How consistency led to Egypt’s economic survival

Khalid Dalal is a former advisor at the Royal Hashemite Court, a former director of media and communication at the Office of His Majesty King Abdullah II, and works currently as a senior advisor for business development at Al-Ghad and Jordan News.(Photo: Jordan News)
Egypt was hard hit by the Arab Spring in 2011, making worse an economic situation that was immensely shabby during the reign of former president Hosni Mubarak.اضافة اعلان

The country then received a series of blows from terrorist activities, which mainly targeted the gas pipelines, consumed a lot of the country’s energy and affected the morale, while posing as a serious threat.

With COVID-19 hitting in March 2020, this most populated Arab country suffered a lot, but dealt realistically with the pandemic, refusing to resort to full closures and directing assistance to the most damaged sectors.

Egypt, led by President Abdel-Fattah El-Sisi, still faces dissent and is challenged by political opposition, but amidst all of that, the economic correction drive succeeded, and figures and forecasts at the end of 2021 show that the rectification efforts have paid off.

According to some economists, the country ended 2021 as the third strongest Arab economy, after Saudi Arabia and the UAE. “Fiscal consolidation slowed,” according to the Economist Intelligence Unit, “but not reversed as part of ongoing engagement with the IMF. Domestic demand will be muted in 2021/22, strengthening later in the 2022-26 period, with economic growth rising above 5 percent a year from 2022/23.”

In other words, Egypt is likely to achieve the same growth rate many EU countries will, and is even predicted to surpass some of them in the coming years, as tourism and consumption pick up.

2020 was a bad year in the Arab world by all economic standards. All Arab countries witnessed a setback due to the coronavirus impact, and/or political turbulence, except Egypt, which did very well with a 3.6 percent growth rate, according to World Bank data, while the majority of Arab countries recorded minus growth, including oil-rich states.

Size of the economy aside, Jordan and Egypt share many characteristics, including political stability and security despite existing in a volatile region, reliance on tourism and remittances from nationals working abroad, weak employment in the public sector and pinning hopes on the private sector to create the jobs needed, a young society, high rates of school and college education, partnerships with the IMF and World Bank, as both pursue economic correction and fighting high unemployment and poverty rates.

Equally important is that both countries have recently reclaimed their leadership roles in the region after a period of idleness brought about by regional politics and the influence of the Trump administration’s policies on the political landscape in the Middle East.

Jordan is aware of Egypt’s strengths and the lessons that can be learned from a country whose economic policies and related action plans have been implemented with utter consistency, away from populism. Now the country is given the thumbs up for a commendable performance that can serve as a model for other Arab countries, and is likely to reflect on the welfare of the Egyptian people in the long run.

That is why Jordan has partnered with Egypt to spearhead mega economic projects in the region, as part of a tripartite alliance, also involving Iraq, which is struggling to tap its huge potential. The Egyptian-Jordanian-Iraqi alliance, according to a report by Politics Today, “may serve as a leverage in Middle East politics”, and economy, of course, if the three partners follow the path Cairo has taken to fix its economy and re-emerge as an economic power in this part of the world.

Again, the magic word is “consistency”, which means leaving no room for hesitation.

This same recipe was followed by emerging economic powers over the past decades, mainly South Korea and other Asian tigers, among others across the world. It entails good planning, determination to succeed coupled with political will and popular support, partnership with the right parties, and periodic evaluation as well as rectification to ensure that the train remains on the tracks.

Let us learn from Egypt, and move on. Time is of the essence.

The writer is a former advisor at the Royal Hashemite Court, a former director of media and communication at the Office of His Majesty King Abdullah II, and works currently as a senior advisor for business development at Al-Ghad and Jordan News.

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