Having secured close to US$60 billion in investment pledges at last month’s investment conference to help revive its economy, Egypt now faces an even more daunting task: reducing the country’s bloated bureaucracy.
“The main concern, we all know, is bureaucracy,” says Ashraf Salman, Egypt’s investment minister, in an interview with The Wall Street Journal. “If you remove bureaucracy…then you will have private investments, you will have job creation,” says Salman.
Egypt is in the middle of an economic comeback after having struggled since political turmoil engulfed the country in 2011. Its government has introduced a series of reforms that, coupled with support from friendly Gulf States, have allowed the economy to post stronger growth again. For decades, Egypt’s development has been held back by an oversized civil service and an unpredictable justice system, in addition to rampant corruption, which discouraged many would-be investors.
Egypt’s standing on the World Bank’s Ease of Doing Business index highlights the challenges the country is facing. It ranks 112th out of 189 countries. The United Arab Emirates, Saudi Arabia and Qatar rank 22, 49 and 50 respectively. North African nations Tunisia and Morocco come in at 60th and 71st.
“We can’t say that we can get rid of bureaucracy but we have said we’re putting a plan based on proper legislative reforms in place,” which includes improving government structures and cutting administration, Salman says. It also involves developing a so-called one-stop shop for prospective investors to help them avoid dealing with multiple government agencies, he adds.
The March economic summit helped Egypt raise its global profile and promote itself as an attractive investment destination to foreign investors. In recent months, ratings agency Moody’s also lifted the country’s credit rating, while unemployment figures fell slightly.
The country now has plans to tap the international bond market in the next two months for which it has mandated investment banks and for which roadshows will begin at the end of May, Salman says.
Egypt is also looking at privatizing three state entities that are active in the petrochemical, oil and gas sectors. And in August, it will open a new Suez Canal shipping lane.
As for Egypt’s notorious red tape, foreign investors can expect change by the end of next year, Salman says. “When do I expect to be compliant to international markets? I expect to see that 18 months down the road.”
Source: The Wall Street Journal