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Infrastructure-led post COVID-19 recovery is key to Egypt’s long-term transformation of the economy: Al Mashat

Minister of International Cooperation and Governor of Egypt at the World Bank, Rania Al Mashat, participated in the ‘Global Economic Prospects’ session as part of the annual meetings organized by the World Bank this week, which looked at the impacts that COVID-19 had on regional economies and the most recent economic indicators and data published since the June 2020 Global Economic Prospects report.

During the session, Al Mashat noted that the post-Covid-19 recovery will be infrastructure-led to achieve a long-term transformation of the economy due its immense potential for job creation and helping the most vulnerable in society be more resilient to future shocks. According to World Bank data, renewable energy projects ensure long-term job creation than fossil fuel projects and are also cost competitive. Additionally, the International Renewable Energy Agency estimates that investment in renewable energy could add almost $100 trillion to global GDP by 2050, which manifests the significance to prioritize the sector in economic recovery. Investment in infrastructure is also critical to promoting an inclusive society through enhancing connectivity, Al Mashat stated, as it will allow new actors such as Egyptian small- and medium-sized enterprises (SMEs) to have better access to opportunities and integrate into regional and global value chains (RGVCs). The minister added that currently there are over 42 projects worth 6,354 million dollars are implemented for the achievement of Goal 9 for industry, innovation and infrastructure. Al Mashat referred to the third pillar of economic diplomacy; the Global Partnerships Narrative that focuses on: people, projects and purpose to showcase success stories to be replicated elsewhere, as no country on its own has the silver bullet to any crisis. She referred to the success of the ministry’s trip to Luxor with the World Food Programme earlier in September, which earned praise from the African Union (AU) Commission developing rural communities and supporting small farmers in Upper Egypt and that it is an “an example that could be replicated in other African countries.” To fill the financing gaps resulting from the current pandemic, the minister noted that the international community must work collectively and innovate on the different types of financing to get out of this crisis. Al Mashat referred to Egypt's success in using innovative methods such as blended financing to execute major national projects, particularly in the infrastructure sector, which has helped Egypt achieve positive growth rate amid global downturn. According to the reports of the World Bank and the European Bank for Reconstruction and Development, Egypt is estimated to achieve growth of 3% and 2% during the current year, and about 2.1% and 5% next year, respectively. The private sector also showed played a large role in mitigating the impact of the crisis, the minister added, with the example of the ‘Egypt Will Pass’ initiative that saw participation of several private companies and employers to share their efforts on how to keep their workers employed. H.E is stressing on the importance of transparency and good governance especially as a reform policy for all countries and regions Because of the structural reform that has been undertaken in Egypt since 2016, Egypt is probably the only country in the region that has positive growth rate and very good projections in 2020-2021 According to the 2020 Global Economic Prospects report, economic activity in the Middle East and North Africa is expected to contract by more than 4 percent in 2020, due to the disruption of consumption, exports, and services activity by the COVID-19 pandemic.