Private sector engagement, green recovery are main themes for Egypt in 2021: minister

Published 28 Feb,2021 via Daily News Egypt - Private sector engagement and green recovery will be a key theme in 2021, according to Egypt’s Minister of International Cooperation Rania Al-Mashat.

Talking to Daily News Egypt, Minister Al-Mashat said that going into 2021, it is important to realise that the novel coronavirus (COVID-19) pandemic has proven that multilateralism is vital to the reconstruction of global economies.

The pandemic has also shown that private sector engagement is critical for development, and that green recovery should be on the minds of all policymakers. COVID-19 was not the wake-up call we wanted, but does reflect the one we needed as it reinforced the importance of inclusive economies.

The interview discussed the Ministry’s plan in 2021, in addition to the Egyptian Government’s plans to ensure the economy is not negatively affected in 2021. It also touched on economic diplomacy and the lessons learned from COVID-19. It also touched on the development financing and the UN’s sustainable development goals (SDGS).

You have called for shifting mindsets through “Economic Diplomacy”. Could you outline what you mean by that, and what are its principles?

Extraordinary times require extraordinary action. There are no limits to our commitment to Egypt’s inclusive and sustainable development. Our vision at the Ministry of International Cooperation primarily centres on pushing for a human-centred circular economy.

To achieve this, we focus on implementing “Economic Diplomacy”, which aims to push the frontiers of multilateralism and cooperation. This will occur through strengthening inclusive multilateral and bilateral engagement with development partners, governments, global policy makers, the private sector and the civil society. This will achieve a circular economy and push forward the global goals, the UN’s 17 SDGs.

It is through multilateralism coupled with governance, dialogue, connectivity, and transparency that we aim to push the frontiers of collaboration. The three principles of Economic Diplomacy are: regularly organising Multi-Stakeholder Platforms to ensure that all projects between development partners are streamlined and effectively aligned with the national agenda and the 17SDGs; mapping Official Development Assistance (ODA) to the SDGs for all projects with multilateral and bilateral development partners; and adopting a consistent Global Partnerships Narrative People & Projects & Purpose (P&P&P).

The main objective of the Multi-Stakeholder Platforms is to strengthen partnerships for achieving value-centric results through regular interactive and participatory consultations with all development partners.

The platform ensures harmony and complementarity of development collaboration to maximise impact and achieve sustainability. The platform also provides an opportunity to capitalize on successes, learn from pitfalls and harness the power of group interaction.

Ever since the launch of the first multi-stakeholder platform in April 2020, the Ministry of International Cooperation has organised a number of participatory workshops in various sectors. The workshops focused on different areas related to the Health Sector, Public Enterprises, Private Sector Engagement in Development, Rural and Agricultural Development, Transportation and Closing the Gender Gap Accelerator.

In terms of the ODA – SDG Mapping Framework, in 2020, we concluded an extensive first-of its kind comprehensive mapping exercise of all current effective projects within the Ministry of International Cooperation’s portfolio. These aimed to identify their alignment with relevant SDGs, ensuring optimal contribution of development cooperation projects to the UN’s SDGs.

Our mapped cooperation portfolio includes both financing to sovereign projects as well as financing to the private sector, and also accounts for projects developed by the United Nations and its agencies. There are more than 377 ongoing projects, totalling $25.6bn in the ministry’s development cooperation portfolio.

With the Global Partnerships Narrative, economic diplomacy is not solely based on results, but on the values of solidarity and serving humanity. The issues that the world currently faces are universal, and this is why we have unified all our development efforts under one core narrative to mobilise the international community towards development goals. Our narrative is P&P&P.

In 2020, the Ministry of International Cooperation secured $9.8bn in development financing. What distinguished Egypt to receive this amount of funds?

Egypt has embarked on its economic transformation through comprehensive reforms to promote growth that is sustainable, inclusive and green. At the Ministry of International Cooperation, we are designing financing initiatives that push forward throughout strategic international partnerships, economic and structural reforms that foster private-led inclusive growth through effective dialogue, transparency and collaboration.

Egypt’s economic and development performance story was also singled out in 2020 and celebrated by IFIs, driven by sound policy choices and robust partnerships that have supported economic growth and employment, despite the pandemic.

With Egypt positioned to be among the handful of countries to avoid recession this year, and the large infrastructure investment programmes underway, the country will continue to attract investors in the post-COVID-19 economic climate.

On 20 January 2021 we presented to the newly elected Egyptian Parliament the Ministry of International Cooperation’s portfolio of development projects that are both contextual and diverse. We presented an outline of the 80 projects initiated in 2020 through the $9.8bn in development financing.

How far do these projects help Egypt in achieving the SDGs?

The Ministry of International Cooperation’s total cooperation portfolio includes 377 projects amounting to $25.662bn for both sovereign and private sector projects, across multiple and diverse sectors.

In the second pillar of Economic Diplomacy, we mention mapping the ODA financing to the SDGs for all projects with multilateral and bilateral development partners. The ODA-SDG mapping framework is a tool to ensure the allocation of resources in the right place, for the right cause, and measures Egypt’s progress in achieving its SDG targets, when it comes to development financing.

Over 50% of ODA allocation is directed toward lagging regions to combat multidimensional poverty, with a focus on SDG 1 relating to No Poverty. Other goals include SDG7, SDG9, and SDG6 (Affordable and Clean Energy; Industries, Innovations and Infrastructure; and Clean Water and Sanitation, respectively). These three goals have received 62% of ODA financing, and this is where Egypt is over-performing. We have set an example to the region on pre-emptive measures to mitigate the impact of COVID-19 and to build back better and greener.

What are the Ministry’s plans for 2021 in terms of financing development projects?

Going into 2021, it is important to realise that the COVID-19 pandemic has proven that multilateralism is vital to the reconstruction of global economies. It has also shown that private sector engagement is critical for development, and that green recovery should be on the minds of all policymakers.

COVID-19 was not the wake-up call we wanted, but it is the one we needed as it reinforced the importance of inclusive economies.

Private sector engagement and green recovery will be a key theme in 2021. Green growth and environmental initiatives have become a top priority, which aligns global and national priorities, and in return reinforces Egypt’s commitment to deepen its engagement with the private sector to encourage innovation and growth according to the environmental, social and governance (ESG) principles.

You announced earlier that the Egyptian private sector engagement will be a key theme for 2021, what is the Ministry’s plan on that?

Private sector engagement is a powerful force in development cooperation for providing better livelihoods, creating innovative solutions, and pushing ahead towards transformational action to meet the Vision 2030 Agenda. The Ministry of International Cooperation secured development financing agreements in 2020 with a total of $3.191bn through direct financing to private sector companies as well credit lines to commercial banks for the financing of SMEs.

There are plenty of opportunities ahead for Egypt to harness the full potential of a productive private sector. Through fostering lasting linkages in the year ahead, the Ministry of International Cooperation aims to catalyse and galvanise efforts in promoting private sector engagement by putting people first. The role of the private sector can create transformational impact through job creation, digitalization and sustainability to address the world’s most pressing humanitarian challenges.

In your opinion, what are the lessons that COVID-19 has taught the world, and Egypt specifically? And how will you take it forward?

If there is one thing COVID-19 has taught us, it is humility. We have been given an awakening to connect, communicate and collaborate, to try to unleash a positive force of nature.

The pandemic has also taught us that risk needs to be embedded within our psyche, in order to build resilience in the face of challenges. A new “Societal Risk Compact” is needed wherein companies, civil society, policy-makers, risk advisors and investors all play a part in decision-making and managing catastrophic risks.

Globally, we learned the impact and importance of multilateralism and what global cooperation really means in a crisis. We live in an ever-changing world, with the impact of technological and digital innovation creating both major breakthroughs and major challenges. The crisis has not derailed Egypt’s development progress, as we continue to chart our path forward to build back better for a more inclusive society.

What are the Egyptian government’s plans to ensure the economy is not negatively affected by COVID-19 in 2021?

Egypt is not new to crisis and has shown resilience over the past decade. We entered the crisis in 2020 with strong buffers that kept Egypt relatively shielded from the economic fallout, primarily thanks to the International Monetary Fund (IMF) backed economic reform programme which enabled the policy transparency and predictability that is crucial for foreign investors.

The approval of the standby loan from the IMF during the crisis is a signal to investors that policymakers have not lost sight of the long-term reform goal, with investments made in education and digital infrastructure enabling the country to “breeze through” the lockdown period.

In the Regional Economic Prospects report, issued by the European Bank for Reconstruction and Development (EBRD) in October 2020, Egypt is the only economy forecasted to rebound by 5% in 2021. It is also one of the countries with a positive growth rate for business as per the latest PMI data, which shows Egypt’s PMI passing 50, making it one of the Arab World’s three largest economies.

Sector-based projects that prioritise strengthened infrastructure related to electricity, renewable energy, and transportation to enhance private sector development have been expedited. Moreover, availing credit lines to small- and medium-sized enterprises (SMEs), the engine of growth going forward, has been a key theme of cooperation with development partners.

Reform is a continuous process. Egypt will continue to expand on reforms, whether fiscal or monetary, which create a conducive environment to attract FDIs and ODA; this will help us navigate through troubled waters going forward.

What are the ministry’s plans for boosting cooperation with Africa? As global supply chains are now facing several challenges, is now the best time to look at regional supply chains in the continent?

Recently, I took part in the Future Investment Initiative (FII) 4th Edition Programme Multi-hub Conference in Riyadh, where I addressed the importance of reshaping the trade routes and methods in order to adapt to the new interdependent and digitalized world.

Egypt is a gateway to Africa with many trade opportunities in this context. As part of the African Continental Free Trade Area (AfCFTA) process, looking at regional supply chains in Africa will boost the economy of both Egypt and African countries. AfCFTA is actually expected to help increase the speed of the region and continent’s recovery through intra-African trade in goods and services.

There is also a growing tech and digital scene in Africa. According to a report by Google and the International Finance Corporation (IFC), Africa’s Internet economy could make up for $180bn to the continent’s GDP by 2025, and $712bn by 2050. Youth in Africa have an untapped potential and the startup scene is growing in the continent, with a heavy focus on digitalisation and technology, and hence boosting cooperation with Africa would be a step forward in Egypt’s economy.

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