CAIRO: Egypt fell 25 points in the Competitive Industrial Performance (CIP) index, according to a UN report.
The United Nations Industrial Development Organization (UNIDO) released earlier this week its annual Industrial Development Report, which saw Egypt’s rank fall to 75 from 50.
Tunisia and Morocco topped the MENA region and continued to improve in industrial competitiveness. Both have emerged as small dynamic economies able to compete in global markets in basic manufacturing as well as more sophisticated products, the report said.
Several economic experts stressed that with foreign direct investment (FDI) inflows expected to fall and tourism likely to suffer, developing nations that depend on tourism and revenue-led growth have to find an alternative.
The report goes on to highlight 10 case studies of dynamic industrial development in different countries and demonstrates how these nations have developed strategies to help themselves.
The report aims to create a blueprint for action to help the world’s poorest countries out of poverty.
Dr Paul Makin, UNIDO representative and head of the regional office, attributes Egypt’s low ranking to the inclusion of new countries on the index.
Small and medium enterprises (SMEs), or the hidden champions as Makin describes them, are the lifeline for Egypt to survive the global financial crisis.
“Since there is an increasing demand for Indian outsourcing companies, Egyptian companies should grasp this opportunity by offering competitive rates, Makin said.
Countries could specialize in making individual components of whole products, such as buttons as opposed to a whole garment. The village of Qiaotou in China, for example, now produces 65 percent of the world’s supply of buttons, a press release by UNIDO said on Thursday.
The CIP index is meant to serve as a tool for countries to benchmark their progress and see if they are succeeding in eradicating global poverty.
However, Makin said the report is not a recipe for how to get out of poverty, rather it is a guideline for countries on how to find its own, tailor-made solution to tackle poverty.
On a positive note, Egypt’s banking system – flush with liquidity from its previously conservative policies – will survive the global financial storm.
“The banking system has to lend more money to youth – not to buy houses, but to fund SMEs and to enhance the spirit of entrepreneurship, Makin said.