August heralds an exciting month for Egypt as the country moves forward to strengthen itself both internally and externally. Experts around the world have come to recognize the country’s steps towards fortifying its partnerships with other nations, improving investor confidence, and taking steps to achieve energy self-sufficiency. Below are some brief thoughts from experts who commented last week on continuing as well as new developments in the nation.
In an opinion piece for Newsweek, Former Israeli Ambassador to the United Kingdom Ron Prosor commented on the new regional dynamic brought on by U.S. President Donald Trump’s renewed ties with Egypt and President Abdel Fattah el-Sisi. Prosor notes that Egypt stands as a wall against the spread of Islamic terrorism and is a key player in achieving lasting peace in the Middle East. In his own words, Prosor states:
“…Make no mistake, Egypt is a strategic ally for the U.S., and a strategic ally for Israel, too. Egypt’s relationship with Israel has never been stronger at both the military and intelligence level. The Trump administration’s renewed relationship with the Egyptian leadership reflects an awareness of the role that Egypt plays in the region and its centrality to maintaining regional security.
As the sun rises on a new day for the Middle East, the international community must understand that a stable and prosperous Egypt is a stable and prosperous region. Just as the Nile was the ancient patron of plenty, today, Egypt’s well-being is the region’s well-being.
… [Egypt] stands up to the Muslim Brotherhood’s extreme teachings and support for terror. It is bravely fighting Islamic State cells in the Sinai Peninsula. And it has taken a firm stand against Hamas, the Palestinian terror group which continues to hold the Gaza Strip and its 1.5 million inhabitants hostage.”
President Trump’s recent July 5 call to President el-Sisi and his previous invitation of the Egyptian President to the White House certainly signify an improved partnership between the two countries and an appreciation of the crucial role Egypt plays in the security of the region.
In the field of energy, important news broke last week that sheds light on Egypt’s push to reform its natural gas sector. After a two-year long effort by the government to shape the law, President el-Sisi signed a new measure which enables a new regulatory authority to better open the market to competition and eventually allow private imports of gas. This new legislation will help the country to meet the increasing domestic electricity demands and bring the state ever-closer to fulfilling its goal of energy self-sufficiency by 2019 through output from the Zohr gas field.
In a comment on this development, Head of Equity Research at Cairo-based investment bank Pharos Holding, Radwa El-Swaify, noted that, “This law effectively relieves the government from the burden of providing for the rapidly growing natural-gas consumption and turns it into a regulator … It’s all part of the same direction of having freer markets in Egypt.”
This move comes as part of Egypt’s greater push to improve its economy and spur renewed investments in the nation. Backed by the International Monetary Fund, reforms are wide-ranging and work to increase investor confidence and improve public finances.
As evidence that Egypt’s IMF-backed reforms are well-underway and bearing fruit, news reports noted at the beginning of this month that Egypt’s foreign-currency reserves reached a record high in July. This surge signifies renewed confidence in the Egyptian economy.
Senior economist at CI Capital Holding Hany Farahat, who often comments on Egyptian economic matters, noted that, “Egypt’s reserves now cover almost eight months’ of imports, which adds credibility to the new currency regime.” The data show that Egypt is able to attract strong inflows, “implying the country’s currency problems are almost over.”
In light of the Egyptian government’s new economic program, a budget deficit at a 5-year low, and securing of a $12 billion IMF loan in November, this is only the beginning of continued growth for Egypt.