WB report: optimistic signs of Egyptian economic performance
Egypt, Economics, 12/25/2001

The World Bank (WB) asserted its support of the Egyptian government's policy which depends on rapidly growing market mechanisms in developing the Egyptian economy.

"Economic indications were optimistic regarding the Egyptian economy, especially in the light of the governments abiding by basic restructural reforms," according to a WB report.

Egypt is proceeding steadily on the economic reform track, the report said, noting that accelerating the reform programs will increase the Egyptian economy's competitiveness and facilitate the penetration of Egypt's products to the world market.

The WB is one of the most important partners in the development process in Egypt where the volume of loans extended till May 30, 2000, amounted to $ 5.38 million.

"These loans were mainly focused on agricultural, industrial, mining and energy sectors. They were extended recently to new spheres of cooperation between Egypt and the WB, atop of which upgrading the health and educational services for citizens," according to the WB report.

The WB aid strategy to Egypt paid special attention to four main domains namely: developing the exports, enhancing development through the private sector, updating human cadres and modernizing the management of natural resources.

"This strategy aims at supporting the Egyptian economy in curbing poverty and unemployment rates and improving living standard," the report said.

The WB strategy is also designed to developing human cadres in the fields of education and health as well as enhancing social care and combating poverty in the rural areas.

However, the report warned against the unemployment problem, saying it still constitutes a fundamental challenge for the development strategies and plans. Official estimations indicate that the unemployment rate reached 8 %, while the labour force grows by 3 % annually.

This necessitates that Egypt should realize a growth rate of 6 per cent annually for the Gross Domestic Product (GDP) so as to reduce unemployment rates.

"The achievement of sustained development in Egypt requires increasing rates of domestic savings and investment as well as upgrading performance and competitiveness in the various economic institutions and authorities," the report said.

The WB report also underlined the necessity of increasing exports to world markets and lessening dependence on external sources such as the expatriates' remittances as well as oil and gas exports in getting foreign currency as these sources are affected by world events.

The report referred to the importance of luring foreign direct investments so as to facilitate the Egyptian economy's integration into the world economy and help the transfer of technology.

"Additionally, the government's proceeding in the privatization programmes, removing all obstacles impeding the flow of foreign investments and facilitating the setting up of various trade activities are very important," the report said.

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