As Egypt asks the IMF for a $4.8bn loan, we ask if it should be looking inwards at its underdeveloped financial sector.
Egypt is a country in transition. It has been through some turbulent times since the fall of Hosni Mubarak in January 2011. The political dramas have been major, but there has been some sort of resolution with the election of a president and government.
The same cannot be said of the economy however. It has grown a paltry two per cent since last year’s popular uprising. And the country is now trying to secure a $4.8bn loan from the International Monetary Fund (IMF), which would be the largest in its history.
But does Egypt need to look inwards first and reform its own underdeveloped financial sector? After all, around 90 per cent of Egyptians do not even keep their money in a bank.
With a population of over 80 million, Egypt is a lucrative market but cash remains king, mortgages are almost non-existent and the bulk of the economy is undocumented.
So, 20 months after the revolution, what is holding back this one-time powerhouse and can Egypt regain its economic standing?
Counting the Cost put these questions and more to Masood Ahmed, the IMF’s Middle East director, who explained: “The Egyptian authorities are now putting together their own detailed economic programme, which they would like us to support. [It is] very important for us that it is a national programme that they design, they own.”
Ahmed also spoke more broadly about those countries that have gone through upheaval during the Arab Spring, saying: “The twin challenges facing many of these countries: restore confidence, because that is what is going to bring private investors back, and manage expectations, particularly social expectations.”
Unemployee of the year
There are more than 75 million young people out of work worldwide according to the International Labor Organization. In some industrial nations youth unemployment is running at more than 50 per cent.
But is this really something that a fashion house would take up as a cause?
Alessandro Benetton, the chairman of the Benetton Group, joins the show to explain why he believes “we are running the risk of losing a generation” and why his company is running an ad campaign giving a voice to unemployed young people.
He also talks about the drawbacks and positives of globalisation as well as sharing his views on the state of the Italian economy.
The power of the public
Are those disillusioned with a banking system that does not seem to change taking matters into their own hands?
In Britain it is estimated that around half a million people have left the big banks this year – partly as a result of disgust at interest rate fixing or other malpractice.
So, what would happen to the high street banks if people started to vote with their feet and simply stopped giving them their money? Is there a point at which regulating the banks becomes irrelevant because people have chosen to ignore them instead? And could a rise in ethical and community banking inspire the big banks to start behaving better themselves?
Al Jazeera’s Laurence Lee meets businessman David Fishwick. He is the biggest supplier of mini-buses in Britain. But a couple of years ago he discovered that the banks were not lending to his clients, who, in turn, were struggling to buy his mini-buses.
So he responded by opening a bank of his own. He does not take a wage, let alone a bonus, and the profits go to charity. The regulators will not actually allow him to call it a bank, but he tells Counting the Cost what he hopes to achieve with it: “My ultimate goal with all of this is to have a community bank in every community, in every town across the country and, indeed, across the world. Then we can get real change. A community bank run by the community for the benefit of the community, not for the benefit of the big bonuses of the bank.”