Competitiveness and Private Sector Development: Egypt 2010: Business Climate Development Strategy

This report presents the results of that assessment. It also highlights Egypt’s key reform priorities and describes the challenges and opportunities in improving Egypt's business climate to help Egypt realise its full potential as a high-growth economy.


The report notes that to attract further private investment, Egypt needs to improve the country’s anti-corruption measures, skills development, infrastructure and access to finance, especially for the country's small-and-medium sized enterprises. BCDS Egypt offers specific recommendations on how policies, institutions and regulations can be improved to increase predictability for investors and make Egypt a prime investment destination. Acknowledgements Preface by H.E. the Minister of Investment, Mahmoud Mohieldin, of the Arab Republic of Egypt Preface by H.E. Ambassador Marc Franco, Head of the Delegation, European Union in Egypt Acronyms Chapter 1. Business Climate Development Strategy Framework – The Methodology Used 1. Business climate reforms constitute an important area for reform policy intervention 2. The BCDS methodology focuses specifically on business environment policies 3. BCDS builds on OECD tools and instruments taken from the good practices of other international organisations and adapted to the region’s needs 4. Key substantive areas of business climate reforms were selected 5. The three-step BCDS process 6. Cross-cutting findings and summary of key recommendations per chapter Chapter 2. Recent Business Climate Reforms in Egypt 1. Privatisation programme and restructuring of state-owned enterprises 2. Trade liberalisation and trade facilitation 3. Tax policy and tax administration reforms 4. Monetary and exchange rate policy reforms 5. Banking sector reforms 6. Infrastructure reforms 7. Land and property registration reforms 8. Policies towards foreign investors Chapter 3. Macroeconomic Context of Egypt’s Business Climate Reforms 1. GDP growth and job creation accelerated from 2004 to 2008, and Egypt has weathered the global crisis comparatively well 2. Budget deficit and public debt have been broadly contained 3. Inflation remains high 4. Foreign direct investment increased significantly until 2008 but has fallen back since 5. Trade deficit persists 6. The financial sector’s resilience has improved 7. Major challenges persist for the Egyptian economy 8. The global economic crisis has set the bar even higher Chapter 4. Business Climate Development Strategy: The Assessment of Egypt’s Business Climate Key Findings from Phase 1 1. Cross-cutting findings to all 12 dimensions assessed 2. Dimension-specific findings for the 12 areas of Egypt’s business climate Chapter 5. Conclusion 1. Egypt has made progress on business climate reform which has translated into economic growth 2. More and further-reaching reforms are needed at the micro-economic level in order for Egypt to maximise its potential as an investment location 3. The next phase of the BCDS focuses on defining policy priorities and on project implementation References