Hoda El-Enbaby and Fatma Abdelaziz - IFPRI Egypt
IFPRI’s Xiaobo Zhang and Fatma Abdelaziz gave two presentations at the 2019 annual conference for the Egypt’s Network for Integrated Development (ENID/ElNidaa). This year’s conference title was “Clusters and Economic Development in the South”. It was held in Luxor on February 14th and 15th, under the auspices of H.E. Dr. Mostafa Madbouly, Egypt’s Prime Minister. During the conference, Xiaobo Zhang gave a presentation about China’s experience in cluster-based development. In addition, Fatma Mahfouz presented IFPRI’s work on clusters in the agricultural and food processing sector, by showcasing IFPRI’s preliminary findings on the medicinal and aromatic plants (MAPs) cluster in Upper Egypt.
Xiaobo Zhang’s presentation started out by outlining how China seems to defy conventional wisdom on development. The country did not have sound financial or legal systems, but was able to achieve industrialization through developing clusters. Cluster-based development made use of several factors: 1) the strong social capital that exists within the society; 2) the abundant labor; and 3) the entrepreneurship spirit, which are all factors common to the Egyptian culture too. Yet, for these factors to form a successful cluster, markets need to exist and local collective action needs to overcome the cluster’s binding constraints. Zhang gave two examples of Chinese clusters and explained how the constraints met by each cluster were resolved. These constraints are often location-specific and do evolve over time, requiring contingent solutions. Thus, it is important to “put the local government on the driver’s seat”, as Zhang highlighted. Zhang’s message on the advantages of decentralization and developing incentives for the local government was reiterated during the discussion by the panel’s moderator and participants. In response, the governor of Qena highlighted the government’s efforts in empowering the local government, and in improving the infrastructure to support Upper Egypt’s development.
In a following session, Fatma Abdelaziz gave insights on the ongoing Cluster Based development (CBD) research project that is conducted by IFPRI Egypt as part of the United States Agency for International Development (USAID) funded project “Evaluating Impact and Building Capacity” implemented by IFPRI. During her presentation Abdelaziz shared primary research findings from the field on Egypt's MAPs cluster in Fayoum and Beni Suef. Highlighting the importance of the sector, given the high international demand for MAPs, and Egypt’s role as one of the leading MAPs exporters in the world. The sector is also highly labor-intensive and benefits from Egypt’s favourable weather conditions. As such it makes use of one of Egypt’s comparative advantages and has the large potential of contributing to employment and raising farmers incomes. Yet, the sector is facing some challenges, or what is termed as "non-individual binding constraints" that necessitate both local government intervention and collective action. These binding constraints present untapped opportunities and potentials.
Both IFPRI researchers in the conference stressed how rigorous research is important; not only to document cluster specific challenges, but also to support evidence based policy interventions. The MAPs research project is just a starting point for more cluster research to come and the same research methodology can be replicated to study other clusters across Egypt. Post the presentation, several attendees expressed their interest in the MAPs value chain, and how there can be room for value addition through managing wastes from the MAPs production process. Qena’s local government representatives also expressed their interest in replicating the study to explore Qena and Suhag’s promising, yet stagnating clusters.
