Egypt’s Minister of International Cooperation Rania Al Mashat believes that infrastructure development will play a vital role in the country’s economic recovery after the novel coronavirus (COVID-19) pandemic. The infrastructure development projects will also help Egypt achieve its long-term economic transformation due to their immense potential for job creation.
Minister Al Mashat’s remarks came during her participation in the ‘Global Economic Prospects’ session as part of the World Bank annual meetings on Thursday. The session looked into the COVID-19 impacts on regional economies and the most recent economic indicators since the June 2020 Global Economic Prospects report.
According to the World Bank data, renewable energy projects ensure long-term job creation than fossil fuel projects and are also cost competitive. Additionally, the International Renewable Energy Agency estimates that investment in renewable energy could add almost $100trn to global GDP by 2050, which manifests the significance to prioritize the sector in economic recovery.
Investment in infrastructure is also critical to promoting an inclusive society through enhancing connectivity, Minister Al Mashat stated, as it will allow new actors such as small- and medium-sized enterprises (SMEs) to have better access to opportunities and integrate into regional and global value chains (RGVCs).
The minister added that currently there are over 42 projects worth $6.354bn implemented for the achievement of UN Goal 9 for industry, innovation, and infrastructure.
Minister Al Mashat referred to the third pillar of economic diplomacy; the Global Partnerships Narrative that focuses on people, projects and purpose to showcase success stories to be replicated elsewhere, as no country on its own has the silver bullet to any crisis.
She referred to the success of the ministry’s trip to Luxor with the World Food Programme earlier in September, which earned praise from the African Union (AU) Commission developing rural communities and supporting small farmers in Upper Egypt and that it is an “an example that could be replicated in other African countries.”
To fill the financing gaps resulting from the current pandemic, the minister noted that the international community must work collectively and innovate on the different types of financing to get out of this crisis.
She also pointed to Egypt’s success in using innovative methods such as blended financing to execute major national projects, particularly in the infrastructure sector, which has helped Egypt achieve growth rate amid global downturn.
According to the reports of the World Bank and the European Bank for Reconstruction and Development, Egypt is projected to achieve 2%-3% growth during the current year, and 2.1%-5% growth next year.
The private sector also played a large role in mitigating the impacts of the health crisis, the minister added. For example, the ‘Egypt Will Pass’ initiative that saw participation of several private companies and employers, contributed to keeping their workers employed.
According to the 2020 Global Economic Prospects report, economic activity in the Middle East and North Africa is expected to contract by more than 4% in 2020, due to the disruption of consumption, exports, and services during the COVID-19 pandemic.