CAIRO: “Growth has been our target, and the steps taken by the government since 2004 have created an environment that attracts investment, said Prime Minister Ahmed Nazif during the closing speech at the Euromoney Egypt Conference Wednesday.
Nazif lauded the efforts of his Cabinet, which helped bring Egypt’s real GDP growth rate to 7.2 percent during the third quarter of 2007 as well as increase exports by over 30 percent.
The atmosphere became less ethereal when Richard Ensor, managing director of Euromoney Institutional Investor PLC, asked Nazif about Egypt’s political future in light of a possible presidential succession.
“Our next election is in 2011 so there is no major concern in that direction, Nazif replied.
He went on to briefly mention the possibility of land reforms to deal with infringement on property rights.
“The agricultural sector in Egypt today suffers from the small ownerships that have been distributed too much. That is a problem in terms of management, said Nazif.
Agriculture represents 14 percent of Egypt’s overall GDP, which amounts to LE 16 billion, according to Ministry of Investment figures.
Although Nazif acknowledged Egypt’s heavy burden of subsidies, he said that no decision has been made to completely remove them. He also added that strategic targeting will improve the effects of subsidies on the population.
“A removal of subsidies would have to take place only when peoples’ standards of living have been raised, Nazif said.
As a result of higher growth levels, a greater need will arise for infrastructure, land as well as skilled labor, he added. “Once you create the demand for those things (infrastructure, land, skilled labor), the system and the society, come up with solutions. You can see that very clearly in human resources. When people see that this is where they need to be in terms of jobs they start changing their career path, Nazif said.
When asked by Ensor whether the slow down in the US market would affect the Egyptian economy, Nazif was cautiously optimistic. He said that the diversity of the Egyptian economy can – to some extent – ease the effects of external shocks.
“If it’s not the Suez Canal, it’s the remittances. If it’s not that its tourism, its exports. You can see the diversity there, which gives us room to breathe, Nazif said.
