The Minister of Planning reviews Egypt’s experience in economic and structural reform at the “Bloomberg” forum

Dr. Hala Al-Saeed, Minister of Planning and Economic Development, participated as a keynote speaker in a high-level session titled “A New World Order: Emerging Markets and Frontiers” during the Bloomberg Forum 2022, in the presence of the President of Fitch Ratings, Managing Director and Head of the Research arm of JPMorgan, Dr. Mahmoud Mohieldin, Executive Director of the International Monetary Fund, on the sidelines of her participation in the activities of this year’s session of the United Nations General Assembly.

During her speech at the forum, Dr. Hala Al-Saeed referred to the negative effects of high prices worldwide, explaining that the sharp rise in the prices of certain commodities could lead to the suspension of work in a range of sectors, including food industries, construction, petrochemicals and transportation, and that most emerging countries are at risk. Especially after the repercussions of the COVID-19 pandemic and the resulting weakness in macroeconomic fundamentals, achieving macroeconomic stability and addressing structural issues should be the focus of emerging countries.

With regard to the repercussions of the Russian-Ukrainian war on the global economy, Al-Saeed said that the repercussions of the current crisis on emerging economies are represented in three main points: the borrowing costs of emerging countries have increased significantly due to high inflation and central banks raising interest rates, which increased pressure on international reserves, and foreign reserves have shrunk. in emerging countries by about $400 billion in 2022. Rebuilding reserves will be a major challenge, especially in light of the global economic slowdown.

Al-Saeed added that the rise in interest rates in advanced economies led to investments in emerging markets to achieve better returns, taking into account risks, and this has caused more pressure on local currencies, which led to more inflation and more adverse effects on the balance of payments, as well as The adverse effects of higher food and energy prices on fiscal spending and debt levels are due to the fact that higher prices are forcing emerging countries to increase subsidies in order to offset the effects on vulnerable segments of the population.

While governments in advanced economies can pass the increase in prices on to consumers, this is not possible in emerging countries because large proportions of the population live either in poverty or on the edge of a precipice, and thus, social protection schemes are necessary, and this further undermines the measures Debt and liquidity, moreover, emerging countries rely heavily on trade as an engine of economic growth and a source of foreign exchange reserves.

Al-Saeed reviewed Egypt’s experience in economic and structural reform, as Egypt launched its economic reform program in 2016, and implemented well-studied institutional and legislative reforms. These reforms fundamentally improved the country’s resilience during the Covid-19 pandemic and allowed for fiscal space to push a stimulus package that would enable sectors and groups most affected by the population to overcome the repercussions. A structural reforms program was launched last year to further enhance Egypt’s resilience to shocks. Addressing the root causes of imbalances in the real sector, by creating decent job opportunities, diversifying and developing production patterns, improving the business climate, localizing and strengthening industrialization, increasing exports, and developing the role of the private sector in the economy, especially foreign direct investment, as a major driver of exports and a source of foreign exchange and capabilities. Value Added.

Al-Saeed confirmed that the reform program focused more on the financial and monetary aspect, noting that work has been done to develop a reform program that focuses more on the real aspect of the economy, and enhances the role of agriculture, manufacturing, and information and communication technology, with a focus also on green projects.

Al-Saeed added that the focus during the past two years has been on the structural reform agenda in view of the real side of the economy, as agriculture is one of the main sectors we focus on, noting the increase in the cultivation of wheat production to meet the current challenges, pointing out that the Egyptian economy is diversified, and 60% of the population is Among the youth, stressing the importance of investing in Egypt, which is a hub for Africa and has all the capabilities and components for green projects.

Al-Saeed added that the current challenges have also accelerated Egypt’s efforts to support the tourism sector as another major source of foreign currency, and the crisis creates great opportunities for broader and more creative cooperation at the national, regional and global levels to build the much-needed momentum to overcome the prevailing challenges, adding that this cooperation does not It includes not only cooperation between governments, but also between government, international organizations, civil society, and the private sector as we do through the Sovereign Fund of Egypt, to share in investment, use assets and harness potential.

Al-Saeed explained that the challenges facing Egypt are not different from the challenges facing all emerging countries, and include rebuilding reserves, ensuring adequate funding, expanding social protection and preserving hard-earned gains in the fight against poverty, providing decent job opportunities, and combating the impact of climate change. .

Al-Saeed concluded her speech at the forum by highlighting the enormous and promising opportunities in Egypt, including stimulating growth led by the private sector, enhancing the role of the private sector in the economy through various activities and projects for small and medium enterprises, increasing infrastructure development, the 27th Conference of Parties, and providing the opportunity for Egypt to provide and benefit from Among its efforts in the face of climate change in the world, leadership in the transmission of clean energy through green hydrogen and water desalination projects, as the potential of Egyptian tourism remains largely untapped, a more comprehensive regional integration where Egypt is considered as a gateway to Africa, as well as opportunities for further cooperation With Europe on a variety of topics including energy.

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