the third pillar for sustainable growth is the development of infrastructure. and the government has increased in the complimentary budget load public spending for infrastructure development from 5.2 billion dinars to 6.4 billion dinars, an increase of 1.2 billion dinars in infrastructure projects, roads, electricity, industrial zones, all kinds of infrastructure which are necessary in order for businesses to come and invest, especially in the regions of the interior. for you, what we did between december and now is have a national consultation in the regions. and we asked people what kind of infrastructure projects you'd like to see in your region. what didn't the other regime or the previous dictator do for you? is it the hospital? is it an industrial zone? would you like to see an

electrical plant? and we gathered all of that information after one month in consultation in all the regions. and afterwards, we decided on two priority projects for each region. so for this year, each region we get in addition to the program infrastructure projects at least two priority projects that will be executed. and the cost for those was estimated to 1 billion dinar. now, this sustainable track will take us from minus 2.2 growth in 2011 to 3.5 hopefully in 2012 to 5 points in 2013 and then 6 to 7 points when we will be cruising in 2014. obviously, the sustainable track is the main track of reform of tunisia, and that's the way we're going to develop our economy.

but this will be the first jobs in a year and a half to two years. and we have 800,000 unemployed youth today. so we needed to introduce another track which is the component in the economy for two years, 2012, 2013. and we're going to increase government spending through stimulus in three major programs. one program is to create immediate temporary jobs for about 100,000 people. just like the new deal did in the 1930s. which is to provide the youth with some temporary job waiting for the economy to take off. the second program is to do an on-the-job training for college graduates. to change and make them more adequate for employment. some of the college graduates have degrees maybe in certain

disciplines that are not required today or asked for for a job to give them english skills. to give them city skills which makes them more attractive for employers. and the third program is to build 30,000 social housing units over a period of two years. now, this will be done through increased government spending, but to reassure the world bank, and it's going to be in a go-and-stop mode which means that these programs are clearly stated for two years, 2012 and 2013. and they will stop after 2013. and by then, hopefully the sustainable track will catch up for the economy to provide the necessary jobs. now, the announcement of this program had a good psychological effect in tunisia today. although clearly in the steps that are going to be carried,

the government was careful to say this is the general program. this is the vision. this is where we're heading economically. but we can only do this much in a year because our mandate is for one year. so that we don't scare the opposition and we don't say like the question today, when islamists come to power, they don't intend to leave. and that's why in the program in the first page on the political program, the government has announced officially that it will seek the date of the 20th of march 2013 as the date for the next election. so today we have a target date for the next election. also, the government has announced that it will maintain an independent election committee and that it will maintain the president of that election committee who did a fantastic job. and by the way, he is known to be a leftist secular. so for those of you who, you

know, would like to know where we're heading, the idea of giving a clear road map, a clear direction, a sense of objection to assure investors and society and introduce some comfort in order for the production faus to go back again. that decision by another to maintain adequate one of the constitution has created in the past ten days a climate of security there are less disputes, less tension between the different rivals, and that's very important for business. business and politics are closely interlinked. a good political framework and a sense of the election is good for economics. so at the same time as i told you, we introduced the complimentary, i'd just say two words about the budget load

which increased public spending by 2.5 billion dinars from the original law. now, the financing of that will come mostly from the sales of the confiscated assets from the family which is estimated to generate this year 1.2 billion dinars for the tunisian economy. also, although we did the public stimulus package for the economy for 2012, we will only -- you know, we will reach a budget deficit of 6.5. we were on a budget deficit of approximately 3%. and with good macroeconomic parameters and stability. also, the debt ratio of tunisia was 40% before the revolution. now it's 46%.

and we ran 2012 and 2013 through the models that you have at the imf. and we estimated three kinds of shocks. the evaluation shock, an inflation shock and international crises. and all of that has shown that our economy is still ee still ye resilient and that our debt is sustainable up to 55%. so we are in a safe zone even compared to what's happening today in the world. and our debt situation is still healthy. obviously, our objective is to come back in 2014 to a deficit level of 3%, an inflation level of 3%, a growth of 6% to 7%, and a debt ratio over a period of

time by 2017 of 40%. so here is the economic strategy that tunisia will be adopting. there are many signs that -- encouraging signs that investment will go well in the country. many, many, many countries have shown a lot of support for tunisia economically. the united states is showing a lot of support. recently it has announced that will give tunisia $100 million in direct budgetary aid. and there are other packages as well. europe and european firms have confirmed that intention to stay in the country and to increase their investments in the country. a lot of companies from the gulf countries also are visiting tunisia and indicating their intention to invest. we have every reason that the environment will be good for

tunisia -- for these firms to make money and to have job -- have real economic opportunities. we have a free trade agreement with europe. we're constantly talking about our european position, and we are seeking the status of a privilege partner with europe. and the process is under way for tunisia to get that. secretary clinton announced to the prime minister a few days ago on a phone call that president obama gave the green light to start the free trade agreement negotiation with the united states which is obviously a good sign for investors and for american firms. so, you know, growth, investment is what's going to create jobs. and we, the government, will create the right environment for that. thank you. >> thank you very much. that's a very clear plan. and you've laid it out very nicely. i'm sure many people will have specific questions they want to

come back on. but before we do that, i do want to turn to the other panelists. of course, jordan is not the same situation as tunisia. both in terms of laying out a government plan. so in a sense, your perspective would be a bit different from that. but also, economically, tunisia has a bit more space for doing the kind of fiscal expansion because the initial debt levels were low. the budget deficit was quite small before the 2011, 2%, 3% this year. jordan is in a slightly different place. so less space to do the kinds of things tunisia's doing for the short term. and yet some of the same challenges that you're facing in terms of youth unemployment, in terms of the shock of high energy prices. so i wanted to get a sense from

you now of how you see the kinds of policy package that you think would make sense from where you sit which may be different from what the government is doing because obviously you're not in a position to speak for them. >> okay, thank you. actually, i am a medical doctor. the economic language is not my language. that's why i have to speak in arabic because it will be easier. >> translator: i'm invested in the medical sector and a project totalling about $50 million. this is a model of the islamic economy in which principles of free economy or private sector, no doubt the islamist movement

with also the other islamist movement in terms of the reform program, it's public or general direction as far as the economic information is concerned. i believe that any islamist movement that wants to start with economic reform should work to stop the bleeding, in medical terms, that is hemorrhage or bleeding. we have to stop that bleeding. so in order to support other vital signs for life. so i think that islamist movement had suffered. and many peoples in the nation suffered a lot from corruption and dispensation of public funds arbitrarily. i believe that it's imperative that there should be a serious

step to show that we are able to control the resources that are being wasted in various ways. no doubt that corruption is a general phenomena. and we in the arab world population is about $350 million, about 65% work in agriculture. of course, here there's a shortage of water. therefore, the number of unemployed in that sector is about 15%. and those who are below the poverty line is with one-third of the 350 million. so i believe if we wanted to, if there's any movement to look at these numbers, they will be concerned with stopping that

waste in the resources. the islamist movement is not against the public sector. i particularly have an experience in the public sector. and i'm sure others in other areas have experiences in the private sector. for example, i have about 1,000 citizens working with me. i have 100 people like me in a country like jordan cleared to do projects like i do. you would employ about 100,000 people. currently the government employs annually about 6,000 people because that is a glut in human manpower. the government tried to work on unemployment by employing people within the government sector to kind of camouflage the real numbers of unemployment. so you'll find that the ones who

produce in the private sector are more productive. i think that focusing on the private sector in economic reform is no doubt a step that must be a major step. but in the private sector, we cannot adopt western experience because we cannot compete by establishing conglomerates, for instance. that requires a huge amount of capital. we focus on small businesses or entrepreneurship. this is adopted through development projects in the public sector and some small industries that would be able to produce at least the domestic market and also to produce some

immunity for the domestic economy in order that it will provide the necessity, basics and decent life for the citizens, and we're not talking about luxury here or prosperity, but we are concerned firstly to work on providing the basic needs. after that, we will work toward prosperity among individuals in the society. i believe that small development projects should be targeted extensively through programs that will be employed by those who would be in government. other issue in my belief is the infrastructure or the focus -- the infrastructure projects are long-term projects normally.

a provision of the means for infrastructure projects, no doubt there is a problem in the financing sources. i believe the islamist movement can work on two tracks concerning the infrastructure. the first track is to gather the expatriates of the citizens from abroad. most of the people who are there have -- many of the citizens living abroad, they invest all they have in small businesses. this project could be gradually moved by providing the right climate so that they can invest in their mother countries. i believe there is a movement in turkey that depicts this issue. so the governing party is an

islamist-leaning party. they start providing for security investments. now more than 2 million turks have returned to turkey and invested there, and that reflected on the prosperity country. so this is an example. another 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 relations with other countries. so the rich finances the poor, and the benefit of this is the principle of mutual benefits. so i believe that investment -- balanced investment which is properly guided assured it would lead into projects in the infrastructure.

i believe 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 but rather to take their advice to maintain the price of the currency. and i think this is a very sensitive and serious problem because the issue of currency 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 -- implement the price on the currency. the relationship with the islamic banks and commercial banks. now, i believe that islamic

banks are not any more experienced than other countries. rather, it's possible to these banks as world 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 relations 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 i believe it is fobl to incorporate. 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 are 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 avoid as a systemic movement because this is 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 many people have on their minds. 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 turning 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 see 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 carnegie endowment for making this event possible. the freedom and justice party in egypt has outlined an 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 5 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 trade. 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 ver very, 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 very 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 albeit 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 spend $2 a day or less. it's not just a statistic. if you actually go and spend the day in one of upper egypt or delta villages, you will get a

feel of what this really means on a 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 five or six 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 in the party not from our people, but from the government agencies, the central bank, finance department, people are coming forward 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 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 easier for them to go get licenses to get to work and so on and so forth. 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 for every turk public servant, there is 11 egyptians.