CAIRO: The Euromoney Egypt Conference 2009 kicks off today, bringing together government and business leaders to analyze trends in the Egyptian economy from a global context and offer predictions for the future.
Over two days, the conference will bring five ministers – including Investment Minister Mahmoud Mohieldin, Minister of Finance Youssef Boutros-Ghali, Minister of Trade and Industry Rachid Mohamed Rachid – to share the stage with industry heads and discuss Egypt’s economy as the global financial crisis shows signs of relenting.
Arab League Secretary General Amr Moussa will also speak and Prime Minister Ahmed Nazif will close the conference.
Panels with names such as “Rejoice! It’s not as bad as we thought set the tone for the ministers and moguls of the real estate, banking and communications sectors to discuss maintaining Egypt’s positive economic growth rate.
However, Euromoney’s international perspective – this week will see similar Euromoney events in Nigeria, Spain and Turkey – gives the conference a comparative outlook that will prove indispensable for planning the future direction of Egypt’s economy.
“Since we met in September 2008, much has changed, said Euromoney s Middle East Director Richard Banks in a press conference Monday. The world is asking: what will replace the paradigm of unlimited growth that failed so spectacularly a year ago?
“For so long, we acted under the assumption that more is better… [and] a new dogma has yet to take its place, Banks said.
Developed economies growth rates will remain low, while emerging markets, from China to India to Egypt, will grow faster, narrowing the gap between the developed and developing world.
Banks points out that “this is not a re-drawing of the map [of economic influence]. We had known that emerging economies would be the engines driving growth in the future, while developed economies influence would decline. The global economic crisis has simply hastened that process.
The recent inclusion of China and India in the G20 acknowledges the rising influence of emerging economies in the world financial order. Yet despite signs of recovery, Banks emphasized that “the old economic model is broken.
Egypt and other emerging economies, he said, can no longer rely on foreign direct investment as a source of growth, and should instead capitalize on its burgeoning population by increasing domestic demand.
In an interview with Daily News Egypt, Banks said that while the Egyptian economy has continued to grow at a time when many developed economies are shrinking, many suggest that the threshold for Egypt is higher considering its high unemployment and rapidly expanding work force.
A growth rate of only 4 percent this year and next, some say, may hurt the economy in the long term.
“I don’t think it’s building up to a crisis, Banks said, though he noted that there was a greater imperative for growth in an emerging economy like Egypt’s.
The Egyptian economic community has done its share of backslapping because of the still positive GDP growth rate, and Banks noted the accomplishment in light of a historically weak economic track record.
“It shouldn’t be underestimated how fundamentally different [the Egyptian economy] was from a decade ago, Banks said, noting that the economy was in such bad shape until recently that it likely would not have been able to handle this sort of global economic upheaval.
He also noted that Egypt has survived the crisis well compared to similar economies like Turkey and Indonesia.
Even as the global economy begins to show hints of recovery, Banks is quick to point out that inherent in the march of capitalism is the boom-bust cycle.
Even at this moment, he said, the global community is “planting the seeds of the next bubble.