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Egypt’s Social Capital and Arab Economic IntegrationGovernment actionprovides theframework for theformation andaccumulation ofsocial capital.Globalization couldempowermarginalized or evenpersecuted groups inthe countries of theSouth.this predicament is seen in high transactioncosts with the government. The dissatisfactoryranking of Egypt in the International Indexof Transparency well illustrates theconsiderable transaction cost perceived bybusinessmen in their dealings with theEgyptian government.Another negative spin-off from lack ofeffective social capital is seen in the modestaccumulation of other types of capital inEgypt, particularly physical capital. Theexecution time for national projects extendsfor much longer periods than forecast. Onereason for this is the lack of speedy andefficient dispute settlement mechanisms.The business community is often reluctantto respond to government appeals to investin its projects for similar reasons. Governmentaction provides the framework for theformation and accumulation of socialcapital. In this respect, public policiesduring the last three decades have had amixed effect. Disregard for court rulingsand loopholes in the legal system underminethe rule of law, and citizens areconsequently not sufficiently secure in theirdealing with others, making the accumulationof further social capital difficult.In addition, attempts to organize or toaccumulate social capital through itsmodern associational forms encounternumerous restrictions from the authorities.This is the case for political parties, professionalassociations, trade unions, civic societies,and even business groups. Governmentactions and legislation have eroded thepotentially positive impact of globalizationon social capital in Egypt. However, somepublic policies, mainly in the areas of socialdevelopment and social care, now providestrong potential for the further expansion ofsocial capital in the country.Globalization and Social CapitalThe impact of globalization on social capitaldepends on many variables. One variable isthe tie which provides the foundation ofsocial capital, and its quality. It could beargued that the rapid movement of people,information, ideas, news and imagesweakens the ties of solidarity amongmembers of groups that previously lived inharmony with community values. Theexpansion of the market economy toembrace many of the services that wererendered in the past by the traditionalcommunity, such as employment, healthcare and social protection, could weaken theneed for individuals to maintain the ties ofsocial duty and collective responsibility.These ties have in the past met not onlyemotional, but also physical and survivalneeds. Another significant variable isexposure to the international mass media,particularly through satellite television. Thismay not necessarily undermine traditionalvalues, particularly among the older generation,but is likely to influence the young, and ifvalues that previously cemented groupingsacross different social levels are eroded, thiswould generate a serious and dangerousdichotomy in Egyptian society.Minimizing these real threats wouldnecessitate a sustained and widespreaddebate, possibly through the mass media, topromote the change needed to fosterbalanced human development. Here, itwould be important to strike a dynamicbalance between the material, moral andspiritual aspects of the national culture andof life within Egyptian society, and allowfor healthy interaction between differentnational variations and values.On the other hand, globalization might giverise to new forms of social capital. Thedemonstration effect, exercised by moreadvanced societies with a multiplicity ofgroups that cater for a myriad of collectiveinterests, could lead to the establishment ofsimilar groups in developing countries.Human rights, environmental and women’sgroups have appeared in the countries of theSouth in the approximate image of theircounterparts in countries of the North. Inmany cases, such groups had been active incountries of the South long before the term‘globalization’ was coined. However, it isclear that in the 1990s their number hasincreased, and their activities expanded, notonly in Egypt, but in other countries of theArab region.Globalization could empower marginalizedor even persecuted groups in the countriesof the South. The solidarity extended tohuman rights groups in many countries ofthe South by their counterparts in the North,108 -Egypt Human Development Report 2000/2001