living in income poor households are more likely to drop out of school or work, experiencing severe deprivation of education and/or income. Therefore, there is an increasing probability that today’s children exposed to deprivation will pass it on to their children in the future. Failure to enhance opportunities for children today will require costly remedies tomorrow.<sup>6</sup> Although health deprivation has remained almost unchanged, food and information deprivation have deteriorated. Children’s risk of suffering health deprivation remained almost the same between 2000 (2.9 percent) and 2008 (2.4 percent), mainly because of the expansion of the national immunization program. Food deprivation deteriorated over time; the prevalence of severe food deprivation drastically increased from 6.3 percent in 2000 to 17 percent in 2008. In addition, the 2008 Egypt Demographic and Health Survey (EDHS) paper shows that 29 percent of children in Egypt age 0-4 years showed evidence of chronic malnutrition or stunting, and 7 percent were acutely malnourished. A comparison of the results with the 2005 EDHS suggests that children’s nutritional status deteriorated during the period between the two surveys. For example, the stunting level increased by 26 percent.

# **1.2** **_Major Public Policy Initiatives Linked to Human Development Opportunities_**

Multiple public policy programs and policies to enhance the human development of children and youth in Egypt were undertaken during the past decade. Greater attention was given to less privileged segments of the population, including poor children. The initiatives focused on four sectors: social protection, health and nutrition, basic housing services, and education. Nevertheless, in most sectors, public expenditures for human development declined, with the exception of social protection, which expanded substantially. After 2006, the programs devoted nearly all the funds to finance fuel and food subsidies, which are costly and poorly targeted programs.<sup>7</sup> In recent years, the country has reformed laws regulating responsibilities to care for and protect children. It has introduced several important new social programs to promote the physical, social, educational, and emotional well-being of children, and established the Ministry of State for Family and Population and the local Child Protection Committees to safeguard children’s rights and welfare. Unfortunately, many reforms have not yielded the expected outcomes, either because they took the form of scattered pilot projects that have not been scaled up, they lack adequate resources, and/or they have not been appropriately and sustainably implemented.

_Social Protection:_ Although the social safety net in Egypt uses considerable resources, public investments targeted to promote the human development of less advantaged children is limited. The country spends around 8 percent of GDP on subsidies and non-contributory social assistance. The great majority of these expenditures are used to finance energy subsidies (5 to 6 percent), bread subsidies (1.5 percent), and subsidies for basic staples under the ration cards (0.6 percent). There is strong evidence that food subsidies are poorly targeted, and a reform to narrow coverage and reduce subsidy leakage could save up to 73 percent of the cost (World Bank, 2010a).<sup>8</sup> The growth of fuel and food subsidies during the past decade was due to increased international commodity prices and expansion of coverage of food subsidies. The distribution of fuel subsidies is even more regressive: ECES (2010) newsletter figures show that in 2008/09 the richest urban quintile received nearly nine times the amount of subsidies given to the poorest urban quintile. In contrast, cash transfer programs to assist the poor, which if well designed could constitute an important tool to equalize opportunities and improve human capital outcomes for children, represent less than 0.2 percent of

> 6 See Heckman (2000).

> 7 Public investment spending on the main human development sectors (education and health) declined as a share of GDP (from 0.7 and 0.5 percent in 2000 to 0.3 and 0.2 percent in 2009, respectively). This decline more than offset the increase in private sector investment in these sectors, reducing total investment from 1.0 and 0.7 percent of GDP to 0.8 and 0.6 percent, for education and health, respectively, over the same period.

> 8 See World Bank (2010).

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