CAIRO: By addressing the next stage of economic reform, the Euromoney Egypt Conference 2007 aims to propel Egypt into the second wave of growth.
“The challenge is going to be more difficult in the future in terms of subsidies, education, and economic development available for the rich as well as the poor, and privatization of the financial sector, said Richard Banks, managing director of Euromoney Conferences in the Middle East.
This year’s Euromoney Egypt Conference – entitled “Into the Second Wave – will take place Sept. 4-5, highlighting various macroeconomic issues and emphasizing the role of the banking sector, capital and equity markets, real estate, energy and public-private partnerships in further developing the economy.
“So far, a lot of work has been done and several problems have been fixed, but still many problems need to be addressed, said Banks.
“The theme of the conference this year is to analyze how the Egyptian government will maintain this momentum and how to further liberalize and modernize the economy, explained Banks. “Another area we’re touching upon this year is the new generation of corporate leaders and younger generation of managers that are handed over the business.
The Euromoney Egypt Conference draws on international experience in leading independent debates with high level decision-makers. This year’s panels will host Prime Minister Ahmed Nazif, the Ministers of Finance, Investment, Trade and Information Technology along with influential business leaders, bankers, and analysts.
According to Banks, this year’s conference aims to convey a number of messages. To foreign investors outside of Egypt, the message is that the country has plenty of investment opportunities.
“Inside of Egypt, [the message is] that the country can’t afford to become complacent. International investors can change their views on markets quite quickly, he added. “So the message is to create an environment conducive for business and investment.
Over the past year – since last year’s Euromoney Conference – the government has embarked on significant economic reform initiatives that still need to be completed.
“We’ve seen in previous years, before 2004, governments that come in and make changes for a year or two and then stop, Banks said. “Stopping the process did not convince investors of any positive change being made. What investors need to see is a sustained commitment of economic leadership in the Egyptian government.
The Nazif government, he added, has so far been able to prove that its commitment to economic reform is constant. The past year has seen Egypt put in place a vigorous privatization agenda while enjoying unprecedented growth in foreign direct investments – soaring to $11 billion this year. Egypt has also seen an inflow of capital from the Gulf and Upper East as well as growth of foreign exchange reserves. All of these, said Banks, were indicators of a sustainable economic development. “In fact, [international economic] publications and [forecasts] view Egypt to be a very attractive investment destination.
Still, a number of challenges continue to cloud the horizon. “This has been a hot summer [and] the country has seen a lot of stress on some of its basic infrastructure such as water and electricity, Banks explained.
The inflation rate is another challenge that adversely affects the people’s purchasing power, he said. “Subsidies need to be addressed. The government can’t [entirely] get rid of them because the people rely on them. A transition has to be very carefully managed.
“What people want to see is that the price of bread is falling and that their children’s future is going to be better, he added. “It’s a challenge of all governments all over the world.
What the Egyptian government needs to do, Banks said, is to make sure that resources are distributed equally among different classes in society. “The people need to see change in basic services, education, and healthcare.
From a liberal economic point of view, he indicated, economic reform is going in the right direction. “It takes time. In Euromoney 2003, we concluded that light was at the end of the tunnel; and in 2007, we are still in the tunnel. You can’t legislate [change] overnight.
Banks said that the opportunity lies in public-private partnerships, which are currently growing across a number of sectors and can play a vital role in upgrading infrastructure particularly in transportation, electricity, and water.
“International flows of capital can help provide solutions to these problems. But again these flows can’t do it alone, and the government can’t do it alone either, he said. “It’s a cooperative venture between the people and the government that does it.
On the other hand, Banks is still pragmatic about ways to make change in the country. “We applaud the government for its work so far and hope it will continue to make similar decisions to what they made in the past.
There are still difficult decisions to be made, particularly across business and investment sectors, he said. “To maintain that course of development is going to be a challenge. What I would like to see, from a personal point of view, is a greater emphasis on development of high quality services in Egypt.
“At the end of the day, Banks said, “our job with this conference is not to impose Euromoney opinions. Our real role is to probe and raise questions and make sure the government articulates.
