Public investments in FY2020/2021 focuses on human capital, digitalization: Egypt's planning minister

CAIRO - 18 May 2021: Dr. Hala El-Said, Minister of Planning and Economic Development, participated Tuesday in the 27th annual conference of the Economic Research Forum, which was held virtually, particularly the session titled "A global economic system in turmoil: What is the situation concerning the Middle East and North Africa?"

During her participation, El-Said said that the world is currently witnessing an unprecedented crisis with the spread of the Corona pandemic and its wide-ranging health, economic and social impacts, explaining that these effects are evident in the achievement of the 2030 Agenda for Sustainable Development.

El-Said  pointed out the policies that Egypt had taken before the spread of the Corona crisis, which contributed to strengthening the ability of the Egyptian economy to mitigate the negative effects of the epidemic, and the most prominent of these policies was the first phase of the economic and social reform program, launched by the government in 2016, which is consistent with the "vision." Egypt 2030.

El-Said explained that the successful implementation of the reform program contributed to the improvement of all economic indicators that appeared in the remarkable increase in the growth rate of GDP, which reached 5.6%, as it was about to reach 6% in the first half of the fiscal year 2019/2020, before the pandemic and the unemployment rate fell from 13.3% to 7.2%.

El-Said added that the current social protection programs have contributed to reducing the impact of the crisis on the poorest groups, referring to the “Takaful We Karama” program and the “Decent Life” initiative, which targets the villages most in need, and improved the living standards of more than 50 million citizens, equivalent to half of the population.

El-Said also referred to the proactive strategy adopted by the Egyptian government at a very early stage, to take all necessary measures to mitigate the negative effects of the outbreak of the epidemic on the poorest segments of the population.

"This strategy focused on the need to strike a balance between preserving people's health and economic activity at the same times, which are inherently difficult goals, especially prioritizing public health and protecting businesses and jobs simultaneously," El-Said explained.

El-Said pointed out that the Egyptian government has intensified its efforts and proactively launched a comprehensive financial package worth LE 100 billion, equivalent to 2% of GDP, to face the crisis, and to address the main pillars of the real economy by reducing the burden on the economic sectors most affected, such as health, small and medium enterprises, tourism and industrial sectors by boosting economic activities and increasing domestic demand.

She also referred to the pillar of social protection for the most vulnerable groups such as women, youth, and informal employment, by launching a series of presidential initiatives to support these groups.

El-Said added that the Egyptian government has also focused on arranging both priorities by directing more public investments to important, resilient, and resilient sectors, in line with post-pandemic needs.

El-Said emphasized that, to achieve this goal, the government's plan for the current fiscal year (2020/2021) focuses on increasing public investments in human capital while increasing investments in the infrastructure and digital transformation sectors to facilitate the automation of government services.

El-Said also referred to the launch of the presidential "Decent Life" initiative to help the neediest villages in light of increasing poverty, explaining that the initiative was granted by the United Nations as one of the best international practices for sustainable development goals.

El-Said pointed to the localization of the local industry for major products such as medicines and food commodities, through the expansion of building industrial zones, supporting the development of supply chains, as well as the localization of sustainable development goals at the governorate level to address development gaps and take advantage of the comparative advantages of each governorate.

El-Said stressed the Ministry of Planning and Economic Development's keenness to develop the regional competitiveness index, in line with Goal 16 of the Sustainable Development Goals, following up that the plan also focuses on harmonizing public investments with the principles of green economy.

El-Said explained that the Egyptian government is committed to following up the second phase of the reform program by launching the "National Program for Structural Reform", which focuses on increasing the productive capacity and competitiveness of the economy.

The program aims to achieve comprehensive, balanced, and sustainable growth and is also consistent with Egypt's Vision 2030, which has been reconsidered and updated to ensure a better alignment of national goals with the Sustainable Development Goals and the African Agenda 2063, as well as to ensure the integration of the three pillars of sustainability in addition to enabling the state to adapt to variables such as Corona outbreak.

El-Said added that the results of these reforms were reflected in making Egypt one of the few countries in the world capable of achieving growth in 2020 to reach 3.6%, noting that despite the economic repercussions of the Corona epidemic, the IMF's expectations for economic growth in Egypt amount to 2.5% by the end of 2021. It is expected to rise to 5.7% in 2022.

El-Said stressed that Egypt is ready to share its best practices in mitigating the effects of the Corona pandemic, and building capacities in planning, monitoring, and evaluating sustainable development goals.

Concerning what the world will look like after the Corona pandemic and the role of the Middle East and North Africa region, Dr. Hala El-Said drew attention to the need to strengthen the capacity of health care systems to provide integrated health services, from prevention and primary care, with priority given to urgent, life-saving medical care for the victims of the Corona pandemic.

El-Said stressed the importance of increasing investments and shifting resources towards critical areas of sustainable development, including universal health coverage, social protection programs, pensions, and access to affordable education, as well as the need to support innovative financing mechanisms.

El-Said explained that Egypt is the first country in the Middle East and North Africa region to launch green bonds, pointing out that the Egyptian government has established The Sovereign Fund of Egypt (TSFE) to achieve more effective and value-added partnerships with the private sector and to cooperate with local and international partners to create job opportunities for young people.

El-Said also stressed the need to support debt relief mechanisms, such as debt stock swaps to finance investments related to sustainable development goals, and the establishment of a global or regional solidarity fund to support countries severely affected by the epidemic, while working to address gender inequality, health, education, and other areas to promote comprehensive and sustainable long-term development using the SDGs as a framework for recovery.

El-Said added, stressing the importance of reviewing national strategies for youth to ensure greater inclusion and participation, promoting a new vision for education, achieving sustainable development goals, and ensuring the reintegration of youth into the education system and the labor market, while promoting public investments in three strategic areas represented in the economic sectors that add value to the economy, human capital and comprehensive infrastructure, in addition to the need to renew commitment to the sustainable development goals.

El-Said concluded by explaining that rebuilding better and enhancing the resilience of the entire community in the face of future shocks requires an approach that supports and broadens participation, through real commitment and solidarity between various stakeholders across governments, international financial institutions, companies, and civil society, which enables the world to emerge from the epidemic phase stronger.