Egypt’s Planning minister upbeat about future
Lack of funding, huge foreign debt and public spending, as well as slowing foreign investment, are major impediments to implementation of Vision 2030, an ambitious development strategy that aims to revitalise Egypt’s economy.
Nonetheless, Egyptian Planning Minister Ashraf al-Arabi, the man most responsible for formulating the strategy, said he was confident that Egypt can overcome the challenges.
“The road to change is always difficult,” Arabi said, “but we will do everything to put our country where it most deserves to be.”
Vision 2030 states that Egypt belongs among the world’s 30 strongest economies. The idea was formulated after Arabi and other development planners listened to the private sector, civil society, industrialists, international development partners and young Egyptians. Vision 2030 aims to achieve Egypt’s maximum economic potential.
Egypt, beset by poverty and struggling to economically stay afloat, has great natural and human resources. With a population of 94 million, Egypt is a huge market for investors and producers. It is located on the crossroads of three continents and is the gateway to hundreds of millions of consumers in Africa and the Arab world.
Egypt has many barriers to cross before reaching the future it dreams of, Arabi said. Those include a lack of funding necessary to implement scores of projects in the development strategy.
Egypt has $24.3 billion in foreign currency reserves. Most of the reserves belong to other countries, which deposited them in Egypt’s Central Bank to help Cairo.
The poverty rate is 27.8% after commodity prices shot up and the government slashed electricity, water and energy subsidies. After spending 81% of the budget on the salaries of its 6 million civil servants and food subsidies, Cairo only has 9% of the budget for development projects.
The tight budget leaves little room for confidence outside Arabi’s office in the ability of government to implement the strategy. Detractors say a government incapable of cleaning streets, controlling commodity prices and offering decent health services is incapable of making Egypt a top economy.
“Those making the vision miss one thing: Things might not move as smoothly as they expect,” said economist Amr Hassanein. “The government’s projection for the tourism sector in 2016, for example, was full of optimism but the bombing of a Russian passenger plane over Sinai before the end of 2015 reversed everything. We should learn something from these experiences.”
The plane bombing was catastrophic for Egypt’s tourism sector, which contributes 1.6% of the national income. It precipitated a series of flight suspensions from top Egyptian tourist markets.
Arabi, 47, was appointed minister for the first time after the 2011 uprising. After being removed during the tenure of Islamist president Muhammad Morsi, Arabi was given the Planning portfolio after Morsi was ousted in 2013.
“Countries that wanted to make economic progress always faced challenges,” he said. “They could overcome these challenges in the presence of a comprehensive development vision.”
Vision 2030 is based on a number of large projects that would give Egypt’s development momentum, economists said. The projects include turning the Suez Canal region into an international industrial, service and logistics hub that attracts hundreds of billions of dollars in investments.
There is also the construction of an administrative capital between Cairo and Suez, the reclamation of 1.6 million hectares of desert, turning the north-western coast into a magnet for tourist investment, exploring for gold in the eastern desert, constructing 1 million flats, creating a furniture manufacturing centre in the coastal province of Damietta, establishing a location on the outskirts of Cairo for leather goods production, setting up scores of fish farms and turning Egypt into an international grain trade centre. These projects are expected to generate 5 million jobs.
Parliament member Bassant Fahmi is among those who share Arabi’s optimism. She said Egypt was more than capable of implementing the strategy and making economic progress.
“This progress depends primarily on whether our governments are serious in making the vision a reality,” she said. “Plans are always good when they are ink on paper but they are better when they turn into realities that make the lives of the people better.”
Arabi said he and fellow cabinet members would do everything in their power to make Vision 2030 a reality.
“We are confident that the economic reform programme designed within the vision will help our country get over its economic hardships,” he said. “To everybody I say: Trust the abilities of your country. Development is like war. It cannot be won without self-confidence.”