The Egyptian economy is recognised as a remarkable story of success in economic and financial risk management, well represented by the launch of the National Structural Reform Programme (NSRP) in April 2021. Egypt has succeeded in laying the foundations of a more resilient and balanced economy through four main aspects of the NSRP: well-sequenced structural and legislative reforms; coordinated economic policies; efficient and effective social policies; and sound communication strategies in terms of public awareness. The global Covid-19 pandemic has not been the only external crisis that the Egyptian economy has successfully managed and mitigated its risks. The global financial crisis and debt crisis that took place over the past decade or so also negatively impacted the economies of the developing and emerging as well as the advanced countries. But the Egyptian economy had sufficiently diversified resources and was strong enough to confront economic and political instability thanks to policies able to contain and limit negative consequences. It displayed consistent and growing resilience towards all external and internal shocks and global financial imbalances. This resilience and good governance have also been increased through well-coordinated policies that consider public opinion to be a cornerstone of the success of any policies. Egypt has been able to contain the spread of the Covid-19 without halting the pace of its economic and structural reforms and while at the same time bolstering economic activities and providing support to affected households and hard-hit firms and sectors in order to maintain social cohesion. This means that the economy has been able to achieve macroeconomic outcomes that were better than had been anticipated. The reforms implemented in recent years have also helped to strengthen social protection and bring about institutional reforms, all boosting Egypt's resilience in the face of the pandemic. The government has accelerated the pace of implementing more dynamic and integrated reforms through concerted efforts consistent with the goals of its sustainable development strategy aligned with main environmental, economic and social outcomes. The first phase of the economic and social reforms was embarked upon in November 2016 through the implementation of a package of financial, monetary and social reforms that made the Egyptian economy one of the most resilient and competitive in the region and was reflected in its ability to absorb the negative effects of the global Covid-19 crisis. The government has now taken accelerated steps towards preparing the NSRF, the second phase of the economic and social reform programme. The NSRF was launched on 27 April and targets the real economy for the first time, bolstering it to maintain and achieve balanced and sustainable inclusive growth. It includes a set of well-sequenced structural and legislative measures to be implemented in the short and medium terms, all aimed at consolidating the governance and resilience of the real economy, bolstering productivity and export competitiveness and sectors having high competitive advantages such as the agricultural sector, the manufacturing sector and the communications and information technology sector. The Programme is in line with Egypt's Vision 2030 Strategy, which includes priority challenges for the Egyptian economy in the coming period in the light of significant geopolitical and geo-economic changes at both the regional and international levels. In implementing the programme, the government is adopting a highly coordinated and participatory approach with all the ministries and stakeholders concerned, along with the private sector and civil-society institutions. This ensures sound operational foundations in terms of integration, dynamism, coordination, comprehensiveness and integrated operational planning governed by performance indicators in order to ensure the quality of policy implementation and its economic, social, environmental and political returns. The implementation strategy is supported by a risk-and crisis-management approach that takes into account necessary preventive mechanisms for evaluating the impact of policies by measuring their economic and financial impacts across sectors. Given the outstanding performance of the Egyptian economy, a wide range of international financial and economic institutions have praised Egypt's remarkable success in economic and financial risk management, magnified in its positive and flexible containment of the direct and indirect impacts of the global Covid-19 crisis and affirming the solidity and resilience as well as the good governance of the economy. The Standard & Poor's credit-rating agency has kept the credit rating of Egypt in local and foreign currencies unchanged at the level of "B" over the long and short term, while also maintaining a stable outlook. This is the third time in a row since the outbreak of the global Covid-19 crisis in March 2020 that Egypt's credit-rating has been maintained, comparing favourably to countries with similar or higher credit-ratings and at a time when economic conditions have deteriorated in most similar and emerging countries. The unchanged rating with a stable outlook reflects the international view that pressures on external and government debt will be temporary and will gradually decrease from the beginning of next year supported by the growth of GDP and current account revenue. According to Standard & Poor's estimate, the Egyptian economy will be able to overcome the negative repercussions resulting from the global Covid-19 crisis thanks to steady improvements in major economic indicators such as the stability of public finance, the existence of healthy foreign-exchange reserves, and the continuation of government efforts to implement economic and structural reforms that will further improve the business environment and ensure the sustainability of the country's economic development. Egypt's economy has witnessed significant development in recent years, especially in promising sectors such as the manufacturing sector, the agricultural sector, the communications and information technology sector and the services and production sectors. The rates of goods and services exports increased even in the midst of the global Covid-19 crisis, while the economy as a whole maintained positive growth rates and saw a steady rise in foreign exchange reserves to $40.343 billion in April 2021, continuing to rise for the eleventh month in a row after being subjected to a significant decline in the first three months of the global Covid-19 crisis in March, April and May 2020. This has been in addition to the competent management of the sustainability of public debt and the stability of financial conditions and investment activities. All this confirms the solidity, good governance and resilience of the Egyptian economy, resulting from the diversification of the production structure and its growing resilience, not only in terms of being able to absorb external and internal shocks, but also to overcome them and take advantage of such shocks and crises as opportunities and challenges. Last but not least, the key factors of the Egyptian economy's success mainly stem from a well-structured economic system. This includes (i) the consistent coordination of dynamic economic policies and integration of development plans supported by key performance indicators with specific targets and exact timeframes; (ii) the engagement of the public in decision-making and the use of policy response tracking; (iii) the solid foundation of a diversified and productive economy, lowering dependence on external economies and creating well-based buffers of foreign reserves to cover sudden shocks; (iv) a proactive approach in managing economic risks at the domestic and international levels; and (v) the continued collaboration between the executive and legislative authorities in drafting laws and executive regulations to regulate the economy with a high degree of accountability and transparency as well as proper governance and the production of legislation compatible with new advances. The latter include managing the transition to a green economy and greater digitisation as well as the fourth industrial revolution. The writer is a member of staff at the Faculty of Economics and Political Science at Cairo University.
*A version of this article appears in print in the 27 May, 2021 edition of Al-Ahram Weekly
