Trying to maintain economic activity and jobs throughout the first year of the pandemic topped the agendas of countries around the world. To that end, states borrowed from international financing institutions enacted stimulus packages and led infrastructure investments. Egypt’s government received facilitations from the IMF worth a total of $8 billion in May and June, and is still offering financial support to tourism companies and other eligible sectors. At the same time, work continues on building new cities and the country’s first high-speed rail, along with plans to manufacture Egypt’s first electric vehicle within 12 months. Egypt might be the…
Author: Tamer Hafez
Trying to maintain economic activity and jobs throughout the first year of the pandemic topped the agendas of countries around the world. To that end, states borrowed from international financing institutions, enacted stimulus packages and led infrastructure investments. Egypt’s government received facilitations from the IMF worth a total of $8 billion in May and June, and is still offering financial support to tourism companies and other eligible sectors. At the same time, work continues on building new cities and the country’s first high-speed rail, along with plans to manufacture Egypt’s first electric vehicle within 12 months. Egypt might be the…
One barometer for how well the Egyptian economy is performing is which cars are being assembled locally. Despite declining sales since 2015, the auto industry more than held its own during the year of COVID-19 and the government has accelerated its efforts to boost both production and investor interest. In 2008, when GDP growth was 7.2 percent, the top two German carmakers were racing to locally produce top-of-the-line models and putting their most potent and costly engines in smaller vehicles. During the next five years, sales of passenger cars went from 160,000 to 273,500. But after the foreign currency shortage…
In the mid-1940s, Europe was left in rubble after two world wars in 31 years. The only way to rebuild was the Marshall Plan, a $15 billion program sponsored by the United States. The four-year plan helped rebuild cities, industries and infrastructure. Today, Europe is a superpower economy that benefits from a single currency and open borders among its 27 member states. Almost 70 years later, the world could use another “Marshall Plan” to build sustainable, environmentally friendly cities, industries and infrastructure from the ground up. “We set up a world order after WWII,” Jenefer Morgan, executive director of Greenpeace…
Leaving a currency’s value to change based on international forces was always a point of contention throughout the MENA region. On one hand, allowing central banks to manipulate a currency’s foreign exchange rate could be a buffer in the face of domestic and foreign economic crises. However, investors would have to deal with currency exchange risks and sometimes unfriendly monetary decisions. MENA countries long chose to peg their currencies to the dollar or a basket of currencie s comprising the greenback and euro. By 2016, Egypt, which had a “managed float,” announced it would no longer prop up its currency. The…
Being a major tourist destination, Egypt has long relied on international travelers as a source of foreign currency. That is vital for a country that is a net importer of basic and luxury goods. As a result of the pandemic, lost tourism revenues may reach 2 percent of Egypt’s GDP by the end of 2020, according to an IMF report in August. Egypt is not alone. The global tourism sector’s losses may top 1.5 percent of global GDP, at least $1.2 trillion by the end of 2020, according to a U.N. Conference on Trade and Development report in December. “With…
Since the pandemic became a global threat in March, almost every expert has agreed the economic crisis brought about by COVID-19 will be unprecedented. A UNCTAD report published in November warns that even the recent news of a vaccine that is 90 percent effective in late-stage clinical trials “will not halt the spread of economic damage, which will be felt long into the future.” However, the government and international institutions such as the World Bank and IMF are forecasting that Egypt’s GDP will grow this year. That has been in part thanks to fiscal and monetary policy decisions made throughout…
Hoping to become a regional energy hub by 2030, Egypt saw its plans affected by developments in the oil and gas sectors both domestically and internationally. COVID-19 hasn’t been kind, throwing a wrench into the world’s economic growth prospects as nations locked down their economies to curb the pandemic. At press time, almost all countries were suffering from new highs in COVID-19 infections (the United States, India and Brazil) or preparing for the second wave of infections (most of Europe and Egypt). Nonetheless, the pandemic didn’t significantly hurt Egypt’s oil and gas sector outlook. That has allowed the government to…
As 2020 comes to a close, MENA governments have something in common: the need to limit the debt they took on to keep economies and businesses afloat during the COVID-19 pandemic. The region’s oil-producing and exporting countries added debt first, as prices crashed in March only to regain some lost ground as the global economy faces recession (See p. XX). Meanwhile, nations with more diverse economies, including Egypt, have slowly but surely suffered from weaker international economic activity, fewer tourists, and slumping remittances. History of debt When the COVID-19 pandemic hit the region in March, forcing governments to partially shut…
Following in the footsteps of its predecessors, the current administration has ambitious plans to build new cities. This year’s Cityscape real estate conference showcased options for both existing and potential homeowners. Living on less than 10 percent of Egypt’s land was never sustainable with a current population of 100 million, according to CAPMAS and growing by 2 million a year. “Given that the entire population lives on only 5 to 7 percent of the country’s land, it is essential that new land is developed to absorb increased demand for housing,” Darwish Hassanein, CEO of SECON, told Oxford Business Group (OBG).…