Under the auspices of Prime Minister Hisham Qandil, Cairo-based Beltone Financial Holding launched a three-day conference on the future of investment in Egypt, titled New Dawn.
The conference aims to provide a platform for discussion presenting delegates from regional and global sovereign funds, investors, and institutions the opportunity to meet the government’s top officials, political leaders, and representatives of the Egyptian Stock Exchange (EGX) as well as the Financial Supervisory Authority (EFSA).
In the first day of the conference, PM Qandil introduced the government’s plan for reviving economic growth in Egypt, assuring foreign investors of the fertility of the investment environment.
“We really have a vision,” said Qandil, assuring the audience the government has a clear plan on how to achieve growth and development over the next ten years. Nonetheless, he stressed that Egypt’s urgent problems, which require a swift resolution, are not overlooked by his administration and a top priority.
“The long-term plan is to become a knowledge-based economy, one that is capable of maintaining sustainable growth under a democratic regime, ensuring communal participation from all sectors of society,” Qandil stated.
Ministers speaking during the conference unanimously stressed the importance of small and medium-sized enterprises (SMEs), stating their development will be focal point of the coming period. “Our goal is to link SMEs with large enterprises in order to aid their growth,” said the minister of industry and foreign trade, Hatem Saleh.
In the aftermath of 25 January 2011, the Egyptian economy was crippled by an exodus of foreign investors, against a backdrop of political instability and deteriorating security. According to the first deputy of the minister of planning and international cooperation, Ambassador Mahmoud Al-Saeed, the economic fallout of political instability, manifested in the dwindling coffers of the state’s budget, curtailed the government’s ability to carry out the infrastructure development projects necessary for economic recovery.
The decline of the state’s reserves encouraged the government to reinitiate negotiations with the International Monetary Fund (IMF) for a US$4.8 billion loan. According to the minister of investment, Osama Saleh, not only would the IMF loan provide the country with direly needed credit facilities, but it also represents a certificate of guarantee on the credibility of the Egyptian economy.
The government’s economic philosophy, as articulated by officials, is to seek sources of credit to secure the necessary liquidity to galvanise economic recovery. Fears over harsh conditions imposed by the IMF, which come at the expense of the poor and most needy, continue to reverberate across Egyptian press and media outlets. The Egyptian government stresses that the IMF loan is part and parcel of the social and economic reform programme it proposes.
Deputy minister of finance and director of the Macro-Fiscal Unit, Hisham Qadry, told Daily News Egypt one of the main problems facing the Egyptian economy is the persistence of low saving rates, which never exceeded 17 per cent. “We’re in need of sustainable high economic growth for at least ten years to stimulate high saving rates, a necessary prerequisite for economic development,” Qadry said.
EFSA Chairman, Ashraf El-Sharqawy, announced during the conference that all precautionary measures would be lifted and the Stock Exchange would resume operating under normal procedures by the end of this year.
The minister of investment said the government is committed to economic reform and a free economy, highlighting the importance of the private sector’s role in achieving economic growth. He added the government seeks to promote partnerships with the private sector in order to benefit from their expertise and technological innovation in boosting infrastructure development projects.
Government officials recognised the various structural ills of the Egyptian economy. Saleh commented on the need to review labour laws in order to establish an efficient relationship between employers and their workers. “We are reviewing Turkish and Japanese labour legislation in order to benefit from their experience,” Saleh said.
Since the inauguration of the new government; officials have embarked on a campaign among foreign investors, international and regional donors, and financial institutions, attempting to regain confidence in the Egyptian economy and secure funding necessary for catalysing economic recovery.