Vision 2030: Big plans, fuzzy on the details
 
 

In optometry, a person with 20/30 vision suffers from mild short-sightedness — able to navigate everyday life, but a bit fuzzy on fine details or at long distances. In titling Egypt’s newly launched sustainable development strategy “Egypt Vision 2030,” the document’s authors have hit on an unintentionally apt metaphor for describing a program chock-full of ambitious targets but rather scant on details of how these goals can be achieved.

Two-years in the making, Vision 2030 relies heavily on the United Nations’ 2030 Sustainable Development Goals, which are in turn successors to the Millenium Development Goals that member countries aimed to achieve by 2015.

These UN programs have been criticized in some quarters for being overly vague, sprawling and unfeasibly expensive. Elsewhere, they have been accused of failing to seriously engage with inequality and the environmental impact of growth. Given the similarity between the United Nations vision and Egypt’s, it is hardly surprising that Vision 2030 suffers many of the same flaws.

The first concrete goal listed in Egypt’s sustainable development strategy (SDS) is to increase annual GDP growth to 10 percent by 2020 and 12 percent by 2030. Although Egypt’s targets generally track the UN Sustainable Development Goals, here they appear to surpass them; the UN program does not specify a specific metric for middle-income countries like Egypt, but mentions a goal of 7 percent growth for the least developed countries.

Egypt’s GDP growth goal has in fact become more ambitious since the release of a 2015 pamphlet promoting the Vision 2030 plan, which lists a GDP growth rate target of 7 percent. At the time, the government was flush from the announcement of a first-quarter growth rate of 6.8 percent (later revised down to 5.6 percent). In the same quarter this financial year, growth was reported at 3 percent, and the government has been forced to revise down its projected year-end growth rate to 4 percent from an earlier target of 5.5 percent. Yet, somehow, this has only increased Egypt’s confidence in its growth prospects.

For an economy to grow by 10 percent or 12 percent in a year isn’t unprecedented. In 2006, for example, World Bank figures show that Azerbaijan’s GDP growth rate hit 34.5 percent, while Qatar’s reached 26.2 percent. However, neither country was able to sustain these growth rates over a decade, as Egypt proposes to do. By 2014, growth in Azerbaijan had slowed to 2 percent, while Qatar had dropped to 4 percent.

Maintaining double-digit growth rates for a decade would require an extended run of good luck with the global economy combined with a massive and sustained increase in domestic productivity and consumption. Yet, Egypt’s plans on how to reach this goal seem to rest on essentially vague premises, like promoting tourism and legislative reforms to improve the investment climate. Even the full, 300-page document does not expand on what these legislative reforms and promotion plans are to involve. Instead, it lists now-familiar plans like megaprojects, including the Suez Canal development project, the new administrative capital and a plan to reclaim 4 million feddans of desert land.

One could certainly argue that there is no harm in setting and striving for ambitious goals, and for an individual seeking motivation this is probably true. The difficulty here is that virtually every other goal listed in Vision 2030 appears to rely on maintaining this extraordinary level of growth.

Egypt’s SDS aims to increase GDP per capita from US$3,436 at present to $4000 by 2020 and $10,000 by 2030. It strives to bring extreme poverty from 4.4 percent at present to 2.5 percent in 2020 and 0 percent in 2030. It also aims to raise per capita health expenditure from $152 per year now to $300 per year in 2020 and $600 in 2030, with out-of-pocket spending reducing by half in the same time scale. It intends to cut child mortality and anemia rates in half, while increasing life expectancy at birth from 71.1 years now to 75 years by 2030. Education is also supposed to increase in both scope and quality. Spending on pre-university education is projected to rise from 3 percent of GDP now to 5 percent of GDP in 2020 and 8 percent in 2030. Class sizes are supposed to get smaller at all education levels, while enrollment in higher education is projected to rise from 31 percent at present to 35 percent in 2020 and 45 percent in 2030.

It’s hard to argue with any of these goals, just as it is impossible to ascertain from the SDS exactly how the government intends to achieve them. Clearly, though, it’s going to take a lot of money.

One thing the government does make clear is that it intends to do all of this without raising taxes or increasing the deficit. Vision 2030 incorrectly implies that a Value Added Tax has already been imposed, putting the levy at 10 percent, a level it says will be maintained until 2030. (Significantly, this appears to be the first time officials have committed in print to a set rate for the long-discussed VAT). However, given that Egypt already has a 10 percent general sales tax, this does not seem like a silver-bullet for massively increased revenue in the next few years. The income tax rate is set to stay at its current level of 22.5 percent through 2030. Meanwhile, public debt is projected to fall from 92.7 percent of GDP at present to 85.7 percent in 2020 and 75 percent in 2030. Likewise, the budget deficit is expected to fall from 11.5 percent of GDP to 7.5 percent in 2020 and 2.28 percent in 2030.

This is exactly the “having it all” mentality pointed to by critics of the philosophy underlying the UN’s sustainable development goals. Boosting public spending and improving public services without raising taxes or going into debt is impossible without massive and sustained economic growth — and this is a difficult scenario to guarantee.

The critique that such programs often sacrifice the environmental dimension in the name of growth appears to apply to Egypt as well. Specific implementation plans are not discussed, but the section on the environment in Egypt’s Vision 2030 does list some concrete goals: reducing losses in the transmission and treatment of water, increasing the number of stations monitoring emissions, improving garbage collection and increasing the number and size of nature reserves. However, there is no stated target for reducing greenhouse gas emissions, either in 2020 or 2030. The energy section of the document gives a clue as to why this might be: Egypt anticipates that 29 percent of its electricity will be generated by burning coal in 2030, from 0 percent at present. It does anticipate, however, that 35 percent of electricity will be generated by wind, solar or hydro power by 2030, up from 9 percent at present.

Egypt, like most countries, has a history of producing and discarding grand development plans as administrations and economic circumstances change. Perhaps there’s no need for Vision 2030 to be any more than it is: a vague but ambitious wish list. But with the population struggling and the country facing serious economic and political challenges, it seems like the ideal time for a document that is grounded in reality and based on serious thought about how best to prioritize limited resources in order to improve the standard of living for ordinary Egyptians.

AD
 
 
Isabel Esterman