The Egyptian government has undertaken many economic procedures that positively reflected on the country's credit rating in the last period, according to Mohamed Barakat, United Arab Banks (UAB) chairman. Barakat said: "Laws lately issued contribute to organising the investment environment and increasing investment flows for the coming period." He clarified that the government proposed several diversified developmental projects to fit the different categories of investors. Of primary importance to these projects were new and renewable energy projects. In this context, Barakat expects the next period to witness further increases for Egypt's credit rating, in addition to a change in the negative vision of a lot of sectors, whether banks or public institutions. However, to complete the economic reform system, according to Barakat, there are still important laws that must be revised, most notably are labour and litigation laws. He mentions that the real problem in Egypt is not issuing laws, but executing these laws and the bureaucratic procedures. In addition to economic reform, Barakat clarifies that political and security stability is necessary for increasing rounds of economic wheel and increasing growth in the next period. Barakat believes that small- and medium-sized projects are major axes in creating new jobs, especially for youth. They also help in combating terrorism in the region, because they represent more than 70%-80% of the value of Egypt's economy. "The banking system has liquidity estimated by around EGP 600bn and ready to fund all projects, whether small or huge," according to Barakat. UAB seeks, through addressing the World Bank, to develop a precise definition of the SME projects which aim primarily at helping Arab banks wishing to expand in the financing of this important sector, according to Barakat. In addition, there is an initiative by the union that aims to set up Arab fund for financing small and medium-sized enterprises. The idea of the fund is in the participation of more than 12 Arab countries to support the fund with a specific capital, through which small and medium enterprises will be supported in all Arab banks. "Arab governments should take necessary measures to facilitate license procedures required for commercial and industrial activities and to simplify the procedures as they are considered the glimmer of hope of the economic and social development," says Barakat. Barakat believes that UAB will play a pivotal role in the coming period through establishing a committee composed of 13 countries, whose main role is to coordinate between Arab banks to exchange experiences, especially with regard to the updates and applications of Basel in order to improve risk management. The banking sector represents 64% of the total economy of the Arab world, with assets of about $3tn, deposits of $1.9tn, and loans worth $1.7tn. Barakat called for the need to set a clear and specific strategic plan according to a framework. Through this strategy, banks seek to transform this segment of the financial system in the banking sector and that was evident in the Suez Canal certificates. Source: Daily News Egypt
