حفلة 2024

Towards export-friendly economic system

Dina Abdel Fattah
  • It is essential to handle export and import files properly, with a greater emphasis on the import file, which suffers the most.
  • We are at a disadvantage since our overseas “commercial representation” is not fulfilling its mandate, preventing our local decision makers from learning about potential export markets.
  • Dealing with the private sector like a criminal until proven innocent must end.

 

It is hardly unexpected that the International Monetary Fund mission is staying longer in Egypt given the severity of the economic crisis and the urgency with which a viable agreement with creditors must be finalised.

It is no secret that the Egyptian government is attempting to increase the borrowing limit in order to satisfy its fundamental commitments, which place a challenging burden on the country’s existing economic performance.

In fact, any conclusions that may arise from the negotiations between the Egyptian government, the creditors, and the Fund, in my opinion, are only a temporary fix for symptoms that, if left untreated, might get worse.

Maintaining the current course of action in response to the crisis implies carrying on with the same gloomy journey.

In line with my earlier article, export promotion rather than debt accumulation is the solution to the current problem, which has caused a halt in economic development. I shall now proceed with my understanding, that Egyptian government must know, of what export means.

I hope, dear reader, that you will not disregard this article as soon as you come across the word “export”. It has now become a simple “cliché,” repeated by government and agency officials without any understanding of its significance.

I will review the vision of the private sector, which is supposed to be the main driver for implementing this file. With the primary goal of boosting it, export must be considered in the context of the necessary changes, which include production, investment, and employment.

I also believe that we will not get out of the current crisis only through negotiations with the creditors, that can result, in the best case scenario, in obtaining new grace periods or rescheduling the debts.

Negotiations or grace periods won’t let us get out of our hundreds of billions of dollars of debt until 2054, even if we foresee an impending disaster.

Comprehensive Vision

A comprehensive vision that emphasised the importance of export as a process that involves many tasks like investment, production, supply of raw materials from local or global markets, as well as the provision of logistical services, was prepared by the Egyptian private sector, represented by the Egyptian Centre for Economic Studies, the Federation of Industries, the Federation of Chambers of Commerce, the American Chamber of Commerce, the Alexandria Businessmen Association, the Egyptian Businessmen Association, the Egyptian Exporters Association, the Export Council, and the Egyptian Association for Young Businessmen.

They thus see that exports cannot be promoted by targeting specific figures if the system’s underlying issues are not resolved. The process’s weakest point determines how strong it is overall.

The private business sector believes that with regard to solutions for increasing exports, the so-called “high road” policy must be sought, rather than the “low road”.

This requires us to define the exact requirements to achieve, not only the targeted figures without changing the business environment that is full of obstacles, a breakthrough that brings the Egyptian state to a position worthy of its ability, by liberating the economic system from all restrictions.

Towards export-friendly business environment

The private sector agrees on the necessity of urgent action to solve the problems, not just the widespread symptoms that fill the atmosphere day and night, such as the slow procedures, and lack of export support. The issues are symptoms of larger problems connected to the management of the whole economic regime.

Currently, instead of providing complete, ongoing, and sustainable assistance to boost exports to a level that fulfills Egypt’s position, different groups within the state strive to develop contradictory policies hampering output, especially exports.

It is clear that the executive and bureaucratic components of the state do not share the political commitment of the state to prioritise increasing exports, in addition to the taxation policies that are imposed regardless of the targets of operation, production and export.

The sector brought spotlight on the risk of regulating and supervisory agencies competing with the private sector by offering the public the same services and goods.

They emphasised that the government’s self-evaluation without auditing was inadequate and that an efficient mechanism of monitoring the government’s performance was required.

The private sector also emphasised the significance of doing thorough analyses of each industry’s export potential, creating comparative studies that include competing countries, and filling in for the lost duty of the commercial representative.

The private business sector emphasised how important it was to finish the reform circle’s aspects and implement institutional changes that would prioritise exports and increase export capability.

The private sector also thinks that fulfilling the requirements would contribute to the achievement of fundamental objectives for export promotion in order to meet the necessary targets. It also provides the information needed to create possibilities and designates those in charge of execution as well as their timelines. It will also create incentives for the private sector to expand.

Many research studies have revealed that the misapplication of the drawback system and temporary permits, which represent a refund of financial benefits for exporters after calculating the imported components, puts additional pressure on the exporters, and is typically linked to the rising cost of export and their prolonged time requirements. The research also emphasised how critical it is for the public and private sectors to restore mutual trust and to cease treating private sector like criminals unless proven innocent.

The Ministries of Finance and Trade as well as other entities concerned must co-operate to ease and speed up export procedures.

Export these days seems to be a life-or-death decision

Export these days seems to be a life-or-death decision. Since the political leadership has pledged to give this issue top priority, the Egyptian state must be reorganised so that its constituent parts are positioned according to their capacities and potentials in order to accomplish the necessary reforms within the allotted time frames, and oversight bodies must be established in order to create a rival environment out of anarchy.

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