The world is undergoing profound and extensive changes, with a reconfiguration of political and economic power and a crystallisation of international relations based on the rules, interests, and objectives of various international blocs. These changes span political, economic, industrial, and regional levels, resulting in a metamorphosis of the global economy driven by economic liberalisation, where trade relies on market mechanisms, capital flows, and multinational corporations.
The Egyptian economy cannot exist in isolation from these ongoing regional and international changes. It is inevitably affected—positively or negatively—by global developments, necessitating greater flexibility, adaptability, and preparedness to respond to both current and future events. Achieving this requires astute and informed planning to address the challenges at hand.
In 1981, Egypt embarked on a strategy aimed at development and modernisation, outlining the main principles of a long-term plan spanning 20 years, divided into four consecutive five-year plans. The long-term objectives were established along three primary axes:
1) Enhancing the Egyptian economy’s self-sufficiency in financing development.
2) Continuing to support and reform financial and social infrastructure.
3) Considering population and spatial dimensions of development as key components of the plan.
Central to this strategy was the goal of improving the standard of living for ordinary citizens. The first five-year plan (1982-1987) was reformative by nature, with the primary aim of balancing the various sectors of the national economy. This was to be achieved by advancing and stabilising development rates, and by focusing on the commodity sectors to sustain development, create employment opportunities, and strengthen infrastructure, particularly in construction, energy, and transportation. Additionally, the plan sought to address the deficit in the balance of payments and to couple economic development with genuine human development through workforce planning, training, and education, as well as by encouraging both local and foreign private investment to bolster development efforts.
The continuity and stability of development throughout the 1980s and the early 1990s culminated in the execution of a substantial investment programme totalling 328 billion Egyptian pounds, undertaken by both public and private sectors. This programme encompassed major structural projects as well as initiatives in productive and service sectors.
While the government and public sector entities had traditionally shouldered the burden of investment, the private sector increasingly contributed, accounting for about 62% of the total national product by 1994. The focus was not merely on fostering development, accumulating investments, and establishing core infrastructure. These efforts were accompanied by the implementation of a comprehensive reform programme, whose effects gradually manifested in the economic and social spheres, ensuring the programme’s stability and efficacy. This led to a significant reduction in the general balance of payments deficit, eventually turning it into a surplus. Additionally, the base of ownership expanded, and the money market became more active.
The economic reform programme yielded positive outcomes, contributing to a degree of economic stability that paved the way for accelerating the privatisation programme, promoting investment by removing barriers to investment projects, and positioning Egypt as an attractive destination for investment opportunities.
Principles of Investment Future in Egypt
Egypt seeks to attract Arab and foreign capital, as well as remittances from Egyptians abroad, to bolster its investment capacity. To this end, the government offers a range of incentives to encourage investment, including:
1) Provision of a trained technical workforce.
2) Availability of essential raw materials for various industries.
3) Access to intermediary and semi-manufactured raw materials.
4) Simplification of procedures for dealing with government authorities.
5) Streamlining of fiscal procedures.
6) Provision of customs cuts and tax relief for periods ranging from 8 to 15 years.
7) Affordable access to electricity and water.
8) Availability of transportation services and road networks.
9) Designation of new industrial towns for the establishment of additional projects.
Damietta and Small and Medium-sized Industries
The state places significant emphasis on the role of small industries in driving development. Drawing inspiration from the Japanese experience, Egypt seeks to highlight the necessary organisational and financial components to establish numerous small projects and industries in Damietta, thereby advancing economic and social development.
As previously mentioned, the primary objective of promoting small industries is to employ the maximum number of workers. Damietta stands out as one of the most attractive cities for labour, representing both the production and consumption sides, as well as saving.
The approach to achieving this objective and ensuring the growth of Damietta’s economy involves fostering a sense of belonging and loyalty among its people and encouraging them towards independent productive work. Efforts have been made to introduce a programme tailored to the unique characteristics of the Damietta workforce, aiming to improve administrative fields necessary for the growth of small projects and to provide them with the required technology and information.
Egypt has entered a new phase of national development, grounded in principles that seek to inspire confidence in the country’s economic capabilities. In addition to efforts to stimulate and revitalise the investment climate and to create an attractive environment for investors, there is a focus on providing opportunities for these investments to expand and grow. Consequently, Egypt is now aiming to transition towards an export-oriented economy. The success of investment expansion will not depend solely on the domestic market, as the international market will increasingly form the foundation of future economic policy.
Al-Salam Canal
The Al-Salam Canal is a technological and scientific achievement, designed to transport water from the Nile to Sinai for construction and agricultural purposes. This canal traverses the lands of Damietta, Al-Daqahliya, and Al-Sharqiya, west of the Suez Canal, before reaching Sinai, east of the canal. It draws water from a point approximately 2 km behind the Damietta barrages and irrigates an area of about 620,000 feddans, with 400,000 feddans in the Sinai desert and the remainder in the governorates west of the Suez Canal. The project aims to address the isolation of Sinai, increase investments and agricultural activities in the region, and create numerous job opportunities for the Egyptian workforce. The canal will also contribute to redistributing the population from the overcrowded Nile Valley and Delta to this new land.
The Port and Development in Damietta
Damietta port offers the governorate a wealth of opportunities, including:
1) Providing employment for more than 4,000 workers and employees across various companies and authorities within the port.
2) Enabling numerous individuals and private sector companies to obtain licences to engage in a variety of activities within the port, such as maritime procurement, importing and exporting, ship waste trading, ship provisioning, transportation, laundering, and logistics.
3) Saving the demurrage fees incurred when importing wheat—more than 300,000 dollars for each ship carrying 80,000 tons.
Damietta represents a significant element in Egypt’s broader economic reform programme, reflecting the country’s focus on development and modernisation. The integration of small and medium-sized industries, alongside large-scale projects like the Al-Salam Canal, underscores the importance of regional development in achieving national goals. The continued emphasis on enhancing infrastructure, attracting investment, and improving living standards aligns with global economic trends while addressing local needs. As Egypt transitions towards an export-oriented economy, regions like Damietta will play a crucial role in ensuring sustainable growth, reducing regional disparities, and positioning the country as a competitive player in the global market.