Egypt has potential to be a regional economic hub .
Egypt has done well regarding the implementation of its economic reforms and the government’s performance amid the pandemic, and 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 .
Hasan said that his visit to Egypt aims mainly to cement the WBG’s strong partnership with the government of Egypt and renew its commitment to supporting Egypt’s second wave of reforms through the WBG’s new strategy for the coming five years: ‘The Country Partnership Framework (CPF) FY2022-26.’
It also aims to discuss Egypt’s key development priorities and potential World Bank support related thereto.
During his visit, Hasan met with Prime Minister Mostafa Madbouly and the ministers of education, petroleum, international cooperation, planning, and economic development.
“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 that was published last month,” said Hasan.
SCD reports are prepared by WBG staff in close consultation with national authorities and other stakeholders to identify key challenges and opportunities for a country to accelerate progress towards development objectives that are consistent with the twin goals of ending absolute poverty and boosting shared prosperity in a sustainable manner.
As of 30 June 2014, SCDs are required prior to sending a CPF to the board .
On the key themes of cooperation between the two sides over the near- and short-term, Hasan expounded that the WBG looks forward to supporting the government of Egypt in implementing reforms to address the deep-seated structural issues that hinder Egypt from excelling to realise its ambitious potential.
“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
In this respect, Hasan said that Egypt’s macroeconomic reforms helped stabilise the economy in recent years and allowed the country to enter the COVID-19 crisis with improved fiscal accounts and a relatively ample level of foreign reserves. Egypt was among the few countries worldwide that maintained a positive growth rate during the pandemic, however, long-standing challenges persist.
“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 fulfill its economic potential nor its ambitions 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 also added that Egypt needs a range of reforms to transform the economy towards export-oriented higher productivity sectors that would generate high quality job opportunities.
A set of policy reforms is also needed to support greater private sector participation in infrastructure development and service delivery based on its successful experience in the energy sector, according to Hasan.
To achieve that, Hasan said that this will require simplifying the business environment and removing regulatory barriers; supporting land, property registration, and judicial reforms; and promoting sectoral reforms that create an open and level playing field to encourage a dynamic and competitive private sector.
Moreover, a parallel set of inclusion reforms is needed to address financial, spatial, gender, and youth disparities to alleviate poverty and promote shared prosperity in the country, said Hasan.
“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.”
A national of Kuwait, Merza Hasan was elected in 2006 to represent 13 countries as the executive director to the WBG while becoming the dean of the Board of Executive Directors at the WBG since 2012.