With public interest in the global financial crisis and close scrutiny of reports from the Central Bank of Egypt, the Ministry of Finance, and other financial and statistical sources, questions have resurfaced about the accuracy of economic data. Given the significant informal sector in Egypt’s economy, concerns have grown over the reliability of figures at this critical stage of economic reform and crisis management. To address these issues, expert insight is essential. Among those offering analysis is Dr Hanaa Khair El-Din, director of the Egyptian Centre for Economic Studies, former head of the economics department at Cairo University, and holder of several prestigious academic positions, including previous membership in the Shura Council.
Khair El-Din provided an overview of the centre’s activities since its establishment in the early 1990s, emphasising its high level of independence from both the government and private sector representatives. The centre conducts year-round economic research across various sectors, responding to emerging issues such as the financial crisis. It also publishes an annual policy report. In this interview with Al-Borsa, Dr Khair El-Din discusses the confusion surrounding Egypt’s economic indicators, as well as other pressing issues including subsidies, waqf development, transparency, and economic policy.
Asked about the overall confusion surrounding Egypt’s economic indicators, Khair El-Din responded bluntly: ‘It has always been like this! Confusion exists across many economic sectors.’ She pointed out that subsidies, for example, benefit the wealthy as much as the poor. The problem is not limited to food subsidies—petroleum products such as petrol disproportionately benefit the wealthy rather than the poor. Subsidies often end up supporting capital-intensive industries rather than labour-intensive ones, as they should. This misallocation, she warned, reinforces dangerous economic values and practices.
Regarding the centre’s role in addressing these distortions, she highlighted its extensive research on the labour market, including studies on wage reform in the public sector and unfair labour practices in the private sector. According to Khair El-Din, addressing wage imbalances must start with the government, which still sets the minimum wage at an unreasonably low EGP 53 per month. Instead of superficial hiring policies aimed at reducing unemployment figures, the government should focus on employee efficiency and fair wages. Once public sector wages are reformed, private sector wages will follow, aligning with labour market supply and demand.
On the issue of distortions in the goods market, Khair El-Din admitted that monopolistic practices are widespread in both wholesale and retail distribution networks. Reform, she argued, requires greater transparency in production costs and pricing, as seen in free-market economies such as Japan and India, where consumers are provided with detailed cost breakdowns. Additionally, she stressed the need to empower civil society and consumer protection groups to raise public awareness and demand their rights. She reiterated the government’s crucial role in ensuring subsidies reach those who truly need them, warning that weak oversight has allowed parasitic classes to exploit the system.
Despite concerns in other areas, Khair El-Din believes the foreign exchange market remains stable. She noted that the Central Bank’s interventions in buying and selling currency stay within acceptable limits, and the gap between official bank exchange rates and black-market rates is relatively small. However, she criticised the Central Bank’s fixation on pegging the Egyptian pound to the US dollar, suggesting that linking it to a broader basket of foreign currencies might be a better approach.
Khair El-Din acknowledged that gross domestic product (GDP) estimates in Egypt are highly unreliable. She believes that GDP figures suffer from underestimation due to difficulties in measuring informal economic activity. This becomes evident when examining consumption patterns even among the poor, which, while not disproving poverty, indicate flaws in GDP calculations.
When asked how the centre influences economic policy, she explained that its research and publications are widely distributed to government agencies, private sector organisations, universities, and the media. However, she noted that the centre does not issue binding recommendations. Instead, its reputation for objectivity and independence encourages the government to take its findings into account.
On the global financial crisis, Khair El-Din confirmed that the centre had taken early action. ‘Yes! We presented a working paper at a special seminar in October 2008, featuring international economic experts who acknowledged the centre’s ability to anticipate economic crises.’ She also mentioned the centre’s policy newsletter, which regularly covers the crisis and was published and distributed at the beginning of the year.
Regarding the centre’s recent focus on waqf (Islamic endowments), she argued that modernising the concept could be an effective way to institutionalise social responsibility. Awqaf (endowments) have remained underdeveloped since the revolution, despite historically playing a major role in social solidarity and poverty alleviation. In her view, reviving and reforming waqf could be a more effective poverty-reduction strategy than the current corporate social responsibility model.
When asked about investment in education, Khair El-Din was critical of both public and private efforts. ‘The government invests in buildings rather than curricula or teachers, and much of its budget is wasted on overstaffed bureaucracies with no clear focus.’ She also criticised private sector investment in education, which she said is driven by excessive profit motives rather than a commitment to quality. ‘Education investment should not be profit-driven. Tuition fees should be reinvested into improving the institution’s quality and sustainability.’
Finally, on the issue of economic transparency, she argued that Egypt’s economic data is both insufficient and poorly disseminated. Reports are often unclear and difficult to interpret, even for researchers. She pointed out that institutions such as the Central Bank sometimes withhold critical figures. The solution, she concluded, is to pass legislation requiring public institutions to publish economic data and make it accessible for research.
This article is originally published by AlBorsa in Arabic and later AI-translated by South Push.