Wednesday,20 September, 2017
Current issue | Issue 1359, (7 - 13 September 2017)
Wednesday,20 September, 2017
Issue 1359, (7 - 13 September 2017)

Ahram Weekly

Building BRICS

This week’s ninth BRICS Summit offered Egypt an opportunity to showcase its economic reforms, writes Niveen Wahish

 

photo: Xinhua

Egypt was a guest at the ninth BRICS Summit, a meeting of the leaders of Brazil, Russia, India, China and South Africa, this week. It was invited by China, which hosted the summit in Xiamen, alongside Guinea, Mexico, Tajikistan and Thailand. The invitation of non-BRICS states, the so-called BRICS+ approach, seeks to foster dialogue and cooperation between BRICS countries and other emerging markets.

Magda Shahin, director of the Prince Alwaleed Center for American Studies and Research at the American University in Cairo (AUC), told Al-Ahram Weekly the invitation constituted recognition on the international stage of Egypt as a regional power in Africa and the Middle East.

President Abdel-Fattah Al-Sisi told participants that Egypt views BRICS’ success in achieving an unprecedented degree of policy coordination and effective cooperation as a model worth emulating.

Attending the summit was not only an opportunity to learn from the experience of other states but also to present the “new Egypt” that is determined to move to the next level by showing its keenness on reforming its economy and the endurance of its people to accept heavy burdens, Shahin said.

“It is a forum whose members have followed similar reform trajectories. We can benefit from the exchange of experiences. We can also learn from their mistakes and how they corrected and overcame them.”

Some commentators speculate inviting Egypt to the summit is a precursor to asking Cairo to join. While Mohamed Badr, senior director at N Gage Consulting, dismisses such speculation as premature, he says it is important to build close ties with BRICS members not only because of their political weight but because they have established well developed, diversified economies.

BRICS’ share of the world economy reached 23 per cent in 2016. It accounts for two-thirds of the developing world’s economic activity.

“It is very important to mingle with the bloc’s members to promote our own economy and the investment opportunities Egypt offers,” says Badr.

Which is what President Al-Sisi did during his time at the summit. Speaking at the Dialogue of Emerging Markets and Developing Countries organised alongside the summit, and to the BRICS Business Council, Al-Sisi illustrated Egypt’s economic reform efforts. He pointed out that Egypt followed the best practices from members of the group such as Brazil and India.

The Brazilian model, he said, is considered one of the most successful in dealing with high inflation rates by increasing the productivity and the overall efficiency of the economy, via the privatisation of companies, and the expansion of public expenditure on social services and protection. Egypt also studied India’s application of an advanced modern technological system to identify and register all subsidy beneficiaries in a database that is electronically linked to the government subsidy system, Al-Sisi added.

It was the perfect venue to present Egypt’s efforts to develop its economy and create an investment-friendly environment as well as invite foreign capital to Egypt, says Al-Sayed Amin Shalabi, former executive director of the Egyptian Council for Foreign Affairs. If, and when, Egypt is invited to join will depend, he argues, on the ability to meet development targets and show Egypt has engineered a truly encouraging investment environment.

Al-Sisi demonstrated features of the new investment law such as single window registration for investment projects, tax incentives and free land, and underlined how major strategic projects now require a single approval from the cabinet, allowing investors to start work immediately.

Al-Sisi highlighted mega projects — the new administrative capital, road and tunnel networks, gas exploration and tourism projects — that are already underway and invited investors from the bloc’s member countries to take advantage of the network of trade agreements between Egypt and its many partner countries in the Arab region, Africa and Europe.

“These agreements offer preferential treatment for products which have undergone value-added industrial operations in Egypt,” he said.


photo: Xinhua

The summit was not only a chance for Al-Sisi to display opportunities in Egypt but to stand up for other developing countries. He stressed the importance of developing countries being able to pursue their priorities and goals in accordance with their own national vision and according to their own specific cultural circumstances. He raised the possibility of forming a contact group comprising participants at this year’s summit to develop alternatives to the implementation of each of the 17 objectives of the United Nations’ Sustainable Development Goals.

Such a grouping will neither add nor subtract from Egypt’s international standing, says Shahin. It would be interesting to join only if the members are in a position to influence global governance: until then, she argues, it is the BRICS states that are best positioned to further cooperation among developing markets.

The BRICS Summit began inviting selected non-BRICS countries in 2013. Egypt attended at the invitation of Chinese President Xi Jinping. In recent years cooperation between Cairo and Beijing has been on an upward trajectory. President Al-Sisi has paid multiple visits to China and Chinese President Xi Jinping paid a historic visit to Egypt in early 2016.

A host of joint projects between the two countries are in the pipeline. This week a memorandum of understanding (MoU) was signed between Egypt and China for an electric railway connecting Al-Salam City and Belbeis in Sharqeya governorate as well as the new administrative capital. A second MoU covering economic and technical support for the Egyptian Satellite SAT 2 was finalised and Chinese investments are expected to pour in the new administrative capital.

China’s worldwide investments reached $175 billion in 2016 of which Egypt received a relatively paltry $10 billion.

The two countries are cooperating on the One Belt, One Road initiative launched by China in 2013, a modern version of the ancient Silk Road, which seeks to integrate China with Central Asia and the Arab world. The Suez Canal forms a natural extension of this 21st-century trading route.

During the BRICS Business Forum the Chinese president called on the summit to consolidate the BRICS+ approach and build a diversified network of development partners.

“We should get more emerging markets and developing countries involved in our endeavours to further cooperation and reap mutual benefits,” he said.

China’s president expects stronger dialogue with emerging markets and developing countries to deepen South-South cooperation and create greater impetus behind implementing the UN’s 2030 Agenda for Sustainable Development.

On the sidelines of the summit Al-Sisi held meetings with the leaders of South Africa, India and Russia. On Tuesday Russian President Vladimir Putin said he planned to visit Egypt soon at President Al-Sisi’s invitation to attend the groundbreaking ceremony for the Dabaa nuclear power plant on Egypt’s Mediterranean coast. Putin’s statement suggests the two sides have finally reached an agreement which was being negotiated for two years. The two leaders also discussed resuming Russian passenger flights to Egypt which were suspended following the October 2015 crash of a Russian airliner over Sinai.

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