returned to turkey and invested there and that reflected on the prosperity of the country. so the this is an example. the other example is borrowing now. it's not a shame in any economy to borrow nor is it a shame in any country because there is no country that can do completely without having economic relation with other countries so that it finances their poor or the principle of this is mutual benefits. so i believe balanced investment which is the properly guided and assured that it will lead on to projects in the infrastructure i believe that it is something that could be studied and could be arranged for. there is no reservations on

cooperation with the imf or the world bank for purposes , not t interfere in the sovereignty of the country but rather to take their advice to maintain their price of the currency and i think this is a very sensitive and serious problems for the recovering nations because the issue of current sit is not a domestic matter. it's a regional and international matter sometimes. so it is imperative that for a certain period of time, dependence should be on international toempl maintain the price and integrity of the country. relationship with islamic banks and commercial banks, now i believe that islamic banks are not anymore -- rather they are in the international arena and it is possible to depend on

these banks as world everybody model that can stand side by side competing with the commercial banks. but it's not wise for the islamist movement to fight the commercial bank or to make it imperative that only the islamic system because lots of releases are based on commercial relations. therefore this should be looked at from the point of what is good for the country and the economy and for the protection of the economy of the country. so the i believe it is football cooperate. this we have now the islamic banks and conventional banks, and the question now, of course, the choice now is finally left to the citizen. it's they who will decide with which bank they want to deal

with. the islamic bankers more favorable to them. . the commercial bank is easier to deal with it. so it's not really prohibiting or allowing. so the final point and i will stop talking afterwards. i believe that international economics, there are agreements and international relations that should be respected and should be seen as an integral part of globalization which we cannot afford a systemic movement because an international order that is now affecting great aspects of life and most likely also in the economy. thank you. thank you very much. that was very helpful in also going into some of the detailed elements that i think you many

people have out onnaire mind. so you've already given some of the answers to the questions that people were planning to raise. but i'm sure that won't stop them from asking other questions. before returning to that, let me now turn to our final panelist. so far perhaps you can give us the egyptian perspective. one topic if i may suggest which affects both jordan and egypt a little bit less tunisia is how you seep dealing with one big source of problem for the budget which is the generalized subsidies on energy products in both countries. and as you know, the benefits of these energy subsidies tend to go mainly to rich people rather than to poor people particularly when it comes to gasoline and products like that. and yet, throughout the middle east, the way to help poor

people seems to be to have a system which mainly helps rich people. so i would be interested also in your thoughts on how you see the reform of subsidies. >> sure. >> thank you very much, masood and thanks to the karn gil endowment for making this event possible. the freedom and justice party in egypt has outline add economic strategy, and launched two processes to mature it. one process is a process of dialogue to get as much feed back, different perspectives and so on. and the other process is to technically formulate a policy package that would support that strategy. my role in the next of five to 17 minutes is to try to lay out the strategy in i hope clear terms. the strategy has actually four pillars. one is to expand the private

sector. limit and hopefully shrink the government. empower the civil society. and fourthly, integrate egypt in the global economy on more favorable terms. just go a little bit into each one of these very briefly. just to give you an idea of how suppressed the egyptian economy is and how underperforming it is and how there's a huge need to expand the private sector, egypt's contribution to world trade is close to .23 of 1% of the global. that comes from a population of 1.2% of the world population. so this is definitely an economy that's not performing up to the potential of its people. just at a vet very sort of macro picture, this is depressing. and why is the economy not performing an underperforming to that extent?

there's a great book actually that i read on the plane that i recommend everybody just take a look at it because it also tackles not just egypt but many other countries. it's called "why nations fail." it's a great read. and in that book he describes and the co-author describes what they call extractive political institutions and economic institutions versus inclusive political and economic institutions. and, of course, he cites egypt as one of the classic examples. extractive institutions are ones that extract the resources, opportunities and so on of an economy for the interest of a vet narrow group of people in a particular country. political institutions that support that kind of extraction have by definition to be oppressive to their people. the end result is the creation

of all beit very rich and very capable but very, very tiny class of people who have enormous amount of power, enormous amount of money, enormous amount of wealth but at the end of the day when you look at an economy of 85 million people on the other hand, it creates a very, very low demand because the rest of the population is suffering. there is this awful statistic that i always suffer with because we say sometimes as economists in numbers, but you actually have to go to an egyptian village and spend the day there to feel it. you know, the number we always say that 30% of egyptians spends $2 a day or less. it's not just a statistic. if you actually go and spend the day in one of upper egypts or delta villages, you will get a feel of what this really means on i an human level. and it's just awful. i don't want to go and i'll go very passionate about it but

just awful. anyway, so what we want to do is to actually remove that extractive institution and put in its place an inclusive institution. in other words, we like to include more and more people in egypt. and give them more access to economic opportunities in the country. we would like to do that first of all by reversing, that's the easy part, by reversing what the previous regime has done. if you again look at this book that i referred to, it outlined in very interesting ways how this extractive institution was able to work. it gives examples of 5 or 6 key industries in egypt, the iron industry, the cement industry, the media industry and so on and it details how these industries are so limited. there is entry barriers like

there is no tomorrow. and it details how this actually happened, which coincided with data that we are now receiving not from our people but from the government agencies, the central bank, finance department, so people are coming forward now to say how this actually happens, how this was possible. amazing government contracts, just amazing terms. tax breaks that you've never heard of. land deals, real estate deals totally unheard of also. that kind of thing. fuel deals. when you look at these privileges that was given to be these few and the political institution that supported it, the outcome, as i said is a shrunk economy. we would like to reverse that and give access to people by reversing these strengths. and here is where the second and third pillar come in. we would like to restrict the government. we would like to make it simpler

for people to practice economic activities. we would like to make it simpler for people to invest. first of all to save, to invest, to pick the projects they would like to go to. we would like to make it easiest for them to get licenses to get to work and so on and so for the. >> again, numbers sometimes help the egyptian public sector is about 7 million people strong. just amazing. just to compare it, and you talked about turkey, turkey has almost the same size of population of egypt and it has 650,000 public employees last i checked. which means that is for every turk public servant, there is 11 egyptians. that's -- we cannot again this is why part of our problem does not include creating more jobs in the public sector. we actually want to restrict

that and hopefully with time reverse thars trend and start creating value addition jobs and move huge part of that public sector into the private sector and cooperative sectors through these measures. why we include the empowerment of the civil society, because we need a much stronger civil society to serve the mechanisms of checks and balances on the government because it's not, by the way, it's not just but a party taking over. i'm sure we all you have this experience. it's about the institution of the government and the institution of the government can very easily defeat the program unless you institute the checks and balances that would put enough pressure on the governing bureaucracy and start reversing the trend of this widespread corruption. you asked the question of corruption. corruption i guess in egypt is a

very interesting one. i'll get to this in just a minute. the fourth pillar of the strategy is to integrate egypt in the global economy on more fafrl terms. by that i mean, we looked at the strength of egypt, the competitive advantage of the nation, if you will. and we looked at the practices of the previous government and how they articulated the strength of egypt. i think they articulated the strength of egypt basically in terms of location, in terms of it being a country in which it's easy to go and insti tute polluting industries and so on and so forth. weept identify the strength of the egyptian economy, the competitive advantage in the egyptians have very large relatively disciplined homogenius workforce. i agree 100% the revolution was

not about bread but a haunl huge part of it was about apathy. it's just about millions upon millions of you who have been looked at by the previous regime not as sets, not as resources not as advantages but we'll as a burden. we will we would like to reverse that and by giving more access to these millions of egyptians, we aim at increasing the competitiveness of the egyptian economy. and one way, of course, of doing that is to redefine what we call the industries and val you'll adding industries as those that are associated with an elevation in the capacity of the workforce. so whatever industry is going to add to the capacity of the work pors to number one produce, number two join the knowledge economy at much more fafrl terms is to us a value adding industry and hence, we're looking very

closely now as things like the i.t., medical i.t., new energy and so on and so forth in an decision to the tradition industry. one objective is clear which is broaden the demand base of the economy. the second is to create more -- a fairer distribution system in the economy. and we don't want to do that through regulatesing it centrally because that would not work. we would like to do it by stimulating the economy. when we stimulate the economy, improve the checks and balances in the system, give more access, then hopefully we'll get a better distribution of income and wealth. the third objective is we would like to get, and this is really huge, anyone who knows egypt or read the history of it knows how hard this is, but this is part of what we think the legacy, if you will, should mb given where we come from.

we would like with this restriction of the government to redefine the relationship between the state and the population, the state and the society in egypt. as you know, egypt is one of the few societies that were born with the state. it did not start with people who went farming and so on and then decided to have some sort of a central system. it started with the central system. so egyptians' relations to their state is so unique. it's sort of a hate depend kind of a relationship. you know what i mean? you go to an egyptian and usually by the end of the day, he will have cursed had his government two or three times. but then you go and say, by the way, the government needs to trim itself down a little bit and let's say rationalize the subsidy and people will go in riots in the streets. in other words, people are still so much connected to this government. we would like to change that with time and change the concept of the government and the state from that of a controlling one

to one that's empowering and hence, really latching on the potential of the egyptian society, not just the economy? ways that are very consistent with the values of the revolution. the freedom, the dignity and so on, these things will not come, by the way, if people are still occupied within their own minds with a perspective of a state being the pharoah kind of thing. and finally the fourth objective be to increase the competitiveness of the egyptian economy. in terms of programs, we're looking at three streams in order to kick off the strategy. the first stream was looking at trying to attract foreign direct investment to ejupt but not in sort of a sentimental way of let's come and save egypt kind of thing. we're trying to come up with in the next couple of years with between 50 and 100 very sound projects is, projects that have

very good business plans behind them, financial plans and so on in a number of select industries. this is what we're working on now, trying to look at what industries would qualify to host these megaprojects. each one of these projects we hope will require and an drakt an investment of around $1 billion. which should mean we're pumping into the economy in the next couple of years between 50 and $100 billion. we're looking at two kinds of industries. some in which egypt is already strong, but these industries are suffering now like tourism, like textile and so on. but also we're looking at another stream which is the industries that we believe with the workforce we have in egypt we can excel and excel very quickly so we're looking at i.t. and energy and so forth. the second stream to create jobs, we're looking at a very ambitious small and intermediate enterprise campaign to be launched smeeld as we take over. the bad news is egypt has

already tried that. it's not, you know, a great thought that we came up with. we actually know that small and medium enterprise campaigns have been done in egypt before. and the problem was not with the finance. the problem was with the way it was managed. small and medium enterprise is a complex undertaking. it requires a system in place, a system not just to finance but a system to educate, to train, to integrate, and of course, to finance and to look at the social, economic picture of what's going on on the ground so that people can actually repay the loans they get, can have a success rate on the projects they do and so on and so forth. we are hoping that by being a grassroot movement, that we'll probably have better luck with designing and executing a small and medium enterprise campaign in egypt.

the third stream is similar to what i think our brothers in unesia are looking at which is an infrastructure kind of a program we will probably do a massive government spending in infrastructuture and we'll go through the same process of identifying what kinds of frp structure would probably help in he egypt. we're looking at sort of a highway kind of a project amongst a number of other projects. these are the three streams we're looking at in terms of programs. in the shorter term though, we have very serious challenges. we have a liquidity issues and we're working with imf to grant the loan and we have, i don't know if this is the time to talk about. we have a political issue not an economic or fiscal issue that's hindering the loan and we hope to resolve very soon. we have an interim government that is probably going to take the money and spend it and then we have an elected government that will come in place a few months later and be responsible for replaying it.

we're not sure if this is the right formula. so we're working on that. the imf loan, by the way, is not just important in its own right in terms of the money it provides to egypt which is very important but it's very important in terms of integrating the new government of egypt in the global financial institution at a very responsible kind of a deal and opening the door for more deals with other countries. in the short term, if you look at the numbers, there is no escape. the egyptian economy will need a lot of boost from the outside. and this not happen unless there is a responsible government in place that is going to spend the money wisely and is going to repay it on time. the second challenge we have is the huge expectations. we have people in egypt now the who think that with the revolution and with the coming of the freedom and justice party to power it, all government

workers should become permanent. everybody who used to have a certain income needs to go to a higher income and so on. these are very, very dangerous expectations at a time like this. so our your second challenge is to be extremely open, transparent, frank with the people and also go to them with a plan. we don't just want to go to people and say it's a very dire situation. we want to say it is a dire situation, but here's a plan, stick to us. let's work together and so on. >> we have a challenge of removing obstacles from local and international investments. there is no need for the kinds of bureaucratic complications that we have now. we can deal with that. and we also need to do score on a number of quick wins. we have a team in the party working on something we call the first 100 days. we're trying to make sure that the very first few months of the working of this government will

mean some tangible benefits for people. things that not require necessarily a lot of money and stuff like that. we're looking at some of the basic services. has any of you ever driven a car in cairo? you know what i mean. that's a huge -- you know, thomas friedman visited cairo in the midst of the debate. we call it aura. he came in the office. an hour later he sweating and he said in a broken arabic -- [ speaking foreign language ] i think the guy was right. so these are the kinds of things we're facing in the short term. there are two conditions. and that's my final remark. there are two conditions for this program to work. and we're not kidding ourselves about it and we're not being naive. this is the kind of program that will not succeed because the party -- -- is it time to go?

>> no. >> there are twoen cans. the first condition is one of ownership. if we cannot get very significant segments of the egyptian institutions and egyptian society to own this plan, it will never -- this is why is we're appealing to the private sector to look at the situation favorably. to come and shoulder the enormous task because this is not the enormous task of the party. this is the enormous task of the revolution, the people. so on the one hand, we want partner i mean ownership. on the other hand, we need a lot of partnership outside of egypt

with global institutions with, groups of investors, with multinationals, and we're working on that, as well. if we will succeed in securing these two conditions, then this plan or strategy has a chance. thank you very much. >>. [ applause ] . >> i have to say that you know, you've now had you really very clear three plans laid out. and, of course, now it would be good to get some questions. i would encourage people to also be a little bit provocative in their questions because i'm sure people who have laid out the plans want to hear are the kinds of issues that are on your mind so that they can be implemented. as before, you would encourage you to identify yourself when you speak. so i'm going to go right to the back about the lady over there first and then i'm going to take three or four questions and then have answers to those..ease. >> thank you for taking my

question. my name is suzanne. i was very impressed by each of you. i bring a different depth and with different ambitions. both tunisia and egypt it appears that you are in a dialogue to figure out priorities which sounds laudable. however, as a veteran of the industry, i'm cautioning you that if you don't have a master plan or if you don't look holistically especially at the transportation infrastructure you will end up with a hodgepodge that it will be very difficult to fix later. so that's a comment. my question though is, how do you plan on letting contracts for major infrastructure projects and candidly, candidly, how welcome are u.s. firms coming in to help with work with you opposite to a construction

engineering first coming from other parts of the world candidly, please. thank you. >> thank you very much. i will come to your question. i want to go to this side now. the gentleman, yeah. >> thank you. and thank are you for the cavor gi corporation. i have a question for egypt and a question for the three of you. for egypt, would you consider or agree to transfer the military aid that goes to buy airplanes and tanks, et cetera, to the economic development and aid. the amount may not be great but the symbolism is valuable and it would be helpful in building hospitals and schools. the other question for the three panelists, i didn't hear the word education in any of the plans. now, it seems critical specially

technical education and developmental and the kind of background for investment for the future. >> okay. >> thank you. i now have the lady in the front here. thank you. ing. >> just to follow up on the question about military, speaking of favoritism, will you be able to get the military out of the economy and also could -- speaking to the egyptian panelists and has also, how can you revive the tourist industry? will there be a political problem, especially with salafi members in parliament? will this scare the industry off? what are your plans for handling that touchy problem? >> and i'll take one more question and then i'll come -- >> thank you. georgetown university. my question is to mr. el kazzaz. true you needed to have the

ownership from the whole society. certainly for the current businessmen benefitted from the old system and don't share the same political views. how will you try to convince them knowing some of them are liberals and don't want to even participate with you in the writing of the constitution? how will you overcome this challenge. >> great. so we have some questions. what i would like to do, there are some specific questions for egypt. so i'll come to egypt at the end. but there were two more general questions which applied to everyone. one was the issue of education and the other was a question of how will you let out contracts candidly. so maybe i'll start where mondher on that. >> yes, the first question is easy to answer. infrastructure projects will be tendered through public tendering in a transparent fashion. whether you are a