Cairo – The growth of the economy of Egypt may reach 5.5% during the 2009/2010 fiscal year, said the minister of Investment of Egypt, Mahmoud Mohieldin, at the 15th edition of the Euromoney conference, which took place this week, in Cairo. The news was disclosed yesterday by several papers and other publications from the country.
This annual event is an occasion in which the government of Egypt explains its discussions to foreign and local investors to show that the country is adopting adequate measures. "The economy of Egypt grew 4.7% in 2008/2009, over the expectations of most analysts," said Mohieldin. According to the minister, apart from this positive figure, the diversity of sectors in the country also works as a driving force for growth.
During his presentation, Mohieldin celebrated the lower inflation in Egypt, which dropped from 18% in 2008 to 10% in 2009, as well as the lower unemployment rates, which fell from 11% to 9% over the last five years.
"Trying to show the full half of the cup, he mentioned several areas that need attention for the rate of growth of Egypt to be translated into a true improvement in the quality of life of the Egyptians," said analyst Nevine Hussein, of the Egyptian Centre of Economic Studies. Among these areas are infrastructure, health, education, further jobs and better salaries.
The minister pointed out the development of infrastructure, as well as the generation of incentives to greater numbers of medium and small companies that, according to him, represent 90% of the enterprises in Egypt.
To illustrate his statements, the minister mentioned report Doing Business, of the World Bank, according to which Egypt has advanced from the 126th position to the 24th in the global ranking of countries in which it is easiest to open a company.
He said that 10 billion Egyptian pounds (US$ 1.82 billion) were invested in the development of infrastructure in 2008. Mohieldin admitted, however, that in 2009 the budget for the sector was limited to the promotion of existing projects. New initiatives had to be postponed.
Mohieldin explained that Egypt plans to expand private investment so that it may reach 135 billion Egyptian pounds (US$ 24 billion) during the 2009/2010 fiscal year, against 120 billion pounds (US$ 21 billion) in the previous period.
During the conference, the administrative director at Euromoney, Richard Ensor, praised Egypt for being among the six countries with the greatest GDP growth, but inquired whether the reform program adopted by the country, which uses the IMF model for market opening and incentive to foreign direct investment (FDI), may resist the present economic situation.
On the other hand, Mohieldin beat down allegations that the economy of Egypt has become excessively open, explaining that the country tried and rejected a system of centralization in the 1960s. To him, there is no alternative to the market economy that is currently in practice in Egypt. The minister said that with the development of new and better infrastructure, especially in the area of desalination of seawater and in the sector of renewable energies, Egypt may attract a greater investment flow.
*Translated by Mark Ament
