Egyptians wait in line to purchase government subsidised bread in front of a bakery in Cairo (file). Egypt is facing the monumental task of repairing finances battered by political upheaval, street protests and Islamist militant violence.

 

 

Reuters

Cairo

Egypt’s Prime Minister urged the country’s citizens not to expect instant results from large-scale infrastructure projects the government has embarked on to create jobs and strengthen the economy.

Ibrahim Mehleb faces the monumental task of repairing finances battered by political upheaval, street protests and Islamist militant violence.

He also has to persuade foreign companies that their cash will be safe in a country where complex laws, legal cases and stifling bureaucracy have entangled or scared away even the most adventurous investors.

In an interview for the Reuters Middle East Investment Summit, Mehleb and several of his ministers seem more candid about the economic and social challenges in the biggest Arab country than past governments.

Previous administrations made big promises and rarely delivered, and discontent with these actions eventually helped lead to mass protests in 2011 that toppled veteran autocrat Hosni Mubarak.

Asked why there seemed to be a shift, Mehleb said: “Because the rosy picture did not produce a result”.

Mehleb is offering no quick fixes and acknowledges that it may be some time before Egyptians benefit from highly ambitious ventures, even though some progress had been made on issues such as reducing bread lines.

“The Egyptian people still have not felt it because there are problems in water, in medical care, in health, education,” he said.

Patience is key, he added. “The effect (of projects) will not be today, its impact will be next year.”

The stakes are high, especially since Egyptians have heard it all before and have proven through street protests they are ready to take on their leaders - although the craving for stability seems to be framing the mood on the street these days.

After then army chief Abdel Fattah al-Sisi toppled president Mohamed Mursi of the Muslim Brotherhood last year, security forces mounted one of the fiercest crackdowns against Islamists, killing about 1,000 in the streets and arresting thousands.

Many Egyptians, who staged mass protests against Mursi’s rule, put up with what rights groups described as widespread human rights abuses, hoping that Sisi would stabilise Egypt after the turmoil that followed Mubarak’s fall.

Now that political tensions have eased, Egyptians are bound to more closely scrutinise Mehleb’s performance on the economy, job creation and housing, some of the issues that triggered the Tahrir Square protests that ended Mubarak’s long rule.

Ratings agency Moody’s on Monday changed its outlook on Egypt to stable from negative, citing a stabilised political and security situation. But it affirmed its Caa1 government bond rating which it said was constrained by high government debt and fiscal deficits and large fiscal borrowing needs.

Mehleb said the key to success was mega projects like a new Suez Canal Egypt hopes will more than double revenues from the waterway by 2023 to $13.5bn from $5bn.

It also plans to develop 76,000sq km (29,000 sq miles) in the area into an international industrial and logistics hub to attract more ships and generate income.

The new canal is to be built alongside the existing 145-year-old waterway which is the fastest shipping route between Europe and Asia.

Authorities said Egyptians poured the equivalent of $8.5bn into investment certificates to help fund the project.

“Maybe the biggest project is the Suez Canal. The answer was very clear that the financier of this project was the Egyptian people,” Mehleb said.

He also highlighted a project costing the state 34bn Egyptian pounds (4.76bn US dollar) designed to pave 3,400 km of roads that his administration hopes will boost development.

“Without these projects there will be no development,” Mehleb said.

Reflecting on what keeps him awake at night, Mehleb pointed to unemployment officially estimated at about 13%:

“How can we create job opportunities because we have unemployment and the path is clear job opportunities require investment. This is at the top of my worries.”

Along with mega-projects are high-profile business meetings the government hopes will project a new image of an Egypt that is serious about removing deep-rooted barriers to investment.

An economic summit aimed at encouraging international investment in Egypt will be held on February 21 in the resort town of Sharm El-Sheikh.

Officials have said Egypt will present more mega-projects worth billions of dollars.

“I am expecting big numbers frankly. This summit will be, God willing, a certificate of economic stability in Egypt. We want the best investment laws in the world,” said Mehleb, adding that more than 40 projects would be showcased.

“Will these reforms be ready before the conference? This is the goal. We are moving in that direction. The steps are very quick.”