The European Bank for Reconstruction and Development (EBRD) has, to date, provided a total of over €2bn to banks operating in Egypt for on-lending to small- and medium-sized enterprises (SMEs).
Of this amount, the EBRD has granted over €700m since the start of the novel coronavirus (COVID-19) pandemic, according to the bank’s First Vice President, Jurgen Rigterink.
The EBRD financing took shape in the form of SME and trade finance loans to banks in Egypt, in order to support businesses, Rigterink added.
“Our support to SMEs is not only financial, through our small business initiative, but our Advisory Services have been provided to SMEs, covering all aspects of business from HR, to operations, and marketing,” he said.
Rigterink’s remarks came during a speech, on Tuesday, during the virtual “Egypt’s Green Economy” week, that is held by the British Egyptian Business Association (BEBA) and the Egyptian-British Chamber of Commerce (EBCC).
“I’m of course encouraged by the latest developments and yesterday’s news that an effective vaccine can perhaps be rolled out before long, but it will still be a long time before the majority of people have received the vaccine, and any vaccine will certainly not make a difference to the current wave,” Rigterink said. “Therefore I believe we need to remain alert and cautious.”
He added, “In fact, as the virus continues to spread rapidly, many economies worldwide are facing serious disruption, and the long term consequences of the current crisis is still unfolding.”
Rigterink noted that he believes there are at least three immediate challenges ahead, namely: supporting the post-pandemic economic recovery; building back better; and combating climate change.
He mentioned that the lesson learned from the coronavirus pandemic is that cooperation is no longer optional, rather that it is indispensable. The world must not waste any time to adapt to this change in the environment, and learn to make the best of it, he added.
“The pandemic has led to an unprecedented drop in global GDP,” Rigterink said, “It has forced governments to intervene in the economy, like never before.”
He added that the crisis has exposed how well different countries are equipped to deal with such a massive blow. Some countries had resources and reserves to resort to, while others benefited from being embedded in bigger alliances, such as the European Union (EU).
Egypt also felt the severe impact of the crisis, not the least due to the collapse in tourism, but it was one of the few countries a pandemic-induced recession.
Rigterink said that, in its anti-crisis measures, Egypt could rely on institutions such as the International Monetary Fund (IMF), the World Bank, and the EBRD. He added that for some countries, however, the opposite was true, as the pandemic has forced many governments, especially in the developing world and emerging markets, into a painful financial stretch.
“As a consequence, in the coming years, public support for the economy will remain most needed,” he said, adding “Where the public support is least, multilateral development institutions have a crucial role to play, but capacity and resources were on short supply or missing.”
Rigterink added, “We must step in and we must step up. If the coronavirus pandemic has not alerted us to the existence of global threats and to the fact that they can only be addressed with global responses, nothing will.”
In terms of building back better, he pointed to the massive financial intervention to counter the impacts of the coronavirus means that resources will be stretched for many years to come.
“We need to be smarter, and we must address issues that have been left unresolved for far too long,” Rigterink said, “The question therefore is how we can build a sustainable recovery.”
He said that growth should be combined with the UN’s Sustainable Development Goals (SDGs) to fast tracks lessons from the crisis. This includes the reorientation of supply chains to secure vital supplies or the future of work and the impact of digitalisation on the economy.
As part of this, inclusive engagement is also needed to ensure that the world builds back better.
“We urgently need to mobilise the private sector to support recovery efforts as we emerge from the crisis into 2021 and beyond, but this means that the private sector also has to play its role in overturning the inequalities in societies that the pandemic often has risen to,” Rigterink said.
“One central lesson from the crisis in my view is to spare no effort to prevent the next global crisis from happening and I’m certain that we will overcome the coronavirus pandemic,” he added,
The EBRD official noted that the next threat is already well known, in the form of climate change, which represents a threat due to there being no vaccine available.