Integrating Equal Opportunity Principle in Budgets - Egypt

Subsidies’ Reform and Social Protection to Promote Equity

Ragaa MansourGeneral Director, Equal Opportunity Unit

Workshop on: 'Enhance Equity for the New Generations in the Middle East and North Africa‘

Rabat, Morocco – 22-23 May 2012

In 2001, the Ministry of Finance approved the establishment of

“Gender Unit” to link between the National Council for Woman

(NCW) and the Ministry of Finance, aiming at promoting equality

for marginalized groups, providing opportunities for participation

in public life, eliminating all forms of discrimination, giving big

momentum for efforts exerted to advance rights of women and

children, and opening opportunities for human resources

development, in addition to other constitutional rights to achieve

complete equity.

Objectives of Equal Opportunity Unit

• Promote and integrate budgets responding to needs of both women and men in the national plan and budget to achieve social justice for marginalized groups.

• Enhance cooperation and networking amongst the different sectors in MoF and between MoF and other line ministries.

• Develop staff professional and personal skills and advance spirit of belonging, which has its positive influence on staff performance as well as achieving MoF goals to reach equal opportunities.

Joint Initiatives with UNWOMEN

Extending partnership with UNWOMEN to achieve the Unit goal to support developing gender-responding budgets and raising the ministry staff awareness of gender issues, how to plan for it, and organizing specialized workshops in the field of:•Strategic planning responding to man and woman needs and how to monitor and evaluate it.•Budgeting for gender-based programs and performance to positively impact the improving of children status. •The importance of considering children in state plans and budgets.

Indeed, “Equal Opportunity” project was implemented since 2006,

Starting to identify what are the needs of women, men and children up

to the implementation of gender responsive budgets, which required the

application of programs and performance budgets, undergoing

legislative and legal reforms; significantly required to promote social

justice and fulfill children rights.

Then, we moved ahead from theory to practice, which necessitates the

commitment of different entities to apply modern and automated

information systems and developing programme and performance

budgets in compliance with the law of the State budget.

Objectives of “Equal Opportunities” Project

•Achieve justice and equity for woman through integrating gender-based budgeting, that would eventually contribute to the fulfillment of children rights.

•Support efforts of Ministries and Government organizations to bridge the gender gaps, combating discrimination against women and children, and improving the efficiency of public expenditures.

•Support government efforts to alleviate poverty and achieve the Millennium Development Goals.

•Support the Ministry of Finance in applying modern methods in budget development through applying gender-based programs and performance measurement budgets and promoting transparency.

Project Key Stakeholders

• Ministry of Finance – National Council for Woman.• Ministry of Economic Development – Central Agency for

Public Mobilization and Statistics – Parliament.• Media – Academics and Research Centers.

• Civil Society and Women Organizations.• Netherland Royal Embassy – UNWOMEN.

Target Groups

• Ministries and policy makers.• Ministry of Finance staff responsible for developing,

implementing, and monitoring State Budget.

Legislative Changes

10

Budgeting for Women’s Rights

11

Housewife sets the State Budget

Social Justice in State Budget

Ministry of Finance and equal opportunity

Lessons Learnt

• Participatory approach to develop gender-based budgets’ manual.

• Political support of Minister of Finance, Directors of Budget Departments, UNWOMEN, and NCW.

• Coordination between Ministry of Finance and Central Agency for Public General Mobilization and Statistics.

Sustainability

• Restructuring of Equal Opportunity Unit in the Ministry of Finance.

• Qualified Staff to develop equity-based budgets.• On-the-job training.

What about Child-based Plans and Budgets?

•Considering child rights?

•Adopting the concept and practice of “equal opportunities” for children?

•Social protection to fulfill rights for all children?

Government Budget 2011/2012

Government Social Expenditure

Source: Arab Republic of Egypt, Ministry of Finance, State Budget 2011/12 ,and Financial Monthly March 2012

Social protection expenditure is at around 9% of GDP, and actually was planned to grow between 2010-11 and 2011-12

Social protection is by far the largest component of social spending, with health at 1.5% of GDP, and education at 3.3%

How Social Protection Expenditure is Distributed Among the Population?

Source: World Bank (2005)

Several studies have been conducted to evaluate who is benefiting most from the current social protection policies.

A study of the World Bank (2005) found that out of 100 LE spent in social protection, 29 LE goes the richest fifth of the population, while the poorest

quintile is receiving only 14 LE

While the impact in terms of poverty reduction is still relevant (more than 10% of the population was lifted above the lower national poverty line by social protection policies [mainly subsidies] in early 2000s), the efficiencies of the expenditure is low

and the leakages very high .

Social Security and Social Pensions Versus Subsidies

Social security benefits and social pensions represent less than 10% of the total Social Protection expenditure in Egypt.

Subsidies are by far the largest component (around 90%) of the social protection spending.

In the budget 2011-12, subsidies represented around 27% of government expenditure, equivalent to 8.5% of the projected GDP

Subsidies Are A Key Component of Government Spending in Egypt

2010-112011-12Total expenditure on subsidies8.648.45

- Oil products5.266.08 - General Authority for Supply Commodities (food/bread)1.831.20 - Electricity0.490.32 - Other1.060.86

Source: Arab Republic of Egypt, Ministry of Finance, State Budget 2011/12, and Financial Monthly, March 2012

Government expenditure on subsidies (as % of GDP)More than 5% of GDP is spent in oil product subsidies (which is benefiting mainly the richest quintiles of the population, but which is also very important for the poorest population quintiles).

The food subsidy represents around 1.8% of the Egyptian GDP .

Reforming subsidies

The need of reforming subsidies is widely recognized and it is part of the current political debate (and in minimal part already implemented).

The process of transformation should be managed very carefully, in particular to protect the most vulnerable, within an equity perspective, and considering the highest vulnerability to poverty of children and women.

THANKS FOR YOUR ATTENTION