Economic Development

Economic development is a crucial sector for the Italian Cooperation in Egypt, and it also a cross-cutting thematic that is included in several projects.  Since 2014, the government of Egypt started implementing a reform program, supported by World Bank, International Monetary Fund  and the African Development Bank  aimed at enhancing the country’s business environment and staging an inclusive growth. These reforms  are having a positive effect on the GDP growth reaching 4.3 % in 2015/16 compared to an average of only 2% in 2010/11-2013/14 (World Bank, 2017)[1].  However, wealth is not equally distributed and despite the government efforts, social conditions remain a concern;   Despite the Government’s current efforts, social conditions remain a concern; inflation caused by the currency floatation, energy subsidy reform and other food price shocks significantly affects the Egyptian households, especially the poor and the vulnerable segments of the population as well as the middle class. Unemployment continues to be high at 12.4 percent in the final quarter of the calendar year 2016, and rates are higher among youth and women.

 

The Italian Cooperation is working to promote a sustainable economic development in the country that support  the Egyptian government to increase the investments in the country and benefits vulnerable people, especially youth and women,  through initiatives that enhance their technical skills and hence their competitively on the labor market. These programs are expected to reduce vulnerable families to economic shocks leading to unemployment, or resorting to negative coping mechanisms such as child labour. Early or forced child marriage, irregular migration. AICS is also working with migrants, in particular to tackle the roots causes of migrations and improve their livelihood by promoting new employment opportunities and enhancement of technical skills.

 

Currently, the Italian cooperation in Egypt has two initiatives undergoing and two in pipe line.

 

The undergoing initiatives are two: the “Robbiki Leather City” programme worth 6 M Euros directly managed by the Italian Agency for Development and Cooperation in Cairo and “Initiatives for local Development of Egypt through the support of Egyptians abroad” (ILDEA) implemented by IOM.  The first project follows the ambitious “Robbiki Program” launched in 2004 by the Egyptian Government and targeted to: (i) the creation of a new industrial district for leather processing in the Robbiki industrial zone, about 50 Km from Cairo (Robbiki Leather City – RLC); and (ii) the subsequent transfer to the district of all production activities related to the leather tanning that are located in the central Old Cairo area of Magra el Eyoun, where are carried by outdated and highly polluting production means. Up to date, the infrastructure of the RLC have been completed, thanks to a major contribution of the Italian Cooperation. With the present initiative is meant to conclude what has been achieved, continuing to support the Tanners in the decisive phase of the transferring to RLC and upgrading the leather production activities. The initiative is focused to support the management of the Leather Tanning Technology Center (LTTC) and the RLC’s common facilities. ILDEA program aims to increase the impact of Egyptians expatriates’ financial and technical contributions by enabling their effective engagement in local communities’ development initiatives with an amount of 400,000 EUR with a possible scaling up phase with an additional amount of 550,000 EUR.

 

The two initiatives in pipe line are  “Support to Private Sector Development in Egypt” and  a credit Line Programme,  to be financed respectively with an amount of 45 M Euros and 12.6 M Euros. Private Sector Development in Egypt”; This programme, worth 45 Million of Euros, will be implemented in collaboration with the Ministry of Industry, Trade and SMEs. The main objective is to support the creation of an enabling environment for the private sector, that will ensure a sustainable development and an inclusive growth for local SMEs. In particular, the programme will focus on three main areas of intervention: (i) Venture Capital Facility for Startups to confront youth unemployment; (ii) Credit Guarantee Scheme to ensure better access to finance for SMEs; (iii) Technology Upgrade component to expand SMEs’ business and, in turn, create more jobs.

 

“Italian Credit Line with Social Fund for Development (SFD) for SMEs”. This programme, financed through a 12.6M-Euros soft loan by the Italian Development Cooperation, is implemented in collaboration with the SFD to support the enhancement of the local Private Sector. In particular, the SMEs have the opportunity to access the soft loan for the purchase of machinery, technology and patents of Italian Origin needed for the development of their businesses. Technical Assistance to SMEs is also provided. This is necessary to facilitate the access of end-users to the credit line.

[1] http://www.worldbank.org/en/country/egypt/