|
PRIME MINISTER UPBEAT ON ECONOMY
BY AMENA BAKR
Few astute observers of Egypt’s economy would
deny that things have been moving in the right direction since Prime
Minister Ahmed Nazif first took the reins of the cabinet in July
2004. Though the average citizen may have witnessed little change,
the country has taken important strides on the macroeconomic level.
These gains were highlighted at the Economist Conferences Fourth
Business Roundtable with the Government of Egypt, which convened
in Cairo on April 2. The highly anticipated annual event brings
together top members of the cabinet, along with businessmen from
all sectors, to discuss the status of Egypt’s economy. In the
past, it has been the launch pad for major economic news, such as
the announcement of the floating of the pound in 2002. Yet this
year, the government debuted no major new initiatives, choosing
instead to focus on Egypt’s progress in implementing economic
reforms and how it hopes to sustain the momentum.
Nazif inaugurated the conference’s first session by briefing
the audience – which consisted of leading businessmen and journalists
– on the country’s current economic status. He highlighted
the economic reforms that have occurred over the past 20 months,
stressing the newfound trust and optimism surrounding the government’s
handling of the economic reform process. This trust, he said, has
been reflected in new tax and customs changes that have “eased
the burden” on investment. “Business and government [have
worked together] in a team effort to create the value that we are
looking for,” he said.
Yet despite the “reconciliation” that has taken place
between the government and the private sector over the period past,
Nazif stressed, many challenges still lie ahead for the current
government. “I think that a lot has been done in the past 20
months, but I also think there is a lot to be done,” he said.
The government’s next goal, he added, is to meet Organization
for Economic Cooperation & Development (OECD) goals on good
governance by 2025. “Ambitious,” Nazif admitted, “but
doable.”
The prime minister asserted that positive moves were visible in
numerous sectors of the economy over the past 20 months. The construction
industry, he was proud to report, grew by about 12.7 percent. “This
is one of the leading indicators of the growth in the economy,”
he said. Other such indicators include a 20-percent spike in exports
and overall industrial growth of more than 6 percent in the last
quarter of 2005. “This is something we haven’t seen in
over 15 years,” he said.
Nazif reported progress on a new law that would form special courts
to deal with economic issues. The Economic Courts Law, which will
be submitted to parliament later this year, would help speed up
court cases affecting businesses, thus creating a more investment-friendly
environment.
Turning to the energy sector, Nazif said the government was candidly
addressing the more obvious investment impediments, namely land,
bureaucracy and the difficulty of finance. “We are starting
new reforms every day,” he said, rattling off the litany of
sectors in which cabinet reformers are active. “Today we are
addressing energy, we are addressing land, we are addressing bureaucracy,
we are addressing finance problems. [These are] four main areas
that can make or break our government.”
To promote new projects and investment, the government is issuing
new regulations that ease the process of land acquisition and the
addition of new energy projects. Nazif hopes these changes will
catalyze the growth of business activity. “What business wants
is clear and steady, predictable policy... and we are set to provide
that,” he said.
The government is also beginning to realize the importance of private
investment in projects that involve education, housing and health,
areas formerly the exclusive domain of the public sector. “Instead
of the government building everything and carrying the process in
one step,” Nazif said, “this new framework is providing
opportunities for the private sector to invest, and for the government
to lease.”
One challenge that Nazif says will have to be addressed in the coming
period is the high percentage of lower income groups in society,
which places an enormous burden on the subsidy system. “We’ve
created a new portfolio for social solidarity that will... better
target those low-income groups and add better efficiency into the
subsidy system so that the value remains within the economy,”
he assured.
With reforms well under way, Nazif says sustainability will emerge
as the critical issue. “Sustainability of the reform process
is very important,” he said, adding that it will require continued
commitment by the government. “Commitment, opportunity, resources
and environment; that’s what we call our core strategy for
the sustainability of our development.”
Nazif believes Egypt’s diversified economy has contributed
to sustaining the progress of economic reform. Despite the terrorist
attacks that took place last year, tourism still managed to make
positive contributions to the economy. “The tourist industry
continued to grow, yet at a lower percentage than we thought,”
he said, adding that while 15-percent growth had been predicted,
it still fared a respectable 5-percent growth.
In conclusion, Nazif argued that political and economic reforms
are working hand in hand to deepen Egypt’s democracy. He said
the government is committed to success and “moving on all fronts.”
Submit
your comment
Top
|
