CAIRO: Egypt is to get $3.2 million to boost its efforts to make it’s regulations more business friendly, thanks to Switzerland the International Finance Corporation (IFC).
Switzerland’s State Secretariat for Economic Affairs (SECO) has put forth $3.2 million towards a three-year FC advisory program that plans to help Egypt implement “business-friendly” regulations to create jobs and boost economic growth.
SECO and IFC, a member of the World Bank, will cooperate with Egypt’s government organizations, including the General Authority for Foreign Investment (GAFI) as well as the private sector to improve Egypt’s overall business scene.
“[Part] of this program is directed with the public and private sector,” Luke Haggarty, IFC regional head of advisory services, told Daily News Egypt.
“We want to help facilitate the process for small and medium enterprises, help get the permits they need to expand their businesses. All of this will be done with GAFI and others.”
The initiative is meant to tackle the unemployment and lack of opportunity issues, which are challenging countries across the Middle East and North Africa.
“Switzerland supports IFC’s continued efforts in Egypt to build a better business environment because we know how important the private sector can be to a nation’s economic and social development,” said Stefano Toscano, Chargé d’affaires at the Swiss Embassy in Cairo, in a statement by IFC.
“Progress has been made in recent years to make doing business in the country easier, and we look forward to further improvements in the coming years with a view to creating an ever more diversified and inclusive economy.”
Among the problems that sparked Egypt’s January 25 Revolution is the fact that there is a vast number of youth and a growing job crisis.
“Egypt, like much of the region right now, is looking at a situation which is difficult. It was difficult before everything happened,” said Haggerty. “Youth unemployment is a major challenge in the region, so efforts to encourage job growth, entrepreneurship and new investment are now more important than ever.”
According to Haggarty, 30 percent of the working population in Egypt is under 25 and the region as a whole is seeing a “youth buzz.”
“For years, we have seen that there is a very large wave of young people coming, which means you need to create more jobs,” he pointed out.
“That becomes a lot more challenging when you have foreign direct investments thinking twice to come for business until they have more clarity on economic policies.”
Haggarty underlined that SMEs would be key players in helping Egypt’s market move forward in this murky economic period.
SMEs, which are seen as vital catalysts in growing economies, have often faced obstacles when acquiring business licenses or maintaining their financing, as well as legal issues in Egypt.
According to Haggarty, SMEs often account for 80-90 percent of employment in almost every economy.
“This [SMES] is a huge sector in Egypt, and are highly varied. There are very dynamic SMEs which are investing and can grow,” he added.
“One of the things that you’d want to do is increase opportunities in this sector, whether its for current people to expand, or from my point of view, what’s more important is allowing more people to come in.”
The IFC and SECO will also be committed to helping companies resolve their legal issues by going as far as training judges on how to quickly and efficiently deal with cases.
“Commercial disputes take about 1,000 days to get resolved,” said Haggarty.
“One of the things that we are trying to promote is mediation, where two of the parties get together with a private mediator to help them avoid going to court; we also want to be helping train judges, to show them that disputes can be easily solved.”
Haggerty also pointed out that often times it takes SMEs a couple tries before they succeed and this is normal.
“Big growth in jobs comes from small firms that are coming rapidly,” he said. “Those are dynamic firms that have good ideas and can grow rapidly; to be able to have access to finance or licensing is what they need.”
If a business happens to fail, he continued, the program would help them with the aftermath.
“Even if a firm is going under, we have to have a way to resolve the outstanding debts to recycle those assets back into the economy.”
