Economic development is the main engine for achieving sustainable development, as sustainable economic growth leads to job opportunities and increased income, which enhances the state’s ability to develop the necessary infrastructure to attract local and foreign investment, and to provide and raise the level of services necessary for the lives of citizens to improve their standard of living and enable them to continue to support the process of economic development.
This research paper highlights the sustainable development goals and the economic dimensions of Egypt’s Vision 2030 based on the importance of achieving this and the necessity of developing strategies and drawing development policies with a more balanced future vision, through the following axes:
1- Sustainable Development Goals
2-areas of development in Egypt’s Vision 2030
3- performance measurement indicators to achieve development areas
4- the components and opportunities in the Egyptian economy
5- the challenges of achieving economic development in Egypt
6- knowledge economy as an approach to achieving development in Egypt
7- policies to achieve economic development in Egypt at the sectoral level
The most important findings of the paper are as follows:
1-there are several axes for the Egyptian government to deal with all developments to achieve sustainable development based on enhancing the role of the private sector in economic activity, raising its participation rate in the economy to 65% of the total investments implemented within 3 years and supporting the localization of national industries to rely on the local product.
2-the state strategy is based on the complete exit, reduction or stabilization of government investments directed to certain sectors and activities, as well as studying the continuation or increase of government investments in sectors with strategic or social dimensions, and announcing a program for private sector participation in state-owned assets with a target of 10 billion dollars annually for 4 years.
3- Announcing a clear and binding plan to reduce public debt as a percentage of national income, and reduce the budget deficit over the next 4 years.
4-Proposing an integrated vision to advance the Egyptian Stock Exchange, which includes offering companies owned by the armed forces, providing basic goods at subsidized prices, and social protection measures.
5- Egypt must rely on its own resources to achieve economic development in terms of investment, awareness, or developing capabilities, and translate them into effective policies that benefit Egypt, through preparing strategies capable of achieving Egypt’s Vision 2030.
first axis: the goals of sustainable development
The 17 sustainable development goals adopted by all member states of the United Nations in 2015 are based on what has been achieved.
Among the successes in achieving the Millennium Development Goals (2000-2015), which represents a global vision and call to action to eradicate poverty, protect the planet, and ensure that all peoples enjoy peace and prosperity by 2030.
The 17 Sustainable Development Goals, adopted by all member states of the United Nations in 2015, are based on the successes in achieving the Millennium Development Goals (2000-2015), and they represent a global vision and call to action to eradicate poverty, protect the planet, and ensure that all peoples enjoy peace and prosperity by Year 2030.
The 17 goals are as follows: 1- End poverty, 2- Zero hunger, 3- Good health and well-being, 4- Quality education, 5- Gender equality, 6- Clean water and sanitation, 7- Clean and affordable energy, 8- Decent Work and Economic Growth, 9- Industry, Innovation and Infrastructure, 10- Reducing Inequalities, 11- Sustainable Cities and Communities, 12- Responsible Consumption and Production, 13- Climate Action, 14- Life Under Water, 15- Life in Righteousness, 16- Peace, justice and strong institutions, 17- Contract of partnership to achieve goals.
The Sustainable Development Goals require working in a spirit of partnership and in a practical manner so that the right choices can be made to improve life in a sustainable way for future generations. They provide clear guidelines and targets for all countries to adopt according to their priorities, taking into account the environmental challenges facing the entire world.
Countries are now required to achieve high rates of economic growth ،preserve the environment and the right of future generations to resources at the same time, in addition to fighting poverty and corruption, protecting the consumer, and paying attention to education, training and scientific research. Achieving all of this requires the availability of large amounts of savings and financial resources, which often What these countries cannot fulfill.
Second axis: areas of development in Egypt’s Vision 2030
1- Economic development
Economic development is one of the most important axes of the economic dimension in Egypt’s Vision 2030 sustainable development plan, along with the axes of energy, transparency and efficiency of government institutions. The first axis “economic development” includes 7 goals, the foremost of which is the stability of macroeconomic conditions, and it includes reducing the ratio of public debt to GDP and the ratio of the total deficit to GDP, and maintaining the stability of the price level.
The second goal is to increase competitiveness, diversity and reliance on knowledge, which includes increasing the degree of competitiveness of the Egyptian economy internationally and raising the contribution of services to GDP, especially productive services such as maintenance of equipment and equipment, design and communications, shipping and transportation, in addition to the third goal “maximizing added value”, which includes increasing the local component in industrial content and reducing the trade balance deficit.
Egypt’s vision states that by 2030, the Egyptian economy will be a disciplined market economy characterized by stable macroeconomic conditions, capable of achieving inclusive and sustainable growth, and characterized by competitiveness, diversification, and knowledge-based.
By 2030, the energy sector will be able to meet all the requirements of sustainable national development in terms of energy resources and maximize efficient utilization of its various sources (traditional and renewable), leading to an effective contribution to promoting economic growth, national competitiveness, social justice, and environmental preservation, while achieving leadership in the fields of renewable energy. And the rational and sustainable management of resources, and is characterized by the ability to innovate, predict and adapt to local, regional and international changes in the field of energy, in the context of keeping pace with achieving the international goals of sustainable development.
3- Knowledge, innovation and scientific research
By 2030, Egypt will become a creative, innovative and productive society for science, technology and knowledge, characterized by an integrated system that ensures the development value of innovation and knowledge, and links knowledge applications and innovation outputs to national goals and challenges.
The repercussions of Corona in the first quarter of 2020 and the Russian-Ukrainian crisis imposed additional challenges on the Egyptian state, and their solution requires the search for additional sources of financing the Sustainable Development Goals, the most prominent of these challenges are the reduction of foreign exchange reserves, increasing public debt, and increasing the unemployment rate.
The Egyptian government expected that the negative repercussions of the Russian-Ukrainian war would continue during the current year on the Egyptian economy, which has incurred about 465 billion pounds in direct and indirect impacts since the outbreak of the war in early February 2022. The bill for the direct impacts amounted to about 130 billion pounds, represented by the prices of strategic goods and fuel, in addition to To interest rates and tourism, while indirect effects represented by increased wages, pensions, social protection and tax exemptions amounted to about 335 billion pounds.
The crisis also has its effects on Egypt’s foreign exchange revenues from tourism.during the period from July 2021 to January 2022, the number of tourists arriving to Egypt from Russia and Ukraine recorded about 31%. Russia and Ukraine occupy the first and second places in the ranking of the number of tourists arriving to Egypt during the period from July 2021 to January 2022, while Poland comes in sixth place with a number of tourists up to 214.1 thousand tourists and Belarus in the ninth place with about 146.6 thousand.
There are axes to deal with this crisis based on enhancing the role of the private sector in economic activity, raising the percentage of its participation in the economy to reach 65% of the total investments implemented within 3 years, and supporting the localization of national industries to rely on the local product. According to the cabinet, this step is based on improving the business climate, launching a package of various incentives, and opening direct communication channels with the private sector.
The state’s strategy in this axis is based on complete exit, and the reduction or fixation of government investments directed to specific sectors and activities. As for the third axis, it will be a study of continuing or increasing government investments in sectors with strategic or social dimensions, and announcing a program for private sector participation in state-owned assets, with a target of $10 billion annually for a period of 4 years.
Third axis: performance indicators to achieve the areas of development
Egypt Vision 2030 developed a set of performance indicators that ensure quantitative measurement of the vision, as it specified values for the various indicators included in the strategic goals and objectives of the plan.
The performance indicators were divided into three groups. The first group expressed the strategic results, which was that the real growth rate would reach 12% in 2030, the per capita GDP would reach 10,000 US dollars, and the share of real GDP in the total real global product would reach 1. %, the percentage of poor people reaches 15%, and the percentage of the population below the extreme poverty line reaches 0%.
The second group is the output indicators. The performance indicators were represented in the percentage of industrial added value reaching 18% of the GDP, the percentage of merchandise and services trade reaching 65%, the net trade balance percentage reaching 1%, the percentage of services reaching 57%, and the percentage of the private sector’s contribution to the GDP reaching To 75%, and indicators at the output level determined that the percentage of high-technological exports of total Egyptian industrial exports reaches 6%, net foreign direct investment reaches $30 billion, and the value of outsourcing services revenues reaches $5 billion.
The third group expresses performance indicators related to inputs and specifies that income taxes reach 22.5%, value-added tax reaches 10%, the percentage of public investment managed by localities reaches 30%, the capital formation rate (investment rate) reaches 30%, and the value of Export support amounts to 8 billion pounds.
Fourth axis: components and opportunities in the Egyptian economy
1- Egypt’s strategic geographical location
Egypt is one of the most important global trade corridors between East and West. In addition to land transportation, which plays a major role in transporting foreign trade to and from Egypt, there are a number of canals, roads, and navigational and river corridors, whether natural or artificial, such as the Nile River.
2- Human energy
Egypt is one of the most populous countries in the Middle East, and its population is characterized by the fact that most of it is young. Egypt is considered a young country, with 61% of the total population under the age of 30.
3- The large size of the consumer market
Egypt is one of the most populous countries in the Middle East, and this makes it one of the largest consumer markets in the Middle East due to the large size of its population. Egypt also enjoys a network of international trade agreements that enable it to be a center for trade in the Middle East if these agreements are exploited well.
4- Tourism potential
Egypt has all the elements of tourist attractions, and tourism is one of the most important sources of national income and foreign currency for the Egyptian economy. In addition to the charm of nature and the splendor of the climate, Egypt includes about a third of the world’s monuments, and an ancient heritage. It is also characterized by the diversity of the tourism product between religious, historical, cultural, archaeological and therapeutic.
5-diversity of the Egyptian economy
Egypt’s economy depends mainly on the services sector, revenues from the oil sector, agricultural production, manufacturing industries, tourism revenues and Suez Canal income, which makes the Egyptian economy diversified, and protects this diversity from the negative impact of shocks that may affect one of these sectors, and it also gives Egypt a greater opportunity to participate and integrate into production and value chains at the global level.
Fifth axis: the challenges of achieving economic development in Egypt
1- Challenges at the macroeconomic level
Over the past few years, the Egyptian economy has been exposed to a number of crises, which have led to a decline in growth rates, investment, employment, state general revenues, Government flows, an increase in government expenditures, an increase in the total deficit, the current and trade balance deficit, and the decline of the cash reserve to the lowest levels.the challenges of economic growth can be divided into challenges related to fiscal and monetary policies, investment, in addition to employment-specific challenges.
2- Operational challenges
Employment challenges can be limited to high unemployment, poor efficiency in the labor market, and the high size of the informal sector. Although some believe that this sector has contributed to providing job opportunities for a large number of young people, this work is not considered appropriate due to low wages and the absence of factors Security and safety, and its concentration in the trade and distribution sector, which negatively affected the productivity of this sector and deteriorated the quality of products that are not subject to supervision and harm the interests of consumers.
3- Investment challenges
The Egyptian economy suffers from some challenges that prevent increased investments, including weak domestic savings rates, a decline in foreign direct investment, and a lack of clarity in the mechanisms for allocating land, implementing contracts, protecting investors’ rights, and the rules of governance and transparency. The new Investment Law No. 17 of 2015 is a step in the right direction to develop the business environment and make it more attractive for practicing economic activity.
4- Challenges at the sectoral level
A-The industrial sector… The most important challenges are the complexity of the energy support system for energy-intensive projects, and the non-compliance of many industrial products with international standards as well as environmental standards.
B-In the Agricultural sector, the rates of loss in agricultural products are increasing, in addition to the relative limitation of the advanced agricultural manufacturing sector, the stagnation of marketing systems, the absence of contract farming, the lack of interest in post-harvest transactions, and the high rates of encroachment on agricultural land, which exceeded about 20 thousand acres annually.
C-In the water and irrigation sector, the most important challenges lie in the continuous population growth, which results in an increase in the demand for water services with limited water shares available, the deterioration of water quality due to pollution and the lack of financing and investments directed to the provision of water services at all levels.
D-In the tourism sector, the challenges are the lack of low-priced airline packages, the weakness of the electronic system for procedures for dealing with tourists, the lack of incentive policies, the weak marketing capacity of Egyptian tourism, and the low level of infrastructure necessary to connect different tourist areas.
E-In the transport sector, there is a weakness in the level of services in transport networks, means and services, insufficient coverage of public transport networks, insufficient safety and security measures in all transport networks, means and services, and high rates of traffic accidents.
Sixth Axis: knowledge economy to achieve development in Egypt
The World Bank defines the knowledge economy as one that achieves effective use of knowledge for real economic and social development. This includes bringing and applying different international knowledge, in addition to adapting and creating knowledge in order to meet the needs of society.
The knowledge society is a society in which all institutions and organizations enable individuals to develop without restrictions, and provide opportunities to produce and use all types of knowledge on a large scale for all members of society.
Steps to build the knowledge economy in Egypt
Global Knowledge Index 2021
The Global Knowledge Index 2021 represents a measure of knowledge as a comprehensive concept closely related to the various dimensions of contemporary human life in 136 countries around the world. The index depends on measuring the extent of development in 7 sub-sectoral indicators: pre-university education, technical education, vocational training, higher education, research, development and innovation, information and communications technology, economy, and empowerment.
Egypt advanced from 72nd place out of 138 countries in 2020 to 53rd place out of 154 countries in 2021 according to the Global Knowledge Index report and from the United Nations Development Program (UNDP), which includes multiple other indicators such as clear education.
Four basic elements of the knowledge economy: –
1- The availability of an economic incentive and institutional framework, which allows for the existence of good economic policies that help in the efficient allocation of resources, innovation and the use of knowledge.
2- The existence of an effective innovative system within companies, research centers, universities, consulting companies and other organizations that may participate in achieving the knowledge revolution.
3- The availability of skilled, trained technical personnel who can utilize various skills to use knowledge efficiently.
4- Creating an appropriate and modern knowledge structure that facilitates the use of communications and information technology.
Step one: determine the design characteristics
It is difficult to implement a work program aimed at achieving radical change to build a knowledge-based economy without adopting a methodology based on the spirit of innovation.
Second step: drawing up a proposal on the path of the knowledge economy that corresponds to the identified design characteristics, to the culture and conditions of the country.
Third step: testing the proposed mechanisms and procedures associated with the knowledge-based economy by comparing them with the specific characteristics of the design, and verifying how realistic they are for field application.
Step four: launching the knowledge-based economy campaign
seventh axis: policies for achieving economic development in Egypt at the sectoral level
The policies related to this sector are to correct the imbalance in the market, support fair competition, provide additional resources to support industry and other sectors, and continue the export orientation and openness to African countries, by achieving greater interconnection between industry and export growth, and converting part of commercial activities to manufacturing.
2- The agricultural sector
The policies related to this sector are represented in developing agricultural technology, encouraging contract farming, regional agricultural cooperation with African countries, and developing the agricultural investment climate.
3- Water and irrigation sector
Developing an integrated water resources management system, supporting water cooperation between Egypt and the Nile Basin countries, implementing joint water projects with African countries, conducting studies, research, and scientific and technical applications, while building databases and e-government.
4- Tourism sector
Promoting Egypt (as a tourist destination) and new products in the Egyptian market to reach different segments, such as hospital tourism, religious tourism, eco-tourism, desert and oasis tourism, conference and exhibition tourism, and opening up to new promising tourism markets with African countries.
5- The banking sector
Creating a mechanism to motivate banks to finance feeding industries, developing and diversifying financing services, activating the role of the Export Development Bank and the Egyptian Export Guarantee and Finance Company, and expanding export risk services, especially for African countries.
Achieving economic development in Egypt must depend on its own resources, whether in terms of investment, awareness, or developing capabilities, and translating them into effective policies that benefit Egypt, through preparing strategies capable of achieving Egypt’s 2030 vision.