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Egypt's fourth industrial revolution and the IMF
Published in Al-Ahram Weekly on 30 - 08 - 2016

Events of the past months have shown President Abdel-Fattah Al-Sisi's interest in beginning the fourth Egyptian industrial revolution, complementing the first revolution in the era of Mohamed Ali, the second in the era of Talaat Harb, and the third in the era of the late leader Gamal Abdel-Nasser and the patriotic minister Aziz Sidqi.
Egyptians have noticed a number of voices, local and foreign, that have recently protested the state's interest in national projects for roads, bridges, new cities and social housing to the exclusion of productive sectors. But the fourth industrial revolution began in late 2015 and has become readily apparent in recent months. It is made clear in the state's concern to issue legislation and laws to develop the investment climate in Egypt and to implement tens of industrial and productive projects on various levels and in different sectors, some of which are described below.
- The resurrection of the Ministry of the Public Business Sector and the return of holding companies to their original overseer.
- The issuance of laws and legislation allocating LE200 billion to national banks over five years, for loans to owners of small enterprises at five per cent interest and to medium enterprises at seven per cent interest, to be paid in 5-7 years. This is a first in Egypt's history and will not be repeated.
- A fundamental solution to increase electricity capacity and create a production surplus by 2017.
- The establishment of tens of new industrial zones around the republic and the expansion of existing major industrial cities like Tenth of Ramadan, Sixth of October and Borg Al-Arab.
- Action by state leaders at home and abroad to deepen communication with industrial states and major industrial corporations to promote investment in Egypt.
- The discovery of several deep-sea natural gas reservoirs in the Mediterranean with a productive capacity equivalent to current production. This will double local production by 2018 and bring productive capacity to 11 billion cubic feet by 2019, which is equivalent to the production of 2009.
- The armed forces, represented by the National Service Projects Authority and Al-Nasr Chemicals, have increased the productive capacity of several chemical materials and phosphate fertiliser in Kom Oshim. They are currently implementing the biggest Egyptian project for the production of acids and phosphate fertiliser salts in Ain Al-Sokhna, to come on line in early 2018. Another industrial complex is being established in the New Valley by Abu Qir Fertilisers in cooperation with government phosphate companies.
- Licensing dozens of new factories for the production of fertiliser and rebar around the country.
- Offers to global companies to cooperate with Egypt for oil and gas exploration in large sectors of south and west Egypt and the south Gulf of Suez.
- The private sector and oil sector have established new oil refineries, to start production in 2018, and there has been increased productive capacity for petroleum derivatives, including bitumen, gasoline and butane.
- An agreement between the ministries of Military Production and International Cooperation and a Chinese company to establish an integrated industrial complex for the production of photovoltaic cells, at a capacity of 1,000 megawatts annually, relying on Egyptian quartz, as well as electric transformers and glass used in solar panels, totalling investments of $1.7 billion. Another agreement was made with the German-Swiss Terra Consortium to establish solar energy stations, with a capacity of 1,000 megawatts, and factories producing solar cells, for a total investment of $1.2 billion.
- An agreement with the German Siemens to establish wind stations for the production of 2,000 megawatts of electricity annuals, as well as the establishment of plants for blades and turbines.
- Final stages underway to conclude a contract with Russia to establish the first nuclear plant to produce 4,800 megawatts of electricity annually. The first unit producing 1,200 megawatts will be completed in 2023.
- Cabinet decree issued establishing the Egyptian Space Agency and setting its future promising role in acquiring, using, and launching satellite technologies, tracking satellites and training a generation of Egyptians versed in this field.
- Planning is underway to put public sector factories back in operation after they were returned to the state by judicial decree, most importantly the massive Commercial Boilers Company.
- Intensive meetings and studies between Prime Minister Sherif Ismail and ministers and other competent bodies to resolve the problems of textile industries and the iron and steel works in Tebbin.
- A specialised Chinese company has agreed to implement a project in Egypt to establish and develop specialised industrial zones by pumping in investments of $20 billion over 10 years.
- Contracts signed to implement investments in Matrouh governorate with Emirati and Saudi financing of LE70 billion for the establishment of tourism, administrative and logistics complexes.
- The establishment of a Silicon Valley in Borg Al-Arab as part of an ambitious plan by the Ministry of Communications to establish six technology zones around the country.
- The establishment of an Egyptian factory, in cooperation with China, to produce local mobile phones for the first time.
- The Arab Agency for Manufacturing and the Ministry of Transport are moving ahead with projects to locally produce train, metro and tram cars and develop local components.
- Efforts by Ahmed Darwish, the head of the General Agency for the Suez Canal Economic Zone, and his colleagues continue to promote the implementation of necessary projects, including in the fields of manufacturing, export, logistics and investments in the economic zone.
- The Ministry of Industry is studying the establishment of an integrated industrial complex for the production of pharmaceuticals and other preparations based on medicinal plants in the governorate of Beni Sueif on 400 feddans of land.
- The biggest saltwater fish farm is being implemented in Borollos in Kafr El-Sheikh, to be inaugurated in several months, along with other fish farms in Al-Bardawil and Al-Amal village.
- The biggest national project is underway to develop and dredge Egyptian lakes and remove encroachments, grasses and vegetation to increase annual productive capacity by approximately 700,000 tons.
- The biggest greenhouse project for local production is being implemented in North and South Sinai.
- An ambitious national project is underway to expand and increase petrochemical industries relying on gas and petroleum derivatives, as a means of reducing imports and increasing exports. The biggest government project for the production of ethylene and polyethylene will be inaugurated in the coming months, with investments totalling $1.9 billion.
- A presidential decree was issued to initiate a national project to locally produce passenger cars and various components.
- The Agricultural Development and Credit Bank allocated LE350 million for loans to small livestock growers to revive the veal project to increase annual livestock production.
- The establishment of specialised industrial cities around the country, such as the Medical Industrial Zone in Hosh Eissa in Beheira governorate, Furniture City in Damietta and Textile City in Minya (by Chinese investors).
- Eliminating the shortage of industrial land. The Ministry of Industry has so far put up 3.5 million square metres of 10 million square metres to be offered in 2016.
- An agreement with Russia to establish a Russian industrial zone in East Port Said starting in 2017 with investments of $10 billion and the goal of exporting 70 per cent of production and keeping 30 per cent for the Egyptian market.
- An agreement with the American company General Electric to establish factories in Egypt for the production of trains and components for wind energy plants.
These positive steps over just the last six months show that Egypt is on the cusp of the fourth industrial revolution in Egypt's modern history. We can see the importance of focusing on Egyptian human resources that can acquire and absorb the sciences and modern technologies, deal with equipment and sophisticated production lines, and be trained in marketing and advertising. We can also see that the most significant cause of the deterioration of productive capacities in companies, factories, hotels and public sector complexes is a weak marketing system for the local and foreign market and an inability to compete with foreign states and companies in the Egyptian, Arab and African markets. The most important ingredient for the success and superiority of any country in the world is the level of love and mutual respect between the people and its leaders in all sectors, and citizens' sense that the government is making decisions and taking action for the current and future welfare of the people.
In contrast with the positive, heartening measures seen in recent months, which bring the people closer to the state and officials and increase hope, we are seeing not so positive steps, like the return of talk of the privatisation of public sector companies, factories and institutions, even if in a different form than the privatisation of the last century, as well as news of talks with the International Monetary Fund for a loan of $12 billion over three years.
We are seeing a focus on solving the state's economic and social problems by explicitly telling the people that the Egyptian state is in economic danger and that the state is poorer than most Arab states and even many African and Asian states. We are told there are two ways. The first is to rely on palliatives, which involves borrowing, selling public sector companies and selling empty state lands to build housing at unprecedented levels. The second is for the people to cling to their land and future without an overseer and to protect public wealth for future generations by implementing the principles of austerity and economising, increasing production in a different way, limiting the import of some products for a specific period of time, and restoring the spirit of love between the people and officials. The rich must also do their duty to the nation by paying the necessary taxes and limiting excessive consumption, seen in foreign tourism, weddings and funerals, and imports.
We are all, rich and poor, in one boat and we will drown or be saved together. God willing, we will all be saved by mutual love and continuous work.
Undoubtedly the Egyptian people love and have felt an attachment to the public sector since the 1950s, and they hate privatisation programmes and the guardianship of the IMF. The whole people hope and appeal to the man who saved Egypt from the talons of terrorism and the Muslim Brotherhood, President Abdel-Fattah Al-Sisi, to recommend reconsideration of these prescriptives, which are unwanted by the Egyptian people. In return, every citizen must devote him or herself to constant work, to arm themselves with religion, knowledge and technology, and to fight against time to save Egypt and open the door of hope to our children and grandchildren. The solution is in the hands of the Egyptian people themselves.
The writer is former governor of Beheira.


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