Egypt is the only country that achieved growth despite corona: Prime Minister

Dr. Hala El-Said, Egypt’s Minister of Planning and Economic Development, on behalf of Prime Minister Dr. Mostafa Madbouly, delivered the opening speech of the second edition of the 2020 Economic Summit for Egypt, organized by the Seventh Day Foundation, under the patronage of the Prime Minister.During her speech, Dr. El-Said said that the summit comes as an affirmation and reinforcement of the participatory approach adopted by the government in its efforts to achieve development in various sectors, confirming the state’s keenness to encourage community participation in addressing all issues related to public affairs, especially the economic aspect.El-Said added that when reviewing the development experience of Egypt in recent years, the view of it must be more comprehensive and familiar with the variables and challenges that shaped the work environment and from which this experience was based, following up that an accurate estimate of the size of achievement is measured by the size of the challenge.Egypt has witnessed many major political, economic, and social changes and challenges in recent years, specifically since January 2011 and the consequent accumulation of structural imbalances that the Egyptian economy has suffered from for decades, whether in the real sector, in the financial and monetary sector, or the external sector.El-Said added that all these challenges negatively affected the decline of most macroeconomic indicators from the decline in growth rates to their lowest level in 2010/11 by about 1.8%, which is much lower than the rate of population growth, noting that achieving development requires the sustainability of positive economic growth to exceed the least weak population growth rates, following the increase in the severity of the challenges facing the Egyptian economy in light of the political and economic changes, regional and international events that the Arab region and neighboring countries have witnessed in recent years, and the new outbreak of the corona pandemic and the associated negative health, economic and social effects. There was only an intensification of serious and continuous work, which was based on comprehensive planning and an ambitious vision for the future, for the Egyptian state to formulate a sustainable development strategy: Egypt's Vision 2030.El-Said explained that the government's implementation of many reforms during the first phase of the national program for economic and social reform since November 2016 has led to the achievement of macro stability and comprehensive growth, which was reflected in the positive indicators that the Egyptian economy witnessed during the fiscal year 2019/20 and before the outbreak of the corona crisis. Economic growth was about 5.6% in the first half of 2020, and about 5% during the third quarter of 2019/20, with an average growth of 5.4% in the first nine months of the year, until the corona crisis emerged and affected the decline in many economic indicators, confirming that despite this relative decline, reform efforts and the diversification of the Egyptian economy have contributed to the Egyptian economy becoming more flexible and able to absorb external economic shocks.El-Said pointed to the positive expectations of international institutions regarding the Egyptian economy, which is the only economy in the region that achieved positive economic growth rates in light of the crisis, referring to the results of the Global Economic Outlook report issued by the International Monetary Fund in October 2020, in which it raised its expectations for GDP growth. The total for Egypt rose to 3.5% for this year, compared to its previous forecast of 2% in the report of last June, which makes Egypt among the only three economies in the Middle East and Central Asia to achieve economic growth in 2020, in addition to the report of the Fitch Ratings Agency, which stated that Egypt is in on its way to achieving the highest real GDP growth rate in the Middle East and North Africa region between 2020 and 2024. In this context comes the decrease in the unemployment rate to 7.3% in the third quarter (July-September) of 2020 compared to 9.6% in the previous quarter (April-June) of the year.El-Said also indicated that all international institutions praised the rapid Egyptian response to the first wave of the corona pandemic, describing it as being among the best in Africa and the Middle East, as the government took proactive policies that relied on a clear and deliberate plan targeting all social groups and sectors to mitigate the effects of the corona pandemic. Follow-up that the plan was based on several axes represented in supporting the affected sectors, supporting sectors that have the flexibility and the ability to withstand the crisis and rapid recovery, and working to maximize the use of the opportunities that can be found in these sectors, in addition to supporting the affected groups through support for regular and irregular employment. He pointed out that the presidential grant, which was scheduled for three months, was extended under the direction of the President until the end of 2020, in addition to revitalizing the economy by increasing incomes and increasing investments in priority sectors.El-Said added that the corona crisis rearranged the priorities of all countries, stressing the importance of several areas that represent urgent priorities for most countries of the world, foremost among which are the sectors of health care and social protection, stressing the interest of the Egyptian state to take into account while dealing with the crisis the balance between protecting individuals and continuing economic activity, noting that this was reflected in the government's interest in social protection networks and job creation, through the expansion of the number of beneficiaries of the Takaful and Karama program and the continued implementation of the Decent Life and Survival Boats initiatives as the most important tools to enhance the umbrella of social protection.The minister added that the Egyptian state’s interest in localizing development for its sustainable development goals came among the priorities with the aim of achieving the concept of “inclusive and sustainable growth and balanced regional development” as one of the main pillars of Egypt's Vision 2030, noting that the Ministry of Planning and Economic Development is working on implementing projects to achieve this in cooperation with local and international development partners by setting quantitative targets for each of the indicators of the sustainable development goals at the national level and at the governorate level. She explained that this aims to maximize the benefit from the comparative advantages of the Egyptian governorates and regions, and direct investments in the framework of the state’s general plan in a more efficient and effective manner, with a focus on the governorates that have larger development gaps according to the idea of targeting, on which the state’s efforts to implement development projects are based.Dr. El-Said also confirmed that the Egyptian state is increasing public investments by focusing on several promising sectors that represent a fundamental pillar to drive growth in the next phase, such as the sectors of health services and medical supplies, agriculture, food industries, communications, and information technology, construction, and manufacturing industries. In this context, the state aims to increase public investment by 70%, in a way that reflects the priorities imposed by the corona crisis. The most important sectors in which the investments allocated to it are increased are the health sector and the education sector, as it is of utmost importance to the Egyptian state as the main tool for development and building human capabilities and the main entrance to the progress of society.El-Said added that the development plans and programs focus on advancing education services and developing them in line with the requirements of the times. To achieve this, the government's work program for the advancement of the education sector included a comprehensive strategy for the development of education, whether general or technical, to improve the quality of the educational system in line with international systems, and working also to make education available for all, as well as improving the competitiveness of education systems and outputs to suit the requirements of the labor market. She explained that the state is working hard to mobilize the necessary financial resources to advance the education sector and increase investments directed to this sector, as the plan aims to direct total investments for education services amounting to about 50.9 billion pounds in 2021 compared to about 31.4 billion pounds in the year 2020, a growth rate of 61%. Public investments in the 2020/21 plan constitute 47.7 billion pounds, 93.7% of the total investments, and a growth rate of 28% compared to the previous year.El-Said explained that the state also attaches utmost importance to the communications and information technology sector and digitization infrastructure in the context of enhancing the trend towards digital transformation and intensifying investments in this field, explaining that the state has expanded investments in the information infrastructure sector and digitization, as the volume of investments directed to this field in the 2020/21 plan increased to about 10 billion pounds, an increase of about 300%.The minister added that the industrial sector in general, especially the manufacturing industries, comes from the main sectors on which the state’s efforts are based to achieve sustainable growth, diversify the productive structure, and create decent and productive work opportunities by increasing public investments directed to the non-petroleum manufacturing sector to about 65 billion pounds, while expanding the establishment of specialized industrial complexes, starting to localize purchases of electricity sector companies, and localizing the production of medical products, for which the corona crisis has proven the necessity of increasing self-sufficiency rates. In addition, the plan aims to deepen agricultural industrialization and localize products of the telecommunications sector, the manufacture of trains and railway accessories, the manufacture of household appliances, and the furniture industry, in order to benefit from the changes in global supply chains in accessing new markets in which Egyptian products enjoy competitive advantages.El-Said also addressed the conversation about the trend towards a green economy, explaining that in light of the work to achieve the goals of sustainable development, the Egyptian government adopts a national strategy for the transition to a green economy, where work is underway to achieve 30% of investment projects in the state's plans for the concepts of environmental sustainability and green economy so that the percentage will increase to 100% in the next three years. She pointed to the cooperation between the ministries of planning and economic development and environment to set standards for environmental sustainability that were already approved by the Council of Ministers in October. She added that Egypt was at the forefront of countries in the region that issued green bonds in the international market.El-Said stressed that the state is aware that there are still great challenges that must be faced, while creating promising opportunities from those challenges for future work and development, noting that among the most important challenges is the increase in population growth rates. She explained that if the current population growth rate of 2.56% is stable, the population of Egypt will reach 132.3 million in 2030. This means that Egypt is increasing annually by the size of a country with a population of 2.5 million, which increases the imbalance between the rate of population growth and the size of resources, devours the results and fruits of the achieved growth, and even threatens more economic and social pressures and challenges, which leads to a decline in the return from development efforts and more specifically per capita spending on education, health, housing, and transportation. She pointed to the difficulty of facing the problems of unemployment and the disparity in development indicators between the different regions and governorates with all of this, so the state works to manage the housing issue through controlling population growth and improving population characteristics such as education, health, job opportunities, economic empowerment, and culture.The minister added that the state seeks to meet this challenge by working on two parallel tracks represented in the development of a comprehensive plan to control population growth rates, which will be implemented as of early 2021 in cooperation between all ministries and concerned authorities. This plan includes five main axes: achieving economic empowerment, service intervention, cultural, media, and educational intervention, digital transformation, and legislative intervention, in addition to working to maximize the benefit from the current human resources through implementing a different package of training programs, capacity building, and expansion of investment in people.El-Said added that one of the challenges that are also being faced is the provision of the necessary financing for development, especially about the implementation of infrastructure projects, which requires, in addition to raising the efficiency of public spending and maximizing the use of available resources, which is what the state is working on by expanding the application of the program and performance budget, with work also to diversify sources of financing by creating mechanisms for effective partnership between the government, the private sector, and civil society.She pointed out that the state has established the Egypt Sovereign Fund as one of the mechanisms that the state relies on to create more opportunities for effective partnership between the public and private sectors to implement joint investments that achieve mutual benefit and interests, noting that the fund has succeeded since its inception in attracting investors and partners from home and abroad and signing agreements to enter into partnerships. Despite the economic challenges in the recent period, Egypt has witnessed the start of investment activity of the fund and the conclusion of investment partnerships on all frameworks locally, regionally and internationally.El-Said also indicated that the Egypt Sovereign Fund is planning to launch a group of specialized sub-funds in various fields for various health services, infrastructure, financial services, digital transformation, tourism, and real estate investment, noting that under the current circumstances and the corona pandemic, the fund is currently working on several projects in a range of sectors. The various sectors, especially the sectors that are receiving priority now in light of the repercussions of corona, include the diversified health services sector, in addition to the targeted investments in the agricultural sector and food processing, infrastructure, and digital transformation, as well as various other sectors. She pointed out that the fund has recently cooperated with the General Authority for the Suez Canal Economic Zone, as well as with private investors, to localize the railway carriage industry to meet Egypt's needs and provide great export opportunities by signing a contract to establish the National Company for Railroad Industries (NERIC) between the General Authority for the Economic Zone of the Suez Canal and Egypt's Sovereign Fund, as well as a number of Egyptian private sector companies.The minister stressed that the state is determined to move forward to complete the reform and development efforts that have been initiated in recent years, noting that achieving comprehensive and sustainable development requires years of hard and continuous work and diligent effort in which development partners from the private sector and civil society cooperate with the whole government. She explained that the state is committed to implementing the structural reforms program, which is the second stage of the economic reform program, adding that the structural reforms program is a national program that stems from within Egyptian public and private institutions and civil society, and comes within the framework of the participatory approach adopted by the Egyptian state.El-Said explained that the structural reforms aim to diversify the structure of the Egyptian economy, increase its flexibility, and raise the ability to absorb external and internal shocks, as well as transforming the path of the Egyptian economy to become a productive knowledge-based economy with competitive capabilities in the global economy. The main objectives of this program include preserving the gains of the first stage of the economic reform program (the stabilization phase) and continuing to provide decent and productive employment opportunities, in addition to raising the productive and competitive capacity of the economy, especially export-oriented. She stressed that the axis of diversification of the productive structure of the Egyptian economy is the main focus of this program and aims to improve Egyptian production, increase the economy’s flexibility and create decent and productive work opportunities, noting that to achieve this, five major priority sectors have been identified at the level of product and service sectors, which are agriculture, industry, construction, tourism, and communications and information technology.