Issued by CEMO Center - Paris
ad a b
ad ad ad
Abdelrahim Ali
Abdelrahim Ali

The unprecedented Egypt’s economic success is a reason for negative media campaign against its leaders

Saturday 10/October/2020 - 12:57 PM
طباعة

Throughout its history, Egypt was able to overcome many challenges that impeded the process of development, and was able to keep pace with regional and international changes, with the help of its distinguished geographical location.

The most prominent example was 2011, when Egypt faced many economic problems, and overcame them thanks to a new vision that appeared in 2013.

This new vision included economic reform programs that focused on addressing the root causes of problems while looking forward to the future with all its tools.

Thanks to President Sisi’s administration, Egypt’s government spending has turned, for the first time in history, into productive spending, after it was just consumer expenditure.

This productive expenditure was used to build and develop the entire infrastructure (roads and bridges, cultivating hundreds of thousands of acres - providing housing for the poor - creating a new administrative capital - developing factories - developing slums).

Productive projects have been undertaken in various governorates, and programs have been adopted to transform into e-government, indicating the existence of a scientific plan to establish a modern state.

Egypt implemented an economic reform program starting in 2017 to achieve social justice.

International Monetary Fund reports indicated an improvement in the economic conditions in Egypt.

Since the inception of the reform program that helped exchange rate liberalization, growth rates have accelerated, the external deficit reduced, and the monetary reserve increased.

Unemployment rates decreased to 8.3%, which is expected to reach its lowest levels at the end of the fiscal year 2020/2021, compared to 2011 rates.

Egypt has successfully re-established macroeconomic stability, attained impressive growth figures, attracted new investments and lowered formal unemployment rates. As often is the case, such successes place other developments in a starker light.

Despite the positive indications there are indeed growing challenges that can be resolved, now that macro-economic stability has been achieved. Egypt can look at the future with both determination and confidence.

Some burdens of living appeared after the state’s decisions to raise subsidies, but it did not affect the stability because of the people’s confidence in the government’s policies recommended by the World Bank, and implemented in cooperation with the IMF.

For example, despite the high prices of transportation in Egypt, it is still among the cheapest countries in the world ($ 0.5 for a metro ticket), and despite the high operating costs.

The COVID-19 pandemic is interrupting Egypt’s recent economic success story while these losses are lower compared to many other countries.

The government allocated an emergency response package to augment health expenditure, scale-up social protection, and provide financial relief for individuals and businesses.

Key measures included a one-off monetary grant to irregular workers and the expansion of existing cash transfer programs. Forbearance measures were introduced in the form of delayed tax filing and loan repayments, in addition to subsidized credit for targeted sectors.

Egypt upgrade from Moody’s as our credit profile proves “resilient” to shocks: Indicators that measure Egypt’s credit worthiness have proven “broadly resilient” to external financing shocks despite high exposure.

Moody’s said in a report in September 2020, this profile, which gives the country a solid credit rating of B2 with a stable outlook, puts us on track for an upgrade by the ratings agency pending “a marked improvement in debt affordability and reduction in gross financing needs.

Goldman Sachs’ report on Egyptian economy underlines that the Egyptian economy is both robust and steady, and that it is still achieving real growth. As such, it is one of the strongest among emerging economies.

Although investments exit the country, Goldman Sachs estimates that others worth $10 billion entered. It also speculates that the expats' remittances will improve, after they had declined due to the crisis. 

Wise Air, which is the third low-cost airline in Europe, announced the resumption of 3 weekly flights between Milan and Alexandria, in addition to the resumption of KLM Royal Dutch Airlines flights to Cairo, as well as the return of flights from Russia and Kazakhstan to Egypt, with the government implementing the precautionary measures agreed upon to receive tourists.

Egypt government focused on addressing the deficiencies in the economic indicators, as well as the social problems, as it succeeded in achieving a decline in the total annual inflation rate in August 2020 to become 3.4% compared to 4.6% in July 2020, and about 6.7% for the same month last year, against the backdrop of the continued decline in food prices.

The government is trying to provide digital registration of real estate and agricultural lands, in order to help solve the problem of desertification and alleviate the infrastructure crisis that emerged after the 2011 revolution.

Egypt aims to increase its government investments during the fiscal year 2020/2021 to LE 280 billion, 105 of them to drinking water and sanitation projects.

One of the most prominent successes is the emergence of the Eastern Mediterranean Gas Forum as a regional natural gas entity that included neighboring countries and its launch to become an international entity that enhances the aspirations of peoples and countries.

The importance of working on investing in giant government infrastructure projects, especially those linked to the construction sector, which represented the growth engine of the Egyptian economy during the period of the "Corona" crisis, as it mainly contributed to achieving a positive growth rate in the fiscal year 2019/2020 that reached 3.5%.

The number of employed individuals declined by 2.7 million during the same period pushing unemployment to 9.6% from 7.7% the previous quarter, with job losses.

The president Abdul Fattah Al-Sisi continues to focus on human and social development, through continuing the reform and development of education and health systems, which are witnessing an unprecedented increase in their allocations.

In addition to use the capabilities of the Armed Forces Engineering Authority to implement national projects, given that it has great expertise, especially cost reduction, in cooperation with the private sector and in a way that adds job opportunities and experiences for Egyptian youth.

Some countries seek to question the role of the Egyptian army, and question the reason for using it to support the economy and development.

But the main reason is that it is a disciplined national institution that has the ability to perform without bureaucratic hindrances.

It is worth noting that many countries have succeeded in using the capabilities of their military institutions for economic advancement, and perhaps the Chinese model is the best evidence.

Finally, ancient and modern Egyptian history has proven that the comprehensive power of the Egyptian state (economically, militarily, and socially) is always targeted in an attempt to exhaust it.

These attempts try to disperse efforts aimed at restoring the influence of the Egyptian state on the regional and international arenas.

Egypt has become accustomed in the current era since 2011 to negative media campaign against its progress and prosperity in order to distort its image among the Egyptian citizen and the international community.

Despite all the challenges and difficulties, and the attempts to demolish, sabotage and incite, God always keeps his promises and Allah mentioned Egypt in his holy Quran, so we thought he is both our provider and protector.

The wisdom of leadership and awareness of the Egyptian people are all represented an impregnable wall against the forces of evil and darkness.

 

 

"