Post-Covid-19 recovery will be infrastructure-led, adding to long-term transformation of the economy due to its immense potential for job creation and helping the most vulnerable in society to be more resilient to future shocks, Minister of International Cooperation and Governor of Egypt at the World Bank Rania Al-Mashat has said.
Al-Mashat made her comments during her participation in the "Global Economic Prospects" session as part of the International Monetary Fund (IMF) and World Bank Group annual meetings, which focused on the impacts of Covid-19 on regional economies as well as the most recent economic indicators.
According to World Bank data, renewable energy projects ensure greater long-term job creation than fossil fuel projects and are also cost competitive.
Additionally, the International Renewable Energy Agency estimates that investment in renewable energy could add almost $100 trillion to global GDP by 2050, which underlines the importance of prioritising the sector in economic recovery, according to Al-Mashat.
Al-Mashat added that investment in infrastructure is also critical to promoting an inclusive society through enhancing connectivity, as it will allow new actors such as Egyptian small and medium-sized enterprises (SMEs) to have better access to opportunities and integrate into regional and global value chains (RGVCs).
The minister added that there are over 42 projects worth $6.3 billion implemented for the achievement of Goal 9 of the UN Sustainable Development Goals that centres on industry, innovation and infrastructure.
To fill financing gaps resulting from the current pandemic, Al-Mashat noted that the international community must work collectively and innovate on the different types of financing available, to get out of this crisis. Al-Mashat referred to Egypt's success in using innovative methods such as blended financing to execute major national projects, particularly in the infrastructure sector, which has helped Egypt achieve positive growth rate amid a general global downturn.
According to reports of the WBG , Egypt is estimated to achieve growth of three percent during 2020, and about 2.1 percent over 2021, respectively, said Al-Mashat.
“The private sector also played a large role in mitigating the impact of the crisis," the minister added, with the example of the ‘Egypt Will Pass’ initiative that saw participation of several private companies and employers to share their efforts on how to keep their workers employed.
Because of the structural reform undertaken in Egypt since 2016, Egypt is probably the only country in the region that has positive growth rate and very good projections in 2020-2021, Al-Mashat highlighted.
According to the 2020 Global Economic Prospects report, economic activity in the Middle East and North Africa (MENA) is expected to contract by more than four percent in 2020, primarily due to the disruption in consumption and exports.