Egypt's economic turnaround
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Thanks to investment in renewables, a reform process 80 percent of which has now been implemented, IMF support, and partnership agreements with Italy, France, and the United States, Egypt is heading towards a period of growth based on energy, tourism and infrastructure

The Egyptian government is focusing on renewable energy. Minister of Planning Hala Saed announced that the government has allocated EGP 11.9 billion (EUR 580 million) in investments to the 2017-2018 development plan for the electricity and green energy sectors. The project will be implemented through a public-private partnership. Public investments will account for 10.4 percent of the funding and the rest will come from private enterprises and state-controlled agencies. Saed added that the electricity and renewable energy sector will play an increasingly significant role in the country’s economic growth and in developing Egypt’s commercial services and job market. According to government sources, the sector grew by 4 percent in 2014-2015, by 7.1 percent in 2015-2016, and by 6.9 percent in 2016-2017. In the coming months Egypt is also expecting to receive the third installment of a loan from the International Monetary Fund (IMF), while France and the United States continue to have commercial partnerships with former general Abdel Fattah al-Sisi.

The International Monetary Fund (IMF) loan

The IMF has noted the progress made by Egypt following the implementation of the economic reform program that led to an unprecedented devaluation of the Egyptian pound. Data provided by IMF Director of the Middle East and Central Asia Department Jihad Azour indicates that various sectors of the Egyptian economy, including exports and tourism, are benefiting from the loan. According to the IMF, the Egyptian economy is expected to grow by 4.5 percent in 2018, up from 4.1 percent in 2017. The Egyptian government’s monetary policy, however, has led to price increases, the introduction of a value added tax (VAT) and subsidy cuts. Although these measures caused a fresh wave of protests among national industries, they have also boosted exports, which have grown by 16 percent in the country’s non-petroleum industry. An IMF delegation visited the Egyptian capital on October 25, 2017, to decide whether to disburse the third installment of a USD 12 billion loan agreement signed in 2016. The delegation met with representatives from the Finance Ministry and the Central Bank of Egypt and with officials from the trade, petroleum, gas, and investment sectors. Bilateral meetings are expected to continue through to November 7, 2017, to review the progress made by the Egyptian economy. IMF Managing Director Christine Lagarde praised the reforms introduced by the Egyptian government and its finance minister Amr el-Garhy. According to IMF data, the reform process underway has achieved close to 80 percent of the set goals. The IMF had already confirmed Egypt’s satisfactory progress on its reform program back in July 2017.

New investments and the revival of tourism

There are also signs of recovery in the tourism industry. Egypt’s Tourism Minister Yehia Rashed signed an agreement with Italian Deputy Minister of Culture Dorina Bianchi to boost tourism. Rashed said the agreement would promote the return of Italian tourist flows, which had ground to a halt due to the country’s political instability since 2011. Bilateral relations with France and the Unites States remain solid. During meetings held with French President Emmanuel Macron in October 2017, Egyptian President Abdel Fattah al-Sisi spoke about the developing ties between the two countries. Agreements were signed in Paris ranging from the development of local businesses to partnership deals between French and Egyptian transport companies and local transport authorities. French Finance Minister Bruno Le Maire underscored Egypt’s ongoing efforts towards reform. The two countries signed deals to fund Egypt’s energy budget and specialist clinics in various governorates, and to build new infrastructure in Alexandria. In terms of relations with the United States, in August 2017, Washington withheld USD 95.7 million (and delayed a further 195 million) out of a total USD 1.3 billion in military assistance to Egypt, which has since been definitively resumed by President Donald Trump after the temporary freeze imposed by the Obama Administration. Among the reasons cited were serious concerns over human rights and, most particularly, the ties between Cairo and North Korea. In September 2017, however, USAID Mission Director to Egypt Sherry Carlin signed a cooperation and investment deal with Egypt’s Minister of International Cooperation Sahar Nasr. The agreements, worth USD 100 million, cover assistance in various fields, including health, education and trade. These agreements are the result of bilateral talks between President Trump and his Egyptian counterpart held on the sidelines of the September 2017 United Nations National Assembly meeting in New York.