A five-year aim to cut foreign debt
Egypt's return to a strict centrally planned economy is the most distinct aspect of President Mubarak's economic policy. A few months after he took over, he appointed a minister of planning, the first in several years. The minister, Dr. Kamal Amhad Ganzouri, was entrusted with the task of working out a comprehensive five-year plan for 1982-83 to 1987- 88. Dr. Ganzouri defines the recently approved plan as leading toward a ''balanced open-door economic policy.''Skip to next paragraph
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The ambitious plan calls for an average growth in gross national product of 8 .5 percent annually, and a slight trimming of total expenditure to reach an average annual increase of 5.7 percent. It calls for an investment program amounting to $:35.5 billion (Egyptian), or $25.4 billion, with the government and the state-owned public sector accounting for the major share, contributing $ :27.2 billion ($19.4 billion) to the economy over the next five years.
The plan aims at rectifying Egypt's ''distorted economy,'' as Economy Minister Mustafa Kamal al-Saeed described it in an interview. He spoke of the imbalance resulting from an influx of foreign capital investment directed mostly toward commercial activities and an alarming increase in Egypt's dependence on these sources of financing, which led to a sharp rise in foreign debts, reaching
Although the plan realistically forecasts that the foreign debt will add up to $16.5 billion in five years, the government hopes to reduce the current deficit to one-quarter of its present size and cut debt servicing by one-fifth of the present rate.
As outlined by Dr. Saeed, the five-year plan is formulated to achieve these goals:
* Investing 27 percent of the national income to maintain the high rate of growth reached over the last five years.
* Correcting the economic structure by allocating more resources to agriculture and industry. Output of these sectors is expected to rise 10 percent annually, compared with 4 percent in the services sector.
* Reducing the balance-of-payments deficit through raising the volume of exports by 8.5 percent annually, while continuing to reduce imports, which fell a modest 4 percent last year. The planned rise in local production is expected to help the trade balance, too.
* Increasing self-reliance and striking a balance between foreign-debt service and foreign-exchange earnings by raising the country's ability to attract foreign capital and boosting exports. This policy seeks to lower the percentage of debt service to foreign exchange earnings from the present 17 percent to 15.5 percent in five years.
* Expanding the scope of the social benefits of the open-door policy to include meeting the basic needs of poorer Egyptians and improving public services such as education, health, and social welfare.