more engaged now than ever, thanks to social media platforms that unite and amplify their voices. Democracy is, by its very nature, a hopeful political system; it presupposes the beliefs that everyone should have an equal say, every vote matters, things can change, and the future is always brighter. Young people tend to be the most hopeful, so it is no surprise when they support democracy.

The second and third place winners in the Democratic Transitions category of CIPE’s Youth Essay Competition both agree that youth have a vital role to play in democracy. Kristen Han believes that in Singapore, young people must take greater initiative to join into political and civil discourse. They already have the tools; they simply lack the will.  Judith Aduol Nyamanga writes that education and entrepreneurship are key to youth in Kenya. Economic empowerment will give rise to more capable and engaged young people.  Read both essays here.

CIPE is now accepting entries for the 2012 Youth Essay Competition, which focuses on the theme of entrepreneurship. Winner in each category will have their essays published as Feature Service articles and receive a $500 honorarium, and a special Grand Prize winner will be awarded the opportunity to attend an entrepreneurship conference in the United States in 2013. Find out more here.

Making Progress on Democracy

Find out more about the film at www.awhispertoaroar.com

In the crush of international reporting on terrorism, civil war, and revolution, it’s easy to lose sight of the more incremental progress in the world.  A few decades ago, few would have dreamed that a majority of states in the world would be democracies, or that democracy would be the only broadly legitimate form of government in the world.  Neither would many have imagined that the United Nations General Assembly, which had made a habit of excusing if not celebrating tyrannies, would establish in 2007 an annual International Day of Democracy to intensify global resolve to promote and consolidate democracy.  Even the date (just four days after September 11) is a not-so-subtle rebuke to those who see violence and extremism as the path to a more just world.

While democracy has made dramatic gains over the last four decades, it has also confronted a growing pace of challenges and setbacks, even in the face of the new hope generated by the Arab Spring.  In each of the past six years, many more countries have declined in freedom than have gained, and the number of democracies in this period has also receded.  There has been a rising tide of democratic breakdowns in the past twelve years, and autocrats have been emboldened by the growing power and self-confidence of China and the economic and political troubles of the advanced industrial democracies.

Yet, as we have seen in the Arab Spring, and before that the Color Revolutions of the post-communist states, authoritarian regimes are also facing acute challenges to their stability, and without the floor of intrinsic legitimacy that most democracies enjoy.   A rising generation in Singapore expects more freedom and openness, and has helped to drive unprecedented opposition gains in recent elections.  The ruling Barisan Nasional coalition in Malaysia has seen its political dominance erode and could lose power altogether in the next elections there.  In Burma, the military has launched a transitional process that could lead to a transition to democracy in the next scheduled national elections, in 2015.

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