Downtown Cairo going carless

Downtown Cairo going carless

Via the invaluable Boursa Exchange, I see that the Egyptian government is contemplating a redevelopment plan in downtown Cairo which would transform the area into a pedestrian-only area. This plan has been commissioned by Prime Minister Ahmed Nazif, and envisions the construction of “multi-story underground garages” to eliminate traffic and pave the way for the creation of an area of open-air restaurants and shops.

As anyone who has even passed through Cairo knows, the traffic is truly hateful. It can sometimes take hours to get across the city, and the noise and pollution can be overwhelming. Therefore, the creation of a car-free zone in the center of the city seems like a grand idea.

This isn’t the first example of the Nazif government’s attempts to change the way Egyptians do business. Since becoming Prime Minister in 2004, Nazif has embarked on a series of structural reforms to the Egyptian economy which has moved the country closer to a free market system. The government has privatized many of the state’s assets, particularly in the financial sector. These reforms allowed Nazif to aim to reduce the budget deficit to 3 percent of GDP in 2010, down from 8.2 percent in 2005, and paved the way for GDP growth near 7 percent.

So, if Nazif is the financial mastermind behind Egypt’s economic recovery, why isn’t he mentioned in the same breath as his Palestinian counterpart Salam Fayyad — another technocrat who is taking steps to improve the West Bank’s economy? The first reason relates to his boss: Mubarak has given no hint that he’s prepared to loosen his grip on power, to the simmering resentment of many Egyptians. It’s hard to love even an effective Prime Minister when he is the front man for an increasingly illegitimate dictator. 

More importantly, despite the impressive GDP growth, Nazif’s reforms don’t appear to be making a dent in Egypt’s widespread poverty. Because of rapid population growth, Egyptian per capita income only grew 3.9% annually from 2002 to 2007, which is only middling by regional standards. To absorb the millions of new applicants to the job market, the Egyptian economy must grow at least 6 percent annually — a rate that it almost certainly will not meet during the current recession.

The daunting task of restoring health to the Egyptian economy even makes one rethink the wisdom of creating a carless downtown Cairo. The area could very easily become the exclusive domain of the only people who can afford to drink cappuccinos in these chic open-air restaurants: upper-class Egyptians and wealthy foreigners. With rampant poverty spreading throughout Egypt, doesn’t the Nazif government have better projects to spend its limited investment dollars on than downtown Cairo?