21 February 2018

Egypt: Sisi Eyes Long-Term Economic Health for Egypt - Gulf News Report

President Abdel Fattah El Sisi is arguably the first Egyptian president with an eye firmly focused on his nation's long-term economic health, British columnist Linda S. Heard wrote in the Gulf News website on Tuesday 20/2/2018.

"He is motivated largely by a burgeoning population projected to increase by as much as 20 per cent in 2020 and unlike many of his predecessors he eschews short term feel-good fixes," she said.

With the future uppermost in mind, the government is investing heavily in infrastructure such as highways, airports, power stations, desalination plants, fisheries and agricultural projects as well as two news cities -- a smart green city in Aswan, an eco-city in Alamein -- besides the mega new administrative capital currently under construction.

Moreover, Sisi has made great strides in fulfilling Egypt's energy requirements for decades to come.

The dark days in which the country witnessed hours-long electricity outages, kilometers-long queues for petrol and a shortage of cooking gas are long gone.

The giant offshore Zohr gas field -- the largest in the Mediterranean -- began operating in December and will ensure the country's self-sufficiency in gas by next year.

This month, British Petroleum began producing gas from the Atoll field just 33 months after it was discovered. A projected excess for domestic requirements bolstered by renewable energy and nuclear plants to be constructed at Al Dabaa on the north coast will allow for exports turning the country into an important regional energy hub.

"We are at a bottleneck on the way out [of the financial crisis] and if we want to get out, we must take tough measures; we have to endure them and be patient," was his message last autumn. And, indeed, the consensus is that the president's policies are paying-off big time.

For instance, Egypt's foreign reserves standing at $38.2 billion have reached record highs surpassing the pre- 2011 revolution of $36 billion, one indicator of economic recovery. Inflation is hurtling downwards from its high of 35 per cent in July 2017 and is expected to hover around the 13 per cent mark by the end of this year. Easing inflation propelled the Central Bank to cut interest rates by 100 basis points last week.

Egypt is also benefiting from a rebounding tourism sector, a narrowing trade deficit, increased foreign investment and higher remittances from Egyptians living abroad.

The unemployment rate is slipping southwards although at just over 11 per cent has a long way to go before it reaches the government's desired four per cent by 2030 especially given that each year approximately 700,000 school leavers and graduates enter the job market.

Most crucially, the country is paying its debts. Both Fitch and Standard and Poor's have stamped Egypt's economic outlook as "positive". Moody's has predicted growth of 5 per cent by 2019.

The IMF has praised Egypt for carrying out bold but necessary reforms and sees a "broad based" recovery in progress. Likewise, the president of the World Bank Jim Yong Kim has acknowledged the nation's economic trajectory is on the right track.

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