The Minister of Planning and Economic Development reviews Egypt's reforms during its participation in the Bloomberg Emerging Frontier Forum 2022
22 September 2022
H.E. Dr. Hala El-Said, Minister of Planning and Economic Development, participated as a keynote speaker in a high-level session entitled “A New World Order: Emerging Markets and Frontiers” during the Bloomberg Emerging Frontier Forum 2022.
The forum witnessed the participation of the President of Fitch Ratings, Managing Director and Head of the Research arm of JPMorgan, Dr. Mahmoud Mohieldin, Executive Director of the International Monetary Fund, on the sidelines of her participation in the activities of this year's session of the United Nations General Assembly.
During her speech at the forum, Dr. Hala El-Said referred to the negative effects of the price hike worldwide, explaining that the sharp rise in the prices of certain commodities could lead to the suspension of work in a range of sectors, including the food industries, construction, petrochemicals, and transportation.
El-Said pointed out that most emerging countries are at risk, especially after the repercussions of the Covid-19 pandemic and the resulting weakness in macroeconomic fundamentals, and therefore, achieving macroeconomic stability and addressing structural issues should be the focus of emerging countries.Regarding the repercussions of the Russian-Ukrainian war on the global economy, El-Said said that the repercussions of the current crisis on emerging economies are represented in three main points, which are the significant increase in borrowing costs for emerging countries due to the high inflation and the raising of interest rates by central banks.
This increased pressure on international reserves and foreign reserves in emerging countries shrank by nearly $400 billion in 2022.
Rebuilding the reserves will be a major challenge, especially in light of the global economic slowdown.
El-Said added that the rise in interest rates in advanced economies has pushed investments in emerging markets to achieve better returns, taking into account risks, and this has caused more pressure on local currencies.
Resulting in more inflation and more adverse effects on the balance of payments.
El-Said reviewed Egypt's experience in economic and structural reform, as Egypt launched its economic reform program in 2016.
Egypt has implemented well-thought-out institutional and legislative reforms; these reforms have fundamentally improved the country's resilience during the Covid-19 pandemic.
These reforms allowed the provision of fiscal space to push a stimulus package that would enable the sectors and groups most affected by the population to overcome the repercussions.
The structural reforms program was also launched last year to further enhance Egypt's resilience to shocks, and address the root causes of imbalances in the real sector, by creating decent job opportunities, diversifying and developing production patterns, improving the business climate, and localizing and strengthening industrialization.
El-Said confirmed that the reform program focused more on the financial and monetary aspects, noting that work has been done to develop a reform program that focuses more on the real aspect of the economy, and enhances the role of agriculture, manufacturing, and information and communication technology, with a focus also on green projects.
El-Said added that the focus during the past two years has been on the structural reform agenda, given the real aspect of the economy, as agriculture is one of the main sectors we focus on.
El-Said pointed to the increase in the cultivation of wheat production to meet the current challenges, pointing out that the Egyptian economy is diversified, and 60% of the population is young, stressing the importance of investing in Egypt, which is the center of Africa and has all the capabilities and components for green projects.
El-Said added that the current challenges have also accelerated Egypt's efforts to support the tourism sector as another major source of foreign currency, and the crisis creates great opportunities for broader and more creative cooperation at the national, regional, and global levels to build the much-needed momentum to overcome the prevailing challenges.
El-Said explained that the challenges facing Egypt are not different from the challenges facing all emerging countries, and include rebuilding reserves, ensuring adequate funding, expanding social protection and preserving hard-earned gains in the fight against poverty, providing decent job opportunities, and combating the impact of climate change.
El-Said concluded her speech at the forum by highlighting the huge and promising opportunities in Egypt, including stimulating growth led by the private sector and enhancing the role of the private sector in the economy through various activities and projects for small and medium enterprises.