• “Al-Mashat”: Geopolitical crises and economic challenges have affected various countries of the world, especially developing and emerging countries.
• Recent years have witnessed a significant outflow of capital and investments from developing countries towards more developed countries
• Egypt has begun implementing policies to enhance macroeconomic stability and structural reforms to support a sustainable recovery
• We follow an integrated approach with multilateral and bilateral development partners to implement development policy programs that support structural reforms
• Soft development financing is one of the important financing alternatives that countries compete for, and Egypt has close relationships based on credibility, commitment and transparency with all partners.
During the IMF and World Bank Spring Meetings, Dr. Rania Al-Mashat, Minister of International Cooperation and Governor of Egypt at the World Bank Group, held a live discussion with the Atlantic Council, one of the most prominent research centers in the United States of America, within the framework of interest International institutions want to learn about the plans and measures that have been taken for economic reform in Egypt, promote the measures that the government has implemented, and highlight the state’s efforts to empower the private sector and enhance macroeconomic stability amid the surrounding regional and global crises.
Global Challenges
The Minister of International Cooperation confirmed that all countries of the world were undoubtedly affected by the surrounding circumstances and challenges, whether due to the COVID-19 pandemic and its repercussions, or the worsening geopolitical challenges, as well as supply chain crises and rising prices, and these crises had a greater impact on developing and emerging economies that witnessed an outflow of capital towards developed markets, and a decline in foreign direct investment volumes, causing many economic challenges.
Economic reform measures in Egypt
Regarding the measures implemented by Egypt, the Minister indicated that Egypt is confronting these challenges through many measures, whether at the level of enhancing macroeconomic stability or structural reforms, explaining that a decision was taken to liberalize the exchange rate in conjunction with the implementation of a program with the IMF, now moving forward in strengthening these reforms to support the recovery of the Egyptian economy.
Al-Mashat stated that, in parallel with these measures, the Ministry of International Cooperation, in coordination with relevant national entities, is working to coordinate with multilateral and bilateral development partners to move forward in supporting structural reforms through programs to support the budget and finance development policies, based on three main pillar: Continuing macro-fiscal stabilization, Improving the business environment & increasing the economy's competitiveness, and Supporting the Green transition. H.E. noted that there is integration and consistency between joint relations with development partners to push structural reforms, as coordination is being conducted with the World Bank Group, the European Union, and other bilateral development partners in this regard.
Cooperation with development partners
The Minister referred to details of the partnership with the European Union and enhancing relations to the level of strategic partnership during the visit of the President of the European Commission to Egypt on March 17, explaining that the European package includes €1.8 billion in investment guarantees to support the private sector, in addition to €600 million in the form of development grants, and other financing to support the state’s general budget are currently being finalized.
The Minister of International Cooperation stressed that what distinguishes Egypt's economic and structural reform plans is that they are based on state ownership, and are being implemented alongside packages of social protection programs that protect the lowest-income groups affected by the reform measures.
Facilitated development financing
The Minister of International Cooperation moved on to talk about relations with multilateral and bilateral development partners, and the extended relationship between the Arab Republic of Egypt and various partners, which is based on clear foundations of transparency, credibility and commitment, pointing out that the current development financing portfolio is estimated at approximately $26 billion. Over the past four years, 2020-2023, financing worth $37 billion has been signed with development partners, including $10.3 billion for the private sector.
H.E. stressed the importance of concessional development financing, which is one of the financing alternatives that countries rely on, but it is witnessing great competition from all developing and emerging countries, due to its long-term characteristics, grace periods, and easy interest, which reflects that Egypt has strong partnerships to drive economic growth and development.
The Minister also touched on the launch of the country platform for the “NWFE” program, which includes 9 priority projects in the water, food, and energy sectors, and works to enhance direct foreign investments to implement the National Climate Change Strategy 2050, from various financing alternatives, whether blended financing to stimulate private sector investments, or dent swaps, as well as development grants.
The Minister noted that the Egyptian vision for the future is based on close partnership with the private sector, and its main role in achieving development and leading efforts to provide job opportunities and promote comprehensive and sustainable development, pointing out that a study on foreign direct investment in Egypt is being implemented in cooperation with the World Bank, and is scheduled to be released soon.