Egypt Is World Bank’s Biggest Borrower Of US$4.1 Bln – Hartwig Schafer
Washington, DC:
Hartwig Schafer – the World Bank’s Country Director for Egypt, Yemen and Djibouti – has listed Egypt as the biggest recipient of loans, borrowing heavily from the WB Group’s International Finance Corporation (IFC).
Schafer explained that there are currently 22 projects the World Bank are working on in Egypt with total finance worth US$ 4.1 billion.
During meeting with the media delegation accompanying the AmCham Egypt’s Doorknock mission, Schafer said electricity captures the lion’s share of the WB’s total projects in Egypt of 38.9% for that sector. He also referred to the other percentages as follows: 21.6% for transport, 14.7% for the financial sector, 8.5% for the socials sectors, 8% for water and sanitation and 5.4% for the agricultural and irrigation.
Schafer further noted that the World Bank’s Executive Board had already approved in June 2012 a temporary strategic memorandum which outlines WB’s scheme to support the Egyptian government scheduled till the end of December 2013.
The strategic memorandum is based on 3 key pillars; economic management, job creation and the inclusion of all categories, he said.
World Bank’s Country Director also said the bank’s strategic memorandum relies on a group of procedures which would likely lead to long-lasting sustainable benefits.
Those pillars aim to enhance the country’s economic management through curbing the state budget deficit and starting reform measures which target transparency reinforce and short-term job creation, notably for women and youth.
Moreover, Schafer said the WB has to adopt considerable steps to improve the business environment in Egypt in order for encouraging the private sector to create long-term jobs and to also increase participation in proving economic and social services for the impoverished category. He stressed the importance of giving more concern for women, the youth and the most impoverished areas in Egypt.
Schafer elaborated that the strategic memorandum includes a program for investment purposes that will be financed through loans worth US$ 900 million from the International Bank for Reconstruction and Development in electricity and transport sectors, in addition to a new project which was approved upon on June 28th, 2012 which is an urgent investment intensive-labor project worth US$ 200 million that is expected to create 250,000 jobs over three years mainly for youths in poorer areas and will also increase available job opportunities for women.
He further added that the Egyptian government has made good progress in a loan needed for development policies which is initially valued at US$ 750 million with the aim of supporting reforms of governance systems and social security networks, noting that the World Bank is currently helping Egypt to find suitable solutions in these two fields.
The bank exchanges international experiences in designing and managing social security networks programs efficiently and effectively including analyzing the suggested smart cards, finding ways to improve management and accountability and effectively determining the poorest and most suffering segments, he explained. As part of the Transition Fund’s initiatives, the technical support needed to reform the fuel subsidy system and social security networks is currently planned, he noted.
The World Bank is ready to support Egypt in implementing the social guarantee program to protect the low-income and poor people who may have been badly affected by the proposed economic reform plan presented by the Egyptian government to secure the US$ 4.8 billion loan from the International Monetary Fund (IMF), Schafer stressed.
He then emphasized on the importance of implementing a plan to reform economy so as to boost economic growth rates, create new jobs, improve living standards and reform subsidy system.
The World Bank will continuously provide Egypt with the required aids whether the country reached the loan agreement with IMF or not, he affirmed. The Bank aims at supporting Egypt to fight poverty, improve health care, education and services and set plans to support the poor.
