Presentation by Gouda Abdel-Khalek (Cairo University) at the ERF 20th Annual Conference - Cairo, 24 March 2014

1. Social Justice: Lessons of
Experience for Egypt
Gouda Abdel-Khalek
ERF 20th
Annual Conference
Social Justice and Economic Development
Cairo, 22-24 January 2014
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2. Main Points
• Introduction
• Chronology of events
• Meaning of social justice
• Indicators of Social Justice; How socially
unjust was the Egyptian society?
• Factors behind rising social injustice
• Measures taken: Lessons of experience:
a break with the past?
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3. 3
1- INTRODUCTION
• The foremost slogan of the January 25
revolution in Egypt was
"bread… freedom … social justice".
• Other slogans were raised in Egypt and
other Arab Spring countries, expressing
the same demands in various ways.
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4. 1- INTRODUCTION
The impact of both internal and external
shocks: revolution and the global
financial crisis and the world food
crisis.
Growth of the Egyptian economy plunged
to an average of less than 2% for 2011-
2013, compared to an average of 6.2%
2005-2008.
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5. 5
1- INTRODUCTION
Simultaneously with drastically slowing
growth, the country has to grapple with
conflicting approaches to addressing
pressures for inclusive economies and
demands for social justice.
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6. 1- INTRODUCTION
In Egypt in the lead up to January 25,
public protests escalated- mostly wage
related.
After January 25, protests escalated:
On a monthly average basis:
500 in the second half of 2012, and
1200 in 2013
This compares with 176 in 2010,
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7. 2- Chronology of Events
• 25 Jan, 2011. Youth protest against
celebrating Police Day began the first
wave of revolution in Egypt.
• 11 Feb, 2011. Mubarak steps down, and
SCAF takes over.
• 19 Mar, 2011. Referendum on
constitutional change and roadmap for
transitional period: elections then
constitution
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8. 2- Chronology of Events
• Nov-Dec, 2011. Parliamentary elections.
Islamists led by FJP won a clear
majority.
• June 14, 2012. Supreme Constitutional
Court annuls People’s Assembly.
• July 1, 2012. FJP candidate Mohamed
Morsi sworn in as President of Egypt
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9. 2- Chronology of Events
• Dec 2012. New constitution passed in
referendum by 62% majority
• June 30, 2013. Second wave of Egypt’s
Revolution, triggered by Tamarrod
Movement (a youth movement). Some 20-
30 millions demonstrated, calling for
ousting of Morsi
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10. 2- Chronology of Events
• July 3, 2013. Upon popular demand Morsi
was ousted, a temporary president was
sworn in, and a new roadmap for a
transitional period was announced.
• Dec 2013, a new constitution was drafted.
• Jan 2014, the new constitution was
approved by overwhelming majority in a
public referendum.
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11. 11
3-The Meaning of Social Justice
The essence of social justice is
equality, solidarity, respect of human
rights and dignity.
Social justice is a 3- dimensional
concept:
Horizontal, Vertical, Spatial

12. 3-The Meaning of Social
Justice
1- The horizontal dimension refers to the
intra-generational aspect of justice; ie.
among various groups, strata, or classes.
2- The vertical dimension refers to the
inter-generational aspect of justice; ie.
between the current generation and future
generations.
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13. 3-The Meaning of Social
Justice
3- The spatial dimension refers to the
inter-regional aspect of justice; ie. among
various regions (Upper Egypt/Lower
Egypt/Frontier Governorates; Rural/
Urban).
The vertical and spatial dimensions are
often overlooked and focus on horizontal.
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14. 3- The Meaning of Social Justice
The three dimensions are inter-related.
The inter-generational dimension is often
neglected in public discourse.
It is especially relevant in societies where
natural resources are an important source
of income, such as Egypt.
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15. 3-The Meaning of Social
Justice
Social justice in this sense is the
cornerstone of equitable development.
Other related concepts:
Inclusive development
Social and Solidarity economy
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16. 4- INDICATORS OF SOCIAL
INJUSTICE
• Wage share in GDP went down from
about 70% in late 60s-early 70s to about
30% in the new millennium.
• Unemployment kept rising. Overall
unemployment was 9 per cent, rising to
12.5 per cent in 2012 and about 13% in
2013.
• Youth unemployment is more than 30
per cent.
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17. 4- INDICATORS OF SOCIAL
INJUSTICE
• The poverty rate (WB 1$/day) rose from
42% in 2009 to about 50% now.
• About two-thirds of the poor live in rural
areas, especially Upper Egypt. Assiut
governorate has the highest poverty rate
for all of Egypt, at 58%.
• This underscores the spatial dimension
of social justice.
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18. 4- INDICATORS OF SOCIAL
INJUSTICE
• Wide differences in opportunities for
health care, education and
employment.
• Stunting affects 25% of children 0-4
yrs, with higher incidence in Upper
Egypt and Frontier Governorates.
• 20% of people in Frontier governorates
have on access to improved water.
• Social mobility almost grinded to a halt.
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19. 5- Factors behind Rising
Injustice
• Most important factors:
(i) Economic policy objectives: Growth
now … distribution later. Popular joke.
Blind faith in the trickle down theory,
which never worked
(ii) Biased spatial and sectorial allocation
of investment: neglect of Upper Egypt
and agriculture. Share of agriculture
down to 3% of total investments.
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20. 5- Factors behind Rising
Injustice
(iii) Crony capitalism:
NDP clique heavily involved in dubious
business dealings led to vast corruption
Putting businessmen in charge of
cabinet portfolios, resulting in glaring
conflict of interest and profiteering.
(iv) Inflation: 2-digit rate. As regressive tax.
(v) Corruption-induced Privatization
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6-Measures TO BE taken to
Address Social Justice
Not much has been actually done to
achieve the revolutionary slogan of
"bread … freedom … social justice". More
than 3 years on, the nearly daily
protests and other expressions of social
grievance are testimony to the continued
absence of social justice.
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6- Measures TO BE taken to
Address Social Justice
We address three fundamental questions:
● How best to address the issue of social
justice?
● What options are available in the short
run to expand a tight fiscal space?
● What distributional instruments are
possible and what trade-offs are
necessary?

23. 6- Measures TO BE taken to
Adress Social Justice
Our approach to address social justice is to
target increasing aggregate supply.
That can best be done through
expanding food production.
Focusing on curbing aggregate demand
a la the IMF leads to a zero-sum game.
Social justice is only partly about
redistribution, but it takes much more.
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24. 6- Measures TO BE Taken to
Address Social Justice
In Egypt, giving priority to agriculture is
the way to go.
Investing in rehab of the covered rainage
system and national grain storage
system.
Agr. share of investments fell from 13%
during 1988/89-2002/03 to 3% in 2009/10.
Subsidizing producers is more effective
than subsidizing consumers.
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25. 6- Measures TO BE Taken to
Address Social Justice
• Improving the incentive scheme available
to farmers is also key. Farmers, price
response is really strong.
• Institutional change is another element.
Ex., changing the landlord-tenant relation
in agr. Law 96 for 1992 effectively
eliminated security of tenancy.
• In Egypt, market for land is a seller’s one.
Farmers are subjected to exploitation.
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26. 6- Measures TO BE Taken to
Address Social Justice
• Introducing a genuine progressive tax
system
• Subjecting certain econ activities to taxes.
For ex. Imposing a tax on profits made
through dealings in the stock exchange,
tax on capital gains and speculative
activities.
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6- Measures TAKEN after 25
January, 2011
Some specific examples:
(a) setting a minimum and cap on maximum
wage
(b) Progressive Taxation
(c) Equality of Opportunity (access to basic
services, healthcare and education)
(d) Some Sectorial policy measures

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6- Measures TAKEN after 25
January, 2011
(a) Minimum Wage
• Initially, a minimum wage of LE 700 was
set. The post-June 30 gov announced a
min wage of LE 1200 for public sector
workers. But it is yet to implemented.
• A proportional maximum/minimum of 30:1
has been set, but only within government
departments- not a universal Cap.

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6- Measures TAKEN after 25
January, 2011
(b) Progressive Taxation
All the post-revolution governments in
Egypt have deliberately avoided instituting
progressive taxes. Only very recently, a
new income tax rate of 25% has been
introduced on income above LE 1 million
annually.
New gov. is studying introducing a tax on
the rich (LE 1 Million income) at 5%.

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Measures TAKEN after 25
January, 2011
(c ) Equality of Opportunity
Two-thirds of the poor are in rural
areas, especially Upper Egypt.
People living in rural Upper Egypt are
suffering the most due to the lack of
opportunities for basic services, health
care, education and employment.
Nothing was done to improve their lot.

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6- Measures TAKEN after 25
January, 2011
(d) Sectoral Policy Measures
Offering local producers of wheat an
incentive price 20-30% above the world
price for 2011/12 and 2012/13. As a
result, the contribution of locally produced
wheat to the production of subsidized
baladi bread rose from 27% in 2010/11 to
33% in 2011/12 and 38% in 2012/13-
raising food security.

32. 6- Measures taken after 25
January, 2011
• Advantages of this policy:
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33. Thank You
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