Newspaper article The Christian Science Monitor

Egyptians Are Divided over Move to Help Small Business

Newspaper article The Christian Science Monitor

Egyptians Are Divided over Move to Help Small Business

Article excerpt

WALK down any street in Cairo. Everywhere tucked into small crevices and cubbyholes there are people working.

There is the man seated at his sewing machine in a shop so small he is almost buried by his materials. In a tiny room next door, the shoemaker shapes leather to a wooden model while his assistant cuts the heels. The furniture gilder across the street covers newly made chairs and sofas in gold, with his finished products hanging from the rafters.

These are the small entrepreneurs of Egypt, an increasingly important sector of the economy, as the government attempts to move toward a freer market. This is also a group targeted by the World Bank's Social Fund for assistance to help the poor survive the hardship created by International Monetary Fund (IMF) reforms.

"It's one good way Egypt can expand the economy and the private sector and give a better life to people at the bottom end of the ladder," said Greg Huger, director for trade and investment at the United States Agency for International Development (AID).

Controversy has arisen, however, over whether this money could be put to more effective use.

"If you concentrate on small businessmen, that means you are choosing a fragment of what we call the poor," said Kareema Korayem, an economics professor at Al-Azhar University. "They do not represent the large segment of the poor."

After three and a half years of negotiations, Egypt finally signed an agreement with the IMF in May. Besides bringing millions of dollars in aid and rescheduling billions in debt, this accord also means price and tax increases, tough measures for the population to absorb.

The Social Fund, still in the planning and financing stages, hopes to begin operations this September with $500 million available to help the vulnerable groups survive these reforms.

There are an estimated 300,000 small and micro (even smaller) businesses in Egypt, workshops of one to 15 employees making a variety of products, including clothes, leatherware, wood, metal, and plastic products. These are men and women who took matters into their own hands and started businesses when Egypt's soaring population of 56 million (increasing by 1 million every eight months) and its faltering economy made jobs rare. …

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