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Doaa Moneim – Ahram Online
“Egypt has done well regarding the implementation of its economic reforms and the government performance amid the pandemic. It has the potential to serve as a regional economic hub”, Merza Hasan, the dean of the Board of Executive Directors at the World Bank Group told Ahram Online.
Hasan made his remarks in an exclusive interview with Ahram Online during his current visit to Cairo, few days after the World Bank Group (WBG) approved a $360 Million development policy financing (DPF) loan for the country in support of a second wave of economic reforms.
Hasan said his visit “aims mainly to cement the WBG’s strong partnership with the government of Egypt and renew its commitment in supporting Egypt’s second wave of reforms through the WBG’s new strategy for the coming five years, ‘Country Partnership Framework (CPF) FY2022-26’. His agenda is to “discuss Egypt’s key development priorities and potential World Bank support related thereto”.
“The WBG is keen to support Egypt’s next wave of economic reforms through its new CPF, which follows the country’s priorities and the results of the World Bank’s Systematic Country Diagnostic’s (SCD) recent report which was published last month”, he added.
SCD reports are prepared by the WBG in close consultation with national authorities and other stakeholders to identify key challenges and opportunities in a country. The reports aim to accelerate progress towards development objectives, which are consistent with the goals of ending absolute poverty and boosting shared prosperity in a sustainable manner. As of 30 June 2014, SCDs became a requirement prior to sending a CPF to the board.
“The new CPF strategy for Egypt comes with a focus on enabling private sector investments and job creation, human capital development, and social protection; while maintaining macroeconomic stability and supporting the government of Egypt’s climate and green agenda”, Hasan noted.
“These reforms could be categorised under three main themes. First, strengthening the private sector’s role in development and job creation. Second, leveraging human equity and inclusion with a focus on the poor and middle-class. And third, implementing adaptation and mitigation strategies for climate change,” Hasan explains.
Progress in areas of investment, macroeconomy, and private sector support
“Egypt’s macroeconomic reforms helped stabilise the economy in recent years. It allowed the country to enter the COVID-19 crisis with improved fiscal accounts and a relatively ample level of foreign reserves. Egypt was among few countries worldwide which maintained positive growth rate during the pandemic, however, long-standing challenges persist”, he explained.
“Egypt has done well and has the potential to serve as a regional economic hub. Continuing pre-COVID macro-fiscal and structural trajectory may not fulfil its economic potential nor its ambition of becoming a regional model. A paradigm shift could help Egypt reach its full potential; achieving a balanced, sustainable and inclusive growth; moving from a heavily state-led growth model to a more balanced and inclusive model that unleashes private sector investment and leverages economic development in lagging regions”, Hasan elaborated.
He added that Egypt “needs a range of reforms to transform the economy towards export-oriented higher productivity that would generate high quality job opportunities”.
“To achieve that”, Hasan said, “this will require simplifying the business environment and removing regulatory barriers, such as supporting land, property registration, judicial reforms, and promoting sectoral reforms which create an open and level playing field to encourage a dynamic and competitive private sector”.
“A parallel set of inclusion reforms is also needed to address financial, spatial, gender and youth disparities to alleviate poverty and promote shared prosperity in the country”.
“A third set of reforms is essential to manage state owned enterprises and transform the role of the state to deliver an efficient performance and return for the Egyptian people and facilitate private sector access to markets and resources”, Hasan stressed.
