Egypt on the mend, don't believe the naysayers

The Egyptian government has been working hard to heal the economy after suffering setbacks for several years.

By Christiane Waked

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Published: Sun 9 Jun 2019, 9:00 PM

Last updated: Sun 9 Jun 2019, 11:20 PM

Egypt's economy is picking up. The British Standard Chartered Bank, in a study released on January 8, has estimated that the country will be among the 10 largest economies in the world by 2030. This is in stark contrast with what senior Muslim Brotherhood member and ex-minister of investment, Yehia Hamed, has written in Foreign Policy magazine, dated June 7. Hamed says Egypt's economy is not booming, but is collapsing and is affecting the common man while enriching the elite. These claims can only be argued in terms of numbers and facts.
The Egyptian government has been working hard to heal the economy after suffering setbacks for several years. It was only during the 2016-17 fiscal year that the economy began to recover with growth forecasts of 5.3 per cent in 2018. The Egyptian government is now aiming for a 5.6 per cent growth, while the International Monetary Fund (IMF) expects a 5.5 per cent growth during the current financial year.
In its report, the World Economic Outlook released on April 9, the IMF raised the Egyptian inflation forecast marginally  for 2019 - from 14 per cent to 14.5 per cent. The fund, however, forecasts a drop in inflation in 2020 to 12.3 per cent. Unemployment is expected to fall to 9.6 per cent in 2019 from 10.9 per cent last year.
It is worth mentioning here that Egypt's economy was not faring well when President Abdel Fattah Al Sisi came to power. Most of the vital sectors, including tourism, were badly impacted, especially after Daesh-affiliated groups started growing stronger in Sinai the past years.
This year, the government launched a campaign to cordon off some parts of the Nile Delta and some parts of the deserts especially the western border with Libya which has helped reduce the number of Daesh attacks in Sinai.
Thanks to the improved security conditions, tourism has picked up. It was up by 77 per cent in the first half of 2018 garnering $4.8 billion in revenue, and the number of tourists has grown by 41 per cent to cross the five-million mark.
The government also approved, by decree, an agreement of nearly $200 million with the World Bank. The agreement aims to stimulate job creation and entrepreneurship, as part of the project "Catalysing Entrepreneurship for Job Creation". Among other things, it aims to improve financing granted to small and medium-sized enterprises (SMEs) in order to boost growth and reduce the unemployment in the country.
For instance, $145 million will be used to provide loans to SMEs through non-bank financial institutions. The focus will be on women, youth and businesses in disadvantaged regions of the country.
Nearly $50 million is expected to be invested in venture capital firms to "strengthen the ecosystem of seed investments in Egypt". It should be noted that the rest of the funding should provide training opportunities for new businesses born in the country, to strengthen their skills and capabilities.
The government is supporting investment programmes to develop the country's science, particularly in the field of nanotechnology. The constitution adopted in 2014 mandates the allocation of one per cent of GDP in research and development, a necessity to make the Egyptian economy more competitive.
So, while Yehia Hamed is using propaganda material to make fake claims that if the current trend continues Egypt will be bankrupt, the numbers speak for themselves. Add to that international reports that speak about Egypt's developmental efforts in the recent past, and it is clear that the economy is on its path to recovery.
Christiane Waked is a political analyst based in Beirut

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