From IRIN…

EGYPT: Preponderance of corruption leads to poverty, say experts
10 Sep 2006 14:59:19 GMT

CAIRO, 10 September (IRIN) - While Egypt faces a number of social dilemmas, including rampant unemployment and high levels of illiteracy, many analysts say that official corruption, more than any other factor, represents the root cause of poverty.
Corruption is rampant in many areas of Egyptian society – from young people’s dependence on wasta (meaning ‘connections’ in Arabic) in order to find employment, to wealthy businessmen buying political power through seats in parliament, according to veteran Cairo-based journalist and analyst Gamal Essam El-Din.
“There is bribery on every level,” said Essam El-Din. “Candidates must pay their dues before being given a seat in parliament, while patients bribe doctors to get appointments on time. No one can get anything done without utilising some form of financial corruption.”
The rise of the private sector in the last decade has also bred its own form of corruption. “The government protects corrupt businessmen from exposure, while the businessmen fund officials’ campaigns and lifestyles,” Essam El-Din said. “One could describe the current atmosphere as one dominated by a mafia, Egyptian-style.”
Allegations of this nature have put pressure on the Egyptian government to address the issue of corruption. Egypt ratified the UN Convention against Corruption (UNCAC) in February 2005 and emerged as a leader in the Middle East to promote reform in this area.
Egypt also has four national institutions that have roles to play in fighting corruption, though their efforts are often hampered by non-democratic governing structures. These are the Administrative Authority Council, the Central Auditing Agency, Administrative Prosecution Authority, and Public Funds Prosecution.
Egypt is a country where the gap between the rich and the poor is stark. According to the 2005 United Nations Development Programme (UNDP) human development classification, Egypt ranks 119th out of 173 countries in terms of per capita wealth.
Analysts are quick to point out that a corrupt financial system, regardless of a given country’s wealth or resources, will inevitably beget poverty. “The main problem with corruption is that it multiplies poverty,” said Gamal Essam El-Din, “because public money is essentially plundered.”
There has, however, been a degree of improvement. Egypt’s score on Transparency International’s Corruption Perception Index rose from 1.1 in the late 1990s to 3.4 in 2005. The scale runs from ‘0′ (high corruption) to ‘10′ (no corruption).
In last year’s index, Egypt was on par with Syria and Poland in terms of official corruption, although the World Bank says it is still one of the most corrupt countries in the Middle East and North Africa (MENA) region.
Yet despite several recent well-publicised corruption cases in which high-ranking officials and wealthy businessmen received jail terms and fines, many believe the problem remains endemic to the prevailing system of government.
“Although there may be supervisory agencies whose function would be to limit corruption, their effectiveness depends wholly on the political atmosphere,” said Essam El-Din, pointing out that control of such agencies rests solely with President Hosni Mubarak and the ruling National Democratic Party.
“Because there is no oversight of the government, there can be no real, independent supervision of where public funds go,” he added.
The Egyptian government has made efforts to counter this. It is one of the founding members of the Middle East and North Africa Financial Action Task Force (MENA FATF) and was removed from the FATF blacklist last year.
Economists have pointed out that Egypt’s reputation for corruption has negatively affected capital inflows from potential foreign investors. “Of course investors worry about corruption levels,” said Cairo-based economic analyst Khaled Sewelam.
“But the government has put a lot of effort into trying to limit the trend, while newspapers are increasingly reporting high-level corruption cases. It’s becoming more transparent,” he added.
On the streets of Cairo, public opinion does not hold much faith in the government when it comes to corruption.
“Egypt’s single greatest problem is corruption,” said Amira, a 29-year-old language student in the capital, Cairo. “Had the system been less corrupt, all Egyptians would have shared in this country’s plentiful wealth.”

Related Posting: Kefaya report on corruption