The Egyptian Cabinet Information and Decision of Ministers Support Center (IDSC) Egypt : A path Forward for Future Prosperity March 2020 The Egyptian Cabinet Information and Decision Support Center (IDSC); is the leading governmental Egyptian think tank which is entitled with the responsibility of conducting high quality policy research through using and disseminating information to support the decision-making process in Egypt. IDSC has a diversified working agenda which tackles several economic, social and political issues related to the development process. IDSC relies on highly qualified staff and experts, with distinguished academic backgrounds who are able – at the same time – to creatively think ahead for realizing prosperity all over Egypt. www.idsc.gov.eg In view of Egypt’s ultimate goal of upgrading the quality of life of Egyptians, the Government of Egypt (GOE) has embarked on a very comprehensive economic reform program, and has undertaken very bold measures towards a more stable resilient economy. In this context, Egypt has succeeded in creating an enabling environment for inclusive growth and sustainable development, where economic fundamentals are stabilizing with reduction in fiscal deficit, curbing in the rate of inflation, and increasing the growth rate of output , together with strengthening the local currency, this is met with increased confidence from domestic and international investors, which makes Egypt the promise land for businessmen to come and invest. While implementing its comprehensive reform program, citizens are always the government’s first concern, that’s why the government was keen on reducing the negative impact of this program especially on the most vulnerable. In this regard providing social safety nets was considered as a crucial component of Egypt’s economic reform. The government was also keen on providing quality services to its citizens which includes: improved health services; modernizing and upgrading the educational system; building the capacity of youth; and enhancing women’s empowerment. The GOE also believes that improving the economic conditions is not sufficient as it should be consolidated by political reform, that’s why the past years had witnessed remarkable achievements on the political level, which aims at strengthening the country’s foreign relations with other countries. Dr. Mostafa Madbouly “The Egyptian Prime Minister“ Preface In The context of tracing the development path in Egypt, the Egyptian Cabinet’s Information and Decision Support Center (IDSC) pub- lished its first periodical report entitled «Egypt: A path Forward for Fu- ture Prosperity» to shed light on the main achievements and develop- ments on various levels i.e economic, social, and political arenas. This is being done through four main sections: Section one highlights the major achievements in different sectors, while section two records the Inter- national institutions ’ praises of various Egyptian policies which helps in strengthening the confidence of the international community in restoring the stability of the Egyptian economy. section three presents a comprehensive analysis of one of the key sectors within the last 10 years, section four ends up with the political agenda and highlights the steps taken by the Egyptian Government to strengthen its foreign relations with other countries. Osama El-Gohary Chairman Information & Decision Support center Egypt : A path Forward for Future Prosperity Mission… Tracing the development Phase in Egypt, on economic, social, political, and international levels. Egypt : A path Forward for Future Prosperity Report Team Lobna Mounir Mai Mohsen Monica William Omneya Gaber Sara Abd el Aziz Sally Ashour Technical Office - Information and Decision Support Center (IDSC) Graphic Design Ayat Mekky Mohamed Adel The report wish to acknowledge with gratitude the generous assistance of Aya badr, Safaa El-sisi, Reham Abo donia. Table of Contents Section 1: 11 Achievements in Brief Section 2: 37 Egypt’s ranking in International Indicators Section 3: 45 Egypt open for Business (Investment Climate in Focus) Section 4: 55 Egypt`s International Relations Achievements in Brief Through economic consolidation measures implemented since 2016, Egypt has corrected its macroeconomic imbalances and regained the confidence of international investors. The economic growth has increased significantly, foreign currency liquidity has returned to satisfying levels, the public account deficit is narrowing, and the local currency has been strengthened, on the sectoral level, considerable achievements have been witnessed on various levels which are being highlighted in this section. Information and Decision Support Center - IDSC 11 Achievements in Brief • In the wake of January 25th Revolution, the country exerted strenuous efforts to restore the economy on the right track, in this regard Egypt has Achievementsmaintained its pace of social in andBrief economic reforms, pushing its growth well above the Inregionalthe wake average.of January 25th Revolution, the country exerted strenuous efforts to restore the economy on • The country’s progress in GDP growth, foreign the right track, in this regard Egypt has maintained exchange revenues, fiscal consolidation, and its pace of social and economic reforms, pushing its inflation management have earned its praise growth well above the regional average. from various international institutions such as TheStandardcountry Chartered,’s progress thein GDPInternationalgrowth, foreignMonetary exchangeFund (IMF)revenues, and thefiscal Worldconsolidation, Bank. Considerableand inflationprogressmanagement could be noticedhave earned in variousits praise economic,from varioussocial,international and politicalinstitutions pillars statedsuch asas follows:Standard Chartered, the International Monetary Fund (IMF) and the Considerable progress could be 1- MaintainingWorld Bank. high rates of growth: noticed in various economic, social, and political pillars stated as follows: • Egypt achieved the highest growth rate in 11 1- Maintainingyears, recording high 5.6 rates %, during of growth FY 2018/2019, driven by increased investments and a significant Egypt achieved the highest growth rate in 11 years, increase in foreign trade movement compared to Egypt is enjoying relatively recording 5.6 %, during FY 2018/2019, driven by 5.3% in FY 2017/2018, 2.9% in FY 2013/2014. increased investments and a significant increase in strong growth, projected According to UN, GDP growth rate is expected to foreign trade movement compared to 5.3% in FY Egypt is enjoying relatively strong reach 5.8% in in 2020. at 5.8% in 2020, owing 2017/2018, 2.9% in FY 2013/2014. According to UN, “growth, projected at 5.8% in 2020, owing toto a a robust recovery recovery of • GDPAchievinggrowth rate highis growthexpected ratesto reach affected5.8% thein situationin FY domestic ofdemand domestic and easing demand balance- 2019of /2020unemployment. positively and lead to an of-payments constraints. Achievingincreasehigh in growthjobs, notingrates affectedthat thethe unemploymentsituation of and easing balance-of- unemploymentrate fell frompositively 13%and in lead2014to toan 7.5%increase inin the United Nationpayments – World Economic constraints.” Situation jobs,secondnoting quarterthat the ofunemployment the FY 2018/2019.rate fell from and Prospects, January 2020. 13.6% in 2014 to 7.5% in the second quarter of the FY 2018/2019GDP. Growth Rate during the period United Nation – World Economic Situation and (2008/2009 – 2019/2020) Prospects, January 2020. (%) 6 5.3 5.6 5.1 5 4.4 4.3 4.2 5.6% 4 4.7 The highest GDP Growth Rate 2.9 2018/2019 3 2.2 2.2 Since 11 years 2 1 1.8 The highest GDP Growth 0 Rate 5.6%Since 11 years Source: Ministry of Planning and economic development. 2018/2019 Source: Ministry of Planning and economic development. 7 Information and Decision Support Center - IDSC 12 Information and Decision Support Center - IDSC Egypt ... 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