Global lockdown measures adopted to contain the COVID-19 outbreak may force 40 percent of companies across the world to declare their bankruptcy if these measures are to be extended for three more months, said Abla Abdel-Latif, the executive manager of the Egyptian Centre for Economic studies and former economic adviser of President Abdel-Fattah El-Sisi.
Abdel-Latif's comments were made during a panel discussion held online on Wednesday by the Jordanian Strategy Forum and the International Monetary Fund (IMF).
She added that Egypt’s economic reform programme, which was completely implemented in 2019, was just the first wave of reforms that must be followed by a wave of real economy and structural reforms. She stated that Egypt has a significant opportunity to be tapped amid the COVID-19 crisis to attract the investments that fled the Chinese market due to the pandemic.
Abdel-Latif stressed that Egypt should work on boosting the information and communication technology (ICT) sector, focusing on data and analytics, investing in human capital, including health and education, and support the manufacturing export sector, adding that the manufacturing and agricultural sectors will lead Egypt’s economic recovery.
The hardest obstacle the SMEs sector face is the lack of financing, and channelling such enterprises to large companies in the private sector will achieve mutual benefits, she said in answer to Ahram Online's question about the means by which the government can support the private and the SMEs sectors amid the coronavirus crisis.
Egypt’s private sector needs more reforms and regulations to make it more accessible and attractive, Abdel-Latif said, adding that Egypt has the potential to become an economic powerhouse based on its location and vast population.
Director of the Middle East and Central Asia Department at the IMF Jihad Azour said that emerging markets are expected to face significant risks because of the pandemic due to the fluctuation of the global financial markets.
The global economic outlooks for 2020 and 2021 are expected to be downgraded as the COVID-19 implications are unprecedented, Azour added.
He stated that all the facilities the IMF is extending are directed to meet the governments’ needs and to fill the gap of payment balance deficit, and are not appropriated to finance specific programmes.
Azour said MENA countries have to adapt to the plummeting of global fuel prices and set a mechanism for cooperation between importing and exporting countries to support the workforce amid the crisis, in addition to rearranging their priorities to adjust their budgets and set the balance between expenses and revenues.
“They also need to induce citizens through setting a new social pact that allows them to share their views for the countries’ economic future,” according to Azour.
He added that informal activities have become a weak point in the region’s social structures, which need to have accesses to all kinds of support.