mastar molhaa.indd

The world economist Mohamed El-Erian :
Egypt is to overcome decades of chronic economic underperformance
With bad news generating
many of the headlines from the
Middle East, the Egyptian government is trying to correct this
perception by inviting a range
of high-level officials from both
the public and private sectors to
Sharm el-Shiekh for the Egypt
Economic Development Conference, to shed light on the ongoing revival of one of the largest
economies in the region.
After another rough patch, the
Egyptian economy is picking up.
Growth accelerated to more than
5 percent in this fiscal year›s first
half, which ended in December
2014. Investment, both domestic
and foreign, is gradually recovering. Tourism is slowly coming
back. The budget deficit is targeted to fall to 10.5 percent of
gross domestic product.
The aim isn›t just to stabilize
the economy. It is also to unlock the country›s significant
untapped potentials. To this end,
immediate measures to stabilize
the economy are being accompanied by three, mutually reinforcing pillars of durable economic
Enhancing actual and potential growth and job creation,
including a new investment law
to reduce inefficiencies, increase
investor protection and provide
targeted incentives; and a subsidy reform to better target support for the more vulnerable segments of society.
The measures implemented
so far by the government aim to
create a macroeconomic framework that credibly targets sustained high inclusive growth,
whose benefits are shared widely
by the population, with particular emphasis on protecting the
most vulnerable.
This time, Egypt is also benefiting from the substantial
support of its partners, notably
Saudi Arabia, the United Arab
Emirates and Kuwait.
has spillover
effects beyond
the country›s
The Egyptian authorities aren›t
alone in their efforts to reform
economic policy to ensure superior outcomes. They aren›t the
only ones to have recognized
that success means doing things
both better and differently. And
they aren›t the only ones seeking to place greater emphasis on
engaging youth, an absolutely
critical element of any inclusive
approach to reform, and a paramount necessity.
Given these promising developments, at least four transitions
will be critical to Egypt›s success in building a more prosperous economy:
Improving policy implementation to ensure that the design
of programs includes responsive
execution that adjusts in a timely fashion to developments in
an increasingly volatile global
Moving economic development away from relying just on
state-led growth to a more inclusive model that supplements
important national projects with
public-private partnerships and
private sector activities (particularly small and medium-sized
businesses and start-ups).)
Restructuring domestic institutions to ensure they are more
transparent, efficient, accountable and inclusive, and that they
meet the needs of all Egypt’s
people, not a privileged few.
Broadening external support
for Egypt’s domestic reforms
from a few partners to a wider
range of donors (including regional and multilateral institutions).)
These transitions are critical
if Egypt is to overcome decades
of chronic economic underperformance, reduce its excessive
vulnerability to the vagaries of
an increasingly volatile global
economy, and meet the legitimate aspirations of the January
2011 revolution. Ensuring that
they occur successfully, and
simultaneously, will require a
combination of careful domestic implementation and timely
external support. They also need
to sustain broad social and political buy-in.
The benefits of a successful
Egyptian economic transformation would have notable spillover
effects that extend well beyond
the country›s borders. A dynamic and growing Egypt constitutes
an integral part of a more secure
and stable Middle East.
Al-Ahawany, Minister of International Cooperation:
3 strong indications for Success
Great efforts made by the Ministry of International Cooperation
headed by Minister, Dr. Naglaa
Al-Ahwany during the preparation of economic conference to
be the link between Egypt and the
world through coordination with
the Ministry of Foreign Affairs. It
succeeded through coordination
with all countries at the official
level of governments and regimes,
to confirm the participation of 60
countries high-level delegations, as
well as major investors and international companies. Al-Ahwany made
many promotional meetings organized by the ministry inside and outside Egypt, in order to achieve the
dream of the “Economic Conference”. The following lines reveal
Al-Ahwany’svision for the conference and opportunities for Egypt to
benefit from it, and the investors opportunities to achieve further gains
through Investment in Egypt.
How was the beginning of the
idea of the Economic Conference?
The “Conference” at first was just
an idea and an appeal made by the
late King Abdullah of Saudi Arabia,
for providing aid to Egypt after the
“June 30”Revolution, and the losses
incurred by the Egyptian economy
during the two years of revolutions
which has been very well received
by the Eg y ptian government and
“Strong participation of
with national
and foreign
Arab allies. The government is well
aware of the importance of grants in
ce rtain t iming, and we must thank
all those who supported Egypt, led
by the Gulf countries which helped
the Egyptian Economy to overcome
the crisis. Egyptian state enhanced
King Abdullah’s initiative in order
that the “Conference” will be an opportunity to attract real investment,
and then, put Egypt on the map of
international investment to achieve
high growth rates accompanied by a
fair distribution of the returns of this
growth to the society at all levels.
Al Ahwany added that there are
three indicators which point to the
success of the conference, the first
will be shown in the success of the
go vernment in the delivery of its
ec onomic vision to the world the
best proof of twhich is the number
of conference participants, despite
all the plots against Egypt whrther
to thwart the government’s efforts
to achieve economic recovery felt
by the the poor and the rich. Nowadays, hundreds of investors: Egypti ans, Arabs and foreigners and
do zens of official delegations and
re presentatives of international fina nce institutions, will participate
in the conference. The second indicator is the government’s success
in offering investment opportunities and projects to the participants.
There are some projects which will
be completed and marketed after
the conference, along with a numbe r of companies that provided
material and moral support for the
Economic Conference, the number
of which reached 25 local and interna tional companies. This was the
third indicator of the success of the
conference as shown in the success
of the government in establishing
a free economy that supports the
management of the private sector.
Ahead of Egypt Investment Conference,
world testimonials for Economic Reforms
According to an article written by… published on Forbes on Wednesday.
Ahead of the approaching economic summit, many world organizations expressed
their encomium of the measures implemented
by the Egyptian government in order to make
the investment climate more attractive and remove all obstacles encountered by investors,
to revive the national economy.
Egypt’s President Abdel Fattah al-Sisi’s government sees the conference as an important
component of a strategy to improve the economy through attracting private investment.
Sisi has gone after corruption and put in
place reforms to gradually ease out subsidies
on food and energy. One successful example
of this is a new smart card system which reduced corruption, encouraged accountability
and efficiency. “Under the new system, families are issued plastic cards allowing them to
buy five loaves per family member per day,”
wr ites Reuters, “Buyers no longer have to
qu eue. Bakeries are paid for the subsidized
lo aves they sell, rather than being given a
fixed allotment of cheap flour, making it harder to siphon off subsidies.”
The IMF is positive about the Egyptian government’s economic reforms. “The authorities’
policies to achieve inclusive growth and job
creation focus on pursuing structural reforms,
promoting investment, and protecting the
poor… Measures implemented so far, along
with some recovery in confidence, are starting
to produce a turnaround,” according to a recent
report. Nonetheless, the IMF adds, “But the
authorities’ success in meeting their goals will
depend on their steady efforts, willingness to
take additional actions as needed, and continued external support”.
In 2014, Transparency International ranked
Egypt 94th out of 175 countries. This is an
improvement from the previous year, when
E gypt ranked 114th out of 175 countries,
e ven though the latest score still shows that
Egypt has a long way to go. Similarly, in 2015,
t he World Bank 2015 Doing Business report
r anked Egypt 112th out of 189 countries—a
one point improvement from 2014, yet still a
score that reflects considerable challenges.
By many accounts, Egyptians are currently
optimistic about Sisi. Their priorities right
now are economic improvements over anything else. They see Sisi working towards genuine economic reform, and are even willing to
put up with short-term hardships such as temporary energy shortages, if this means gaining
long-term improvements
Egypt’s regional influence is too important
when it comes to stability the Middle East.
The withdrawal of U.S. support for Egypt
does nothing to advance a human rights agenda and hurts U.S. security interests by pushing
Egypt further towards anti-Western players.