How Egypt rebuilt its economy since June 30 Revolution?



Sat, 30 Jun 2018 - 12:36 GMT


Sat, 30 Jun 2018 - 12:36 GMT

How Egypt rebuilt its economy since June 30 Revolution? – Photo compiled by Egypt Today

How Egypt rebuilt its economy since June 30 Revolution? – Photo compiled by Egypt Today

CAIRO – 30 June 2018: Egypt celebrates on Saturday the fifth anniversary of the June 30 Revolution that toppled the Muslim Brotherhood-affiliated President Mohamed Morsi, after one year in power during which the country suffered fierce political conflicts and social splits that threatened the future of the nation.

After the successful overthrow of the Muslim Brotherhood rule, various Islamist groups vowed revenge against the Egyptian people and their new political authorities, waging a series of terrorist attacks mainly in the Sinai Peninsula. On July 24, 2013, now President Abdel Fatah al-Sisi, then Defense Minister, called on Egyptians to take to the streets to give him a mandate to confront terrorism. The mandate was followed by multiple attacks that were no longer limited to Sinai.

It was clear that the state will not move forward, achieve long-awaited economic development, or empower its sovereign authorities without the elimination of the terrorist groups that plagued the country prior to and following the June 30 protests.

Egypt’s counter-terrorism

Egypt launched several military operations, including Operation Eagle in mid-2011, Operation Sinai in mid-2012, Operation Martyr's Right in 2015 and Comprehensive Operation Sinai in 2018. The ongoing operation was considered to be the largest military action in the country in years. The operation targets sites in all towns in the North Sinai, Central Sinai, Nile Delta and the Western Desert. These operations killed thousands of Islamic militants who launched attacks against the state and security forces.

In regard to border security, Egypt has improved security along its borders with Libya and Gaza. Specifically, in 2015 Egypt installed x-ray scanning devices at the Libyan border crossing, inspecting traffic in and out of Egypt. The amount of checkpoints in highly-impacted areas has also been increased and security vehicles have been reinforced in an attempt to implement measures to combat the use of Improvised explosive devices
(IEDs) use.

As the threat from IEDs continues to grow in scope and use, Egypt received from the United States a number of Mine-Resistant Ambush Protected (MRAP) vehicles that are designed specifically to withstand IED attacks and ambushes.

The first shipment of 762 American Mine-Resistant Ambush Protected (MRAP) vehicles has arrived in May 2016. The delivery is part of the Pentagon’s Excess Defense Articles grant program, according to which the vehicles are delivered free of charge.

Major General Charles Hooper, a senior defense official at the U.S. Embassy in Egypt, said, “The delivery of these MRAPs to Egypt provides a crucial capability needed during these times of regional instability and is part of the continuing strong relationship between the US and Egypt.”

The operational use of MRAP vehicles and intelligence-based operations against the bomb makers reduced the IED threat and the number of victims significantly.

In September 2016, the UK committed troops to train the Egyptian military in counterterrorism tactics, with a focus on IEDs. The UK’s previous efforts had focused on train-the-trainer programs.

Moreover, the Egyptian forces received training from the British Armed Forces on C-IED measures and tactics, such a Counter-Improvised Explosive Device (C-IED) Search training package in the United Kingdom run by the UK’s EOD experts.

In November 2017, fifteen experts from the Egyptian armed forces took part in training at the C-IED Centre of Excellence (CoE) in Madrid, Spain. The participants enhanced their skills in collecting, assessing and disseminating information and intelligence on IEDs.

At the end of the course, the participants were equipped with IED evidence recovery and processing skills. “Everything which has a start has also an end. But the end of the course should be the beginning of an increasing cooperation between NATO SPS, C-IED COE and Egyptian Armed Forces in the C-IED field,” said the Director of the C-IED CoE, Colonel Gomez Martin.

This training came in Egypt’s efforts to support the armed forces in the area of mine and unexploded ordnance (UXO) detection. The center previously supported a project that trained the Egyptian Armed Forces in detecting landmines quicker and more accurately. It equipped Egypt with minimum operational capacity on demining, and considerably reduced the duration of demining operations in the Egyptian Western Desert.

Egypt has been increased its activity addressing cross-border terrorism concerns, particularly about the smuggling tunnels between Sinai and Gaza. The tunnels allow explosives and other such materials to enter Sinai. Egypt managed in the last year to locate and destroy most of these tunnels.

In September 2016, Egypt agreed with India to develop their counter terrorism cooperation. This will see the two states engage more frequently in intelligence sharing, operational exchanges and the prevention of radicalization of youth.

Japan too has provided support through the provision of dual-use equipment for counter-terrorism as well as general commitment to consolidating cooperation between the two states. Through the United Nations Office on Drugs and Crime, Japan has also contributed $1.5m for strengthening the legal system to counter terrorism in Egypt, alongside growing the capability of criminal justice in the MENA region.

Being a member of the Arab League, President Abdel Fatah Al-Sisi proposed the creation of a unified Arab military force to counter regional security threats. Such cooperation is not unprecedented and is to some extent already occurring.

Egypt was one of the first countries that guided global attention to monitor the terrorist financing. It is also a founding member of the Middle East and North Africa Financial Action Task Force (MENAFATF). Upon the MENAFATF’s recommendations to drain terrorism financing sources, the Egyptian government has criminalized the deliberate collection and provision of funds with the unlawful intention that they be used by a terrorist group, individual or act.

What changed in Egyptian economy since Sisi came to power?

Many believe that the real kick-off of Egypt’s economic development plan was when President Sisi launched the Egyptian Economic Development Conference in Sharm el-Sheikh in March 2015, which attracted more than 1,700 international investors, government officials and consultancy experts. During this conference, Egypt unveiled plans to build the New Administrative Capital on the outskirts of Cairo at the cost of $45 billion.

In the lines below, Egypt Today sheds light on the positive steps made following Sharm el-Sheikh conference.

• BP announced discovery of the “Atoll-1” deepwater exploration well – Egypt’s deepest gas well – in the North Damietta Offshore Concession in the East Nile Delta. The estimated potential of the concession exceeds 5 trillion cubic feet.

• Egypt has officially become a founding member of the Asian Infrastructure Investment Bank (AIIB), along with 57 other countries. By becoming a founding member, Egypt will receive concessional loans and investments in the infrastructure development field.

• Egypt signs agreement with Siemens AG to build gas and wind power plants valued at €8 billion ($9 billion), which are estimated to boost Egypt’s power production. Siemens AG will deliver three ready to use gas steam power plants with a capacity of 4.8 gigawatts each.

• President Sisi inaugurated the new Suez Canal – an extension of the old canal – in a large ceremony attended by European, African and Arab leaders. The $8 billion project was completed in just one year instead of three on Sisi’s orders. Government economists say the new waterway will increase traffic and boost revenues from the Suez Canal from $5.3 billion annually in 2015 to $13.2 billion by 2023.

• Sisi launched a development project in the East Port Said region which aims to transform the Suez Canal from a navigational corridor to an integrated development and industrial zone.

• Italy’s Eni announced its Zohr gas field, located about 120 miles off the coast of Egypt, could hold as much as 30 trillion cubic feet of lean gas, marking the largest discovery in the history of both Egypt and the Mediterranean Sea.

• President Sisi and his Russian counterpart witnessed the signing of an agreement between Egypt's Nuclear Power Plants Authority and Russia's state nuclear company Rosatom to build a nuclear power plant in Egypt (Dabaa), with Moscow extending a loan to Cairo to cover the cost of construction.

• The African Development Bank (AfDB) approved a $1.5 billion loan for Egypt to be paid over three years. In addition, the World Bank board of directors also approved a $3 billion budgetary support loan for Egypt over a three-year period.

• Egypt and China signed 21 deals including a $1 billion financing agreement with Egypt's central bank (CBE) and a $700 million loan deal with the state-owned National Bank of Egypt (NBE). Both countries agreed to expand cooperation under the Belt and Road Initiative.

• Egypt participated for the first time in the G20 Sherpa Meeting held in Beijing, to prepare for the G20 summit in Hangzhou.

• General Motors resumed operations in Egypt after temporarily halting activities due to its inability to source dollars amid Egypt’s currency crisis.

• Sisi outlined Egypt’s progressive sustainable development strategy, “Egypt’s Vision 2030,” which aims to place Egypt among the world’s top 30 countries in economic and social development.

• Egypt signed 21 agreements with Saudi Arabia, including one worth $1.5 billion aimed at financing development of the Sinai Peninsula and an agreement to establish a Saudi-Egyptian investment fund with a capital of 60 billion riyals.

• The United Arab Emirates pledged $4 billion to Egypt, with half to be allocated for development projects and half deposited in the country’s CBE to shore up its foreign-currency reserves.

• Egypt participated for the first time in the fourth session of the China International Fair for Trade in Services (CIFTIS) that focuses on six key areas of science and technology, internet and information, cultural and education, finance, business and tourism and health care.

• The International Monetary Fund (IMF) announced that Egypt became Africa’s largest economy after Nigeria, pushing South Africa into third place, as Egypt’s nominal US dollar GDP expanded by an average of 7.5% over last four years.

• The CBE repaid $1 billion to Qatar, the last batch in a $3 billion debt owed to the Gulf country – at an interest rate of 4% – against treasury bonds offered by Egypt to Qatar under the rule of former President Mohamed Morsi.

• Egypt agreed a $12 billion loan with the IMF in a bid to restore confidence in its economy and tackle severe foreign exchange shortages.

• The World Bank provided Egypt with the first $1 billion tranche of a $3 billion loan, as part of its support for the government's economic program.

• Royal Dutch Shell announced a new gas discovery in its North Alam El Shawish exploration concession in Egypt’s Western Desert. The BTE-2 discovery’s initial quantities estimated at about 0.5 trillion cubic feet of gas with more possible reserves.

• Egypt floated its local currency in a move that reduced its value by almost 50% registering about LE 14 against the dollar (November 2016). As a result, Egypt's main stock index jumped by more than 8%, while the CBE increased interest rates by 3% to reach 14.75%.

• The Egyptian government increased prices of fuel, diesel, butane gas and natural gas by up to 47%.

• The IMF’s executive board gave the final approval for a three-year $12 billion loan to Egypt.

• Eni sold a 30% stake in its giant offshore gas field (Zohr) to Russia's Rosneft for $1.575 billion.

• The Egyptian pound exchange rate dramatically dropped against US dollar, scoring about LE 18 at the end of 2016.

• Egypt and Belarus sign nine cooperation agreements in Cairo, targeting military, agricultur, cultur and other fields.

• Egypt's Finance Minister fixed the customs exchange rate at LE 18.5 per dollar until the end of February, promising to review and adjust the rate each month. The ministry also sold $4 billion of international bonds in three tranches in January.

• The CBE announced that Egypt's net foreign currency reserves continue to rise, reaching $26.363 billion at the end of January 2017. Egypt's total imports declined to about $13.93 billion during the first quarter of the fiscal year 2016/2017.

• Egypt’s Finance Minister reduced the customs exchange rate to LE 16.5 per dollar in April.

• BP announced another gas discovery in the North Damietta Offshore Concession in the East Nile Delta, Egypt. The Qattameya Shallow-1 exploration well has 37 meters of net gas pay in high quality Pliocene sandstones.

• Egypt signed a cooperation protocol with World Bank officials to promote anti-corruption measures, develop a system of governance and means of management in Egypt.

• Sisi inaugurated the first phase of BP's North Alexandria gas fields that is expected to raise Egypt's natural gas output to 5.1 billion cubic feet per day from about 4.45 billion in May 2017. The new project started production at about 700 million cubic feet per day.

• Egypt launched Misr Venture Capital Company with the goal to help halted factories. The company's capital is estimated at LE 150 million.

• Egypt paid $1.5 billion in arrears to international oil companies in May and June. Egypt's arrears to international oil and gas companies are estimated at about $3.5 billion. The CBE said that Egypt has received investments worth $8 billion in the first six months of 2017 from 150 global investment funds.

• Egypt launched the China Trade and Investment Exhibition at the Cairo International Fair Ground that was attended by a number of Egyptian and Chinese businessmen as well as officials from both countries. The participant Chinese companies and manufacturers displayed various products such as textile, garments, furniture, home electronics, building materials and cars.

• Egypt's net foreign currency reserves reached $ 44.029 billion at the end of April 2018, compared to $14.936 billion in June 2013.



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