Question

In: Economics

2 policies to get Income and wealth equality in egypt

2 policies to get Income and wealth equality in egypt

Solutions

Expert Solution

We do not have any satisfactory explanation of why income distribution in one country is more or less equal than in another, or what makes distribution move towards or away from equality over time . Behind the development of equality and inequality lie over variety of forces that do not guarantee that this development necessarily continues in the same direction, towards either a greater or smaller degree of equality. . But technology is not the only factor. There is also the nature of power structure, the rate of population growth and the degree of integration with the outside world, the degree of education and availability of information and educatory materials.

During the last fpur years (2004 - 2008) some change seem to have happened, as far as the rate of growth of GDP, largely as a result of even greater integration of Egypt in the world economy (the big rise in private foreign investment, tourism and greater export efforts) but it is very unlikely that this was accompanied by an improvement in equity. In fact, all evidence suggest that the opposite is the case, since there is no improvement in power structure, no decline in corruption, no significant rise in the rate of industrialization and no significant decline in unemployment.

The process of economic groth defines income distribution depending on the forces behind growth.

Fully general model suggests many exogenous factors may simultaneously affect growth and distribution: technology, international prices, trade protection

Things that Egypt does not do and hence does not help in minimizing income disparity

  • Increasing current earnings through growth & employment
  • Conduct macroeconomic and structural policies so as to increase private sector investment.
  • Raise poverty-oriented investments for Upper Egypt.
  • Ensure availability of critical inputs for micro and small business.
  • Reduce regulatory obstacles to starting, operating and dissolving small businesses.
  • Support agricultural development.
  • Increasing future earnings through education
  • Combat adult illetracy by using civil society groups more actively and adding a parental education focus to literacy programs.
  • Enhance access and reduce costs of education for the poor by offering conditional stipends for attendance, etc .

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