A number of private sector representatives in Egypt have called on authorities to launch new initiatives to support the economy during the ongoing coronavirus pandemic (COVID-19).
The calls came during a virtual panel organized by the Egyptian Center for Economic Studies (ECES) on Tuesday, entitled “How do we prepare for the new reality?” During the panel, participants discussed Egypt’s preparations for the post-coronavirus era.
The current health crisis has turned into the worst economic crisis since 1929, which imposes a new global reality that Egypt must prepare for, said Hisham El-Khazindar, Co-Founder and Managing Director of Qalaa Holdings.
Egypt’s good economic position due to the authorities’ economic reform measures has improved international financial instituations’ expectations on the country’s growth expectations, El-Khazindar added.
Although Egypt’s positive economic growth in 2020 is an exception in the Middle East, this does not mean the crisis will not have significant effects on this sector. Egypt can take advantage of the current global changes, El-Khazindar said, adding that the next three years will remain very tough.
Whilst praising the state’s EGP 100bn stimulus package, El-Khazindar said that the priority in investing these funds remains in maintaining jobs and reducing unemployment. He pointed to the remarkable increase in US unemployment, which has now reached rates not seen since the 1929 depression.
El-Khazindar called for a new package of initiatives to activate the Egyptian economy. This could take place by extending the postponement of loan installment payments for another six months, or by extending the period of tax facilities. This stimuli would allow companies to use the financial liquidity to retain employment.
Alaa Sabaa, co-founder of BPE Partners, called for a balanced policy to be implemented between attracting new investments and building integrated social safety nets. Sabaa underlined the necessity for setting a plan to reopen the economy, as many sectors will be unable to bear the costs of long-term closures. This would be particularly in sectors, such as the informal sector, that rely on daily employment. He added that even formal sector workers have seen their income decline due to the crisis.
The current changes in the global economy prove that a strong economy cannot depend on only one or two sectors, according to Tarek Tawfik, Deputy Chairperson of the Federation of Egyptian Industries (FEI). As things stand, Egypt’s economy is heavily weighted towards sectors such as tourism and Suez Canal revenues, although Tawfik noted that a country’s industrial and agricultural sectors are key for any strong economy.
Zawya
23/04/2020