Dubai, Asharq Al-Awsat—Egypt will launch a new economic development program aimed at revitalizing the country’s flailing economy during an upcoming major investment conference later this month, the country’s investment minister said on Monday.
Speaking on the sidelines of a Middle East-focused investment conference in Dubai, Egyptian Investment Minister Ashraf Salman said the upcoming conference in Egypt—which will take place in the resort town of Sharm El-Sheikh during March 13–15—would form the “backbone” of the government’s economic growth initiatives during the coming period.
Egypt’s economy has been battered since the uprising that unseated longtime president Hosni Mubarak in 2011. Since then, an exodus of foreign investment and a sharp decline in tourism receipts—once a major contributor to the country’s GDP—have slowed the economy, which was reaching growth rates of around 5 percent just prior to the 2011 revolution, to a near standstill.
Growth stood at around 3.2 percent during 2013/2014, while unemployment currently stands at 13 percent and inflation is hovering around the 10 percent mark. Both have largely recorded double-digit rates since the uprising.
Salman said the government is now eyeing a 3.5 percent growth this year and is hoping to rein in the country’s widening budget deficit from 15 percent of GDP to 10 percent through subsidy reform initiatives already enacted.
Egypt is hoping through the Sharm El-Sheikh conference to re-galvanize its flagging economic fortunes by drawing in some major long-term investments for large and essential national projects.
Over 1,000 of a total of 6,000 potential investors invited to attend the conference have already signed up for the event, Salman said, a figure he expects will rise to around 2,000 as the start of the conference nears.
The event is sure to see heavy involvement from Gulf investors, including from Qatar, Salman said, a country with whom Egypt has had a frosty relationship during the last few years.
But while Egyptian–Qatari relations have reached a nadir recently, Egypt’s relationships with its other Gulf neighbors have become even stronger.
Since the army ousted former president and senior Muslim Brotherhood figure Mohamed Mursi in July 2013, Saudi Arabia, the UAE, Kuwait and others opposed to the Brotherhood have helped prop up the Egyptian economy with 23 billion US dollars in financial aid.
Gulf countries have also been involved in helping organize the conference, with Saudi Finance Minister Ibrahim Al-Assaf and UAE Minister of State Sultan Al-Jabir both on the organizing committee.
Attendees at the event will be pitched a total of 35 investment projects, at their head a number of major energy projects which Egypt will use to increase its meager electricity-generating capacity, which results in blackouts hitting the country during the peak summer months.
After energy, the government is looking to attract investment in a number of other key sectors including manufacturing, real estate, petrochemicals, and tourism.
But if Egypt is to attract the necessary investment in these fields, a number of legal reforms will need to be put into place, Salman said.
Egypt’s current investment law can be problematic for foreigners, with trade disputes and resolution notoriously difficult to maneuver due to Egypt’s bloated and ineffective bureaucracy.
Salman said the country was hoping to draft a new law before the conference began, promising it would offer investors increased protections by prohibiting any third party from suing and providing a newly improved dispute resolution mechanism. A new bankruptcy law would also work alongside the investment law to ensure safe exits for investors from failing projects.