Al-Ahram Weekly Online   15 - 21 May 2008
Issue No. 897
Economy
 
Published in Cairo by AL-AHRAM established in 1875

The future according to WEF

An international high-level conference to be convened in Sharm El-Sheikh next week is a good opportunity for Egypt to show off, Mona El-Fiqi reports

On 18 May Egypt will host the annual conference of the World Economic Forum (WEF) on the Middle East in Sharm El-Sheikh. The forum will be inaugurated by President Hosni Mubarak and attended by President George W Bush among other 12 heads of state and government. This year's gathering is scheduled to discuss the most crucial issues facing the world in general and the Middle East region in particular. On the top of the agenda are global food prices, climate change, energy issues, economic sustainability, inflation, the international financial order and political instability.

Being held in Egypt, the forum will help to attract the world's attention to the Middle East and North Africa, which is rapidly becoming a high growth region with many new opportunities for investment and partnership. However, this strong business drive backed by an extraordinary oil boom faces shifting security and political realities. The forum will focus on Middle East business opportunities as well as the challenges that they will face in the future.

According to organisers, since we are in an age of rapid and constant change, uncertainty should be a structural feature of the business, political, technological and social environments. So the theme of the 2008 World Economic Forum on the Middle East, Learning from the Future, is trying to address uncertainty, how beat to understand it and make it part of the leaders'reasoning. In an attempt to describe how business political and social environment might develop in the future, the forum is going to present three global scenarios to 2025.

The first scenario is "The Hyperlinked World", a world of possibilities. Advancements in cyber- infrastructure have caused communication cost to drop sharply, while people, business and government experience a great leap forward in their degree of interconnectedness. The global order in 2025 is governed by networks, communities and interest groups.

The second scenario is "The Sustainable World" which is marked by soaring demographics, industrialisation and ongoing climate change. In this world, water and food scarcities lead to new pockets of instability and a different geostrategic relevance of the Middle East.

The third scenario is "The Multipolar World" where the epicentre is in the East. New centres of power, fuelled by strong growth, emerge while global energy demand puts oil exporters under pressure. The trade and investment environment focuses on the new Asian powers that play an ever more assertive role in international politics. The Middle East in this scenario is engulfed in geopolitical competition for influence, power and ideas.

Experts believe that hosting such a gathering has many positive aspects for Egypt as it will help to create a good impression that can facilitate trade and investment dealings. Doha Abdelhamid, professor of economics at the American University in Cairo, told Al-Ahram Weekly that "the conference will be a good chance to attract more Arab and foreign investments particularly at a time when the government must increase subsidies and social solidarity which will certainly lead to a reduction of budget allocations for investments and infrastructure projects." So the government should decide what sectors need foreign direct and indirect investments during the coming period."

According to Abdelhamid, Egypt should use hosting this conference to discuss climate change and its impact on the world in the future. Abdelhamid warned that Egypt is predicted to be one of the countries most likely to be negatively affected by climate change during the coming 25 years according to an international report issued last year by the United Nations. This issue should be addressed by the government in order to avoid a crisis in the future and to try to find solutions in such an important gathering.

Government officials also agree that Egypt can benefit from hosting this conference. Mahmoud Mohieddin, minister of investment, told the Weekly that the forum will allow Egypt to air its political views on all standing issues at a time when coverage be some media circles is not exactly fair to Egypt's image. "In Davos you get a chance to tell your side, promote your people, your prospects for investment, trade and cooperation while boosting tourism."

According to Mohieddin, Egypt's agenda deals with a wide range of economic and political topics. "On top are three international problems -- better call them crises -- world food prices, global financial architecture and world economic growth."

As for global food prices Mohieddin explained that the government has a plan for regional cooperation in the agriculture sector with some Arab countries, particularly Sudan. The government's new agricultural strategy depends on attracting Arab and foreign investments to land reclamation projects, infrastructure development, transportation, and marketing -- all within an organised framework between the private sector and the government. Egypt's agenda also includes discussing methods and measures taken by the government to improve trade and investment cooperation with some countries.

Rachid Mohamed Rachid, minister of trade and industry, agreed with Mohieddin when he announced that the real challenge currently facing Egypt is rising food prices, contributing to a leap in Egypt's subsidy bill from around LE20 billion in 2003 to LE125 in 2008.

One more challenge is employment and human resource development. Rachid added that the government is working hard to turn our vast population into a competitive advantage. The challenge, according to Rachid, is not just to create jobs for graduates but to change Egypt's workforce to be trained to be competitive and exposed to international standards and technology.

However, there is hope in the future since Rachid announced that the current unprecedented strength and diversity of the Egyptian economy and wide range of economic partners will help Egypt weather the slowdown in some Western economies. Rachid added that Egypt expects another strong year in 2008 despite a more challenging global environment and that the GDP growth rate was 7.2 per cent up from less than three per cent a few years ago.

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