Minister of Planning Highlights Financial Sector's Role in Global Growth at St. Petersburg Forum

H.E. Dr. Hala El-Said, Minister of Planning and Economic Development, participated in a panel discussion titled "Transformation for Global Growth: The Role of the Financial Sector in Achieving Strategic Development Goals" during the 27th St. Petersburg International Economic Forum held in St. Petersburg, Russia, from June 5 to 8.

During the discussion, Dr. Hala El-Said emphasized that, like many emerging markets, Egypt has recognized since the launch of the global Sustainable Development Goals (SDGs) that financial challenges will persist throughout the journey of achieving these goals. She noted that countries remain vulnerable to external shocks and geopolitical crises. El-Said highlighted that financing is always a key enabler for development pathways in countries, as it underpins all development programs.

El-Said further noted that despite the widening financing gap for achieving the 2030 SDGs, which now requires over $4.3 trillion compared to $2.5 trillion in 2015, this required financing represents only 1% of global wealth. This disparity underscores the significant lack of multilateralism and cooperation among international organizations and countries.

El-Said mentioned that the expansion of the BRICS group represents a unique opportunity for both the group and its members. With its growing economic strength and focus on cooperation, BRICS+ can become a significant force in shaping the global economic landscape, possessing substantial potential for development efforts in Egypt. She stated that Egypt can benefit from BRICS membership in various ways, including expanding trade and investments. Egypt could leverage BRICS' extensive trade network to access new markets for its exports and attract foreign investment, especially from other member states.

El-Said affirmed that Egypt will work to enhance its infrastructure development. The New Development Bank (NDB) could be a valuable source of financing for infrastructure projects in Egypt, particularly those focused on clean energy, water management, and transportation. She added that BRICS can expand developmental cooperation and international developmental investments, though the world needs more diverse financing tools. She called for urgent actions to enhance all forms of international developmental cooperation and more focused efforts to expand investment across all development agendas, including the SDGs and climate action.

El-Said explained that emerging markets and developing countries like Egypt face many difficulties in financing their strategic developmental goals due to several factors, primarily the lack of financial cooperation and rising geopolitical tensions. She added that BRICS offers a new financial dynamic through its institution, the New Development Bank.

Responding to a question about the financial sector's contribution to implementing Egypt's strategic development goals as envisioned in Egypt Vision 2030, El-Said highlighted that financing is always a powerful enabler for Egypt’s roadmap to achieving the SDGs under Vision 2030. She noted that the Egyptian government has developed a financial formula to allocate financial resources to different governorates in a fair and objective manner based on a set of criteria to improve the efficiency of public investment management and promote decentralization, taking into account the characteristics and conditions of each governorate.

El-Said pointed to Egypt's efforts in enhancing climate and development financing, noting that the Egyptian government is keen on advancing development and climate financing by developing frameworks and procedures and creating various financial instruments. She highlighted key government efforts, including boosting environmentally friendly public investments by launching the "Environmental Sustainability Standards Guide" in 2019. This initiative aims to increase the share of green projects in the national investment plan, raising the percentage of public green investments from 15% in 2020/21 to 30% and 40% in 2021/22 and 2023/24, respectively, with a target of reaching 50% by 2024/25.

El-Said also discussed the launch of Egypt's Country Platform for the Nexus of Water, Food, and Energy Program, aimed at accelerating the national climate agenda and providing opportunities to mobilize climate financing and private investments to support Egypt's green transition. This reflects the integration between climate action and development efforts. She noted that Egypt has provided the necessary regulatory framework for climate-related financial disclosures to encourage companies to adopt environmental, social, and governance (ESG) practices.

El-Said highlighted recent decisions to amend certain provisions of the Executive Regulations of the Capital Market Law, including the introduction of new types of bonds such as sustainable development bonds, social bonds, women's empowerment bonds, climate bonds, and transition bonds.

She continued by noting that Egypt, as a regional leader in issuing climate and development bonds, became the first African country to issue sustainable Panda bonds in the Chinese financial markets in 2023. The proceeds of these bonds will be used to achieve inclusive growth and green goals under Egypt’s sustainable sovereign finance framework. Additionally, Egypt was the first country in the Middle East and North Africa to issue sovereign green bonds in 2020, worth $750 million over five years, reaffirming its commitment to sustainable finance.

El-Said also noted Egypt's success in launching Africa's first voluntary carbon market on the sidelines of the COP27 climate conference to facilitate corporate access to climate finance, along with launching the Friends of Greening National Investment Plans initiative in Africa and developing countries.

Regarding the main current challenges and opportunities in the financial industry locally and globally, Dr. Hala El-Said explained that the global financial sector faces many challenges, particularly those under the umbrella of "geopolitical uncertainty." There are significant financial and economic shifts in all countries. She added that persistent price pressures and ongoing geopolitical risks are expected to continue, posing challenges for central banks in major economies to bring inflation back to target. These challenges underscore the need for different financial tools and greater emphasis on multilateral cooperation.

Regarding current global opportunities in the financial sector, El-Said emphasized that resilient financial systems and capital markets contribute to financial stability, job growth, and poverty alleviation. She underscored the need for countries to strengthen and promote inclusive strategic sectors based on goods and services, while carefully adapting available and suitable financial capacities to sustain the achievement of national strategic development goals.

El-Said concluded by stating that, according to the Organization for Economic Co-operation and Development (OECD), bonds can serve as stable, long-term debt financing. Given the size of the bond market, bond instruments can finance a large number and volume of projects. She stressed the necessity for countries to enhance the implementation of mutual debt exchanges with their development partners. 

She concluded by emphasizing that Egypt advocates for moderate protectionist policies when necessary, accompanied by strengthening effective global partnerships (Goal 17 of the SDGs) based on strong trust. This approach will lead to more inclusive and effective trade, fostering sustainable trade growth worldwide. El-Said highlighted the importance of leveraging sustainable finance to invest in green projects, both globally and particularly in the developing world, such as issuing green bonds.