Foreign Direct Investment (FDI) coming into Egypt has reached near-zero levels, according to Minister of Planning Ashraf Al-Araby during a press conference on Thursday.
Al-Araby added that only 289,000 jobs were offered in the first half of the current fiscal year, out of the 750,000 jobs needed to absorb the new entrants coming into the labour market.
He added that the growth rate did not exceed 2.4% year-on-year in the second half of 2012.
Essam Mostafa, vice chairman of Premiere Securities, said: “We are living in an exceptional period where we can’t make judgements using idealistic criteria,” adding that he believed this current “transitional era” may last up to 20 years.
“We have a cognitive crisis,” said Mostafa. “We don’t realise that we are living in the midst of a revolution, and that the collapse of the economy at such a time is a perfectly normal occurrence.”
Mostafa explained that no plan can be put forward without forecasting abilities, which is impossible during the current unclear state of affairs since “we cannot identify political influences, the liberal current will not likely reach power, the Islamic regime cannot contain liberal aspirations, and an army intervention will not be beneficial to the economy”.
In the midst of this unclear state of affairs, the government is managing the crisis by using “painkillers”, he added, comparing the economy to an injured man lying in an ambulance but who is unable reach the hospital because of the heavy traffic, with nurses giving him tranquilisers to ease his pain.
Mostafa emphasised the importance of social dialogue, stressing that nothing can be achieved whilst all parties are refusing to hold discussions because of ideological differences.
He expressed his optimism on the pending Sukuk draft law, explaining that credit tools are the best way to measure investment tendencies.
“It’s important to look towards the east, countries like Malaysia, Indonesia and the Gulf states can be crucial for the development of Egypt,” he concluded.
For his part, Ahmed El-Najjar, member of the economic committee at the Freedom and Justice Party (FJP), and advisor to the minister of finance, said Sukuk will be an efficient tool in attracting foreign investments, and that they are being marketed in southeastern Asia and Arab countries.
El-Najjar added that big international corporations like Citibank and HSBC are involved in the project, which is expected to attract $10bn to 15bn in foreign investments.
The FJP official confirmed that the Sukuk draft law will be deliberated by the Shura Council on Monday.