War in Gaza has immediate implications on Suez Canal, Egyptian minister says
uh well of course uh uh the geopolitical
tensions in the region and the war in
Gaza has immediate implications on the
sus Canal Zone and I think uh uh the uh
the estimates are that our revenues are
down close to 50% which is quite Hefty
uh on the balance of payments uh so this
is this is the immediate uh implication
that that we have uh most recently there
have been um measures uh taken uh
through uh uh the IMF program through
Finance ing uh through some of the
privatization that has taken place to
sort of compensate uh for some of the
downturn that has happened particularly
on the Swiss Canal so on the SE Canal
what about in trade in particular are we
also seeing a material impact so um of
course the uh the uh uh tension and the
uh attacks that has happened uh or the
threats at least uh on the uh ships and
that that has uh created alternative
routs um uh we haven’t uh uh seen yet uh
the rebound
uh and hopefully uh all of this is
related to of course uh the ceasefire
and trying to find out a resolution to
the situation so what’s at stake for
Egypt’s economy if we don’t see a
ceasefire or this situation stay
unresolved I mean the the a few things
uh for any country in this region uh uh
there’s there’s always a need for
stability for the uh uh inflow uh of uh
foreign direct Investments to be uh more
steady predictable um uh the uh uh you
know if the threats uh affecting the SS
Canal continue that’s also going to be
uh uh stress on the balance of payments
uh and uh uh this is uh uh you know a
fact but then uh the government uh
always looks for uh policies to
compensate uh for that downturn and this
is uh this is what has been happening uh
uh over the past few months so talk to
me a little bit about the work that
you’ve been doing I know you’ve been
extraordinarily busy working with
intergovernmental organizations you’ve
secured incredible funding from the INF
the World Bank the EU and others I think
the question for Market investors right
now and observers of the Egyptian
economy is is it going to be enough to
avert a full buror crisis so a few uh a
few points uh uh which which are you
know pretty obvious but let’s go through
them anyways uh macroeconomic stability
uh is a prerequisite uh and a necessary
condition to be able to uh uh attract uh
private investment however it’s not a
sufficient condition and therefore the
conditions that come after that include
structure reforms uh but without uh
attaining macroeconomic stability both
on the monetary side and the fiscal side
it would be very very difficult uh to
convince uh the longer term investors to
come in and that’s why it was very uh
important uh to finalize our program
with the uh IMF uh the board meeting uh
was uh a few weeks ago uh and in
preparation for that there were many uh
important macroeconomic policies uh that
were undertaken to restore that
stability uh both on the foreign
exchange side as well as on the fiscal
side um also the document related to the
IMF program uh and concluding the the
two reviews uh was published uh uh
yesterday and for any investor who’s
going to look through it uh will see
very clearly the commitment of the
Egyptian government to continue uh on
this uh route of fiscal and monetary
reforms very very important as I
mentioned as a precondition for the FDI
and for the private sector to come in
comes the second stage which is the
structural reforms and that’s uh what we
are uh putting together with uh other
ifis uh including the World Bank uh the
EU the African Development Bank and many
other uh of our International Partners
but the Homegrown structure reform
program uh is anchored on three key
pillars uh the first one has to do with
uh
improving the competitiveness and the
business environment the second has to
do with uh the macro fiscal resilience
so continuing uh on some of the reforms
there and the third has to do with the
green transition Egypt is uh has done
tremendously well uh on many of the uh
renewable energy projects uh uh uh water
desalination and these are efforts which
are continuing so the green transition
is the third pillar of structural
reforms because that is uh again an
attraction for a lot of the private
sector uh for firms that could come in
and invest in the country so it’s a
combination of microeconomic stability
structural reforms that will be able uh
to bring in the private sector
Investments that are much needed today
Rania Al Mashat, Egypt’s minister for international cooperation, discusses the Egyptian economy as the Israel-Hamas war continues and amid the Houthi attacks in the Red Sea.