<h3 style="text-align: justify;">Introduction</h3>
In mid-January, the Egyptian Cabinet's Information and Decision Support Center published a document entitled &ldquo;The Most Important Strategic Directions for the Egyptian Economy for the New Presidential Term (2024-2030) A Dialogue of Experts.&rdquo; It is a less ambitious document than the comprehensive development vision, and less detailed than the government action program, as it is a set of proposals that are up for discussion. The document consists of a series of government policies and targets that must urgently be addressed in order to tackle the economic crisis during the new presidential term.
The document is divided into eight strategic aims that cover a lot of issues and coalesce to outline an action plan to bring about strong economic growth that underpins Egypt&rsquo;s renaissance. Moreover, the strategic plan strives to make the economy more competitive through the effective participation of the youth and Egyptians abroad for &ldquo;a life that lives up to the aspirations of citizens,&rdquo; according to the document.
However, there is a notable disparity in vision and implementation mechanisms between the document&rsquo;s various sections. The policies and sectors in which the government has already made strides have clearer targets and their mechanisms for implementation are more detailed. Those particular areas also have investments outlined. However, some of the directions are stated as a declaration of intent more than anything else and the document tackles their implementation by proposing the development of a strategy, drafting a legislation, or forming institutions to deal with it in the future!
<h3>Ideologies for challenging economic periods</h3>
The document&rsquo;s introduction shows the core of its ideological narrative which, largely explains the priorities and targets the government has set. The document centers on the fact that in the past ten years, the government&rsquo;s development policies have achieved tangible successes according to a key indicator, which is the rate of economic growth. Yet, this &ldquo;achievement&rdquo; is eroding in the face of internal challenges, the most important of which is the population increase, as well as external challenges like the successive crises like the COVID-19 pandemic and the Russian-Ukrainian war. The result of these shocks contributed to increased inflation rates. In addition, the crisis in the Middle East has led to a decline in revenues from tourism and the Suez Canal.
The strategic economic document does not view the crisis that the Egyptian economy is experiencing in isolation from the fallout of these external storms, and therefore it gives no indicators of rethinking the foundations of economic policy, evaluating its results, or any radical modification in the development strategy.
The perspective adopted by the government has shaped the narrative and resulted in the continued reliance on sectors that led to economic growth in the past, such as infrastructure, construction, and transportation. From this standpoint, the officials view the current problems as &ldquo;shocks&rdquo; that economic policies need to overcome or as temporary obstacles that do not warrant a review of economic policy. This is made clear through the repeated use of the terms resilience and flexibility in the report, regarding the economy&rsquo;s ability to deal with crises. Put simply, the core idea encapsulated within the document is that Egypt can return to the prosperity that existed before these crises occurred by overcoming them.
<h3>The core of the document</h3>
Among the various priorities presented in the document, two urgent priorities emerge as focal points. First, maximizing the role of the private sector in economic activity, especially in investment and employment. Second, addressing the foreign exchange crisis, and increasing receipts from it.
The document comes at a time when the private sector&rsquo;s participation has been steadily declining for years, a fact that drew the criticism of international economic and financial institutions, who insist the government must maintain competitive neutrality and separate its role as a legislator and organizer of economic activity, from its role as an actor within the economy.
In this context, the document refers to the previously issued Egyptian state ownership document, as well as the Country Partnership Framework 2023-2027 (CPF) that the nation signed with the World Bank Group, which seeks to empower the private sector among other objectives.
Regarding the foreign currency crisis, the document proposes several targets, some of which have long been sources of foreign exchange revenues like tourism, the Suez Canal, and remittances from workers abroad. It also presents additional revenue streams that were not previously utilized by the government, like outsourcing and investing in the real estate sector, as a means to attract foreign currency. In this context, the document proposes the idea of exporting real estate in exchange for the right to reside for five years (Green Card). It also proposes the idea of exporting labor by targeting labor markets in Western nations with a population deficit.
Finally, the document suggests reducing dependence on foreign currency by creating agreements that allow Egypt to settle commercial transactions in national currencies, whether these countries are members of the BRICS group or not. So far, there are no specifics regarding the terms of these agreements, but they are expected to mimic a barter agreement. However, in light of the massive deficit in the trade balance, these agreements can only reduce the demand for the dollar, but they cannot solve the problem. Additional measures are needed to tackle the fundamental issue that creates and perpetuates the problem, which is the gap between exports and imports.
<h3>The economic sectors prioritized within the document</h3>
Dealing with shocks, especially external ones, is an issue that the document raises, as a primary goal of economic policy. However, it disregards the dangers of the excessive reliance on sectors and resources that are highly sensitive to these shocks. The document aims to increase the annual revenues generated from tourism (at a rate of 20% annually) and the Suez Canal (at a rate of 10% annually), despite the regional and global conditions that make this goal unrealistic, at least in the immediate term.
On the other hand, the document prioritizes the adoption of policies aimed at boosting the performance of the industry, agriculture, and information technology sectors so they may shape no less than 35% of Egypt&rsquo;s gross domestic product (GDP). Despite the importance of encouraging industry in the broader scope of Egypt&rsquo;s development vision, and utilizing it as a means to lessen the foreign exchange crisis -- the section pertaining to industry is one of the least developed and detailed parts within the framework of the proposed strategic directions. Aside from general statements that speak to the need to boost industry and local production, in things like electronics, electric cars, and pharmaceutical industries, the goal lacks a clear vision. Moreover, the document doesn&rsquo;t include a risk assessment that details the potential threats and challenges, or any implementation mechanisms for the goal.
In terms of mechanisms geared towards increasing industrial production, the document refers to ideas such as establishing industrial complexes, free zones, and industrial clusters. Yet, the document does not indicate the existence of clear plans for this vital goal. Nor does it mention the challenges that have prevented the achievement of this objective in the past, or how it could be achieved in the future, despite the existence of a large research project by another government agency dedicated to studying industrial development, which could have been built upon in this document.
While the strategic economic plan presents the development of Egypt&rsquo;s industrial sector and unlocking the fourth industrial revolution as a targeted priority, the document does sufficiently delve into the vision, programs, and policies that would see these targets come to fruition.
In contrast to other sections, that have been relatively vague, the transport and logistics section was allocated a specific investment. The document clearly states government plans to spend approximately 680 billion Egyptian pounds on infrastructure projects like transport and storage investments, and a specific number of roadways and bridges. An indication or a clear execution plan for this sector. The same clarity and specificity is seen again in the document with regards to the establishment of new cities (the section shows detailed plans for eliminating slums, building fourth-generation cities, and smart cities).
Renewable energy and green hydrogen projects are also a priority, as the economic plan discusses the details of the projects that are under implementation or have been agreed upon. The government has earmarked two trillion Egyptian pounds of investments in green hydrogen projects.
<h3>The social justice dimension</h3>
One of the most important issues raised by the document is spatial justice and increasing spending on education and health. The issue of spatial justice was viewed through the lens of contribution to GDP, with the document looking at each region individually. Cairo&rsquo;s share accounted for about 45% in 2020-2021, compared to a contribution of only 13% for the three regions of Upper Egypt.
Given the proven spatial disparity, based on GDP contribution rather than quality of living conditions, the policies aim to increase the contribution of other cities. The document sets a target of increasing the contribution of Upper Egypt from 13% to 20% by the year 2030. To achieve this, the mechanisms presented are focused on outlining investment opportunities in those regions and encouraging investments in them. As for the goals of reducing poverty and improving living standards, the document refers to previous government efforts to develop the countryside (Decent Life Initiative) without any additional detail.
Regarding gender issues, the discussion in the document is limited to addressing the decline in women&rsquo;s share of the labor force, which has reached 15%. The nation aims to raise the participation of women in the workforce to 32%, according to the document which makes no reference to the factors that have driven the decline in women&rsquo;s participation in the labor market or ways to confront them.
In terms of operational policies, the document limited itself to discussing the operational efficiency of economic policies and training policies, especially in promising fields, such as artificial intelligence (AI), as well as providing job opportunities both locally and internationally, and outsourcing. This approach differs from previous documents presented by government agencies that were more sensitive to social dimensions like the fairness of work opportunities and the quality of work offered.
Increased spending on education and health aside, the document doesn&rsquo;t delve into social issues with great detail. The discussion was limited to the issue of spatial justice, which was discussed exclusively from an economic efficiency standpoint and not through the lens of justice and equal opportunities. Even with regards to women in the workforce, the document indicated on more than one occasion that the decision to have women represent a larger share of the labor market is an economically motivated decision, according to World Bank Group estimates.
<h3>Final remarks</h3>
Finally, some suggestions, the document does not claim to be a comprehensive development vision In the medium term, it is closer to a government action program that does not aspire to critically evaluate the economic policies but rather operates with the assumption that these policies are effective. With that in mind, the strategic economic plan continues to work within the same frameworks used in the past while focusing on interim rescue plans. The document treats the current economic crisis as a temporary phase that comes as a result of unfavorable external circumstances.
No doubt the reliance on sectors that do not achieve &ldquo;accumulation&rdquo; for economic growth such as the real estate sector is not as favorable as other alternatives. Similarly, the reliance on tourism and the Suez Canal, as almost the sole sources of foreign exchange, despite repeated exposure to shocks over the past decades, is dangerous and not sustainable. The document does not treat industrialization as a core requirement for a balanced and comprehensive development policy to tackle the chronic foreign exchange crisis.
<hr>
Related readings
<ul>
<li class="MsoNormal" style="line-height: 200%;">Ibraahim El-Issawy (editor), Deepening Local Industrialization in Egypt - Cairo, National Planning Institute, 2023.</li>
<li class="MsoNormal" style="line-height: 200%;">Amr Adly (editor), Useless Accumulation, Real Estate Development Policies in Egypt - Cairo, Friedrich-Ebert-Stiftung (Egypt Office), 2022.</li>
<li class="MsoNormal" style="line-height: 200%;">Amr Adly, Towards salvation from recurring currency shortage crises, deepening industry as a way out - Zawya, June 20, 2022.</li>
<li class="MsoNormal" style="line-height: 200%;">Mohamed Gad, What solutions does BRICS offer to the dollar crisis in Egypt - Al-Manassa, August 24, 2023.</li>
</ul>

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