Thanks to smart investment and strategic policy reforms, Egypt is currently undergoing an economic renaissance. This is not merely theory: it is benefitting all Egyptians, attracting new levels of international investment and cementing the foundation for future prosperity and growth. And our government will remain committed to the kind of opportunity, stability and economic justice that advances the fortunes of the Egyptian people in a fair and equitable manner. We are expanding and investing in critical social services, health care and education. We are embarking on a series of major economic projects to fulfill the vision of a new Egypt, built upon innovation and modernization. At the same time we are implementing long-needed structural reforms to ensure a sound economy. We are reversing flawed policies that caused the waste, corruption and profligate spending that inhibited past economic progress. Challenges remain before our full economic aspirations are completely realized. But thanks to this strategic approach, after several years of uncertainty and stagnation, Egypt’s economy is back on track towards prosperity and progress.
Notably, from 13-15 March, Egypt will host business, economic and political leaders from around the world for the Egypt Economic Development Conference (EEDC) in Sharm El-Sheikh, a key milestone of the government’s economic strategy that will bring prosperity and improved social services to the Egyptian people.
New economic policies, projects and priorities have led to a series of positive economic indicators for Egypt. These strong signs of progress underscore the effectiveness of our economic efforts, the fertile landscape for international investment and the promise of Egypt’s economic future:
In order to build a flourishing 21st century economy, Egypt has begun implementing long-awaited structural reforms aimed at creating a stable and competitive business environment. Central to that is rolling back Egypt’s unsustainable energy subsidies, which benefited Egypt’s richest quintile and absorbed roughly 20 percent of the entire budget. As a result, subsidies deprived the government of much needed resources to meet the basic needs of all Egyptians. Over the next five years, we will eliminate remaining energy subsidies for all commercial and residential users except for those that benefit the most needy Egyptians. This gradual shift will generate more effective and efficient capital allocation, including incentivizing a shift to renewable energy. IMF Managing Director Christine Lagarde praised these groundbreaking reform efforts, stating said that she was “very impressed by what the Egyptian authorities are implementing in terms of reform.” In addition, Egypt is committed to removing the antiquated legal hurdles and unfair business practices that inhibited investment in the past. We are working to remove bureaucratic obstacles to ensure a fair and business-friendly environment. Amendments to the “competition and anti-monopoly code” will kindle a more competitive economy. Finally, once in place, a new uniform investment law will make investing in Egypt a more streamlined and attainable process. All told, Egypt has made great strides in a short amount of time restructuring the antiquated economic and legal policies that stood as a barrier to investment and growth. This new investment landscape is attracting a fresh wave of activity, sparking an economic renaissance clearly visible from our streets and our shores. Egypt’s economic resurgence will be on full display at March’s Economic Conference in Sharm El-Sheikh, where international investors, political representatives and leaders will be on hand as Egypt introduces 30 different investment projects worth a total of $20 billion.
Egypt has launched a number of national megaprojects that will transform the economic landscape. The Suez Canal project is a groundbreaking $8.6 billion endeavor to expand the historic waterway. The Suez is one of the most important commercial waterways in the world with 8 percent of all global maritime trade traversing its waters, earning Egypt billions of dollars each year. The expansion will double the canal’s daily capacity to approximately 97 ships daily by 2023, up from 49 now. The first major expansion in the canal’s 145-year history will also include four new seaports, a new airport, a new industrial zone and a “technology valley” in Ismailia. Egypt is also developing a “Golden Triangle” industrial, mining, commercial and tourism center between Qena and the Red Sea. This will connect Egypt’s two most important geographic and commercial centers, the Nile River Valley and the Red Sea, which are the central maritime transit hubs for global commerce between Africa, Europe, the Middle East and the rest of the world. And we have plans for housing and commercial developments along the Northwest coast and in the desert regions, including the establishment of an all-green city, al-Alamein. All of these mega-projects represent major investment in Egypt’s people, infrastructure and future. Egypt is also moving forward on greater development and diversification of our energy sector—both traditional and renewable. Global companies are investing billions for new oil and gas extraction fields across the country while the government has pledged to generate 20 percent of its total energy needs from renewable sources by 2020.
Egypt’s greatest natural resources remain its people, its land and its strategic location. As the world’s largest Arab nation, Egypt boasts the largest labor pool in the Middle East and North Africa. Its young and highly skilled population, with 50 percent being between the ages of 15 and 44, means potential for innovation and growth that is waiting to be unlocked. Each year around 300,000 Egyptians obtain university degrees, 35, 000 of which are in science, technology and engineering related fields. This highly educated, young and ambitious population has led Cairo to become a center for innovative start-ups and cutting edge technology firms. It has also made Egypt one of the premier information technology centers for the Middle East and North Africa. Egypt is also a critical conduit for international commerce. Low entry costs, strong bilateral trade relations and a geographically advantageous position are key to Egypt’s strong standing in global trade. It’s the world’s largest importer of wheat and represents one of the most important agricultural markets in the region. At the same time, it is the third largest car-producing country in Africa. The Suez Canal remains one of the most important commercial waterways in the world and revenue from the canal continues to set records. As it is expanded and modernized, the canal’s importance to Egypt and the rest of the world will only grow. Egypt’s unmatched beauty and history makes it a center for tourism, which is a major source of revenue for the Egyptian people. While recent uncertainty slowed down this sector, renewed investment and focus has produced a significant rebound. The number of tourists in Egypt rose from 9.5 million in 2013 to 9.9 million in 2014, leading to increased tourism revenue of $7.5 billion in 2014, up from $5.9 billion in 2013. Additionally, U.S. exports to Egypt grew 25 percent in 2014 and Egypt remains the third largest Arab market for U.S. goods.
As Egypt develops and innovates its economy, it will only grow as a destination for international investment. Today investors increasingly view Egypt as a smart place to do business, not only putting a down payment on their own future, but reflecting the strong confidence in a more prosperous and stable tomorrow for the Egyptian people.