Economic dialogue

Gamal Essam El-Din , Tuesday 30 Jan 2024

Preparations are underway to hold a round of National Dialogue sessions focused on the economy, reports Gamal Essam El-Din

Economic dialogue

 

A second round of National Dialogue sessions is expected to kick off within two weeks, with participants focusing on strategies to tackle the tough economic conditions facing Egypt. Last week President Abdel-Fattah Al-Sisi used a televised speech to call a new round of discussions addressing current economic problems.

On Saturday, National Dialogue General Coordinator Diaa Rashwan said dialogue participants had been asked to forward written recommendations by 11 February after which the dialogue’s Board of Trustees will convene to review the suggestions received and fix a timetable for discussions.

President Al-Sisi used last week’s National Police Day to explain the need for “a more thorough and comprehensive discussion of the different aspects of our economic crisis, particularly the foreign exchange shortage”.

According to Mahmoud Fawzi, secretary-general of the National Dialogue, the chronic shortfall in Egypt’s foreign exchange will be the main issue on the dialogue’s agenda. He urged participants to formulate policies that will cut imports and boost exports by increasing agricultural and industrial production.

Addressing a seminar at the Cairo Book Fair on 28 January, Fawzi argued that just as the state and the public prevailed in the fight against terrorism, so they would overcome the current economic crisis.

He cautioned, however, that “solutions to the economic crisis will not be possible without political reform” and pointed out that President Al-Sisi had already referred a number of draft bills that aim to revitalise political life to the government to be implemented.

Trustee Kamal Zayed said President Al-Sisi’s call for the dialogue to focus on economic issues reflected the urgent need to find realistic and effective solutions to the current economic crisis and mitigate its impact on people’s lives.

Samir Sabri, rapporteur of the dialogue’s private investment committee, said the call for a second round of dialogue discussions had been expected.

“Soaring inflation is making people’s lives a misery” and the government has an important role to play in supervising retail markets and controlling prices. Sabri argued the government should phase out bureaucratic obstacles blocking the flow of foreign direct investments and implement investment schemes that guarantee adequate returns for local and foreign investors in order to attract dollars and eradicate the parallel market.

Abdel-Moneim Imam, secretary-general of the House of Representatives’ Budget Committee, predicted 2024 would be very difficult for most Egyptians. He noted that the dollar shortage was being compounded by the drop in Suez Canal revenues caused by attacks on shipping in the Red Sea. Revenue in the first week of January was down 41 per cent from a year ago, a bad start to a year in which Egypt is due to repay $32 billion to its creditors.

President Al-Sisi, who won a third consecutive term in December, sought to reassure the public during his Police Day speech.

“Do not think that I do not acknowledge the magnitude of suffering and economic pressures in Egypt. I know too well that life is tough, prices are high and circumstances difficult,” he said. “People are enduring and putting up with it, and we need to endure some more to live and grow and overcome this crisis.”

The president said regional and global crises, including unstable conditions and war on the country’s western, eastern, and southern borders, were at the root of Egypt’s formidable economic challenges.

The Egyptian state, he continued, needs $3 billion monthly to buy staple commodities such as wheat, corn, cooking oil and soybeans, and $1 billion for natural gas to supply electricity plants.

Warning that the war in Ukraine had “seriously disrupted international supply chains and led to a dramatic rise in global prices of basic commodities” and regional conflicts had negatively affected the flow of foreign currency revenues coming from Suez Canal, tourism, exports and remittances from Egyptians abroad, he said the state needed to double foreign exchange revenues.

“Four years ago I said we needed to double exports to generate $100 billion annually yet businessmen still find it easier to import than to produce goods. This has to change. We have to boost exports to generate enough dollars to meet our basic needs.”

Al-Sisi, nonetheless, said he is confident that Egypt will be able to overcome the challenges it faces given the “steadfastness and resilience” of its people, insisting “the stability and security of this country is not the responsibility of the government alone but the responsibility of all citizens.”


* A version of this article appears in print in the 1 February, 2024 edition of Al-Ahram Weekly

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