Free Egyptians Party (‫)حزب المصريين األحرار‬ http://www.fep.org.eg/ Summary of our economic programme The economic programme is a living thing. It is a document that evolves with the state of the economy, local and worldwide. The Free Egyptians Party has updated it annually so far. This is our version of 2014.

1. The macroeconomy ................................................................................................... 3 1a. Growth ...................................................................................... 3 1b. Deficit reduction ........................................................................... 3 1c. Labour market policies ..................................................................... 5 1d. Investment financing ....................................................................... 6 1e. Central Bank ................................................................................ 7 1f. Egyptian Competition Authority ........................................................... 7 1g. Tackling corruption and red tape .......................................................... 7 1h. Water resources, renewable energies, pollution reduction ................................ 8 2. Sectors of production .................................................................................................. 8 2a. Industry ..................................................................................... 8 2b. Extraction activities (mining, oil, and gas) ................................................ 8 2c. Agriculture .................................................................................. 9 2d. Suez Canal .................................................................................. 9 2e. Tourism ................................................................................... 10 2f. Foreign trade .............................................................................. 10 3. Consumption ......................................................................................................... 10 3a. Housing ................................................................................... 11 3b. Traffic .................................................................................... 11 3c. Healthcare ................................................................................ 12 3d. Education ................................................................................. 12

Our party has an exceptional wealth of expertise needed to run the economy successfully, for the benefit of all sections of the Egyptian society. We have a team of world-class businessmen, economists, and academics, all having illustrious track records of successes in Egypt and internationally. We can lead Egypt to become a firstworld country in less than 15 years, and the benefits will be felt by Egyptians within a year, with a target of two years for self-reliance to avoid chronic dependence on aid. Our party believes in the strength of the free market, but not an unguided or unrestricted one. We believe in making the economy grow in a fair way. We want not only the overall economy to expand, but also everyone’s income to grow as well. In seeking growth, we will be careful in maintaining a low level of inflation, so that there is real growth and not just nominal. Inflation hits the poor disproportionately, and we will ensure that they are protected from this. Inflation can also introduce uncertainty, which discourages investments. Our plans for growth will be sustainable, both financially and environmentally. We will not seek quick-fix window-dressing populist policies. We plan for the long-run good of the Egyptian citizens. A good house must be built on solid foundations, and our economy needs restructuring to be capable of delivering continuing benefits to Egypt’s citizens without depending on ever increasing financial aid from abroad.

The following are the broad principles guiding us: 1. We believe in a government that will design a set of macroeconomic policies to direct the economy onto a path of sustainable growth with low inflation. To do so requires from the authorities: 1. the setting of interest rates and the optimal control of the monetary instruments at its disposal; 2. a responsible approach to spending so as not to waste taxpayers’ money; 3. optimizing revenues from our resources: our material resources like gas, the Suez Canal, etc., but also our human resources and intellect; 4. a duty of care to all members of the society, in particular its weaker members who must never again be left to fend for themselves alone. 2. We believe in a government that will design the right tools for the microeconomy to function in an efficient and fair way. Market failures require prompt pre-emptive and corrective measures that will not happen on their own: they require a government that cares and that follows actively what is going on at the smaller levels in the markets and regions. 3. We believe in decentralization and the necessity of the application of modern management in state institutions, raising efficiency and simplifying procedures to enable government institutions to serve the citizens and facilitate their lives. The reduction of corruption and bureaucratic red-tape is essential. 4. We believe that social and political freedom cannot be completed without real economic freedom based on competitiveness, transparency, and integrity. Freedom of thought, choice, and action within the law are essential. Empowering our countrymen and women to take control of their destiny must include empowering them to become financially strong. We believe in a government that will give both the opportunity and incentive to its people to develop themselves in every domain, starting with a world-class education through to encouraging a successful entrepreneurial society as the Far-Eastern economies have demonstrated. We also believe that, in parallel, we must expand the umbrella of social solidarity to reach the neediest and ensure their access to a high level of services.

1. The macroeconomy Introducing one policy at a time, such as a subsidy, would have implications for the rest of the economy and not just the price of what is being subsidized. We use the notion of general equilibrium (‫ )التوازن الكلي‬to design a set of macroeconomic policies that are not contradictory when implemented, and this makes sure that the policies fit together as a complete and consistent package, after taking into account all the feedbacks and repercussions that will take place in the markets.

1a. Growth Restarting productive activities is a priority. Increased government spending is not the answer if it does not generate more productive activities, in which case it would generate inflation with nominal and unsustainable growth. The additional policies that we will adopt separately for each sector will be detailed in Section 2. Here, we list the overall policies that we will introduce for the whole economy to encourage growth. We will introduce temporary subsidies and delayed taxation (tax breaks and tax credits), in particular for investment in non-speculative activities that generate employment and other benefits to the economy. This will add to the deficit initially but will improve it soon after, as more income is generated by these businesses and the people they employ, with economic activity increasing and generating more tax revenue from all these sources. Also, to compensate this temporary loss of government income, these measures will be financed by the introduction in Section 1d of new sources of financing. We will give more of these financial incentives to activities in poorer regions to regenerate them. We will introduce temporary subsidies on employment in some key activities that we want to encourage to reach critical mass (e.g. because they generate exports): companies get a subsidy per person employed, lower for bigger companies. For many decades, the weakness of the Egyptian economy was the large size of its service sector. But this is a blessing in disguise currently: it is easier and faster to restart a service-based economy than an industrial one. We can restart growth faster by targeting key service industries; such as tourism, transit services, outsourcing of services from expensive countries (such as call centers that do not require much of a capital investment but require training), etc. Egypt is largely a service-based economy and, with correct economic management, services can be restored fast while we invest in encouraging industry and expanding agriculture.

1b. Deficit reduction Growth will lead to deficit reduction, because more profits and incomes generate more taxes. But we must also restructure the government’s spending and reduce the unsustainable current waste which is on an uncontrolled explosive path. With the computerization of the identity card system, we can now target social security and consumer subsidies to those deserving them instead of offering them to the whole population as is currently the case that wastes taxpayers’ money and distorts resource allocation both in consumption and investment. People below a certain level of income will be entitled to a cash handout that is linked to a price index for a basket of essential consumer goods.

We will invest in improving our income and tax database. In addition to reducing tax evasion, it will be linked to other national databases of family card (computerized card for subsidized food), national ID, registration offices, traffic police, and pensioners. This will give us a more complete picture of whom to target with the system of cash payments that we propose as an alternative to the current inefficient and wasteful subsidy system. We will set up a national payment system which will be based on this database, through an electronic transfers system to eliminate the corruption that may occur due to human intervention. Energy subsidies are regressive, meaning that they benefit the rich more than the poor; with the poor effectively paying for the profits of companies and for better-off individuals. This will be changed by the system we propose. Subsidies on industrial fuel will be phased out. It is a waste of government funds and of the country’s wealth. It also distorts the resource allocation in the economy towards unsustainable and uncompetitive activities. We had the courage and long-term vision to say that this change had to be implemented since our first economic programme in 2011, and now the government has simply no resources left to postpone the solution anymore. There will be a oneoff jump in prices, but it will be compensated by direct payments to the needy, removing the amounts wasted by subsidizing those who do not deserve it and reducing the waste that comes with artificially cheap prices encouraging unmeasured consumption. Even after cash compensation, the total cost to the government will be less than the current system, thereby reducing the excessive and escalating spending by the government and stopping the sustained inflation that comes with it. We will open up the energy market to enable competitiveness and give incentives to generate more power. For example, private smaller-scale energy production (from solar and other sources) will arise to satisfy the needs of their private activities, whether production or consumption, and sell the excess to a national electricity grid. This will attract investments in the energy generation and distribution, balancing the huge gap between the energy demand and the current undersupply. The taxation system will be overhauled. We will convert the sales tax into a value-added tax (VAT). One of the side benefits of VAT is that it reduces tax evasion: it gives the incentive to any seller to reduce the amount of tax paid by declaring where and how much was paid for the components s/he bought. We will also crack down on illegal street traders: they trade in broad daylight without any licenses or taxes paid on their irregular activities, driving honest shops out of business. We will raise the tax threshold (exemptions) for individuals to levels that are reasonable at today’s price level, and we will revise them in future budgets as prices change. We will have 3 tax brackets with two thresholds: earnings up to the first threshold are not taxed, additional earnings up to the next threshold are charged at 15% (only on the portion of the income between the 2 thresholds), and whatever remains is charged at 25% (only on the portion of the income above the second threshold). The exact values of the thresholds will be determined at the time of implementation of this policy, to take into account the latest data. Corporate tax rates will remain flat. The government’s newspapers and TV will be privatized. Governments are formed by parties, and these can have their own media without wasting taxpayers’ money. For example, state-owned TV alone is currently draining 3.8 billion EGP every year. We will raise funds by one-time auctions of licenses for a variety of services. Examples include a new mobile operator, new internet providers, management of airports, etc. We will introduce an alternative to the system of running public sector companies, so that they perform more efficiently and remunerate their workers at rates comparable to the private sector. The current Soviet-style model has ceased to exist in the developed world because of it failed a superpower. Sovereign wealth fund (SWFs) will be created and will own and preserve the public assets. The Egyptian state wealth lies in lands, monopoly on mineral rights, public sector companies, and infrastructure such as power stations, energy distribution network, roads,

railway, maritime ports, airports etc. These assets are often poorly managed and inefficiently used, disregarding their potential as securitized financial assets. To maximize the income and wealth of the state, we suggest establishing several SWFs, which would also resolve the problem of politicizing the state’s economic activities. SWFs would be regulated in accordance to chosen objectives. These sovereign funds will also normalize the sale of some assets, with the proceeds of such sales reinvested in the most profitable assets in promising industries and services together with activities of strategic importance, instead of the current system where such sales are diluted into wasteful state budgets. In a few cases, our SWFs could invest in foreign countries that have an economic advantage to solve and secure some of our consumption and production needs that would not be viable locally. Managers of the companies in the SWFs will be monitored and their performance will be scrutinized according to well-established standardized criteria. The direct influence and interference of ministries will be abolished.

1c. Labour market policies We were the first party to enshrine in our policy that we support the minimum wage, since the first day of our foundation in 2011. Unfortunately, its introduction was untimely and the levels that have been set by the government without consultation are unrealistic and will accelerate inflation, rendering these minimum levels worthless quickly. Furthermore, the current wage system is broken and needs to be changed as a matter of urgency. The current governmental wage system dates back to 1978 and suffers many flaws, including the following: - All those who are on the governmental payroll are deemed public employees, with the mixed bag including over one million teacher, over 225 thousand doctors and nurses, and over 300 thousand technicians. Employees who had the same educational degree are paid the same wage regardless of what job they were hired for. Such a system leads to problems as the types of jobs differ in terms of the tasks being performed and corresponding outputs. Apart from the resulting inefficiency, incorrect incentive structure, and unfairness of the wage system, this has caused several protests and strikes demanding special adjustments for teachers, doctors, etc. - The current wages system does not match the current prices, so previous governments have been circumventing this by awarding bonuses and allowances that became the dominant part of the wages paid, with no real productivity incentive in the award of these supposedly variable components of pay. We will therefore restructure the entire wage system and the government structure to ensure modernization and higher efficiency with rewarding wages. We will also separate the management of the state owned hospitals and schools. We will abolish the newly-introduced maximum wage, or render it ineffective by adopting a high ceiling. A maximum wage is not imposed in any developed country, and there are good reasons why. First, it creates an exodus of talent and leads to an underperformance of public-sector companies. Second, it encourages "unofficial" payments, including also bribes. These undeclared payments are also lost tax revenue, since they are undeclared. So, the result is more corruption and less income for the government and the country. Pay should reflect performance: if an executive makes the company flourish, then there is a good reason to reward and incentivize him/her to keep improving. We will reform the mandatory social insurance laws (‫)قوانين التأمينات األجتماعية‬, as the current law mixes pension and healthcare thus forcing employers and employees to pay 40% of their wages as a mandatory contribution for the national social insurance system which is run by the state. We consider it to be hidden taxation, which has a negative impact on the labour market and results in tax evasion as employers and employees agree to have a declared wage that is much lower than the actual wage. This declared wage is the taxable wage, leading to tax evasion. Also the current 40٪ is a hurdle in applying the minimum wage in the private sector. We will reform the

legislation reducing the mandatory contribution for the state and open the door for private pension funds with firm auditing to prevent irregularities. The computerization of ID cards allows us also to introduce, for the first time, unemployment benefits like in firstworld countries, conditional on retraining where necessary. Modern training programmes will be provided in collaboration with institutes, universities, and firms. In cooperation with foreign governments, we will introduce a system to send trained labour who are willing to work abroad to temporarily fill skill shortages. Europe and Africa are prime targets, in addition to our Middle Eastern neighbours. For example, there is a well-known shortage of medics over weekends, to the extent that some European countries have had to fly-in foreign medics for such tasks. Another example is development projects for engineers in African and/or oil-rich countries.

1d. Investment financing We will issue bonds denominated in Dollars and in Euros, diversifying the currencies at our disposal. These bonds will be available for all to buy, but specially targeted to Egyptians living abroad. Egypt has signed a doubletaxation agreement with most countries. Under it, if you pay tax in one country on some earning, you do not pay taxes again in another country on the same earnings. If a bond gives you an interest payment, it will be taxed only by one country. Usually, you pay taxes where you are a resident. Egyptians abroad still have Egyptian nationality and relatives receiving remittances in Egypt, and the interest earned can be taxed by Egypt at a lesser rate than abroad, at a flat rate like 10% (less than our income tax rate). Egypt will gain the liquidity from the bond issued, but also receive the tax deducted from its coupon value, which we would not have collected on any other loan that we may have taken from any other external source. We will introduce a secondary market for sovereign bonds to activate the bond market, to be a major financing instrument for companies. This will relieve the pressure on the banks and will provide the companies with the needed resources for growth. We will encourage wider investment in the Egyptian stock market, e.g. by introducing rules to increase transparency, incentives to reward long-term investment, new investment vehicles with a lock-in period, incentives for listing of new companies (including active foreign companies), etc. We will also launch government investment or hedge funds, with lock-in periods, for the following activities: real-estate construction, extraction (minerals, oil, gas), transit industries (ports, industrial production), antiquities’ exploration and protection. The funds will finance long-term investment activities in these areas and will be managed along the same independent efficient lines as private companies. Commodities markets (spot and future) will be developed, in line with the freeing up of agricultural trading, to incentivize increased output and efficiency of the agricultural sector. We will actively seek public-private partnerships for large-scale projects, such as infrastructure, transport, education, health, etc. This expands the range of projects the government can do and reduces reliance on debt financing. This partnership also increases efficiency in the delivery of products and services to the public. We will introduce more competitiveness in banking services, opening up the banking sector for more banks (including specialists in micro-finance). We will increase transparency, accountability, and independence within a framework to be set by the Central Bank of Egypt. Customer complaints will not be directed to the central bank, as is now the case, but will go instead to a consumer protection agency within the Egyptian Competition Authority (see Section 1f). We will encourage micro-finance programs and institutions to work actively in Egypt, as this sector suffer from several structural and legal problems with no legislation to organize their activities, resulting in the current ones offering only micro-lending services without the rest of the financial and banking services. Such legislation will

help small enterprises, and will encourage those who work informally to become a formal enterprise. We will also introduce a financial inclusion program for youth to enable them to gain access to banking and financial services. 1e. Central Bank The central bank will have twin goals: - control of inflation, including imported inflation and management of foreign exchange reserves; and - stimulating sustainable growth. The twin targets are chosen to avoid the anti-inflationary bias of single-goal banks, as experience of Western economies has shown. Also, recent experience has shown us that central banks have many instruments of policy, more than just controlling interest rates, in order to achieve both targets. We envisage abolishing artificial and unrealistic semi-fixed exchange rates that lead to black markets which harm economic activity and start a cycle of evasion and illegal imports. We will strive to minimize foreign currency interventions and use them to restore the pound to near its fundamental value, when it deviates substantially due to speculation. The current system of semi-fixed rates is unsustainable and is draining our foreign exchange reserves while creating many economic problems instead of solving them. It does not provide any lasting benefit by providing subsidized rates of foreign currency to a small segment of the market, while the unsupervised and unchecked black market rules the vast majority of transactions.

1f. Egyptian Competition Authority The Egyptian Competition Authority exists, but it is not given the independence, the executive power, and the funding that it requires to fully carry out its two ideal functions of consumer protection and ensuring competitive practices in production. In addition to reaching economic efficiency, social peace is at stake and the poorest have been the ones to be hardest hit. We will grant full independence and the necessary executive powers and funding to the Egyptian Competition Authority, and transfer to it the role of consumer protection as well as ensuring competitive production markets, since the two roles are interrelated. We need an independent agency that is not subject to the constant interference of government ministers who derail it in favour of special interests, corrupt or otherwise. The agency will protect consumers from being charged unreasonable prices and from being exploited. It will also crack-down in case of anti-competitive behaviour by firms, especially in sectors where there are naturally few players, and will keep an eye on nascent markets (and others) where the incumbent may exploit the first-mover advantage in an unfair way (e.g. predatory pricing) to prevent market entry. 1g. Tackling corruption and red tape Our successive governments, since the 2011 revolution, have not renegotiated the Israeli gas deal and some others. Nor has it responded to the invitation of foreign governments to take the appropriate legal steps to get back the money that was stolen by the former regime. We will renegotiate foreign deals on natural resources (like gas) that were made by the former corrupt regime. We will also chase to get back the money, other assets, and concessions that were stolen by the former regime, and will employ lawyers and political pressure groups abroad to do so. We will make it a priority to prevent corruption in government and applying efficient management techniques to the way the government is run, similarly to successful private sector companies. It will also necessitate that we redefine the roles of government employees and pay the appropriate compensation. The government can no longer recruit masses of citizens and employ them in an unproductive manner: it not only detrimental to productivity but

also to the low wages being offered as a result. We will simplify the bureaucratic procedures and spread transparency within the government decision-making process. We will implement budget decentralization for the regions. Governorates will be incentivized by keeping a portion of the income they generate. It is better to tax the regions at a reasonable rate, rather than 100% tax then giving them an unrelated subsidy or payoff. This will encourage them to generate more income and savings. Of course, we will also support poorer governorates and help them develop, as indicated for example in Section 1a. We will review and reform the legal framework for investment and contract enforcement. We will effectively manage the one-stop shop system, easing and reducing the procedures needed for establishing and operating companies.

1h. Water resources, renewable energies, pollution reduction We will set up a water management authority, as part of a bigger environmental economics and management agency. We are entering a very sensitive period, with an inevitable reallocation of water resources among the Nile basin countries, as we have warned in our first programme in 2011. The present system encourages water wastage and does not channel enough percentage of our water to productive activities. Differential pricing is a simple example that we will employ to encourage luxury users (e.g. for gardening) to turn to lower quality water (e.g. recycling, desalination, etc.) and preserve the Nile water for other more critical uses. Waterways management is another example where blockage, evaporation, etc. loses us plenty of valuable resources. We will invest in the renewable energy sector, such as solar and wind that we have much of. There is even more urgency now after the various nuclear disasters that have happened in the past decades in advanced countries. We will introduce policies to combat pollution, not just by punishment but by also giving incentives for recycling (e.g. instead of burning rice straw ‫)قش الرز‬, whether by financial aid or facilitating the activity.

2. Sectors of production The economy-wide policies have been covered in Section 1, including some sectoral aspects. Here, we cover additional aspects. 2a. Industry More than 55% of the industrial production in Egypt is done by small and medium enterprises (SMEs). Such enterprises suffer from lack of access to funds, banking services, and technical consultancy. In addition to the measures outlines in the previous section, we will establish a startup fund that will include existing specialized funding outlets. The new fund will offer technical support and financing in the form of loans and/or shared capital with active help, expertise, and participation. We will also make the government guarantee loans for SMEs, so that they gain access to bank loans at reasonable rates.

2b. Extraction activities (mining, oil, and gas) The new fund we proposed in Section 1d will give us the flexibility to move to a Norwegian-type model. Much research in this area has been produced and a consensus is emerging that this is the best type of approach, not only in terms of generating more revenues for the owner country but also in preserving its resources and optimally exploiting them. Two types of government holding companies will be formed, one that takes equity stakes in exploration but is not involved in production, and another which will be involved in the production. Equity

(ownership of the oil) is where the bulk of the profit is, so financing such exploration is of prime importance. Our economic policy advocates moving to this model, which has been shown to be viable for medium and large countries. We will also extend the application of the Norwegian model to the mining sector. With an equity stake, there is a built-in incentive that both sides maximize the benefits from the discovery. Compare that to the system of concessions which we currently have: it is an open invitation for bribery before granting the concession, and other problems after it is granted, such as suboptimal management of the resources when considered from Egypt’s viewpoint.

2c. Agriculture The farmers’ relation with the government as a sole buyer of important commodities has to change, so that farmers are given a fair share of the income and incentivized. The storage and transportation system must be modernized by the government to cut waste, increase supply, and reduce prices. This will apply to fishing as well. We will strike a deal with the EU who is offering to help Egypt on many fronts, and negotiate the opening of their markets to our produce. Private-public partnership will be encouraged for projects of large-scale expansion of agricultural lands beyond the narrow Nile belt. The water management authority of Section 1h will introduce irrigation improvements for existing and new lands. 2d. Suez Canal In addition to the usual projects for turning the Suez Canal area into a major hub for transit trade and other industry, and in addition to the revenue generated by auctioning time-limited licenses and concessions for providing services around the Canal area, we propose adjusting the Canal’s tolls immediately, with major new unconventional sources of revenue to be generated right away. The Suez Canal is a major artery in world maritime traffic. There are limited alternatives to passing through the Suez Canal. They would require going around the Cape of Good Hope in South Africa, or heading in the opposite direction in the Globe and via the Panama Canal. The theory of price discrimination in economics gives a way to optimize revenues from such a commanding position. It is this theory that we propose to apply fully to the case of our Canal. Some of it is already implemented in practice, but other aspects and lessons from the theory are yet to be applied. These could generate billions of extra US dollars per year for Egypt and make us less dependent on aid with all its attached strings. We will also implement our latest forecast about world economic trends to adjusting our Canal tolls. The prospects for toll gains are substantial in the coming years, in particular, as the world is emerging from the worldwide economic crisis that has hit it. Economic activity will pick up substantially in the near future, and with it trade and traffic through the Canal will increase. Because of these improving conditions, the Canal authorities should consider immediately starting a gradual increase in tolls. Furthermore, oil prices will rise as demand from the world economy increases. This oil rise will lead to more gains for countries in the region which use the Suez Canal as a pass-through, gains that we can part-take in. But also it will mean that shorter routes (like the Suez Canal) will become more attractive because of the reduced oil consumption of vessels, compared to the longer routes which become too expensive. A third additional tool of pricing that we propose is seasonal pricing. For example, oil is more expensive during the winter of the northern hemisphere (Europe, North America, etc.) because more heating is required. This is a time

when our tolls should be raised in advance, compared to the rest of the year. Storage cost and cash liquidity difficulties mean that buyers of fuel will not be able to buy it long in advance, so they would be obliged to still buy it for delivery shortly before winter, the time we are targeting our raises for. A fourth additional tool of pricing is based on the urgency of cargos and ships to pass through, not just based on the financial value of cargos as currently used. Here are two examples. First, cargos that deteriorate with the length of the journey should be charged more, like perishables, cattle, etc. Second, military ships should be charged a lot more: they cannot afford the time to go around Africa and the Cape of Good Hope before they can reach their target, while military budgets can always afford to pay more for the timely and urgent movement of its units. Currently, Egyptian military escorts accompany passing foreign military ships, and this is used to charge them a little extra, but nowhere near as much as we can extract even if we do not provide an escort. Finally, traffic through the Suez Canal is negatively affected by piracy around Somalia. We should offer a military escort through international waters, and charge for it a profitable rate. This will generate profit from the escort, and also increase traffic through the Suez Canal because of the increased safety. We are a regional superpower and we should use it for the good of our region and ourselves.

2e. Tourism The money from the investment fund in Section 1d will allow us to launch a campaign to revive tourism. It will also allow us to apply to the tourism sector the general financial incentives’ policy of Section 1a. Temporary subsidies, tax breaks and tax credits for the tourist sector companies will be given in return for them implementing cheaper packages to attract tourists. We will also attract an additional new segment that has watched our revolution with admiration. There is one more historical place to visit in Egypt, the Square that is truly a Liberation Square. We will plan to have a museum for the revolution in Tahrir, on the site of the NDP burnt-up headquarters. We will reorganize the whole strategy and approach for the development of tourism that will include a master plan for development over 20 years on all levels: regional, national, and local. The diversity of destination is a clear advantage of Egypt, and creating new destinations is a necessity for repeat business and visitors together to stabilize the seasonal fluctuation and event-related decrease in visitors. Decentralization is the key for inciting the involvement of industry stakeholder and local population in improving the services, accelerate development and enhancing returns. Training and continuing technical education will be a priority to help solving unemployment while upgrading level of services. Policies will include the incentives for tourism-related industries mentioned earlier, intensive introduction of information technologies, supporting SMEs, while controlling the adverse impact of development on the environment. The key is to maximize return instead of flooding the infrastructure with additional low-spending visitors. Open skies will be the core of our tourist transportation policies, including on internal flights and maritime facilities, while limiting monopolistic tendencies of large tour operators and charter services.

2f. Foreign trade We will gradually abolish customs and duties to integrate the Egyptian economy in the global economy, as per international treaties. This will enhance our competitiveness and attract foreign direct investment. We will negotiate free-trade agreement with the USA and Africa, and negotiate for the upgrade of the free-trade agreement we currently have with the European Union so that it includes agricultural products.

3. Consumption This section is about the end-user, and covers the remaining issues.

3a. Housing The informal housing sector in Egypt is a chronic problem. The estimates of this sector in the greater Cairo area exceed 53% of total residential area, and the estimated value of the informal properties nationwide is about 1.6 trillion EGP. These amounts of money are dead capital as, according to some studies, 92% of these units have no legal title. We will reform the property rights legislations, allowing those who live in the slums (‫ )عشوائيات‬to legally own their property, which will empower those citizens and give them the rights to buy and sell these properties. It will revive this dead capital and open the gate to develop these slums permanently and give a better opportunity of prosperity to the poor and marginalized citizens. We will also have a comprehensive alternative housing plan for big cities, based on two tracks: a complete overhaul of the infrastructure of the slums and the creation of new suburbs. We will create jobs near where the new housing units will be. Parts of this venture will be encouraged and financed by moving some government agencies and ministries to suburbs, then selling the prime-location properties that these agencies currently occupy. Using the money from the investment fund in Section 1d, we will invest in infrastructure and town planning in poor areas of the cities, to bring them in line with more affluent parts of the cities. This also includes regional investment outside big cities, as was done in the EU model with much success for poorer European countries to catch up. Sports facilities and sports scholarships will also be given to channel energies in good directions. Private investment in these regions will be given incentives, which are to be reviewed and phased out gradually when the balance is redressed. We will encourage the creation of private real-estate investment trusts. They are already written into the financial market law, but not a single entity used it because of its complication and uncertain taxation. The sale of small plots of land to individuals should be the main target. Selling to mega developers has proved to be an inefficient policy that created a few billionaires without resolving the main demand of acceptable housing for all. Relying on individuals in a regulated environment is essential. The visible unregulated urbanization around the Cairo ring road is proof that the government will never be stronger than necessary market demand that authorities cannot fully satisfy. This would not have happened if under the supervision of trained planning and regulating authorities. Ownership, rent, and mortgage laws need to be overhauled, in addition to the financing mechanism of real estate. We need to create a government-sponsored credit guarantee institution, similar to Fannie Mae and Freddie Mac in the USA, while liberating the commercial banking sector from these long term loans.

3b. Traffic We will use modern town planning to address the big cities’ traffic problems. This will include redesigning traffic lanes and street parking spaces, modern traffic management, etc. Any new building near the centre of large cities will have to have at least one (depending on the size) floor for parking cars. 95% of the cargo transportation in Egypt goes on trucks which cause road damage and congestion, as well as increase the consumption of the subsidized diesel fuel that represents 48% of fuel subsidy. Although railroads are a major artery for the transportation of passengers and goods, little investment has been made and this has resulted in a very poor quality and safety record, furthermore making losses of 1.7 billion EGP annually. We will reform the railroads authority, allowing private sector to inject new investments and to manage lines for both cargo and passengers.

Also, Egypt’s population is concentrated around the Nile, which is a natural waterway that should be used efficiently for the purposes of cargo and some passenger transportation. We will encourage public-private partnerships for establishing river harbours, cargo and passenger lines.

3c. Healthcare We will invest in providing excellent healthcare that covers the poor as well as the rest. Egypt has some of the world’s most famous doctors and has been historically a leader in the field. With the right structure and financing system in place, our doctors are more than capable of caring for the health of our population. We intend to have a national medical insurance system (free for the poor) that will allow the patient to choose which hospital to get treated in. The advantage of this competitive system is that the government will channel more money towards the more popular hospitals that provide a better service, allowing such services to expand. The government will not run the services directly (except in remote or other special locations), but rather collect the insurance premiums from those whose income exceeds a certain level, and use them to pay for the services from the hospitals that have been chosen by patients deliver them. We will also introduce partial tax rebates for outpatients treated by doctors privately, to incentivize them to declare such expenditures.

3d. Education We will invest in bringing our educational sector into the 21st century. We will invest in training and retraining people who will teach our younger generations, and we will reward and incentivize schools, teachers, and students that perform well. We will also invest in modern equipment, facilities, and buildings. More funds will be unlocked by private-public partnership. For example, long-term leases of some grounds and buildings will be granted in return for more private investments that will enable expansions. In the short run, we will overhaul the methods of teaching and examinations to move the emphasis away from memorization and rote learning, focusing instead on training the students to think.