CAIRO: “Egypt has never had it so good, said Richard Ensor in his opening speech at the Euromoney Egypt 2007 conference Tuesday.
Esnor, managing director of Euromoney Institutional Investor PLC, inaugurated the conference by quoting Harold Macmillan, former UK prime minister, to highlight the success Egypt’s economy has witnessed over the past year.
With a theme that projects the importance of the next phase of Egypt’s economic development, Ensor explained that “Into the Second Wave – as this year’s conference is aptly titled – is the issue at hand.
Amid concerns from international economists that this summer “may not be so good, Egypt has managed to experience its “hottest stock exchange, attract feverish interest, and maintain a 7 percent growth rate.
Non-oil exports have increased by 40 percent and reserves are up by half over the last couple of years.
The result of continued efforts by Minister of Investment Mahmoud Mohieldin was a surge in foreign direct investment, which doubled last year reaching $11 billion.
While the opening speeches were characterized by an air of fulfillment regarding the economic achievements to date, they equally emphasized the challenges that still need to be addressed.
Despite the optimistic figures, there is still a “great deal more to be done, Ensor said, and the government “is in a race against time.
Highlighting the public as the government’s main concern, Minister of Finance Youssef Boutros-Ghali started his speech by saying that the “successes and achievements of the economy we are celebrating are yours. Those who have established a self-sustained momentum are sitting in this room.
Talking of Egypt’s current state, Ghali cited the economy’s achievements. For the first time in 20 years, the nation’s Gross Domestic Product (GDP) has reached 7.1 percent in real terms.
Exports and consumption are growing, and the balance of payments has experienced a surplus from LE 3 billion to LE 5 billion. In the last three years, the cash deficit has decreased from 9 percent to 5.5 percent and credit growth has increased from 4 percent to 14 percent.
“There is no fear of reaching a ceiling, because the faster we grow, the faster we can grow, said Ghali. The government hopes to reach a growth rate of 8-9 percent, he added.
To continue to flourish, the government must carefully plan for the period ahead. The quality, and not the quantity, of growth must be improved, so that the economic surge is experienced by all groups in society.
Success must be institutionalized and consolidated, but most importantly, challenges must be faced.
“In periods of sudden, fast growth, those who can exploit the opportunity in markets are the ones who benefit from the growth. It is a significant proportion and we cannot ignore them, Ghali said.
The coming period will see certain measures implemented to address the lower income strata. The government must extend a social safety net, “currently 1.2 million families are being reached by a social solidarity arm and given money to spend on education, healthcare and basic necessities, he said.
In addition, the method by which this money is delivered must be improved. “We have the money, but subsidies get lost on waste or theft, he said. Soon the cost of getting LE 1 to the lower income bracket will only be 2 piasters. Labor mobility must be increased through the improvement of transportation, housing and training.
“Quality of life must be improved, Ghali said, “[and] we have started an integrated program to restructure over 100 villages.
Furthermore, inflation must be addressed along with the development of healthcare and social security.
Another challenge that must be faced is the concept of “managing expectations.
“Improvement will come, but we can not perform miracles, Ghali said. The Egyptian people should know that “this government cares, and soon everyone will benefit from this growth.
“The success we achieved in this economy, we will achieve in the social structure, Ghali said.