The Numbers tell the story!

Reading stuff like that, just pisses me off: Egypt's ministerial cabinet said that the state budget for the fiscal year 2005/6 is expected to total approximately 187.7 billion Egyptian pounds ($32.3 billion). The figure represents a 5.8 percent jump on last year's 177.4 billion pound budget, which will make the upcoming fiscal year - in terms of state spending - the heftiest in Egypt's history. The new expenditures are attributable largely to the government's stated intention to boost public sector salaries and pensions at least by 10 percent, effective as of the new fiscal year July 1, in a bid to offset rising costs of living. Please note that the rising costs of living is due to the devaluation of the Pound, which lost about 50% of its value thanks to the recession caused by “wise” ( also see: dumb as hell) government projects like Toshka . This means that every pound you get is now worth half a pound, so you can imagine how much a 10% increase will help people out, especially that government monthly wages on average wouldn’t get you a dinner for 3 at Chillis in Cairo. But whatever, I know, this is about the poor, right? Wanna see how much better they will be off? Last week Prime Minister Ahmed Nazif announced that 600 million pounds would be added to the budget of the Social Insurance Fund, raising average monthly pensions to the poorest to between 60 to 80 pounds instead of the current figure of 50 to 70 pounds. The increases will affect more than 600,000 families. It is worth to note that the difference is 10 EGP, which equals less then 2 dollars, and that’s how much the government is giving out to help families cope with the effects of their failed economic policies. Ohh, and to help kids stay in school, the government allocated 20 pounds monthly to be given to every school-age kid. I don’t know, maybe it’s just me, but wouldn’t it be a better plan to take that money and I don’t know, IMPROVE THE DAMN SCHOOLS? Like Hire better Teachers, or build more schools or something crazy like that? It seems to me that bribing kids to stay in school just won’t work, because they are either not going because the school sucks, or because they need to work to help their families survive, and are likely to make more then that lousy 20 Pounds a months doing so. So, I can't help but wonder : What’s the point behind that policy exactly, you know, besides wastting money? Anyway, as my accounting teacher told me, the Numbers usually tell the story. So I figured- against my better judgment and at risk of raising my blood pressure- that i should take a more Macro approach into the whole evaluating the government Budget thing and try to keep things is some kind of persepctive. Let’s see: out of the 187.7 Billion, the government is allocating 90 Billion to “meet the primary needs of citizens”. That means that more then 46% of the Budget is going into subsidizing stuff, like our “free education” , “healthcare” and “food”. The sad thing is, most of this money is wasted already and will not accomplish anything. You disagree? Let me explain: Take the Free education thing for starters: It’s a myth. It doesn’t exist. I know, you could enroll in a government school for free, but you can’t pass unless you take private tutoring lessons from your teachers. The reason why the teachers do that is because they don’t get paid enough to live or survive, and because the system enables them to do it ( we don't have school boards or anyway for the people to keep the school adminstration in check). So the parents end up paying lots of money every month- let’s say 100 EGP for argument’s sake, and for the poor people that’s a lot of money- in order for their kid to take private tutoring lessons and for the teacher to pass him. Now, if the parents agreed to pay that money to the school instead, the school probably would end up having enough money to pay the teachers a decent enough salary to do their jobs, like the private schools do. However, you can’t do that, because we are a socialist country, and we have free education, which amazingly, ends up costing each family per kid more then the 20 pounds the government is willing to give to them. This is why Private education is a booming growth industry in Egypt : everyone takes their kids to private schools these days. The same goes for Healthcare and Hospitals mind you: no one I know has ever been to a public Hospital, even though we pay mandatory health social insurance as part of our taxes. You can’t go there, because they never have good doctors, and they rarely will have medicine or good service, and if you are that poor that you have to go there, then god help you, because if the doctor misdiagnoses you or causes you death or permanent injury, there is little or nothing you can do. The court Justice system in Egypt is notorious for being slow, and any lawsuit will probably cost you more then any compensation the court may give you. It almost makes you wonder, where does all this money go to? Anyway, let’s revert back to the Macro view. What about the Deficit? How big is it this time? But Egypt's 2005-6 budget will bring a deficit of around 59.4 billion pounds, an estimated 9.4 percent of GDP, which is a noticeable decline from the past fiscal year's 10 percent of GDP. "We will spend [in the next fiscal year] 187.7 billion pounds and we will collect about 130.8 billion pounds in revenue but we also expect that the budget deficit could be lower in the final version of the state budget," said Hassanein. You do? By how much? And what makes you expect that? No answer? Ok! "These figures are quite shocking," said independent MP Hamdi Hassan. "Last year when we had a budget deficit of 52 billion pounds, up from 20 billion pounds in 2002-3 and 40 billion pounds in 2003-4 we were shocked and worried and now we are talking about a deficit of 59.4 billion pounds," he told the Middle East Times. So the deficit compared to the GDP declined 0.6% from Last year, yet in actual financial terms it has increased by 8 Billion pounds? Talk about Fuzzy math! Please also note that the deficit increased by 40 billion pounds in exactly 3 years. Nice for a third world country, isn't it? The government has previously tried to cover the deficit through social security, pension funds, borrowing from abroad and issuing government bonds and treasury bills. However, experts believe that some 35 billion pounds will not be covered and adds to the government's already-huge public debt, which is expected to jump to 407 billion pounds. 407 Billion pounds in Public debt. Hmm. That’s just lovely! We are so screwed! So regarding my question of “where does this money go?”, they seem to have the answer right here: In order to finance the budget deficit, say some analysts, the government has to control state spending. Last year press reports said that behind the budget deficit every year is the ministries' expenditures and the government's unnecessary five-star ceremonies. Let me give you an example: The President’s convey has 64 vehicles: 40 Mercedes, 10 Jeep Cherokees, and 10 BMW’s/ Discovery’s and 12 Harley Davidson motorcycles. I know that for a fact, because me and my friends have counted them once. That’s how many vehicles are on the road every time he needs to go somewhere. Just imagine how much one trip messes up Cairo Traffic. And mind you, we have 35 ministers, each with his own convey or motorcade as well, not to mention decoy conveys to escape possible assassination plots against them. Now add those to the equation, and you might just realize why there is always heavy traffic on Cairo's streets. But government officials assert that most of the increases in non-subsidy expenditures are earmarked for salaries and pensions, as there have been no increases in allocations for administrative expenses such as vehicles or furniture. Oh, of course! The government has also pledged to control spending in the new budget. According to the plan the state has only allocated 4 million pounds for government expenditures, much less, according to Hassanein, than last year. Only? LOL. That’s what I call being fiscally responsible. I said it before, I will say it again: we need to cut the waste, eliminate failed programs, eliminate unnecessary ministries and become fiscally responsible. In short, what we need is a small government. Can we get that please?