By Hany al-Houty, translated by Sara Ghali
CAIRO: Egypt will not fail to pay its debts, said Minister of Planning Ashraf al-Arabi in an interview with Youm7, adding that the government will not delay “even for a single second” in paying the interests of the Suez Canal investment certificates.
Arabi stressed on that the partnership with the private sector is the “best way” for projects’ financing in Egypt currently, referring to that the ministry has two success models in that partnership with the private sector, through the sovereign fund “Amlak ” and “Ayadi” company, for which successful experiences are to be announced soon, adding that “the private sector is comfortable when in partnership with the government.”
Below follows the transcript of the full interview:
What does the government benefit from Euromoney conference?
Arabi: The conference is the chance that the government waits for yearly, to explain its main positions, whether related to monetary or financial policies or to explain the government’s visions to combat specific challenges, adding to gathering the suggestions and points of view about the global and regional economic situations, especially that a large number of investors are taking part in the conference.
Will the conference be a witness on some new plans from the government?
Arabi: No new plans or polices will be announced but the government will stress its continuity in reforming politically, economically and socially. It will also assure that it is serious in its reformative process; it is not important to propose new policies and plans. It is more important to present last year’s accomplishments.
Was the government successful in implementing its plans announced in the conferences’ last session?
Arabi: As for the political aspect, the final steps are in progress, which are the parliamentary elections. Regarding economic plans, I think that the application of the Central Bank’s monetary policy was wise; it could have some negative effects on some sectors but that is the reform’s tariff.
Talking about financial policy, the government succeeded in controlling public spending and creating revenues, therefore reducing the budget’s deficit.
For that reason, the government sought controlling the wages system through the civil service law. It took clear procedures in the subsidiary system, through the gradual removal of the power subsidiary and using the fuel smart cards system to discharge oil shares, besides controlling the supply goods and bread, which was successfully done.
Regarding the investment policy, we could agree or disagree about the duration or regarding some procedures, but among the frame of the legislative amendments and the investment vision in Egypt, a great enhancement has been achieved.
Are there any complaints regarding the non-completeness of the legislative side of the investment law?
Arabi: If there is a subjective evaluation of investment attraction plans, amid the hard circumstances, complications, bureaucracy and non-competency, we succeeded in holding the economic conference to regain Egypt’s position and introduce our vision and our reform program.
In general, there were a lot of success stories in attracting investments and also in the legislative reforms of the investment laws. We have to admit that there are some goals that haven’t yet been accomplished and we are trying to reach nowadays. Besides, raising Egypt’s credit rating is the best evidence of the success of the government’s plans.
There are also complaints regarding Egypt’s disregard of Euromoney 2014 recommendations.
Yes that is true, and that is why we want a follow-up mechanism to enforce this year’s recommendations. But we have to put into consideration that sometimes some recommendations are controversial; so sometimes there is a trend that is opposite to the government’s, and when it is not applicable, that does not mean any neglect or disregard to the recommendations.
On the other hand, we agreed on some recommendations and the government worked on their enforcement; most of the conference’s recommendations were agreed on. Moreover, all the recommendation are pouring in the same river; on other words, there were recommendations to eliminate the phenomena of the black market of dollar, the thing that was done by the Central Bank through the strong procedures taken.
Also, there were strong recommendations for the necessity of ending the power crisis; as we suffered the last summer from the insufficient power needed, but now, we implemented an urgent electricity plan and succeeded in provided power for home-use. As it is not the final solution, we have put a strategic plan to end the crisis whether through contracting with Siemens, establishing a nuclear plant or using the coal energy, biofuel and wastes’ recycling to make the perfect power blind.
The conference is discussing financing, so what are the best ways of financing that suit Egypt currently.
Financing in Egypt is divided into banking finance, stock market finance, or through the partnership with the public sector. The government used to have an experience through establishing a supreme committee led by the Prime Minister to study the partnership opportunities with the private sector.
Nowadays, we had better have all means of finance, but the best of all is the partnership between the public and private sectors, as the private sector feels comfortable when in partnership with the government, but with limits.
The Ministry of Planning has two experiences related to the partnership with the private sector: the first is by establishing the sovereign fund “Amlak” to be the investment hand of the government, to make partnerships with similar funds, either Arab and foreign. The second experience is with “Ayadi” company, in which the government is in partnership with the private sector by a certain share; for which successful experiences are to be announced soon.
Are there any other projects to be financed by the same way of the Suez Canal, by investment certificates?
The experience of the Suez Canal experience was a success by all standards, but the norm of the project differs. The project of Suez Canal attracted citizens and it is possible for the way to be repeated but in the national frame.
Is Egypt capable of paying the interests of the investment certificates of the new Suez Canal?
Egypt has not failed to pay any of its sovereign debts, and will not fail to in the future. What was harvested from the investment certificates, the Central Bank guarantees it.
There won’t be any delays even for a single second in paying the debts interests of the Suez Canal investment certificates, despite the doubters. Those who doubts doe not understand and are creating rumors.
The Suez Canal project is an accomplishment by all means that will create a gradual increase in revenues, adding to the great benefits of the Suez Canal Region Development projects.