Egypt: A Nation Of Potential

Having faced a tenuous political environment since the outbreak of the Arab Spring in 2011, Egypt has witnessed the overthrow of a dictatorship, experienced military rule, held it’s first democratic elections, and faced a military coup all in the span of six years. Egypt’s strongman and current president, Abdulfattah Al Sisi, is now faced with the difficult task of navigating the country through the rocky waters of political and socio-economic transition.

Over the next decade, the Egyptian government must face a multitude of challenges and opportunities which it must address and take advantage of in order to carve out a better future for Egyptians of all backgrounds.

Boasting a population of nearly 100 million, the natural rate of population growth set at 2.4% is double the average of other developing countries. Youth between 18–29 years of age make up 24% of the national population, and roughly 27% of them are unemployed.

Providing Egypt’s youth with employment opportunities has become a priority of the government. However, such a large population makes the delivery of state programs in the fields of healthcare, education, and socio-economic initiatives very difficult, particularly since the Egyptian economy has taken quite a hit since 2011, which saw the GDP growth rate fall from 7% in 2010 to 4% in 2017. The inflation rates have also taken their toll on the Egyptian Pound’s value.

Economic pressures on the Egyptian state have only increased with the fall of tourism, the drying up foreign reserves, and the recent taking on of an Internation Monetary Fund (IMF) loan. The latter has forced the government to make difficult decisions such as cutting fuel subsidies and enforcing tax hikes.

Despite the harsh measures, the government maintains that they were necessary to kick start an ailing economy. With approved funding of the IMF and generous financial grants form Egypt’s Arab Gulf neighbours, primarily the U.A.E and Saudi Arabia, the government has begun reinvesting some much needed financial resources into its troubled economy through a number of initiatives.

Just last week the government announced plans to introduce universal healthcare insurance to all Egyptian citizens, a first in the North African state’s history. Despite the number of tourists falling sharply from 2011–2016, the first economic quarter of 2017 saw tourism rates increase by 170%, partly due to a new government media and marketing campaign abroad, while last June saw a new environmental protection program launched with a focus on the preservation of Egypt’s nature reserves.

The government must also look to tap into its natural resources more efficiently rather than rely on foreign funding. Egypt sits on enormous reserves of natural gas, both on and offshore, and with the recent discovery of the giant Zohr gas field off Egypt’s Mediterranean coast, the country is expected to transition from a gas importer to an exporter.

With oil exploration deals in Egypt’s vast Western Desert region signed with Shell and Apex, the potential for discovering further resources is quite possible in the near future. However, oil and gas are not the only two energy sources Egypt is looking to tap into, as it now looks to the sky above to harness the power of the sun through solar power projects.

Egypt’s New and Renewable Energy Authority (NREA) has set a target goal of generating 20% of its energy from renewable sources by the year 2020, and has just signed a partnership agreement in September with General Electric to build a massive 50 megawatt solar power plant.

Egypt has all the assets to build a booming and productive state; the key lies in tackling the factors that hinder their potential such as political stability and regional security. Furthermore, the government must invest time and resources into three key initiatives necessary for the future development of the country.

First, the government must focus on education, particularly providing grants for those who cannot afford to have access to one. There is an absolute necessity in guaranteeing that all Egyptians have access to education straight through to the high school level. These grants must also allow youth to access a post-secondary education via means of the post-secondary education loans model that many other states follow.

Secondly, investing in the middle class by means of providing development loans and logistical support for local economic initiatives is a good means of supporting the economic backbone of any developed state. These must be inclusive of Egypt’s agricultural sector, which provides a livelihood for 55% of the population, and contributes 20% of GDP earnings.

Finally, if the Egyptian government is serious in its attempts to tackle the challenges it faces ahead, then it must ensure a transparent process of economic development free from the corruption that has crippled the nation’s true economic potential since independence.

Ultimately, Egypt has all the bearings of a fruitful economic power house in the Middle East, all it needs is an opportunity to get its foot into the door of progress and the rest will follow. It is up to the Egyptian government to help carve the path towards such an opportunity.

Khalid Shoukri
Latest posts by Khalid Shoukri (see all)