Thursday,14 December, 2017
Current issue | Issue 1296, (19 - 25 May 2016)
Thursday,14 December, 2017
Issue 1296, (19 - 25 May 2016)

Ahram Weekly

Developing Egypt’s economy

The government’s recently completed mega-projects are essential for Egypt’s future development, writes Nesma Nowar

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Al-Ahram Weekly

Since President Abdel-Fattah Al-Sisi came to power in June 2014, he has often talked of the many mega-projects he intends to pursue to develop the country’s economy.

Many of these projects have started to see the light in recent weeks. This is in addition to the expansion of the Suez Canal, inaugurated in August 2015, which saw the construction of a 34-km canal parallel to the existing Suez Canal.

On Tuesday, Al-Sisi launched phase one of the new West Assiut power plant which has a capacity of one gegawatt of electricity, enough for more than 960,000 homes. The time it took to build the plant is considered a world record as power entered the first phase of the grid in less than six months, according to a statement issued by GE, one of the companies working on the plant. Phase two, which is currently being worked on, would add an additional 500 megawatts to the plant’s capacity.

Al-Sisi also was briefed on developments concerning the new Assiut Barrages and its hydroelectric station which will improve irrigation in five governorates in Upper Egypt and would replace the 100-year-old barrages.

On Saturday, the Armed Forces opened the development works at Lake Bardawil, one of Egypt’s most important sources of fish production, which aim to return the lake to its former glory and set up a factory for packing fish for export.

A day earlier, Al-Sisi gave the green light to 32 major projects in different governorates, in the areas of housing, roads, bridges, railways and utilities.

Prime Minister Sherif Ismail said that the new projects came only a few days after the beginning of the wheat harvest in the Farafra Oasis in the New Valley governorate of the Western Desert, itself part of a mega-project that intends to reclaim 1.5 million feddans of land across the country.

Ismail said the aim is to achieve comprehensive development by pressing ahead with reforms and partnerships between different sectors of the state.

Such development is now being particularly felt in the field of transport, as many roads and bridges are being constructed, improving infrastructure across the country. The Armed Forces Engineering Authority has also been assigned to develop 64 roads, of which 13 are finished and the rest are under construction, said Kamel Al-Wazir, head of the authority.

Al-Wazir said the authority is to construct a total of 160 bridges and 21 tunnels, of which 120 road bridges and 13 tunnels have been completed.

Despite these achievements, some of Al-Sisi’s economic policies have been met with mixed reactions, and some question whether the mega-projects will help ease the country’s deteriorating economic situation and bolster growth.

Some analysts have said the projects could boost the economy, while others have remained sceptical of their economic impact.

On Friday, the international ratings agency Standard & Poor downgraded its outlook on Egypt’s long-term sovereign debt to negative from stable because of “external and fiscal difficulties”.

The agency forecast that Egypt’s current account deficit would widen to an average of 4.8 per cent of GDP between 2016 and 2019, largely as a result of weak exports and tourism revenues.

The country’s budget deficit stands at 11.5 per cent of GDP, public debt amounts to 94 per cent of GDP, and the rate of inflation is 11 per cent.

Against this background, the mega-projects were essential for achieving development, said economist Mokhtar Al-Sherif. “You can’t build a building without laying the foundations for it first,” he said.

Al-Sherif said that the infrastructure projects that have been finished and the others that are underway are crucial for achieving sustainable development, even if their advantages might not be immediately apparent.

He said that the development works on the Cairo-Alexandria road and the Al-Alamein road, which, links Cairo with the North Coast had initially been met with criticism, but after the roads had been upgraded people wanted to see similar development works on the rest of Egypt’s roads.

He also pointed to the importance of the Golden Triangle Development Project, which covers the area between Safaga and Al-Qoseir, overlooking the Red Sea, to Qena and Qeft in Upper Egypt. “This has long been a dream for many Upper Egyptians, and it is now starting to become a reality,” he said.

Farag Abdel-Fattah, a professor of economics at Cairo University, agreed, saying that investing in infrastructure is a prerequisite for sustainable development and that it will attract foreign investment to the country.

Abdel-Fattah said that Egypt had needed these projects for a long time and that they were long overdue. “President Al-Sisi must be credited with the acceleration of these vital projects over a short time period,” he said.

Abdel-Fattah and Al-Sherif both said that people should not need to wait long to feel the economic benefits of the projects.

“People need to be patient if they want to see positive results, and they need to trust the government and believe that its efforts aim at their welfare,” Al-Sherif told Al-Ahram Weekly.

He said that the government should arrange field trips to the projects for students and members of different syndicates and other institutions so that they can see for themselves the amount of work and effort that has been exerted to complete them and to appreciate their importance.

He added that execution of the projects has immediate advantages by offering job opportunities to many Egyptians and creating incomes in the short term.

Both experts agreed that this is the right time to execute the projects because they are necessary to kick-start the country’s development. “Egypt’s future lies in these projects,” said Abdel-Fattah.

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