The Strategic Forum for Public Policy and Development Studies “Draya” issues a research paper on the crisis and its causes, consumption and production rates, energy sources in Egypt, the most important projects in this field, and finally the international outlook on the development of the electricity sector in Egypt.

The most important recommendations for getting out of the crisis :

– The need to accelerate diversification and dependence on new and renewable energy sources, especially solar-powered plants.

– Taking advantage of batteries that rely on solar energy generation by deploying them on the roofs of houses and factories and making use of them during power outages.

– Compensating for the shortage in gas production at the Zohr field as a result of reports that some of the field’s wells were out of operation due to the presence of a leak of sea water inside them, with the continuation of exploration and exploration for other gas fields.

– Take advantage of the current decline in gas prices by importing gas during the summer period.

– The importance of openness and disclosure to citizens and constant information about the government’s response to the crisis.

– Fair and regular distribution of electricity outages with no exceptions except for vital areas only .

– Reduce the hours of interruption in areas suffering from severe high temperatures in southern Egypt.

– Cooperation with international organizations and partners in order to fulfill their obligations to countries suffering from the effects of climate change and rising temperatures.

First: the crisis

Egypt has been hit by power outages before and their severity increased after 2011 amid the deterioration of electricity networks and their inefficiency amid the lack of investment in this sector, as well as the stagnation of production and the suspension of gas exploration contracts.

Indeed, confronting this crisis was a priority on the agenda of President Sisi, who, since coming to power in June 2014, has been keen to solve it and the state has launched an ambitious plan to confront the crisis by building a network of new plants: three gas-fired plants with a capacity of 4.8 gigawatts, namely Beni Suef and the new capital, burlus, operated by the German Siemens group, representing almost 40% of Egypt’s energy capacity and providing electricity to about 40 million Egyptians. In 2015, Egypt also began importing liquefied natural gas (LNG) for the first time in its history, docking two floating storage and re-conversion units (FSRU) in Ain Sokhna in the Gulf of Suez.

The Italian company Eni announced the discovery of a natural gas field in 2015 with reserves estimated at about 30 trillion cubic feet of gas, which is equivalent to 5.4 billion barrels of oil equivalent, and these reserves represent more than 135% of the current reserves of crude oil in Egypt, after which Egypt will become a net exporter of liquefied natural gas.

This discovery has strengthened Egypt’s position to become a regional energy center and a platform for trading gas, whether produced locally or imported from neighboring countries, and then re-exported after liquefying it.

These discoveries and this development contributed to Egypt playing an important role in meeting Europe’s natural gas needs after the Russian/ Ukrainian war, and in June 2022 the European Union signed a gas agreement with Egypt and Israel to increase gas supplies.

In 2023, Egypt exported 8.5 million tons of liquefied natural gas, ranking as the twelfth largest exporter in the world.

Second: the causes of the crisis

– The country is exposed to heat waves caused by climate change, amid increasing domestic consumption.

– The decline in natural gas production due to the presence of some errors causing cracks in one of the wells in the Zohr field, which led to the leakage of sea water inside it and stopped production completely .

– The Egyptian government stopped importing the fuel oil needed to operate the stations as a result of its high prices, it is noteworthy that the Electricity Holding Company had received more than 500 thousand tons of fuel oil and it was consumed to operate electricity production stations.

– The crisis of the shortage of foreign exchange necessary for the import of gasoline fuel mixed with gas for the operation of power plants in the country.

– Continue to support the electricity sector and sell it at less than its real price.

– Compliance with gas export contracts to Europe, which prompted the government to transfer part of domestic production to the European market .

– Israel’s decision after the events of the seventh of October and its war on the Gaza Strip to stop the eastern Mediterranean gas pipeline that connected Ashkelon in southern Israel to El Arish in Egypt, which negatively affected the duration of the interruption.

Third: consumption and production rates

Government data indicate that investments of up to 355 billion pounds (11.5 billion dollars) were made in the field of electricity production during the period from 2014 to the end of 2022, and the government invested about 85 billion pounds (2.75 billion dollars) in strengthening and modernizing the electricity transmission system.

– In 2022, Egypt exported about 8.5 million tons of liquefied natural gas to become the 12th largest exporter in the world, and about 60% of its natural gas production went to Europe.

Gas is still the largest source of electricity generation in Egypt at more than 79%, but it is lower than the previous year’s 82.9%. Electricity generated from natural gas decreased from 174 in 2021 to 159.3 TWh in 2022 by 8.5%.
In the same context, Egypt’s consumption of natural gas decreased over the past year to 60.7 billion cubic meters, compared to 62.2 billion cubic meters in 2021, an annual decline of 2.3%.

Gas exports jumped during the year 2022 to 8.4 billion dollars, compared to 3.5 billion dollars in 2021, and liquefied gas exports decreased to 2.9 million tons (3.9 billion cubic meters), compared to 3.9 million tons (5.3 billion cubic meters) in the comparative period of 2022.

Fourth: energy sources in Egypt

Egypt has a variety of sources of electricity generation between Steam and gas-fired plants based on fossil fuels, water plants based on the High Dam in southern Egypt and wind and solar-based plants such as the Zaafarana and Bannan project south of Aswan.

While solar plants operate only during the day, and wind turbines stop when the air movement stops, the greatest dependence remains on plants that combine steam and gas, which make up 52% of electricity stations in Egypt .

Egypt relies heavily on natural gas for electricity generation by 66%, so it has developed plans to diversify energy sources in the country by investing in the new and renewable energy sector, as it is one of the most developed countries in the Middle East and North Africa in terms of energy transformation projects, and ranks first in North Africa in terms of installed electric capacity (solar, wind and hydrogen energy).

The most important Egyptian projects in the field of electricity and energy:

-A report by the information and Decision Support Center of the Council of ministers indicated that “Egypt reached the fourth place in energy projects in the Middle East and North Africa during 2022-2026,” as confirmed by APICORP in its report, ” the value of energy projects in Egypt, both planned and projects under implementation during the period (2022-2026) reached about 100 billion dollars. The estimated value of the 10 largest gas projects in Egypt was set at about 14 billion dollars, compared to 12 billion dollars for the 10 largest oil projects in Egypt,”he said.

It pointed out that Egypt aims to generate 42% of its electricity from renewable energy sources by 2035.

– Egypt has one of the largest power plants in the world, the Bannan solar energy complex with a capacity of up to 1.8 GW, and the complex is also the largest solar energy farm on the African continent( 200 thousand solar panels equivalent to 90% of the electricity generated by the High Dam, with a total investment cost of up to 4 billion dollars.)

– the Kureimat solar energy project, the installation of photovoltaic cells on the rooftops of 121 MW as well as hydropower projects in Nag Hammadi with a capacity of 64 MW, and Assiut bat.

-Dabaa Nuclear Station: One of the largest electrical energy production projects on the African continent. It includes four nuclear reactors with a total capacity of 4,800 megawatts, with 1,200 megawatts for each reactor. The first nuclear reactor is scheduled to begin operating in 2028, and the other reactors will then be operated successively.

Future projects

The green hydrogen strategy announced by Egypt at the COP27 climate change conference aims to:

-An increase in GDP from 10-18 billion dollars by 2025.

-Creating more than 100,000 new jobs.

-Contributing to reducing Egypt’s imports of petroleum products.

-Reducing carbon emissions

This strategy is being implemented in cooperation with the European Bank for Reconstruction and Development (EBRD) and the Arab Union for Sustainable Development and Environment.

Within the framework of cooperation with Siemens, the Egyptian Electricity Holding Company will launch a green hydrogen pilot project in which the capacity of electrolyzers will range from 100-200 megawatts.
Signing a memorandum of understanding with the Norwegian company SCATEC, which aims to produce 1 million to 3 million tons annually of green ammonia.

-The Indian ACME Group’s production target is 2.2 million tons annually of green fuel
-The Saudi Al-Fanar Company aims to produce 500 thousand tons annually of green fuel.
-The German company H2 Industries (East Port Said Industrial Zone) established the first station to convert waste into green hydrogen with a production capacity of 300 thousand tons annually.

Egypt has sought to be a pivotal center for energy, through electrical interconnection with neighboring countries and its membership in various energy groupings at the continental level up to the international level, especially since the continents of Africa and Europe are among the least continents and regions of the world producing electricity around the world for the year 2021, (the percentage of electrical energy generated in… Africa represents 3.2% of the world’s total production, Europe’s production accounts for 14.2%, and Asia and the Pacific’s production of electrical energy accounts for 49.2%.

The figure shows the most prominent bilateral interconnection projects:

-The Egyptian/ Libyan electrical interconnection project with a target capacity of 2000 MW, the electrical interconnection project between Egypt and Sudan with a target capacity of 300 MW, the electrical interconnection project between Egypt and Saudi Arabia with a target capacity of 3000 MW, and between Egypt and Jordan with a target capacity of 2000 MW.

-Egypt / Cyprus / Greece electrical interconnection project: the project aims to make Egypt the Gateway of electrical interconnection between Africa and Europe through Cyprus to exchange electricity capacity up to 2000 MW.

-At the African level, the country is working to be a pivotal Center for energy and electricity trade by establishing an electricity trading market between countries that pool energy for East African countries EAPP.

Fifth: consequences of the crisis

Positive results:

– Registration of gas export revenues ranging from 100 to 150 million dollars per month, with an increase in the value of Egypt’s gas exports to reach 8 billion dollars by the end of June 2022.

– The reduction of domestic gas consumption by 10% brings returns of 300 million dollars per month.If it is reduced by 15%, it achieves returns of 450 million dollars per month.
Negative results:

Social effects related to:

– The temperature is increasingly rising, which affects citizens negatively, and social and political stability as a result of citizens ‘ discontent.

– The feeling of a state of inequality among citizens as a result of its non-interruption in all parts in an equal way, as well as the existence of exceptions for tourist areas, while these considerations were not taken into account in other tourist cities such as Luxor and Aswan.

Economic effects :

– Causing a decline in the rate of foreign investment in Egypt, especially as this will affect the business climate and attract investors.

– Ending the current crisis will require the government an additional 300 million dollars a month to import enough energy in addition to the value of state support for the sector of about 220 billion pounds (about 4.6 billion dollars), which will put pressure on the state budget, according to the minister of finance, especially since the state cannot pay from the foreign reserve of 46,125 billion dollars in May 2024.

– Fears of rising inflation rates, which have reached 35% on a monthly basis, especially in light of the government’s announcement of a trend to increase electricity prices, and adjusting the prices of consumer segments, as well as the rise in prices of cereals, fruits and vegetables as a result of crop damage due to high temperatures

Sixth: the international view of the development of the electricity sector in Egypt

Fitch expects:

– Strong growth in renewable energy sectors compared to 2021 (the growth rate of electricity generation from renewable energy sources (other than hydroelectric energy) will reach 13.9% in 2021, compared to 22.6% in 2022, and 23% in 2023)

Egypt will be one of the fastest growing non-hydroelectric renewable energy markets in the region over the next ten years

– Egypt is enhancing its competitiveness and becoming a very attractive destination for investors in renewable energy sources, thanks to strong support and natural solar and wind energy potential.

Egypt is also at the forefront of the Arab countries in the production capacity of solar and wind energy, with a capacity of 3,523 megawatts, and Fitch confirmed that electricity exports and green hydrogen projects will drive the long-term growth of the Egyptian energy sector, and the surplus energy supply in Egypt will remain high during the next ten years.

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The “New Republic” was strongly aware of the problem of informal housing and its dangerous repercussions, deriving from the revolution of June 30, 2013, considering it one of the urgent issues that needs a comprehensive confrontation to limit its spread and address its negative effects on the future of development in all its fields.

This paper addresses the issue of slums in Egypt, the extent of their impact on the national economy, and the role of the state in confronting it, through several axes.

First: the concept of slums

There are multiple definitions of “slums” around the world, but everyone agrees that slum areas are illegal and unplanned areas.

For example, the World Bank defines slums as “informal areas that suffer from some problems such as high population density and insufficient infrastructure and services.”

According to the United Nations, slums are “dilapidated and old areas located within the city or squatter colonies that occupy the outskirts of cities outside the urban plan.”

The Central Agency for Public Mobilization and Statistics defines slum areas as: “those areas that were established by self-effort on the lands of their owners or on state lands without official licenses, and lack basic services and facilities.”

Second: the development of slums in Egypt and the reasons for their appearance

The population of slums in Egypt is 22 million people living in 88 slums nationwide, and the total area of slums in the Republic is 160.8 thousand acres, representing 38.6% of the urban mass of the cities of the Republic (37.6% unplanned areas, 1% unsafe areas).

-The areas of the informal areas in the governorates of Sohag, Sharqiya, and Beni Suef represent the highest at the level of the governorates of the Republic with percentages of “71.1%, 5%, and 65.3%, respectively.
-The percentage of slums represents about 39% of the total urban mass of the Republic and is spread in 226 cities .
-There are only 8 cities free of slums, distributed as follows: “two cities in Suez governorate, and the same in Sharqiya, and 3 cities in Kafr el Sheikh, and one city in Giza governorate .

-Alexandria governorate occupies the first place in terms of the prevalence of slums, where the area of slums with 1 thousand acres amounted to 12.5% of the total area .

-Cairo governorate comes in second place with an area of 4 thousand acres by 12%, followed by Giza governorate with 15.5 thousand acres and 9.6% of the total area of informal areas .

-The percentage of the area of unsafe informal areas in Cairo and Ismailia governorates is 7% of the total area of unsafe areas at the level of the Republic .

-Unsafe informal areas with the second degree of danger come in first place, with 251 areas .

– The total area of unplanned informal areas reached 156.3 thousand acres representing 97.2% of the total total area.

-The area of unplanned informal areas in the three governorates (Alexandria – Cairo – Giza) is the highest at the governorate level, with a percentage of (12.8%، 11.8%، 9.8%) on the order of the total area of the unplanned regions of the Republic.

– The total number of unsafe informal areas in the governorates reached 351, occupying about 4.5 thousand acres, representing 2.8% of the total area of informal areas. As of 2014, Cairo governorate ranked first in the number of unsafe areas in Egypt with about 56 areas representing 15.4% of the total of those areas in all of Egypt.

– The total number of random markets in the Republic amounted to 1099 markets in 2015 containing 305.6.

The reasons for the emergence of slums in Egypt :-

– Rising prices for apartments

– Increasing childbearing and not keeping up with the pace of construction of new housing units for accelerated population growth .

-Leniency in the treatment of violators of State territory by officials and government agencies .
– Poor urban planning and lack of provision of basic services in some areas.

Third: The danger of slums

1-Social problems

– Low educational level and high illiteracy rate(29%), as well as low rates of middle and university education.
-43% in unsafe slums, and 37% in unplanned slums, suffer from deprivation of education, which has led to children dropping out of education and increasing the rate of child labor and their enrollment in inappropriate jobs.

– spread of “early marriage”(34%).

– spread of poverty and the rise in crime as a result of high unemployment rates.

-Slums in Cairo Governorate lack basic facilities such as electricity, water, and sanitation. All of these violations have led to an increase in crime rates.

2-Health problems

– Lack of availability of hospitals and medical centers.
– The spread of many diseases as a result of the lack of provision of clean water and sanitation.

3-Economic problems

– The agricultural area is shrinking due to the random urban encroachment on it.
– Increasing pressure on utility networks, infrastructure, roads and transportation.
– High unemployment rates in various forms.
– Building on agricultural land and converting it to residential land, which negatively affects the national income for agriculture.

Fourth: Slums and their economic challenges

Slum areas constitute a major obstacle to the economies of countries because they lack any proper urban planning, which causes massive chaos that impedes transportation and constitutes a huge burden on the city’s infrastructure, giving priority to slum dwellers for housing and shelter and not proximity to work.

The lack of adequate health and sanitation services, the spread of environmental pollution, high crime and corruption rates make slums a fertile environment for diseases, epidemics and social problems and increase the suffering of their residents, which contributes to increasing the burden on the state due to therapeutic and social costs.

Fifth: The state’s achievements in developing slums

The state has provided many successful models in developing slums. It has developed and created safe housing integrated with services and equipped for citizens who were living in inhumane areas that are not suitable for life.

Some of the state’s projects to eliminate slums are as follows:

State efforts to eliminate unsafe areas:
About 2 million citizens benefit from it, with a total of 246 thousand housing units, at a cost of 63 billion pounds, with 33 unsafe areas of the first class, 269 unsafe areas of the second class, 34 unsafe areas of the third class, and 21 unsafe areas of the fourth class. These areas include 54 districts in Cairo.

The state’s efforts in the development of unplanned areas:

The cost of upgrading the efficiency of infrastructure in unplanned areas reaches 318 billion pounds.56 unplanned areas have been developed with an area of 4,616 feddans, serving about 460 thousand families, while 79 areas are being developed with an area of 6,941 feddans, serving about 690 thousand families.

-Social Housing Project “Ahalena 1” in El-Salam 1 District, Cairo

The project was established on an area of 11 feddans and consists of 25 residential buildings, each building has 12 floors and each floor contains 4 residential units with an area of 90 meters with an electric elevator for each building. 32 housing units of them have been allocated for people with special needs. Ramps and wide doors were made specially for them. An electrical network and 1121 electricity meters for residential and administrative units, a water supply network, a 1,100 cubic meter tank to serve the project, two sewerage and rain networks were established. There is also a fire network for all residential, administrative and service buildings. 4 water wells to irrigate green areas were established as well. A shopping mall and 84 stores of various sizes were built so as to provide job opportunities for the residents of the region. A primary school with a total of 28 classrooms was fully finished and equipped. Moreover, the project includes an integrated medical center for health care services, a mosque that takes up to 500 persons and 18 workshops to provide job opportunities for women and men in this project.

Ahalena 2 in El-Salam 1 District, Cairo

The project cost 700 million pounds, and included 34 buildings, each building containing 12 floors, and each floor containing 4 units, for a total of 1,632 residential units. The project also includes 4 commercial malls, 176 commercial stores with an area of 45 square meters each, a basic education school with 33 classrooms, and a youth center on an area of 7,300 square meters.

2-Rawdat Al Sayeda, launched in 2016, was a very dangerous slum called Tal Al Aqareb (Arabic for the Hill of the Scorpions) encompassing huts and houses vulnerable to collapse.

The first phase consists of 16 five-storey buildings having a total of 816 residential units. The alternative-housing project is also earthquake-resistant, given it lies 11 meters above the surface of the rest of the area. The cost of the project is LE330 million, and it also houses 198 commercial units

The second phase is being implemented in the Fatimid architectural style. This project is located on an area of about 6 feddans, and it consists of 9 residential buildings, each building consisting of a ground floor and 5 floors.

Sixth: The vision of international institutions for the Egyptian state’s efforts to eliminate informal housing

The Human Development Report issued by the United Nations in 2021 pointed to the interest of the Egyptian leadership in the file of slum development as one of its most important priorities, in contrast to what was stated in its report in 2010, which indicated that slum areas lack the minimum standards of organization and security.
In 2023, the World Food Program confirmed that there is integration in sustainable development policies in Egypt, and the Decent Life initiative has proven the Egyptian integrated approach to development, as it included the rehabilitation of infrastructure, improving access to basic and health services to improve the quality of life in the poorest villages in marginalized rural areas

Egypt advanced in global indicators after the extent of its achievement in developing slums, according to the World Bank’s classification of Egypt in the “slum population as a proportion of urban population” index. It also jumped 13 places in the social risks index for the year 2021, including the real growth rate of the gross domestic product per capita, and the participation of… Labor force, trust in government, public social spending, political stability, and others.

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In the village of Benban in Aswan, the largest solar energy station in Africa and the Middle East was established to generate the equivalent of 90% of the energy produced from the High Dam, within the framework of the strategy developed by the New and Renewable Energy Authority, which aims to increase the supply of electricity generated from renewable sources to 42% by Year 2035.

The solar energy project in Benban is one of the largest clean energy projects in the world to confront the electrical energy deficit after the events of January 2011. It was started in 2014 to address the then energy crisis and support the national electricity grid.

In this context, the Strategic Forum for Public Policy and Development Studies “Draya” issues a research paper that sheds light on the Benban solar energy project and its economic and social impacts, in addition to clarifying the funding agencies and those in charge of the project, and how the project contributes to achieving the 2030 sustainable development goals.

The most important results of the paper were as follows:

-The station consists of 32 individual stations, each producing 20-50 MW, and four substations, generating approximately 1.5 GW of power, to support Egypt’s goal of meeting more than a third of its energy needs by 2035 through renewable energies.

-Increasing Egypt’s share of renewable energy sources to reach 20% of the electricity produced in 2022 and 42% by 2035.

-The Benban project enabled Egypt to attract investments worth 146 million US dollars to support this project alone.

-Egypt was able to attract investments amounting to $653 million to support and develop clean energy projects.

-Aswan Governorate witnessed an alliance of 40 international companies to create the largest complex for generating electricity from solar energy, which contributes to enhancing sustainability and generating clean energy. The project received 85% financing from the Bavarian Bank of the United States.

First: Benban station and the reasons for choosing its location

The Benban plant is the fourth largest solar power plant in the world, and was implemented in cooperation with the European Bank for Reconstruction and Development and the International Authority for Effective Finance. It contains 32 power generation stations built on an area of 8,843.3 acres on the Aswan-Cairo desert road in front of the village of Benban, with a capacity of 1,465 megawatts.

The Benban Solar Park was developed, and the area was divided into 41 plots of different sizes. The plots were allocated to about 30 developers who installed solar panels, inverters and other devices, and the state-owned Egyptian Electricity Holding Company built roads and infrastructure, including connections to the electricity grid. . Completely insulated GIS-type stations were constructed for the first time in Egypt, and the construction of the Benban solar power station was completed in 2019.

The New and Renewable Energy Authority selected 39 companies specialized in energy production according to international standards, including 9 international and Arab companies and 30 Egyptian companies out of a total of 200 companies that applied to implement this huge project.

It is worth noting that each of the 32 individual stations produces 20-50 megawatts, and four substations, generating approximately 1.5 gigawatts of energy, with the aim of supporting Egypt’s vision of meeting more than a third of its energy needs by 2035 through renewable energies. .
Reasons for choosing Aswan governorate:

– Availability of solar energy: Aswan has high solar radiation, which means that it receives a large amount of sunlight throughout the year, and this makes it an ideal location for a solar power plant.

– Availability of land: the Egyptian government has provided a large area of land (37.2 square kilometers) in Benban, allowing the development of a large-scale solar park. The availability of such vast territories is necessary to accommodate numerous solar power plants and infrastructure.

– Government support: the Egyptian government supports the development of renewable energy projects, including solar energy. This support includes the provision of land, facilitating permits and providing incentives to attract investment in the renewable energy sector.

– Strategic location: Aswan’s location in Upper Egypt makes it a strategic location for solar energy projects that can contribute significantly to the national energy grid, it allows the generation of clean energy that can be distributed efficiently throughout the country. Aswan is considered the future of the south according to the southern Egypt Development Studies.

Second: the economic and social effects of the solar power plant

Economic effects

Reducing greenhouse gas emissions:

Solar power generation of electricity without releasing greenhouse gases such as carbon dioxide, methane or other atmospheric pollutants, reduces the total carbon footprint and protects the environment for future generations, making it an ideal option for a sustainable future.

A source of renewable energy and promoting green energy:

The Benban project is considered an important example of the development of green energy, as it takes advantage of the power of the sun as a sustainable and renewable source, without depleting the limited fossil fuel reserves. This is in line with the global shift towards cleaner and more sustainable energy sources.

Less water consumption:

Unlike some conventional power plants that rely on water for cooling, solar photovoltaic (PV) systems require less water consumption, which contributes to water conservation.

Reducing air and water pollution:

Solar energy production does not generate air or water pollution during operation, which contributes to improved air and water quality

Enhancing energy security

Investing in renewable energy projects such as the Benban project enhances energy security by diversifying energy sources and providing green energy sources, such as solar energy, which provide a reliable and distributed energy supply, reducing dependence on fossil fuel imports. Egypt’s share of renewable energy sources has increased to 20% of the electricity produced in 2022, and it is expected to reach 42% by 2035.

Social effects

Improving the standard of living:

The expansion of employment opportunities and economic development associated with the Benban project can lead to an improvement in the standard of living in local communities, as increasing employment opportunities leads to an increase in income levels and access to basic amenities, which has a great impact on improving the quality of life of citizens.

Community Development:

The project can contribute to the overall development of the local communities surrounding the Benban solar plant, as infrastructure improvements, educational initiatives and social programs are often implemented as part of the corporate social responsibility efforts associated with such projects.

Environmental benefits:

While the impact is primarily economic and energy-related, the transition to renewable energy, as the Benban project contributes to, carries positive impacts on the environment, as reducing dependence on fossil fuels reduces air and water pollution, contributing to the fight against climate change, and enhancing the health and well-being of the public in general.

Skills development:

The implementation of renewable energy projects often includes training programs for local residents, which helps in developing skills and providing work experience to the growing renewable energy workforce, and promotes long-term sustainability.

Third: financing, partnerships and project managers

-The project was established in partnership with the private sector and specialized international expertise, with a total cost of about 4 billion dollars, none of which was borne by the state treasury, according to the Ministry of electricity.

-Aswan governorate witnessed the alliance of 40 international companies to create the largest solar power generation complex, which contributes to promoting sustainability and generating clean energy.

-The project has received 85% financing from the Bavarian Bank of the USA for the project and shows strong financial support from international financial bodies.

– The Bavarian bank provided the United States with a large percentage of debt, while the Arab African International Bank provided 15% of the remaining debt, providing a variety of sources of financing.

-The World Bank’s IFC led an alliance of the African Development Bank, the Asian Infrastructure Investment Bank, the Bahrain Arab Bank, the CDC Group, the Arab European bank, the green for Growth Fund, finfund, the industrial and Commercial Bank of China and the Austrian Development Bank by pledging USD 653 million to finance the construction and operation of 13 plants by six groups of private energy companies.

-The Multilateral Investment Guarantee Agency (Miga), a member of the World Bank Group, recently approved the provision of USD 210 million in political risk insurance for 13 projects in Benban.

-The EBRD is also involved in financing 16 projects with a total capacity of 750 MW, under a USD 500 million agreement to finance renewable energy in Egypt.

-The alliance also includes the United Nations Green Climate Fund (GCF), the Dutch Development Bank, the FMO Foundation, the Islamic Development Bank (IsDB) and the Islamic Foundation for the development of the private sector (ICD).

Fourth: the role of the station in achieving the Sustainable Development Goals 2030

– Economic development: the Benban solar park contributes to the economic development in the region by providing jobs and attracting investments.large-scale renewable energy projects often have positive economic impacts on local communities, as they are expected to achieve the highest economic growth rate in the south and represent the largest share of the population attraction in the southern Egypt development plan as a development resource.

The seventh goal: clean and affordable energy

The Benban solar power plant is directly in line with Goal 7 which aims to ensure access to modern, reliable, sustainable and up-to-date energy for all. By harnessing solar energy, the plant contributes to the generation of clean and renewable energy, reducing dependence on traditional fossil fuels, as the total solar power capacity increased by more than 9 times between 2018 and 2019, from 172 MW at the beginning of 2018 to 1,597 MW by the end of 2019.

Eighth goal: decent work and economic growth

The development and operation of the Benban solar park contributes to the creation of jobs and economic growth in the region. Large-scale renewable energy projects often require a workforce for construction, maintenance and operation, which provides jobs and supports economic development, as the project provided about 20 thousand jobs during the four-year construction period, and 6,000 permanent jobs necessary for the operation of the plant. This project has helped build solar energy expertise within local communities that will be able to benefit from this experience in upcoming projects in Kom Ombo, which is located close to Benban.

Finally, the Benban solar plant is an important step in Egypt’s use of solar energy, as it is one of the most important national projects in Egypt, which represents a milestone in the country’s march towards reliance on renewable energy, and a role model in the field of renewable energy that confirms Egypt’s commitment to transition towards a more sustainable future.. We expect that the project will bring more economic, environmental and social benefits to the Egyptian state in the near term

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In this context, the research paper aims to analyze the regional and international variables to which the Egyptian economy is exposed, clarify the economic effects of these variables on it, as well as shed light on the policies and procedures that the Egyptian economy can follow. Finally, the research paper presents several proposed solutions to enhance the performance of the economy and support its ability to withstand external shocks.

The most important solutions proposed by the paper to enhance the performance of the Egyptian economy were as follows:
-Increase the volume of national projects with a dollar yield and temporarily stop financing projects that need dollar spending.

-Expanding support to the Egyptian industrial sector by paying attention to the strategy of deepening local manufacturing.

-The current boycott campaigns are a golden opportunity for local products to increase their market space through increasing demand for local products.

-The government should focus on increasing the competitiveness and quality of exports and reducing the obstacles facing exporters as exports are a means of obtaining foreign exchange.

-Raising the interest rate will lead to a decline in investment, contraction of economic activity and increasing unemployment.

-Easing the restrictions on obtaining foreign exchange, which the private sector needs to obtain the raw materials necessary for production.

First: Analysis of the regional and international changes to which the Egyptian economy is exposed

The Egyptian economy was subjected to successive shocks (from the corona pandemic to the war in Ukraine). Where it influenced the gains of the economic reform plan, which began since 2016. The Russian-Ukrainian crisis in 2022 has led to significant repercussions on the Egyptian economy as it struggles to recover from the economic consequences of the covid-19 pandemic, as high inflation rates, declining wheat imports and dwindling tourist flow come on top of the negative consequences of this war. Thus, the risk of food insecurity has increased due to the fact that Egypt’s food imports are linked to these two countries.

Egypt sought a new loan from the International Monetary Fund in December 2022 in order to fill part of the financing gap.

The Executive Board of the International Monetary Fund approved a 46-month agreement with Egypt under the Extended Fund Facility worth approximately US$3 billion. The program includes a comprehensive package of policies aimed at maintaining macroeconomic stability and achieving comprehensive growth led by the private sector. The policy package includes a permanent shift to a flexible exchange rate system, a monetary policy aimed at gradually reducing inflation, fiscal consolidation to ensure a decline in the path of public debt while strengthening social safety nets to protect vulnerable groups, and broad structural reforms.

The “Extended Fund Facility” is expected to encourage the availability of more funding for Egypt from its international and regional partners. Despite the promising goals of the IMF loan, however, the transition to a flexible exchange rate policy led to a significant devaluation of the Egyptian pound, which negatively affected the purchasing power of Egyptians and the high import bill. Therefore, the Egyptian government has turned to increasing support for the poorest groups.

It should be noted that China is the second largest economy in the world after the United States, according to gross domestic product, and the world’s number one trading power, as well as being one of the most important engines of global economic growth, and its currency has become one of the IMF’s Special Drawing Rights basket of currencies, starting in October 2016. China’s national income is more than 10.4 trillion dollars, compared to 17.4 trillion dollars for the United States of America. China has a purchasing power equivalent to more than 15 trillion dollars, an estimated 3.7 trillion dollars in hard currency and gold reserves, a third of which is held in US Treasury bonds. China is seeking to reduce its dependence on the dollar, after the Chinese currency covers about 10% of World Trade. Since 2015, China’s arms exports to Africa have doubled, surpassing the US share and accounting for 17% of the African market.

China and the United States are locked in an escalating trade war that has seen rounds of tariffs imposed on each other’s imports, as well as increasingly strained relations due to disagreements over issues such as arms sales and military activity in the South China Sea.

Regarding the trade balance between China and the United States, it tends in favor of Beijing, whose trade surplus exceeded $375 billion in its exchanges with Washington in 2021, noting that the volume of trade exchange between the two countries exceeded $600 billion in 2020, and US exports to China in 2021 amounted to about $116.2 billion, while China’s exports to the United States amounted to about $492 billion in the same year. The United States imports aluminum, steel, electronics, clothing, and machinery from China, while China is the largest importer of soybeans from the United States.

Second: The economic impacts of current international and regional changes on Egypt

The instability and turmoil in the monetary policy of major countries have prompted an exodus of indirect investments in emerging markets, including Egypt, where about 20 billion dollars have flowed out since the outbreak of the Russian-Ukrainian crisis due to interest rate hikes in developed countries, which led to a sharp drop in the exchange rates of the local currency accompanied by record inflation levels as a result of the increase in the cost of imports, but the positive economic growth achieved over the past three years, on the one hand, as well as reforms in the balance of trade, especially the balance of energy, on the other, have pushed the Egyptian economy somewhat away from the severity of the external shock, which will performed Due to high energy and food prices, which undermined economic growth.

-Opportunities – Europe’s increasing dependence on Russian energy essentially pushes European governments to increase their investment portfolio with Egypt in the field of energy, especially natural gas in the short term and electricity in the medium and long term.

-The increasing dependence over the last two decades on factories in China and Southeast Asia has prompted major companies in the world, especially European and American companies, to reconsider the distribution of their factories and production lines around the world, which makes the reforms that Egypt implemented in infrastructure an opportunity to attract the largest possible amount of these investments, as well as About the availability and sustainability of energy on the one hand, and the low cost of labor on the other hand.

Challenges:

-Slowing economic growth:

The slowdown in global economic growth may lead to a recession that includes emerging economies, which may lead to lowering expectations for economic growth. According to the expectations of international institutions, the Egyptian economy is growing at a rate of 5.6% for the current year, amid expectations of a slowdown to reach 4.6% for next year.

-Increase in the general level of prices:

The rise in the general level of prices globally led to a further rise in prices at the local level, which in turn leads to an increase in the state’s obligations towards the most vulnerable groups, and increases the size of the general budget, which requires more borrowing, as the total budget deficit reached about 6.2%. As a percentage of GDP, the following figure indicates the relative distribution of public expenditures in the current budget 2022/2023.

High external public debt:

Egypt’s external public debt reached about $145.5 billion at the end of December from the level of $137.4 billion at the end of last September, an increase of about 5.8%, which may hinder the volume of spending allocated to investments, as interest payments amounted to about 45% of total revenues and about 33%. % of total public expenditures and the equivalent of 8% of the gross domestic product for the current fiscal year. The following figure shows the development of both interest payments on the one hand and the current and total deficit on the other hand.

Challenges of foreign trade:

The effects of the slowdown in international trade appear in two directions. The first is an increase in the import bill as a result of the rise in the price of oil, and about 20 billion pounds to move the exchange rate. The second trend is a decrease in the expected returns from Suez Canal revenues, as a result of the decline in the growth rate of global trade. It is expected that trade growth will decline. The global rate will reach 4.9% in 2023 compared to the current year’s estimated 6.7%, and the rise in interest rates by 100 basis points will contribute to increasing the general budget deficit by about 28 billion pounds.

Third: Policies and procedures that the Egyptian economy can follow

Egypt should resort to a set of policies and procedures to confront international and regional changes at the local level as follows:-

1-to make more efforts to protect the production and marketing activities necessary to meet local and global demand, and that supply chains continue to operate, which means protecting the existing infrastructure for processing crops, livestock and food, and other logistics systems.

2-finding new and more diverse food suppliers, relying on the existing stocks of food commodities and diversifying local production to ensure that people get healthy dietary patterns.

3-expanding the scope of social safety nets to protect the vulnerable.many will be pushed into the cycle of poverty and hunger by the ongoing conflict, which requires the provision of appropriate and targeted social protection programs.

4-avoiding ad hoc policy responses.reducing import tariffs or using export restrictions would help to address food security challenges.

5-enhancing transparency in markets and encouraging dialogue: ensuring greater transparency and information on the state of global markets will help the government and investors to make informed decisions in light of the fluctuations in the agricultural commodity markets.

Fourth:  proposed solutions to enhance the performance of the Egyptian economy and support its ability to face external shocks:

-Increase the volume of national projects with a dollar yield and temporarily stop financing projects that need dollar spending. Sources of dollar liquidity should be diversified more quickly and focus on sources that do not require large infrastructure.
– Expanding support to the Egyptian industrial sector by paying attention to the strategy of deepening local manufacturing. It is necessary to provide alternatives to imports in the Egyptian market to reduce its vulnerability to external shocks.

-Although the devaluation of the currency makes imports more expensive, it makes exports cheaper and increases global demand for them. But the government should take steps to increase the competitiveness and quality of exports, and reduce the obstacles facing exporters as exports are a means of obtaining foreign exchange. There should be more subsidies to support small and medium-sized enterprises in order to help them produce for export.

– -Raising the interest rate by the central bank is not the only solution to curb inflation, especially since inflation is not caused by an increase in demand, but by rising costs and shocks to global supply chains. On the contrary, raising the interest rate will lead to a decline in investment, contraction of economic activity and increasing unemployment.

– -Easing the restrictions on obtaining foreign exchange, which the private sector needs to obtain the raw materials necessary for production. In addition, the private sector is now facing a high cost of financing due to the tightening of monetary policy.

-Reducing the government’s crowding out of the private sector in obtaining local credit, as the bulk of local credit is allocated to the government and the public business sector and represents about 60% of local credit

The post The Egyptian Economy in light of International and Regional Changes: Scenarios and Solutions appeared first on المنتدي الاستراتيجي للسياسات العامة و دراسات التنمية.

Since January 2011, the Egyptian economy has been subjected to many pressures and strong shocks with the devaluation of the pound and the decline of its purchasing power, which negatively affected citizens and their ability to provide their basic needs, so the state had to intervene to relieve that suffering on the shoulders of individuals, especially low-income, and this has been evident since 2014 as the political leadership sought to raise the minimum wage.

In this context, the Strategic Forum for Public Policy and Development Studies “Draya” issues a report that sheds light on the movement of the minimum wage in Egypt during the period from 2014 to 2023, and its allocations in the state’s general budget, in addition to highlighting the relationship between rising wages, inflation, purchasing power, and the obstacles that It faces the wage system and ways to overcome it, through the following axes:

First: The reality of the workforce in Egypt.

Second: The movement of the minimum wage during nine years from 2014 to 2023.

Third: The cost of increasing the minimum wage from the state’s general budget.

Fourth: The relationship between rising wages, inflation, and purchasing power.

Fifth: Obstacles facing the wage system in Egypt.

Sixth: Proposed solutions and recommendations to address these problems.

Results of the research paper:

– The labor force in the first quarter of 2023 registered about 30.6 million individuals, compared to 27.6 individuals in the same quarter of 2014, an increase of 10.9%.

– The number of employees increased and amounted to about 28.4 million individuals in the first quarter of 2023, compared to 23.9 million individuals in the same quarter in 2014, an increase of 18.8%.

– The number of unemployed decreased by 40.5%, reaching 2.2 million individuals in the first quarter of 2023, compared to 3.7 million individuals in the first quarter of 2014.

– The minimum wage of employees in the country has witnessed 7 consecutive increases since 2014 until 2023, increasing from 1200 pounds in 2014 to 4000 pounds in 2023 with an increase of 233%.

– Raising the tax exemption limit from 12 thousand pounds in 2014 to 45 thousand pounds in 2023, an increase of 275%, in order to reduce the tax burden on low-income people.

– The approval of two exceptional grants “cost of living allowance ” for the first time within one year by the decision of the president of the Republic for employees of the administrative apparatus of the state, economic bodies and the business sector, where the first grant was worth 300 pounds the first of November 2022, and the second of 300 pounds the first of October 2023 .

– The wages of private sector workers have witnessed successive increases, as the minimum wage for private sector workers increased from 2,400 pounds in January 2022, to 2,700 pounds in January 2023, then to 3,000 pounds in July 2023, and then 3,500 starting from 2024.

– Approval of an annual periodic bonus for private sector employees of at least 3% of the insurance contribution fee, with a minimum of 200 pounds, to be applied from January 2024.

– Wage allocations and compensation of employees in the state budget increased from 207.2 billion pounds in 2014 to reach 470 billion pounds in 2023 at an increase rate of about 127%.

– The increase in inflation rates significantly during the period from 2014 to 2023 represents a major challenge that may prevent the achievement of the state’s efforts to ensure a minimum level of well – being of citizens.

First: The reality of the workforce in Egypt

The labor force in the first quarter of 2023 registered about 30.6 million people, compared to 27.6 million in the same quarter of 2014, with an increase of 10.9%, as the number of employed increased and reached about 28.4 million in the first quarter of 2023, compared to 23.9 million individuals in the same quarter of 2014, with an increase of 18.8%, while the number of unemployed decreased by 40.5%, reaching 2.2 million in the first quarter of 2023, compared to 3.7 million in the first quarter of 2014, according to the latest report issued by the cabinet of ministers.

It should be noted that the unemployment rate decreased by 6.3%, where it was recorded about 7.1% in the first quarter of 2023, compared to 13.4% during the same quarter of 2014

With regard to the distribution of workers according to the most important economic activities, agricultural and fishing activity included 18.1% of the labor force, with 5.1 million workers in the first quarter of 2023, compared to 26.9%, with 6.4 million workers in the same quarter of 2014, and wholesale and retail activity employed about 14.6% of the labor force, with 4.2 million employees in the first quarter of 2023, compared to 11.3%, with 2.6 million employees, in the same quarter of 2014.

Second: Wage movement over nine years

1) Wages of workers in the state’s administrative apparatus:

The minimum wage for workers in the country witnessed 7 consecutive increases from 2014 until 2023, with the minimum wage increasing as follows:

-1,200 pounds in 2014, compared to 700 pounds in 2011, an increase of 500 pounds.
-2000 pounds in 2019, an increase of 800 pounds.
-2,400 pounds in 2021, an increase of 400 pounds.
-2700 in April 2022, an increase of 300 pounds.
-3000 in October 2022, an increase of 300 pounds.
-3,500 in March 2023, an increase of 500 pounds.
-4000 in September 2023, an increase of 500 pounds.

2)-Wages of workers in the private sector:

The wages of workers in the private sector witnessed successive increases, as the minimum wage for workers in the private sector rose from 2,400 pounds in January 2022, to 2,700 pounds in January 2023, then to 3,000 pounds in July 2023, then 3,500 starting in 2024.

This is in addition to approving an annual periodic bonus for workers in the private sector of no less than 3% of the insurance subscription wage, with a minimum of 200 pounds, as the annual periodic bonus for the year 2023 was a minimum of one hundred pounds, provided that these new decisions are implemented as of January 2024.

We point out here that workers in the private sector receive a lower minimum wage than their counterparts in the government sector, and that there are a large number of companies that have not implemented the decisions to increase the minimum wage.

Third: The cost of increasing wages from the state’s general budget:

The increase in the minimum wage is reflected in the increase in wage allocations and workers ‘ compensation (title I) of the state budget, and during the period from 2014 to 2023, the allocations of this section of the budget witnessed a huge increase year after year as follows:

The increase in the minimum wage is reflected in the increase in allocations for wages and workers’ compensation (Part One) in the state’s general budget. During the period from 2014 until 2023, the allocations for this section of the budget witnessed a tremendous increase year after year, as follows:

1) 207.2 billion pounds in the fiscal year 2014/2015, compared to 171.2 billion pounds in 2013/2014.

2) 213.7 billion pounds in the 2015/2016 fiscal year, an increase of 6 billion pounds over the previous fiscal year.

3) 225.5 billion pounds in the fiscal year 2016/2017, an increase of 12 billion pounds.

4) 240.1 billion pounds in the fiscal year 2017/2018, an increase of 15 billion pounds.

5) 266 billion and 91 million pounds in the fiscal year 2018/2019, an increase of 26 billion and 37 million pounds.

6) 288 billion and 773 million pounds in the fiscal year 2019/2020, an increase of 22 billion and 682 million pounds.

7) 318 billion and 806 million pounds in the fiscal year 2020/2021, an increase of 30 billion and 33 million pounds.

8) 358 billion and 735 million pounds in the fiscal year 2021/2022, a financial increase of 39 billion and 928 million pounds.

9) 410 billion pounds in the fiscal year 2022/2023, an increase in value amounting to 51 billion and 265 million pounds.

10) 470 billion pounds in the fiscal year 2023/2024, an increase of 60 billion pounds.

From what was previously presented, it is clear to us that the allocations for wages and workers’ compensation in the state’s general budget increased from 207.2 billion pounds in 2014 to reach 470 billion pounds in 2023, with an increase rate of about 127%.

Fourth: the relationship of wages to inflation and purchasing power

There is no doubt that the Egyptian state has made unprecedented efforts to take care of the wages of workers in the state and the private sector, but the increase in inflation rates significantly during the period from 2014 to 2023 represents a major challenge that may prevent these efforts from achieving their goals, which are centered on ensuring a minimum level of well – being of citizens.

Due to Egypt’s heavy dependence on the import of goods (especially food and fuel) from abroad-despite the decrease in imports by 40%- the prices of these goods increase with the increase in the value of the dollar, as well as the impact of the exchange rate on local goods, as the rise in prices of imported goods leads to an increase in the cost of production of local goods, which leads to a decrease in the actual living value of wages, especially with the depreciation of the pound against the dollar.

Fifth: Problems and obstacles facing the wage system in Egypt:

-There is no uniform minimum wage that includes all wage earners in Egypt
-No law has been issued regulating the minimum wage, which makes it easy to circumvent, especially with regard to workers in the private sector, and no penalty has been stipulated for those who do not adhere to applying the minimum wage.

-Private sector workers receive a lower minimum wage than their counterparts in the government sector, in addition to the lack of a binding mechanism for implementing the minimum.
-The National Wage Council does not have a mechanism for complaints about companies’ non-compliance, or immunity for workers from being subjected to retaliatory penalties for demanding the implementation of the minimum wage, or for demanding better wages in general.

Sixth: proposed solutions and recommendations:

– The need for a legislative basis for the minimum wage: this necessitates the enactment of a unified law to restructure the wages of all wage earners in Egypt, so that their wages increase commensurate with price increases at least, and review the minimum wages of workers, whether in the government sector or the private sector every six months in light of the continuous increase in prices.

– The need to take care of the wages of workers in the private sector in the state : by providing a package of compensation and transfers to maintain their purchasing power.

– The need to have a mechanism that obliges the private sector to apply the minimum wage approved by the National Council, and a complaints mechanism in case of non-compliance with the implementation of decisions.
.
– The adoption by the National Wages Council of the principle of the Living Wage instead of the minimum wage: the living wage is defined as the wage that is granted to a family breadwinner, middle-aged, with accumulated experience in his field of work. This wage should vary according to skills and degrees of education, as well as years of experience and type of work, and the living wage benefits a large number of wage earners in Egypt with experience and family owners, who receive income less than the minimum wage, so these will benefit when the minimum living wage is applied to them, which achieves proportionality between the minimum wage and inflation rates, and the adoption of the National Council for wages of the principle of living wage requires more social research to identify and codify enough to ensure the individual, family and society availability of minimum requirements for well-being living .

– The National Wages Council follows an approach based on linking the minimum wage and inflation rates: each time the value of the minimum wage is raised or determined in general, this is done by periodically measuring inflation rates and determining the requirements of monthly consumer spending for the Egyptian citizen, and based on it, the minimum wage is determined.

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Illegal immigration is a global phenomenon that exists in developed and developing countries, and represents a threat to many of them because the resulting disturbances lead to compromising the economic, social and cultural privacy of these countries, and constitute a threat to their national security and their economic, social and political interests, even if the numbers of illegal immigrants on their lands diminish.

Egypt is one of the countries suffering from this phenomenon as a source and receiving country for illegal immigrants as well as being a transit country, so the strategic forum for public policies and Development Studies “Deraya ” issues a research paper highlighting its various dimensions through the following axes:

First: The reality of illegal immigration in Egypt

Second: The economic factors driving illegal immigration

Third: The negative economic effects of illegal immigration

Fourth: Measures taken by Egypt to reduce illegal immigration

Fifth: Ways to reduce the negative economic impacts of illegal immigration

Sixth: Recommendations

The most important findings of the paper are as follows:-

– Egypt, as a country of destination, transit and departure, has been exposed to waves of illegal immigration, as a result of the increasing political instability and civil wars on the African continent, and the situation witnessed by the Arab world of revolutions and divisions.

– Egypt hosts about 9 million refugees and migrants from more than 58 different nationalities, who enjoy various basic services.

– The number of refugees and asylum seekers in Egypt reached about 259.3 thousand refugees and asylum seekers in 2020.

Pressure on public utilities, loss of jobs for citizens, loss of tax revenues are the most prominent negative consequences of illegal immigration.

– Egypt has become a successful international model in the fight against illegal migration and in supporting refugees, amid international praise for the treatment of the Egyptian state.

– The Egyptian state has taken many security and legislative measures to protect its youth from death boat trips, and job opportunities through national projects have contributed to eliminating the phenomenon of illegal migration.

First: The reality of illegal immigration in Egypt

Egypt has three communities abroad, represented by ancient migration to Europe and America and temporary migration, where the number of expatriate Egyptians residing in non-Arab countries, such as Italy, the United States of America, Canada, Australia and Greece, is estimated at three million Egyptians. Or labor migration, represented in the Gulf, where official estimates indicate that more than six million Egyptians reside in the GCC countries, and the third migration that appeared in the nineties, represented by irregular
.migration

It should be noted that about 90% of Egyptian immigrants return to Egypt after a while because their main goal is to search for a better job opportunity, and the state and international organizations play an important role in reducing the phenomenon of irregular migration because it cannot be eliminated by 100%.

The geographical location of Egypt and the political situation witnessed by a number of countries in the region have contributed to the transformation of Egypt into a transit and destination country for refugees .Egypt hosts about 9 million refugees and migrants from more than 58 different nationalities, including Iraq, Syria, Yemen, Libya, Eritrea, Ethiopia, Somalia, Sudan, South Sudan and sub-Saharan African countries. the vast majority of them live in urban areas in Greater Cairo and Alexandria and enjoy various basic services

The previous figure shows that the number of refugees and asylum seekers in 2020 amounted to about 259.3 thousand, compared to 258.4 thousand in 2019, 246.7 thousand in 2018, 232.6 thousand in 2017, 213.5 thousand in 2016, 212.5 thousand in 2015, and 236 1 thousand in 2014, 230.1 thousand in 2013, 109.9 thousand in 2012, and 95.1 thousand in 2011.

Second: The economic factors driving illegal immigration

1- Population explosion: Population growth that exceeds the carrying capacity of the region or environment leads to population explosion. Population explosion and its consequences are considered a greater problem in developing countries.

2- Family reunification: Some illegal immigrants seek to live with relatives who live in a country they are not allowed to enter, such as a husband/wife or other family members.

3- Education: Families want to ensure a better education for their children.

4- The search for livelihood: It is one of the first and most important motives, as it leads immigrants to leave their homelands and migrate to any of the countries in which they find work opportunities to earn a living.

5-the societal transformations that most of the developing world countries are going through specifically, as these transformations carry increasing economic and social bottlenecks, escalating inflationary pressures, a low standard of living, and worsening crises in the areas of housing and utilities; Therefore, migration for work has become a necessary process

6-The high price of entry visas for some developed countries in particular. Therefore, some young people resort to the services of people called smuggling intermediaries, who facilitate the entry of migrants and their crossing of the border.

7- The lack and scarcity of labor in some countries: This is often due to the expansion of the areas of these countries and their location on a large geographical area, and in return, they suffer from a lack of population density. This causes a severe shortage of labor, which is offset by a high level of wages. These countries become a destination for any immigrant.

8-The policies and laws of the governments of countries that limit and prevent their citizens from immigrating outside their countries; This forces them to resort to illegal immigration.

Egypt has been exposed to waves of illegal immigration, as a result of the increasing state of political instability and civil wars on the African continent, and the state of revolutions and divisions witnessed in the Arab world and the increase in ethnic and sectarian armed conflicts, especially in Iraq, Syria, Libya and Yemen on the one hand, and the deteriorating economic conditions of most of the countries of the continent African.

Third: The negative economic effects of illegal immigration

There are negative effects of illegal immigration, such as

A- Pressure on public facilities: Illegal immigrants usually use public services such as health facilities, public schools, transportation, and parks, yet they do not pay taxes to build and maintain these facilities.

b-Job loss for citizens: Illegal immigrants are usually willing to work for low wages. They take jobs reserved for locals, which can be frustrating for citizens who cannot find reasonably paying jobs.

c- Loss of tax revenue: Employing illegal immigrants means that the employer gets away without paying the necessary taxes…which can undermine government programs and harm government projects that benefit us all, and this hurts everyone so that a few benefit.

d- The escalation of criminal and terrorist activities: Most illegal immigrants are only looking for work opportunities, but there is a large number of them involved in criminal activities without proper oversight of those who enter a country illegally.

Fourth: Measures taken by Egypt to reduce illegal immigration

During 9 years, the Egyptian state took many measures that enabled it to develop an integrated system to contain illegal immigration and reduce its risks, in an effort to preserve its true wealth of young people. The government enacted some laws, tightened control over airports, ports, and Egyptian borders, and implemented giant projects that accommodate thousands of young people to reduce illegal immigration.

The state’s efforts to combat illegal immigration, in light of its keenness to adhere to international conventions, have resulted in no ship departing to transport illegal immigrants from the Egyptian coast since September 2016. Three files were worked on to combat this type of immigration as follows:

A- The first file: establishing legislative and institutional frameworks

Law No. 82 of 2016 regarding combating illegal immigration and migrant smuggling and its Executive Regulation No. 983 of 2018 came to establish deterrent penalties for this phenomenon by criminalizing all forms of migrant smuggling, which helped law enforcement agencies eliminate smuggling networks.

In April 2022, the President of the Republic issued Law No. 2 of 2022 amending some provisions of the Law on Combating Illegal Immigration and Migrant Smuggling promulgated by Law No. 82 of 2016 in order to combat this phenomenon. The penalty was increased to become aggravated imprisonment for a period of not less than five years and a fine of not less than Five hundred thousand pounds and not more than one million pounds.

The National Strategy to Combat Illegal Immigration (2016/2026) was also launched, which targets the groups most at risk of exploitation by smugglers, namely young people (18-35 years old), children and their families, and those arriving to Egypt illegally. It also seeks to deter and punish immigration brokers and traders through… Strict procedures and penalties.

The government also established a number of bodies concerned with managing the illegal immigration file, the most important of which is the Ministry of State for Immigration and Affairs of Egyptians Abroad, which was created in 2015.

B-The second file: the security

There were infiltration operations taking place across the eastern borders and the western and southern borders, but they stopped thanks to the efforts of the Ministry of Interior and the Armed Forces in securing the borders very well. Attempts at illegal immigration of Egyptians and foreigners across the land and sea borders, especially those overlooking the Mediterranean Sea, were thwarted, and immigration brokers were besieged. Illegal workers, who facilitate the crossing of Africans and use Egypt as a transit country.

C- The third file: development efforts

Launching the “Decent Life” initiative to develop the Egyptian countryside to raise the quality of life for citizens in villages that source illegal immigration, as it contributed significantly to eliminating the causes of illegal immigration, by achieving comprehensive community development, as a budget worth one trillion pounds was allocated to the initiative.

2-Developing places and hotspots for illegal immigration, including Kafr El-Sheikh Governorate. The political leadership opened the industrial fish city project in Ghalioun, Kafr El-Sheikh, as the project provides thousands of direct and indirect job opportunities for fishermen and university graduates from the people of Kafr El-Sheikh and its neighboring governorates.

3- Facilitating all marketing procedures for the Small and Micro Enterprise Financing Initiative for Youth, and allocating an amount of 200 billion pounds for its implementation, especially in geographical areas where illegal immigration is widespread.

4- The Ministry of Immigration implemented the presidential initiative “Survival Boats,” which was launched by the President of the Republic as part of the recommendations of the third edition of the World Youth Forum in December 2019. The initiative contributed to raising awareness and training the most targeted groups to introduce them to the dangers of illegal immigration and its safe alternatives, according to a plan drawn up to include 14 governorates. It is one of the governorates most prone to illegal immigration.

Fifth: Ways to reduce the negative economic impacts of illegal immigration

The fight against illegal migration will not only come through awareness-raising processes, but also through the adoption by countries of some measures that contribute to changing the thinking of young people by:

– Increase and support national investment to be able to increase new job opportunities for young people who can completely stop thinking about immigration.

– Improving the health reality by paying attention to the health sector from hospitals and securing trained medical staff, modern devices and all kinds of medicines, and this can limit the migration caused by diseases and epidemics.

– The demand of governments to build housing associations for young people and sell them at affordable prices so that they can get married and start a family, and then stop thinking about immigration.

-Countries monitor their land and sea borders well, and set up military and security barriers in open border areas or on secret passages and crossings taken by people smugglers.

– Taking strict legal measures and deterrent penalties against every illegal immigrant who is arrested, so that the rest of the young people who want to do this type of immigration know their fate.

– The governments of the countries of immigration to spread awareness among their citizens and ask them to help their governments by refraining from hiring any person from outside the country who does not have a legal entry visa and immediately inform the authorities of the country about it.

– Allowing citizens to engage in the political situation and express their opinions without intimidation or intimidation.

-Providing suitable jobs and jobs for young graduates with wages commensurate with their fatigue, qualifications and the living situation of the country.

– Consolidate the idea of the motherland and strengthen their attachment to it, and provide intellectual, material and psychological comfort to increase and strengthen this attachment and refuse to abandon it and emigrate from it.

– Achieving the principle of equal opportunities, justice, equality and job descriptions, and providing the simplest rights and privileges for young people to support, assist and encourage them to work effectively, such as providing transportation, health insurance, appropriate wages, comfortable and healthy work environment, and others.

Sixth: recommendations

The Egyptian state has succeeded in managing the illegal immigration file and addressing this dangerous phenomenon over the past nine years, perhaps the most important of which are the following:

– Strengthening the spirit of belonging among young people, instilling the value of patriotism, motivating them to participate in political life

– Employing the religious dimension to raise awareness of the dangers of migration, and activating the role of religious institutions.

– Activating and increasing the role of civil society organizations in addressing the phenomenon of illegal migration, through direct contact with Target groups in the most exporting governorates of illegal migration, and clarifying the risks and alternatives.

– Increase investment in education in the provinces that are the source of illegal immigration, and pay attention to high-quality technical education.

– Highlighting the consequences of illegal immigration through educational courses and programs in schools and universities.

– The direction and support of production projects because they absorb a lot of manpower, and this is next to the giant national projects that Egypt is implementing now.

– Encouraging the private sector to support activities to combat illegal migration.

– Intensification of the media processing of the illegal immigration file.

– Investing and strengthening international and regional cooperation in the field of combating illegal migration

The post Illegal immigration in Egypt: economic effects and ways to reduce its aggravation appeared first on المنتدي الاستراتيجي للسياسات العامة و دراسات التنمية.

The Egyptian state attaches great importance to citizenship and social peace, upholding the values ​​of law and belonging, and empowering women with all their rights without discrimination. The state was also able to erase the effects of the era of real development and reform, in line with the challenges of the current stage, and moving towards broader horizons. These efforts received a positive outlook from international institutions and succeeded in strengthening Egypt’s leadership regionally and internationally.

 In this context, the strategic forum for public policies and Development Studies issues a research paper highlighting the economic empowerment in Egypt and its impact on improving the standard of living through the following axes:

First: analysis of economic empowerment indicators

Second: examples of economic empowerment programs

Third: the impact of economic empowerment in improving the standard of living

The paper reached the following main results:

-Egypt ranked first in the Investment Attractiveness Index in Africa, and advanced 8 places in the economic openness index, which measures opportunities for openness to trade, investment, entrepreneurship and governance

-Egypt advanced 6 places in the infrastructure and market access index, and also ranked 87th in the Sustainable Development Index 2022

-Egypt has advanced 11 centers in the Human Development Index, as well as 15 centers in the Global Youth Development Index, which depends on several sub-pillars, including education, health, employment and opportunities available to youth

-Egypt advanced 3 places in the quality of Life Index, where it ranked 54th in 2022, and advanced 7 places in the overall quality of Life Index for expatriates, where it ranked 47^th

-Egypt ranked 78th in 2022 in the Economic Empowerment Index, where it advanced 56 places, compared to the 134th place in 2014

-Poverty rates in Egypt have decreased to 29.7% in 2019/2020 compared to 32.5% in 2017/2018 with a decrease of 2.8%

-Economic empowerment has resulted in an increase in the ability of families to spend on the educational process, a decrease in dropout rates from education, as well as a decrease in the proportion of children under the age of five with dwarfism from 21% in 2014 to 13% in 2021.

First: Analysis of economic empowerment indicators Egypt advanced 5 places in the Investment Attractiveness Index in Africa issued by (RMB), which measures possible opportunities and risks for investors, as it ranked first in 2021 compared to 6th place in 2014, while it advanced two places in the Index of Foreign Direct Investments in Africa issued by (UNCTAD), which It measures global flows of foreign direct investment in billion dollars, as it came in second place in 2021 compared to fourth place in 2014. Egypt’s credit rating has improved, which reflects the country’s ability to fulfill its obligations when they fall due, as Fitch agency fixed Egypt’s credit rating at (B+) with a stable outlook in April 2022 compared to (B) with a stable outlook in December 2014. Standard & Poor’s also rated Egypt at (B) with a stable outlook in April 2022, compared to (-B) with a stable outlook in November 2014.

Egypt also advanced 8 places in the economic openness index issued by the Legatum Institute, which measures opportunities for openness to trade, investment, entrepreneurship and governance, as it ranked 102 in 2021 compared to 110 in 2014, while it advanced 57 places in the business environment index issued by The World Economic Forum, which relies on several pillars, including property rights and the extent of the impact of laws and legislation on the business and investment environment, ranked 38th in 2021, compared to 95th in 2015.

Egypt advanced 17 places in the IESE countries attractiveness index for capital and private property rights, which measures the attractiveness and quality of the investment environment and the ease of performing economic transactions, ranking 53rd in 2021 compared to 70th in 2016.

This is in addition to Egypt’s progress of 6 positions in the infrastructure and market access index issued by the ( Legatum Institute), which measures the quality of infrastructure that enables the flow of trade to and from international partners, to come to the 85th place in 2021 compared to the 91st place in 2019, noting that Egypt is one of the top 10 countries achieved an improvement in the index compared to 2011.

In addition to the above, Egypt advanced 26 positions in the competitiveness index issued by the World Economic Forum, which measures the competitiveness of countries through institutions, policies and factors that determine the level of productivity, where it ranked 93rd in 2019, compared to 119th in 2014, while Egypt’s points in the Budget Transparency Index issued by Budget partnership International improved to score 43 points in 2021 compared to 16 points in 2015, where the assessment covers all stages of the budget, whether drafting, approval, implementation, control.

Egypt ranked 87th in the Sustainable Development Index 2022 issued by the Sustainable Development Solution Network as a result of the improvement in the score, which evaluates the progress made each year regarding achieving the sustainable development goals, to obtain 68.7 points in 2022 compared to 66.8 points in 2014.

Egypt’s score also improved in the index of policies supporting the entrepreneurship environment issued by GEM, which measures the extent of encouragement and support directed at startup companies, as it obtained 4.6 points in 2021, compared to 3.3 points in 2015.

Egypt also advanced 100 places in the Road Quality Index issued by the World Economic Forum, which measures the efficiency, safety and breadth of roads, to occupy 18th place in 2021, compared to 118th place in 2015, in addition to progressing  11 places in the Train Services Efficiency Index issued by the World Economic Forum, which It measures speed, prices, punctuality, and availability of trains, as it ranked 34th in 2021, compared to 45th in 2019.

Among the strengths achieved is the decline of Egypt by 5.4 percentage points in the proportion of slum dwellers out of the total urban population, according to the World Bank, where it recorded 5.2% in 2018, compared to 10.6% in 2014, in addition to Egypt occupying the 13th place at the level of the best countries that have achieved an improvement in the points of the sanitation and drinking water index over ten years with a total of 9.3 points, noting that the indicator issued by Environmental Performance Index measures the extent of protection provided to human health against environmental hazards unsafe and unsafe sanitation.

As for the most prominent indicators of digital transformation, Egypt advanced 14 places in the Network Readiness Index issued by the Portulans Institute, which is based on digital readiness for 4 main pillars: technology – people – governance – impact on the economy and sustainable development, to come in 77th place in 2021 compared to the previous position. 91 in 2014.

Egypt advanced 46 places in the Government Readiness for Artificial Intelligence Index issued by Oxford Insights, which measures the extent of readiness to apply artificial intelligence in providing public services to citizens, as Egypt ranked 65th in 2021, compared to 111th in 2019.  Digital transformation indicators also include Egypt achieving 103rd place globally in the e-Government Development Index in 2022 after improving in total points, as the index issued by the United Nations measures the availability of digital services, remote communication, and human capacity development, to record 0.5895 points in 2022 compared to 0.5129 in 2014.

Egypt has also advanced two positions in the Digital Inclusion Index issued by Ronald Berger, which measures the extent of universal and equal access to technology and its use for all, to occupy the 50th place in 2021 compared to the 52nd place in 2017, as well as Egypt occupies the 23rd place globally in the Cybersecurity Index 2021 after improving by a total of points, where it scored 95.5 points in 2021, compared to 58.8 points in 2014, noting that the index issued by ITU assesses areas of improvement and increasing awareness of cyber risks and threats and confront her.

Regarding the most prominent indicators of the energy sector, Egypt advanced 5 places in the Effective Energy Transition Index issued by the World Economic Forum, which evaluates the performance of the energy sector through the ability to support economic growth and comprehensive access to safe and reliable energy supplies based on environmental sustainability goals, to come in 76th place. In 2021, compared to 81st place in 2018, Egypt also advanced 31 places in the World Energy Index, to occupy 54th place in 2021, compared to 85th place in 2014. The tripartite energy index issued by the World Energy Council is based on (security, justice, distribution Energy sustainability.

Regarding the most prominent environmental sector indicators, Egypt advanced 5 places in the climate change index, issued by Germanwatch, which is based on a review of the country’s policies and efforts to protect the climate, to occupy 21st place in 2022, compared to 26th place in 2014, while Egypt advanced 5 places in the ranking. Global Gas Production, issued by (BP), which is based on gas production in billion cubic metres, where Egypt ranked 13th in 2021, compared to 18th in 2014.

Egypt also advanced 91 places in the Human Development Index within the World Human Development Report for the year 2021-2022, which was launched by the United Nations Development Programme, UNDP, compared to 108th place in 2014, which is a measure of the average achievement made in the main dimensions of human development such as healthy living, a decent standard of living, and knowledge. Egypt moved from the category of countries with medium human development to the list of countries with high human development.

As for education and scientific research indicators among the most prominent indicators of human development and human building, Egypt advanced 19 places in the higher education index issued by the UNDP, which relies on several sub-pillars, including spending on education and the quality of universities, where it occupied the 35th place in 2021, compared to the 54th place in 2017.

With regard to the index of the ability of the educational system to meet the needs issued by the World Economic Forum, Egypt has advanced 41 positions, where it occupied the 67th place in 2021, compared to the 108th place in 2019, noting that the index measures the extent of the educational system’s contribution to creating a strong and competitive economy, in addition to Egypt’s progress in the Global Knowledge Index issued by the UNDP reached 42 positions, where it occupied the 53rd place in 2021, compared to the 95th place in 2017, and Egypt is the most advanced country in the world sectoral ones include pre-university education, technical education, vocational training, higher education, research Development and innovation.

Second: Examples of economic empowerment programs in Egypt

 Economic empowerment programs seek to provide assistance to the poor to start their own projects rather than providing permanent social care. These programs may also be governmental or by internal, external, and international non-profit civil society organizations. At the same time, economic empowerment programs help reduce poverty rates, by creating job opportunities for many families, and this effect is of great importance, as poverty leads to malnutrition, inability to receive health care, homelessness, begging, etc.

 Egypt’s experience is a pioneer in empowering the poor in rural areas and unleashing the potential of women in rural communities, especially since Egypt currently has a social protection network that includes 5.2 million families, about 22 million people, a percentage of almost 80% in the countryside and the illiteracy rate among them is 62%, which requires innovative methods of economic empowerment.

The state gave priority to integrating economic empowerment with food systems, and making the poor produce to meet their needs, and local and international cooperatives were established to serve this goal.

Among the initiatives that have been implemented in Egypt is the launch of the Opportunity Program to create 50,000 self- and third-party job opportunities with a budget of 50 million dollars, of which 35,000 projects are being implemented in cooperation with 18 civil society organizations in eight governorates, and President Abdel Fattah El-Sisi’s initiative to provide high-production livestock breeds for small farmers. To combat the decline in the productivity of local farm animals, with a budget of 150 million Egyptian pounds for small farmers, in cooperation with the Ministry of Endowments, the Ministry of Agriculture, and the Agricultural Development Bank, work began in April 2022.

There is also an initiative to provide high-production sheep and goat breeding for families in the border governorates, to cover the food needs of the population and their economic activities, which benefited 2,400 families in four governorates and 6,000 projects are being completed, all in the fields of animal production, providing each family with 2 to 4 sheep or goats as the main capital.

The government also places the issue of women’s economic empowerment at the top of the development plan for the year 22/23, where the national strategy for the empowerment of Egyptian women 2030 includes four main pillars, namely political, economic and social empowerment, and protection from all forms of violence against women.

In her plan document submitted to the House of Representatives and approved by the parliament, she stressed the importance of developing women’s capabilities to expand their professional opportunities, increase their participation in the workforce and achieve equal opportunities in terms of women’s employment in all sectors.

The National Council for Women also prepared the Egyptian Women’s Guide to Entrepreneurship, with the aim of enhancing the economic empowerment of Egyptian women. The guide aims to build the capabilities of women who want to start a project to help them generate income, in addition to helping women who already have a project and want to expand it, or who face problems in implementing it, by providing advice and guidance.

The “Women and Work” project, “Do Good” and “One Village, One Product” were implemented as programs to enhance women’s economic empowerment through information technology. The “Adha and Adud” initiative was also launched to empower women who own handicrafts with an authentic Egyptian character and work to develop it. And promote it. The “Egyptian Cotton from Planting to Harvest” initiative was launched to train women in improved harvesting to increase cotton productivity.

Third: The impact of economic empowerment on improving the standard of living

Egypt advanced 3 places in the quality of Life Index, where it ranked 54th in 2022, compared to 57th place in 2016, noting that the index issued by US News depends on several pillars, including access to food, housing, education and adequate employment for citizens.

Egypt advanced 7 places in the general quality of life index for expatriates, occupying 47th place in 2022, compared to 54th place in 2014. The index issued by InterNations relies on several sub-pillars, including well-being, health, safety and climate. Egypt also advanced 4 places in the index of the best countries in the world issued by US News, which relies on sub-pillars including cultural influence, trade openness, entrepreneurship, and quality of life, ranked 35th in 2022, compared to 39th in 2016.

It also advanced 17 places in the Best Destination for Expatriates index issued by InterNations, which measures the ease of residence for expatriates, as it ranked 35th in 2022, compared to 52nd in 2014.

As for indicators of citizenship, coexistence, and equality, Egypt’s score improved in the Community Peace Index issued by the Institute for Economics and Peace, which is based on sub-pillars related to indicators of violence, terrorism, and crime, as it obtained 2.5 points in 2022 compared to 3 points in 2014, noting that the lower The more points the better.

it also advanced 56 positions in the women’s Political Empowerment Index, where she ranked 78th in 2022, compared to the 134th position in 2014, as the index issued by the World Economic Forum measures the extent of gender parity in political empowerment opportunities, in addition to her progress of 22 positions in the Gender Inequality Index, where she occupied the 109th position in 2021, compared to the 131st position in 2014. In addition to being removed from the list of countries of concern for the sixth year in a row, according to the report of the US Commission on International Religious Freedom, thanks to the country’s adoption of the principles of religious tolerance, noting that Egypt was classified in 2014 on the list of countries of concern with regard to the file of religious freedom.

the most prominent indicators related to the tourism and antiquities sectors, Egypt has advanced 32 positions in the tourism and travel Development Index issued by the World Economic Forum, which measures a range of factors and policies that enable sustainable and flexible development in the field of Tourism and travel, where it occupied the 51st position in 2021, compared to the 83rd position in 2015, and advanced 38 positions in the index of safer countries, where it occupied the 65th position in 2021, compared to the 103rd position in 2019.

Finally, Egypt won the second place as the best diving destination in the world for 2021, according to Dive Magazine, and was also selected among the top 10 tourist destinations to visit in 2022, according to the Lonely Planet Travel Guide, as well as being selected among the top five tourist destinations on the African continent according to the Financial Times Magazine. This comes in addition to choosing Egypt among the best tourist destinations to travel to in the fall of 2022, according to CNN Travel Report, as well as being selected as one of the best tourist destinations in the world for 2022, according to Tripadvisor.

According to the Human Development Report for the year 2021/2022, poverty rates in Egypt witnessed a decline to 29.7% in (2019/2020) compared to 32.5% in (2017/2018), a decrease of 2.8%, as poverty in the governorates of Upper Egypt decreased from 52% to 48% during the same period, according to data from the Central Agency for Public Mobilization and Statistics on poverty statistics in Egypt. The following figure shows the increase in average annual family income in Egypt:

In conclusion, it is clear from the above the efforts made by the Egyptian state to support economic empowerment programs and provide the necessary funding for them, because of the positive effects of these programs on the economic and social reality, which is confirmed by the returns at all levels through the high level of economic and social indicators in the country.

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BRICS is an abbreviation of the first letters in the English language of the countries that make up the organization, which are: Brazil, Russia, India, China and South Africa. The group represents about 30% of the size of the global economy, 26% of the world’s area and 43% of the world’s population, and produces more than a third of grain production In the world. Member states have established the New Development Bank (NDB) with a capital of $100 billion to finance infrastructure and sustainable development projects in member states, as well as emerging market economies and other developing countries.

Interest in the BRICS bloc increased following the Russian-Ukrainian war and the accompanying restructuring of a new world order heading towards multipolarity, as several countries seek to join this bloc out of a desire to benefit from the economic and political advantages it offers, and to achieve a state of balance in the global economy.

After the “BRICS” group announced its invitation to Egypt to join its membership starting in January 2024, several questions emerged regarding the expected gains and the nature of the opportunities and challenges that the Egyptian state may face after joining, which is what this research paper answers in an analytical manner through several axes that come as follows: :

First: The economic importance of the BRICS bloc

Second: Egypt’s economic relations with the BRICS bloc countries

Third: The impact of Egypt’s accession to the BRICS bloc (opportunities and challenges)

Fourth: Estimating the gains of the new bloc

The most important findings of the paper are as follows:

-The total GDP of the BRICS member states will be about USD 25.9 trillion in 2022

-The BRICS group controls 17% of World Trade, and its current countries control 27% of the world’s land area, equivalent to about 42% of the total population of the Earth.

-Egypt’s exports to the BRICS countries increased by 5.3% to reach 4.9 billion dollars in 2022.

-The investments of the BRICS countries in Egypt amounted to 891.2 million dollars during the fiscal year 2021/2022.

-The size of the economy of the “BRICS ” group will become about 29 trillion dollars after the accession of the six new countries, representing about 29% of the size of the world economy

First: The economic importance of the BRICS bloc

The BRICS has become one of the most important economic blocs in the world today, due to the economic weight of its countries in light of its human, industrial and agricultural potential, which makes its decisions the focus of global attention and influence, as follows:

1-share of global gross product: the total GDP of the BRICS member countries is about 25.9 trillion dollars during 2022, which is 25.6% of the global GDP of about 101 trillion dollars in 2022, and it is also one of the countries that witnessed rapid economic growth rates, making it one of the largest global economies, such as China, the second largest economy in the world after the United States of America.

2- Contribution to global trade: The BRICS countries control 17% of the volume of global trade, according to World Trade Organization data. Looking at the global trade weight of the BRICS bloc in 2022, it was found that China leads the world with an export share of about 15% of total global exports, and comes in second place in terms of imports with a global share of more than 11%. Russia – second in the world in fuel exports – is ranked 15th globally in terms of exports, while India ranks 21st globally in terms of exports and 17th globally in terms of imports.

3- Human capital: The BRICS countries own about 40.9% of the world’s total population, with a total of 3.25 billion people out of a global total of about 7.95 billion people in 2022, making it a huge global market in terms of labor force, production, as well as distribution and consumption.

4- Diversity of the production structure: The commodity structure of BRICS exports in 2022 is characterized by diversity. Which gives these countries great opportunities for intra-trade and the integration of supply and production chains between them. For example: Russia has a huge production power of oil, natural gas, grains, fertilizers, nickel and its products, while China is distinguished by the diversity of its non-oil industrial production structure and leads the world in exporting many heavy industrial products. . South Africa is also distinguished by the manufacture and extraction of minerals and precious stones, especially pearls.

Second: Egypt’s economic relations with the BRICS countries

The BRICS countries have great economic relations with Egypt, where the volume of trade exchange between Egypt and the group in 2022 is as follows

– Egypt’s exports to the countries of the “BRICS ” group increased by 5.3% to reach 4.9 billion dollars compared to 4.6 billion dollars.

– The value of trade exchange between the two parties reached 31.2 billion dollars in 2022, an annual increase of 10.5% from 28.30 billion dollars, according to data from the central agency for public mobilization and statistics.

– Egyptian imports from Brazil, Russia, India, China and South Africa amounted to 26.4 billion dollars last year, an increase of 11.5% from 23.6 billion dollars in 2021.

– The Indian market was the first destination for Egyptian goods within the group in 2022 with a value of 1.9 billion dollars, followed by China with a value of 1.8 billion dollars, and Russia with a value of 595.1 million dollars

The BRICS countries began investing in Egypt over the past years, reaching $891.2 million during the fiscal year 2021/2022, an increase from the previous year, which amounted to $610.9 million, thus increasing by about 45.90%, and China came in first place with $369.4 million. Followed by India with $266.1 million, and South Africa with $220.3 million.

The number of companies established by the group’s countries in Egypt has reached 2,318, with a capital value of approximately two billion dollars, operating in several vital economic sectors, including the industry, services, construction, communications, and technology sectors.

China is at the forefront of the BRICS countries in terms of the volume of investments, as the number of companies established with the General Authority for Investment and Free Zones of the State of China is 1,345, and the contribution of these companies to the issued capital reaches 792.53 million dollars. China’s ranking on the list of foreign countries investing in Egypt is ranked 21st.

The Russian Federation ranks second among the BRICS countries investing in Egypt, as the number of companies founded by investors from Russia reaches 423, and the contribution of these companies to the issued capital reaches $124.97 million. The Russian Federation is ranked 47th among countries investing in Egypt.

There are strong partnership relations with Russia that have extended for more than 79 years of political, economic, military and diplomatic cooperation.the volume of trade exchange during 2021 amounted to about 4.7 billion dollars compared to 4.5 billion dollars in 2020, and Egyptian exports to Russia increased during 2021 to about 591.7 million dollars compared to about 515.6 million dollars in 2020.

Egypt is Russia’s first trading partner in Africa, with a ratio equivalent to 83% of the volume of trade between Russia and Africa, and Egypt obtains 33% of the volume of trade exchange between Russia and the Arab countries.

India: The number of companies established is 462, and the contribution of these companies to the issued capital is 751.64 million dollars. India’s ranking comes in 32nd place among countries investing in Egypt.

Brazil: The number of companies established at the Investment Authority is 28, and the contribution of these companies to the issued capital is $36.47 million, and Brazil is ranked 61st among the countries investing in Egypt.

South Africa: The number of companies establishing the State of South Africa in Egypt is 60, and the contribution of these companies to the issued capital is $292.16 million, and South Africa is ranked 64th among the countries investing in Egypt.

Third: the impact of Egypt’s accession to the BRICS bloc

The member states of the group play an increasing role in influencing the global economy, and thus the formation of a new multipolar economic strategy represents an opportunity to help the Egyptian economy. This is why Egypt’s joining the group represents a diversification of options for Cairo and a reduction in its exposure to any form of economic pressure. We review the opportunities and challenges related to Egypt’s joining the bloc as follows:

– Opportunities

1-the decision of Egypt to join the BRICS group directly contributes to benefiting from the experiences of participating countries in increasing manufacturing and production rates, as the agreement establishing the BRICS Development Bank allows Egypt to strengthen the trade exchange agreement with 68 BRICS countries, thus providing a common market for the promotion of Egyptian goods and products, next to the Comesa grouping, which supports the continuation of the strategic vision on a new diversification of international trade relations.

2-this bloc gives the member states a kind of balance and rapid trade exchange to revive their economies, as well as the formation of reserves to address the liquidity problem, and how to face global crises through the economies of the member states, which are considered the most and fastest growing in the world.

3- -reducing the demand for the dollar: the “BRICS” countries are working on the formation of alternative payment systems and the creation of a common digital currency and a reserve currency for World Trade, which is likely to be backed by gold; as they are working on the gradual development of a financial system away from the US dollar, and expanding the use of local currencies in trade exchange, in a way that achieves win-win cooperation.

4-Egypt’s accession will strengthen its important and influential role in Africa, through trade agreements between them, and it will be able to benefit from trade agreements such as the common market of the South (Mercosur), to become a center connecting Africa, Asia and South America.

5-expectations indicate more intra-regional investments and the placement of countries such as India, for example, on the Egyptian investment map. The Egyptian economy is looking forward to attracting investments in the fields of digitization, renewable energy, agricultural development, green environmental investments and infrastructure.

6- securing strategic goods: the BRICS countries produce a third of the world’s grain production, and Egypt, Russia and India have previously held discussions regarding the trading of wheat and rice, along with other strategic goods in the Egyptian pound, ruble and rupee.

7-settlement of payments resulting from intra-trade between Egypt and the countries of the group using their currencies without the need for dollars, euros or yen.

8-stressing that Egypt has become an independent political decision seeking to establish balanced relations with all parties.

B. challenges:

There are a number of challenges facing the bloc, both internal related to the extent of compatibility between the member states and the nature of their handling of key files and issues, and even bilateral relations between different countries within them, as well as external challenges related to the developments witnessed in the world and the range of current or upcoming wide variables.
There are also challenges associated with agreeing on future collective economic formulas

It is too early to agree on a single currency, but the ambition is currently related to exchanges in local currencies, reducing dependence on the dollar and transaction costs, and there is a state of freedom in trade exchanges without relying on the US currency .

Fourth: Estimating the gains of the new bloc

Three countries (Russia, China, and India) with international economic, political, and military weight are all seeking to play a greater role in the international arena and it seems obvious that they know-and even benefit-from American mistakes by making partnerships different from what the United States is doing. In light of these data and the political-military attraction sometimes between these giant economic powers and between America and Western countries, the dominance of the dollar will decline, but this will take some time.

Another important issue is the ability of the BRICS group to move forward towards more orderly, fairer and more established economic relations between the countries of the group. The following gains can be tentatively estimated:

1-after the size of the economy of the “BRICS” group was about 26 trillion dollars, representing about 6 percent of the global economy in 2022, after the accession of the six new countries will become about 29 trillion dollars, representing about 29% of the global economy.

2-with the increase of the number of BRICS countries to 11, the population of the BRICS countries will become more than three billion and 670 million people, which is almost half of the world’s population, while this percentage was at about 40% before the accession of these countries.

3-with the accession of both Saudi Arabia and the UAE to the “BRICS” bloc, there are oil forces with high production capacity, given the daily production volume of 10 million barrels of oil for both Russia and Saudi Arabia, and about three million barrels for the UAE, and in the presence of China within the bloc and as the largest importer in the world.

In conclusion, it can be said that there is a state of optimism in the language of numbers, the percentage of the contribution of the “BRICS” group reached 31.5% in the world economy, compared to 30.7% for the Seven industrial powers. The group seeks to reflect this superiority in practice by expanding its economic activities aimed at countering the dominance of the US dollar. The BRICS group controls 17% of World Trade, and its current countries control 27% of the world’s land area, equivalent to about 42% of the total population of the Earth, while the population of the group of seven countries is about 800 million people, but the bloc’s policy so far does not take the paths of conflict, all BRICS members are talking only about increasing the use of local currencies in intra-trade and the establishment of a common payment system, taking the Russian-Ukrainian crisis as an opportunity to achieve this goal.

Despite the optimism related to the success of the BRICS bloc in shaking the throne of the dollar, the de facto policy reduces this optimism, because reality strongly confirms that breaking the dominance of the US dollar in the global financial system is extremely difficult, as the dollar represents the most widespread reserve currency in the world at 61%, it is the main currency in World Trade and in the global stock markets, in the commodity markets, bank deposits, development finance and borrowing.

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The war led to a decrease in Ukraine’s grain exports to about 23.6 million tons in the 2022-2023 season from 33.5 million tons in the 2021-2022 season, rising food commodity prices around the world, inflation rates and worsening hunger around the world, where about 345 million people suffer from acute food insecurity, which is more than double the number recorded in 2019, according to estimates by the UN World Food Program.

The Strategic Forum for Public Policies and Development Studies “draya” issues a research paper aimed at analyzing the causes and repercussions of the food crisis, presenting the state of food security and nutrition globally and in the Arab world, then dealing with the efforts of international organizations to confront this crisis, and finally reviewing the efforts of the Egyptian state to address it:

1-domestic food price inflation is still high in most low -, middle-and high-income countries, where the inflation rate exceeded 5% in 70.6% of low-income countries, 81.4% of the lower middle-income countries, and 84% of the upper middle-income countries.

2-about 80.4% of high-income countries suffer from high food price inflation.

3-food price inflation in the Middle East and North Africa this year will slow growth to 3%, compared to 5.8% last year.

4-inflation accounts for between 24% to 33% of the food insecurity expected in 2023.

5-some 258 million people in 58 countries or territories faced severe food insecurity in 2022, up from 193 million people in 53 countries and territories in 2021.

6-about 53.9 million people suffered from severe food insecurity in the Arab region in 2021, an increase of 55% since 2010, and an increase of 5 million from the previous year.

7-more than half of the population of the Arab countries, i.e. 162.7 million people, could not afford to adopt a healthy diet in 2020.

The Egyptian state seeks to confront the food crisis by exerting more efforts through the following:

1-reclamation of more agricultural lands, as the area of cultivated lands in Egypt increased by about 9% to reach 9.7 million acres in 2021, and it is targeted to increase the area of the agricultural patch to about 3.3 million acres by 2030, to reach the total area of the agricultural patch to 13 million acres.

2- Expanding the activity of the stock exchange for commodities, and trading wheat on the stock exchange for the first time, which contributed to controlling and stabilizing prices in the local market, in light of the decrease in the price of a ton of flour extracted by 72% to 13.5 thousand pounds instead of 15 thousand pounds, and the decrease in the price of bran by 2000 pounds per ton.

3- Signing a $40 million grant agreement from the European Union, implemented by the Italian Agency for Development Cooperation, to enhance food security efforts in Egypt.

4- Implementation of the “European Union support for food security in Egypt” program funded by a grant of 100 million euros. The current development cooperation portfolio between Egypt and the European Union has amounted to about 3 billion euros.

5- Providing maximum support to the agricultural sector and farmers, and continuing to develop the contractual farming system to encourage the expansion of the cultivation of strategic crops, in addition to efforts to develop Egyptian breeds of livestock to enhance their production.

First: Analyzing the causes and repercussions of the food crisis

According to the latest update on the state of food security in the world on the World Bank website on June 1, 2023, domestic food price inflation is still high in most low-, middle- and high-income countries, as information for the period between January 2023 and April 2023 shows an inflation rate of more than 5% In 70.6% of low-income countries, 81.4% of the lower bracket of middle-income countries, and 84% of the upper bracket of middle-income countries, in addition to the suffering of about 80.4% of high-income countries from high food price inflation.

According to the report, the countries most affected by the rise in food prices are located in: Africa, Latin America, South Asia, and Europe, as shown in the following figure:

Figure No. (1) Food price inflation map

Source: IMF, Havre analytics, trade economics

The World Bank stated in a report entitled “When Destinies Change: The Long-Term Effects of High Prices and Food Insecurity in the Middle East and North Africa Region” issued in April 2023, that food price inflation in the region this year will lead to a slowdown in growth to 3%, compared to 5.8%. , last year. The bank thus lowered its growth forecasts for the region, after its previous estimates, published in October 2022, that the growth rate reached 3.5% in 2023.

The report of the food and Agriculture Organization of the United Nations (FAO) indicates that its food price index reached 143.7 points in 2022, an increase of 14.3% over 2021, the highest level since records began in 1990. The global food crisis has worsened for several reasons, including the increasing number of restrictions on food trade imposed by countries in order to increase domestic supplies and reduce prices, where 22 countries applied 28 bans on the export of food until March 13, 2023, and 10 countries applied 14 measures to limit exports.

A Moody’s report also indicated that global food prices have declined from their record levels recorded in March 2022, following the Ukrainian-Russian war, but it is likely that prices will remain at high levels throughout the current year. Moody’s identified the factors that lead to higher food prices, most notably the ongoing risks to crop production in Ukraine, the problems faced by the Black Sea initiative to transfer grain from Ukraine to the world, in addition to the scarcity of global supplies and climatic fluctuations.

It should be noted here that the prices of wheat and corn have declined in the recent period due to allowing Ukraine’s agricultural exports to resume within the Black Sea Initiative, which allowed the flow of Ukrainian agricultural exports, which contributed to a decline in crop prices by 10-15% from their record levels with the onset of the Russian-Ukrainian crisis.

According to the World Economic Forum’s Global Risks 2023 Report, the food crisis – along with the energy crisis – risks undermining efforts to address long-term risks, particularly those related to climate change, biodiversity and investment in human capital, and this crisis is expected to continue Over the next two years, the risks of a recession, mounting debt distress, and an ongoing cost-of-living crisis are increasing, driving a hole in climate action, and potentially triggering a geo-economic war.

The 2023 Risk Report indicates that failure to cooperate more effectively in mitigating and adapting to climate change would lead over the next ten years to continued global warming, an increase in natural disasters, loss of biodiversity and environmental degradation in general.

Second: the state of food security and nutrition

The global report on food crises 2023, published on the FAO website and released on 3 May 2023, indicates that 258 million people in 58 countries or territories faced acute food insecurity at crisis or worse levels in 2022, up from 193 million people in 53 countries and territories in 2021. This figure is the highest in the history of the report, which was first released seven years ago.

The report added that individuals in 7 countries (Afghanistan, Burkina Faso, Haiti, Nigeria, Somalia, South Sudan and Yemen) have faced catastrophic levels of food insecurity, which indicates the risk of famine and very dangerous levels of malnutrition in several regions of these countries. . Acute food insecurity occurs when a person is unable to consume enough food, which would put their life or livelihood at grave risk.

The “Regional Overview of the State of Food Security and Nutrition 2022” issued by the Food and Agriculture Organization and the International Fund for Agricultural Development confirms that hunger and malnutrition have reached critical levels in the Arab region, especially after the COVID-19 pandemic and war in Ukraine has access to basic foods.

The report reveals that an estimated 53.9 million people experienced severe food insecurity in the Arab region in 2021, an increase of 55% since 2010, and an increase of 5 million over the previous year. The report also warned that moderate or severe food insecurity negatively affected about 154.3 million people in 2021, an increase of 11.6 million people from the previous year.

He also explained that half of the population of Arab countries could not afford the cost of adopting a healthy diet in 2020. The cost of adopting a healthy diet has been increasing in the Arab region every year since 2017, as the cost in 2020 reached $3.47 per person per day.

Third: the efforts of international organizations to confront the food crisis

In April 2022, as part of a comprehensive global response to the existing food security crisis, the World Bank announced the availability of up to $30 billion over 15 months, including $12 billion in new projects. The goal of this funding is to scale up short- and long-term responses along 4 focal points to enhance food and nutrition security, reduce risks, and strengthen food systems: (1) support producers and consumers, (2) facilitate increased trade in food and inputs, and (3) support the most needy families, and (4) investing in sustainable food and nutrition security.

The Bank achieved its commitment target of $30 billion for the food and nutrition security response. Between April and December 2022, the Bank’s food and nutrition security commitments under the new loans exceeded $12 billion, almost half of which was provided to Africa, one of the regions hardest hit by the food crisis. Examples include:

-At a cost of USD 766 million, the strengthening the resilience of food systems in West Africa program is increasing
food insecurity preparedness and improve the resilience of food systems in West Africa.

-An additional USD 150 million grant for the second phase of the food security and Resilience Response project in Yemen, which will help address food insecurity, strengthen resilience, and protect livelihoods.

– A USD 300 million project in Bolivia will contribute to increasing food security, market access, and the adoption of climate-smart agricultural practices.

-A $315 million loan to support Chad, Ghana and Sierra Leone to increase their preparedness for food insecurity and improve the resilience of their food systems.

– A USD 130 million loan to Tunisia aimed at reducing the impact of the war in Ukraine by financing vital soft wheat imports and providing emergency support to cover barley imports for dairy and seed production for small farmers for the upcoming planting season.

-The $3 billion Enhancing Food Systems Resilience in Eastern and Southern Africa program is helping countries in both regions increase the resilience of their food systems and their ability to respond to rising food insecurity.

Fourth: The Egyptian state’s efforts to confront the food crisis

The Egyptian state seeks to confront the food crisis by exerting more efforts through the following:

1- Reclaiming more agricultural lands, as the cultivated land area in Egypt increased by about 9% to reach 9.7 million acres in 2021, compared to 8.9 million acres in 2014. The 2023/22 plan aims to increase the agricultural area by half a million acres within the scope of projects Horizontal expansion, which includes the Mostaqbal Egypt and the New Delta project on the Dabaa axis in the northwestern coast, the Toshka development project south of the New Valley, and the East Owainat project in the southwestern part of the Western Desert.

2- Increasing the self-sufficiency of some strategic crops by expanding agriculture and reclaiming more land, as the state aims to increase the area planted with wheat by about one and a half million acres over the next two years to reach self-sufficiency to 65% by 2025.

3- Providing maximum support to the agricultural sector and farmers, and continuing to develop the contract farming system to encourage the expansion of strategic crop cultivation.

4- implementation of a number of projects in the field of livestock development and maximization of its products. These projects are represented in the establishment of several farms for breeding and fattening cattle of meat breeds and other farms for raising dairy cattle and the establishment of integrated modern automated slaughterhouses in addition to factories for various dairy products.

5-the implementation of giant projects for the development of fish resources in Ghalioun, Fayrouz and Dibba, made Egypt ranked first in Africa in the field of fish farming, and the sixth globally, as the output from fish farming areas in the country has been increased from 1.1 million tons in 2014 to 2 million tons so far.

6-Implementation of the “European Union support for food security in Egypt” program funded by a grant of 100 million euros. Projects related to the remaining amount, estimated at 60 million euros, are being agreed upon. This is to meet the challenges of food security resulting from the Russian-Ukrainian war, in addition to strengthening national efforts in the field of grain production and storage, stimulating climate resilience and increasing strategic grain storage capacities.

7- The current development cooperation portfolio between Egypt and the European Union has amounted to about 3 billion euros. These projects are financed through European financing mechanisms within the framework of bilateral and regional cooperation, and the Blended Finance mechanism.

8– Three phases of the debt swap program for development between Egypt and Italy have been implemented, at a value of 350 million euros, through which 106 projects will be financed in the following sectors: food security, education, agriculture, civil society, environment and cultural heritage.

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Tension escalated during the last period in relations between China and Taiwan, followed by tension in relations between China, America and the European Union due to Beijing’s position towards Moscow by not criminalizing the Russian-Ukrainian war, and how the two countries began to create a state of convergence and unification of interests and orientation to target the Middle East and North Africa in investments and promotion Products, obtaining energy sources, and reducing their need for Europe and America, as well as trying to convince many countries to exchange trade in local currencies to reduce their need for dollars.

The question that now arises is what is the American position on this rapprochement, which threatens Washington’s control over global issues and its hegemony in the Middle East and North Africa, and how this convergence will affect global food and energy prices, and the extent to which developing and Arab countries and Egypt will be affected by this rapprochement, which will support Russia’s position. to continue its war with Ukraine.

This will be explained in that report through the following points:

First: the global economic situation

Second: the economy of China and Russia, and targeting the countries of the Middle East and North Africa

Third: Sino-Russian rapprochement and the American position on it

Fourth: China-Russia rapprochement and its impact on developing countries and Egypt

First: global economic situation

The global economy witnessed a number of crises during the year 2022, beginning with the Russian-Ukrainian conflict, the strained relations between China and America, and between China and Taiwan, as these global tensions between the major countries caused global economic activity to experience a wide and noticeable slowdown in global growth during the year 2022 and high levels of inflation.

the recent forecasts of the International Monetary Fund indicate a slowdown in global growth expectations from 6% in 2021 to 3.2% in 2022 and then 2.7% in 2023, and according to forecasts, global inflation will rise from 4.7% in 2021 to 8.8% In 2022, to decline later to 6.5% in 2023, according to the Global Economic Outlook report issued by the International Monetary Fund in October 2022.

Table (1): Real GDP 2021 (annual change %) for countries of the world and forecasts for 2022-2023

Source: IMF Global Economic Outlook Report, October 2022

Fuel and food prices have skyrocketed as a result of those tensions  Global growth is rapidly increasing, with the greatest impact on vulnerable populations in low-income countries and countries that depend on imports to meet their energy and food needs. However, according to the World Bank’s report on the outlook for commodity prices in October 2022, the prices of most primary commodities in dollar terms have witnessed a decline from their peak levels due to fears of an imminent global recession. Since the Russian-Ukrainian conflict in February 2022 until the end of September 2022, the price of Brent crude oil, estimated in US dollars, witnessed a decrease of about 6%. However, due to the depreciation of the currencies of many developing countries, nearly 60% of emerging market and developing oil-importing economies have seen oil prices rise in local currency terms during this period. About 90 percent of these economies also experienced a larger increase in wheat prices in local currencies than in US dollars.

Figure (1): Changes in the price of Brent crude futures contracts from January 10, 2022 to January 6, 2023 (dollars per barrel)

The figure expresses the daily fluctuation of the price of Brent crude futures contracts from January 10, 2022 to January 6, 2023, from $80 per barrel to $78 per barrel.

Figure (2): Changes in the price of crude oil futures contracts from January 10, 2022 to January 6, 2023 (dollars per barrel)

The figure expresses the daily fluctuation of the crude oil futures price from January 10, 2022 to January 6, 2023, from $77 per barrel to $73.5 per barrel.

Figure (3): Natural gas futures prices from January 10, 2022 to January 6, 2023 ($ per million units)

In this race, the previous format reflects the fluctuating price of natural gas futures per day since 10 January 2022, until 6 January 2023, moving from $4.1 per million units to $3.7 per million units.

According to the Food and Agriculture Organization, in December 2022, the average of the organization’s food price index reached 132.4 points, declining by 2.6 points (1.9%) from its level recorded in November 2022, to witness the ninth consecutive monthly decline, as it recorded 1.3 points (1%) less than its value. registered a year ago.

The decline in the index value in December 2022 is due to falling global prices of vegetable oils, along with some declines in the prices of grains and meat. However, the moderate increase in the prices of sugar and dairy products has partially offset the increase in oils. As for 2022, the average FAO food price index reached 143.7 points, which reflects an increase of 18 points (14.3%) compared to 2021.

In the latest World Trade Report issued by the United Nations Conference on Trade and Development (UNCTAD), total trade in services was expected to reach nearly $7 trillion, an increase of 15% from 2021, due to the strong growth achieved in The first half of 2022, and in this context, the second half of the same year witnessed a slowdown in trade growth as a result of deteriorating economic conditions and increased uncertainties, and trade in goods witnessed a decline of about 1% during the third quarter of 2022, compared to the second quarter of 2022.

The report predicted that global trade would reach nearly $32 trillion for the year 2022, but its growth turned negative during the second half of 2022. Geopolitical frictions, continuous inflation, and low global demand are expected to negatively affect global trade during 2023.

Second: Economic situation of China and Russia

China has recently been facing a number of internal and external challenges, which led to a decrease in expectations related to the growth of the Chinese economy, according to the International Monetary Fund’s Global Economic Outlook report, from 8.1% in 2021 to 3.2% in 2022, and China had targeted achieving a growth rate of 5.5% in the same year, but it It recently announced that the gross domestic product increased by 3.9% in the third quarter of 2022, compared to a contraction of 2.6% in the second quarter of the same year.

The challenges that the Chinese economy still faces are the zero Covid strategy, which leads to restricting Chinese economic activity, especially in light of the campaigns launched by the Chinese government on the technology sector, which have had a negative impact on investments in the field of Chinese technology, as the two companies (Alibaba) and (Tencent) lost. Until December 2022. $1 trillion of their market capitalization since October 2021. This is in addition to the United States preventing the sale of advanced electronic chips to China, so it is expected that Beijing will witness a state of continuous clash with the Western world in the coming years in economic terms, for reasons including the West’s attempt to divert the path of supply chains from China to other Asian countries that are more compatible with other countries. The West, especially in light of the political positions taken by China that are not compatible with Western opinion and America, the latest of which was the failure to denounce the Russian-Ukrainian war, in addition to the ongoing issue of Taiwan sovereignty, as well as China’s policy towards Hong Kong.

the crises of the real estate sector, where a state of resentment prevails over the Chinese middle class because of the real estate and debt crisis that befell the Chinese real estate sector, as it constitutes about 30% of the Chinese economy, in addition to the external factors related to the crisis of the conflict between Russia and Ukraine, which caused a scientific economic slowdown due to The rise in interest rates to curb the rampant inflation around the world, and the continued loss of the Chinese yuan against the US dollar.

The Chinese Customs Administration announced a decline in Chinese exports in dollars by 8.7% in November 2022, from November 2021 to $296 billion, which is the lowest level that Chinese exports have reached since April 2020 in light of the Corona epidemic crisis, and the data also showed an increase in the decline in imports also to 10.6%. , bringing China’s trade surplus to $69.8 billion in November 2022, compared to $85.15 billion in October 2022.

Figure (4): China’s exports from January 2022 to November 2022 (in billions of dollars)

Figure (5): China’s imports from January 2022 to November 2022 (in billions of dollars)

In view of all these challenges, especially the tensions with America and Western countries, China began to go to the Middle East and North Africa region, where the presence of the Arab Gulf states, and they are among the The largest oil exporters in the world, as well as Egypt being one of the largest owners of natural gas. The region is also considered attractive to investments in the recent period, in addition to being a large market for promoting Chinese products.

On the other hand, the countries of the Middle East and North Africa benefit from China in establishing investments, grants and aid to achieve economic and social development in the region, benefit from advanced Chinese expertise in the fields of industry, agriculture, technology and educational development, and import the necessary products to meet local demand due to the weak production in most countries in the region.

During the last decade, China has invested more than 150 billion dollars in the Middle East and North Africa, and the volume of trade exchange between China and the Middle East during the past ten years has exceeded 230 billion dollars, and its consumption of oil from Arab countries has increased from 0.8 million barrels in 2003 to 5.1 million barrels in 2020, and China’s oil imports from Arab countries amounted to 264 million tons in 2021, according to data from the Chinese Customs Administration.

As for the Russian economy, it faced many challenges as a result of the repercussions of the war in Ukraine and severe Western sanctions, as it depends mainly on oil and gas revenues, and directs the bulk of Russian energy exports to the European Union. The dispute between Russia and the European Union has intensified with Russia’s intransigence in supplying the European Union with the necessary energy sources.

The growth rate, according to the Global Economic Outlook report, was expected for the Russian economy to decline from 4.7% in 2021 to reach negative rates in 2022 and 2023, as it lost about $80 billion since the outbreak of the war, equivalent to a deficit in gross domestic product of 4.5% for the year 2022.

However, despite previous expectations of a decline in the growth and contraction of the Russian economy, it was nevertheless able to withstand as a result of Russia’s insistence that payments for energy, especially natural gas, be for those who buy in rubles, which contributed to the rapid collapse of the ruble.

All these challenges have made Russia increase its orientation recently towards the Middle East and North Africa region, where it began the process of targeting the establishment of interests

And expanded partnerships and investments there. Syria is Russia’s most important strategic ally in the region for more than sixty years, through which it manages an important part of its foreign and economic policy in the Middle East, as Syria represents an important base for Russian economic and military interests.

Third: Sino-Russian rapprochement and the American position 

 Sino-Russian relations witnessed growing development on the economic level to an increasing degree, and to a lesser extent political and military, as it began to converge in light of the increasing tension between them on the one hand and the West and America on the other.

On the economic front, a number of strategic partnership agreements and digital cooperation were signed, internal and joint infrastructure projects were launched, joint financial projects and natural gas were promoted, in addition to land and sea corridor projects such as the North Sea Corridor project.

 Relations began to consolidate between the two countries in light of the energy crisis, as Russia is one of the largest exporters of natural gas and China is one of the largest importers of energy, and Beijing did not take a position of condemnation towards Russia because of its war with Ukraine, as did the West and America. The Siberian line of force project that was signed in 2014 is Between the two countries, with a total value of 400 billion dollars, one of the most important projects for exporting Russian gas to China, as it aims to supply 38 billion tons annually of Russian gas to China for a period of 30 years, according to a time frame agreed upon between the two countries.

 China also imports weapons and military equipment from Russia, and recently, military deals have been signed that provide China with the latest Russian military technology systems in order to strengthen its control over the South China Sea. Here it can be said that the secret of the Sino-Russian rapprochement is the Chinese need for energy, weapons, roads and markets, and the Russian need for Chinese goods, manpower and technology. There are also other factors related to the security and stability of the common vital field that make the development of relations between them always available.

 America believes that the partnership of Russia and China will affect its ability to address many international issues such as the security of East Asia and Europe, democratic flexibility, and the defense of the global financial system. The United States will face increasing challenges in all these areas in light of the worsening crisis of the Russian invasion of Ukraine, and the tensions between China, Taiwan and Hong Kong, as well as the agreement between China and Russia and the conviction of a number of countries to deal in local currencies in trade exchange، Which may threaten the value of the dollar by reducing demand for it globally in the event that countries expand on this decision, and China tends to strengthen its relations in the Middle East, the Arab countries that export oil and Russia that exports natural gas.

Fourth: China-Russia rapprochement and its impact on developing countries and Egypt

 The Sino-Russian rapprochement opens the door for Russia to continue its war with Ukraine. The Middle East and the Arab countries will be among the regions of the world most affected by the continuation of the Russian-Ukrainian war due to the high food prices, especially in light of the small size of its stocks.

 Also, the prolonged crisis will lead to a continued rise in energy prices, given that Russia is one of the largest energy exporters, especially in light of the gradual decrease in stocks in importing countries and thus the continued impact on production and global growth rates, as most products need energy in their production, and thus Increasing countries’ bills of energy imports, and increasing burdens on individuals.

 As for the situation in Egypt, with the prolonged Russian-Ukrainian war, it will continue to be affected, like other countries, from the rise in food and energy prices, as Egypt is one of the largest importers of wheat in the world and the largest buyer of wheat, whether Russian or Ukrainian. Egypt may have been able to hold out a little at the beginning of the crisis due to the presence of a strategic stockpile, but with the continuation of the war and the tendency of the stockpile to run out, the situation will start to worsen, especially in light of the policy of liberalizing the full exchange rate and the pound continuing to lose its value against the dollar, as it recently reached 30 pounds, and thus inflation reached high rates.

The high rate of inflation will affect the purchasing power of individuals despite the fact that the Egyptian market is the most consuming and importing market, as the crisis also comes in the continuation of the decline in cash reserves and the exacerbation of the crisis of need for dollars, which affected the import process, and perhaps the only alternative to get out of that crisis is to turn to Increasing industrial and agricultural domestic production and trying to attract new and old investors to establish factories inside the country and benefit from Egypt’s production of natural gas and its oil that allows the steadfastness of the production process.

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