GAl Monitor, excerpt re Egypt only: Post-Covid Mideast economies look to the Gulf and Egypt
The region took a hard hit from the pandemic, and it’s far from over, but Egypt and Saudi Arabia are managing better than expected.
Ongoing construction work at the Maspero station of the Cairo Metro's third line is seen on Nov. 22, 2020, during the visit of France's transport minister; in the background are the Egyptian Foreign Ministry headquarters (R) and the main Maspero Radio and Television Broadcasting building (L). Egypt has the only economy in the Middle East and North Africa that has been growing. Photo by KHALED DESOUKI/AFP via Getty Images.… and Egypt’s success story so far
Egypt’s management of the pandemic has been success story. While the rest of the region has been slammed by the pandemic, Egypt’s economy is the only country in the Middle East and North Africa that is actually growing. The IMF says gross domestic product is expected to grow 2.8% in the Egyptian fiscal year that ends in June despite the massive hit to the country's tourism sector and remittance incomes.
The report credits the government of President Abdel Fattah al-Sisi for undertaking "proactive measures" to address health and social needs to mitigate the impact of the virus. Egypt has also stayed the course on the IMF "stand-by arrangement."
Egypt’s progress is both remarkable and fragile, and the IMF notes the risks and uncertainty given the uncertain external environment and the effects of the virus. The IMF also says Egypt needs to stay on track to undertake structural reforms, including support for the private sector and more transparency of state-owned enterprises.
Egypt’s pre-pandemic economic turnaround under Sisi sometimes goes unnoticed, but it shouldn’t. Cairo has mostly adhered to the IMF program, and it hasn’t always been easy. Growth is up and unemployment is down, and the government has rolled back onerous energy subsidies which raised fuel prices on Egyptians already facing hardships. The tough-love economic measures have come at a time as political activists have faced a crackdown on dissent, as Shahira Amin reports.
Egypt’s lessons are especially telling as Lebanon, Iraq and Sudan approach discussions about IMF assistance and reform. These programs often come with a heavy dose of austerity and subsidy reduction, which while necessary in the long run, in the short term increase the economic toll on populations already reeling from weak economies and the pandemic.
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