Abstract:
This paper investigates various means to reform the service sector in Egypt with the aim of enhancing its efficiency. It discusses the different regulatory and liberalization frameworks governing the reform initiatives. Moreover, the paper investigates how regional liberalization initiatives interact with the multilateral and unilateral waves of liberalization. The main drivers for services’ reform are highlighted including market failure, globalization pressures, and distributional concerns. The paper emphasizes that the stylized features for domestic regulations should be maintained in any reform process. These features include ensuring transparency, credibility and predictability and most importantly enhancing competition. The Government of Egypt should develop a services policy outlining the regulatory features and setting a strategy for liberalization. Liberalization itself, as the paper concludes, can be undertaken on a regional basis to overcome the stumbling of multilateral negotiations. However, the paper identifies that liberalization attempts should be preceded or coupled with regulatory reform to ensure the positive outcome of liberalization. Regional liberalization can serve as a better option than multilateral liberalization in some types of services (e.g., energy and transport) and if certain aspects are considered including the design of rules of origin, interest of regional partners and overcoming legal loopholes.
