Monday,25 March, 2019
Current issue | Issue 1370, (23-29 November 2017)
Monday,25 March, 2019
Issue 1370, (23-29 November 2017)

Ahram Weekly

Investing in the future

Mahmoud Mohieddin
Mahmoud Mohieddin

 “IT TOOK me 45 minutes to get from my town of Kafr Shokr [in the Qalyoubia Governorate] to Cairo, when in the past that was a four or five-hour drive,” World Bank vice-president Mahmoud Mohieddin told members of the American Chamber of Commerce in Cairo (AmCham) this week, Niveen Wahish reports.   

The reduction was thanks to a recently inaugurated highway connecting Banha in the Delta to Shubra, a district of Cairo, he said. “This is a form of advance. It needs will, finance and proper policies to carry out.” Though he was addressing a meeting on the global economy, a focus on Egypt was unavoidable for Mohieddin, Egypt’s minister of investment in 2010.

Egypt’s current economic reform programme was only one of five elements needed to grow the country’s economy, Mohieddin said, stressing the need for more openness and increased exports. “Egypt’s lack of exports is not a problem of imports,” he stressed. Investment in human resources, education and healthcare, as well as services such as transportation, was also crucial to improving economic performance and attracting foreign finance.

Another area where investment was crucial was technology, Mohieddin said. Few people were prepared for what was coming in terms of technology, he pointed out. “Technology will change what economies look like and the lives of people.” Egypt was in a good position in terms of technology infrastructure he said, but it was not fully benefitting from it. With more investment in infrastructure and more engineers, Egypt could carry out a “leap-frogging” growth strategy, he said.  

Mohieddin listed some of the things that should be avoided in economic management, some of which the country had already begun abandoning. These included reducing unemployment by relying on civil-service jobs, subsidising energy, and exchange rate misalignments. He also warned against cutting fiscal deficits by undercutting public investment in infrastructure, imposing administrative price controls, and resisting urbanisation. If proper urbanisation policies were not put in place, he said, the result would be more informal housing areas or slums.  

Egypt also needed better planning for its population structure, characterised by an increasing number of young people and longer life expectancy. There was a need for the creation of more job opportunities for young people and the provision of more investment in housing and hospitals that could serve both the young and the more elderly, he said.  

Mohieddin pointed to the increasing multi-polarity of the global economy, with the focus of world growth no longer centred on the West. The South and the East now made up increasingly important parts of the world economy, he said, pointing to the opportunities offered by China’s “Belt and Road Initiative”. Egypt was among 63 countries set to benefit from this in future, Mohieddin said.  

Investing in the country’s institutions was another issue highlighted, it being important that Egypt’s society and institutions could withstand external shocks in a turbulent region. Countries such as China and Vietnam had managed high rates of growth despite regional turmoil, Mohieddin said, and Egypt could do the same.

“But all this needs financing,” he added, saying that with limited government resources, this would likely take non-traditional forms with an increasingly important role being played by the private sector.

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