Richard Shediac, general manager of Strategy&, an economic consultancy and research company located in the Middle East, said that although his company is a new face, it is backed by a strong history.
He said: “We are a strategic institution that lays out plans for private companies and governments,” adding that the Middle East is a large and active market and the company is working to improve government and private systems.
“We are working in Egypt to create a model of social reform in the Egyptian market,” he added.
“The government hired us to restore the strength of the Egyptian economy by assessing the economic situation and offering solutions to its crises. We studied the general situation and focused on developing a roadmap for social reform, as well as ways to improve live for Egyptians and ensure that they are not affected by the recent economic decisions,” Shediac stated.
“We sought to determine the quantitative and qualitative status of Egyptians’ needs,” he said, adding that Egypt lacks 1m housing units and a government housing plan must be executed in order to fill that gap. The company also strove to determine the impact of traffic congestion on economic growth.
Richard said that his company has examined all aspects of the issue, including ensuring Egypt’s energy needs, methods for subsidy system reform, reducing reliance on imports, decreasing waste, and establishing facilities for crop storage, as crops are often vulnerable to significant losses during transport and storage.
He added: “The group is considering all economic indicators, including unemployment, growth, and inflation,” but recent reforms have further exacerbated a number of these indicators. Thus the crisis has become three-dimensional, hitting unemployment, growth, and financial and monetary reserves, Shediac said, but Strategy& is now working with the government in order to determine a direction for Egypt’s economy.
He said that the government’s plan to revise the request was sincere, adding that it provides for measures aimed at stimulating the economy in the short-term.
Egypt has already begun the process of reform, particularly in the realm of subsidies, but implementing the measures against a lack of economic growth will force Egyptian citizens to pay the price, Shediac stated. Prices will increase and inflation will spin out of control, and in order to mitigate this, taxes must be increased and spending reduced, which is difficult to implement in the Arab world, he added.
According to Shediac, restructuring or reducing subsidies does not involve a reduction in their proportion or value, but rather, they will be redirected from the rich to the poor. He said that reducing state spending means reducing incentives. Commodities would be sold at market prices, presenting a large challenge for Egyptian citizens.
He explained that Egypt’s economy is “huge” and requires substantial funding in order for it to be open to financial institutions and the greater world, and the Egyptian government is currently making preparations for an economic summit in Sharm El-Sheikh. The summit represents a good opportunity to explain the reality of what is happening in Egypt to all financial institutions.
He said that Egypt’s private sector must begin investing in the country: “Egypt will not succeed in attracting foreign investments if Egyptian investments are not injected into the nation.”
He said that his company focused on six sectors including agriculture, industry, and tourism, as reforming these fields is crucial to bringing in investments. Working with the government has pushed the company to designat approximately 50 investment opportunities, which will be promoted by the state.
Shediac said that investment opportunities that could be converted into money quickly and must also be offered with speed; once this is done, the focus can shift to systemic reform, improving the business environment, and the creation of an investment infrastructure that will attract new investments.
“When will energy and mining laws be issued as part of a government strategy to invest in Egypt’s energy mix?” Shediac said, adding that the government must expedite steps taken to attract more investment. He said that Egypt’s bureaucracy must also be quickly wiped out.
Shediac said: “Consultants’ roles are confined to laying out a strategy, and the government is responsible for implementing and evaluating the results.” He added that Strategy& will cooperate with the government to revise plan and develop a final strategy along with proper mechanisms for implementation. He said that implementing the strategy requires concerted efforts on part of the government, individuals, and all public agencies.
He said that a basic tool to measure success must be formulated alongside clear benchmarks. As a company, Strategy& works with the government to implement and evaluate the results of the strategy that is currently being developed.
He added: “We are now on the verge of laying out a social plan for the government.” Shediac said that the company was laying out a plan to visit all ministries before setting out the final strategy so that it may be revised. In this way, the plan will be Egypt’s strategy, not the strategy formulated by the company for Egypt’s benefit.
Shediac concluded by saying that he felt Egypt’s economy would become a regional leader and a global force over the next ten years in terms of export capacity, services, and an improvement in all economic indicators, which will serve to better quality of life for all Egyptians. Egypt can also learn from the examples of other countries such as Brazil, who multiplied per capita GDP by a factor of three.