WASHINGTON, With Egypt's economic reforms showing early signs of success, the World Bank Group announced today a two-year year extension to its 2015-2019 Country Partnership Framework (CPF). The decision was announced following a formal review of the results of the current Framework by the World Bank Group's Board of Executive Directors, in a process known as a Performance and Learning Review. The extension aims to maintain the momentum on reforms, to ensure continued progress toward inclusive growth, job creation and more and better opportunities for all Egyptians.
The Egypt 2015-2019 CPF focuses on improving opportunities for private sector led job creation, social inclusion and improving governance. The three focus areas remain highly relevant to the country's long-term development strategy. The government's reform efforts which are supported under the CPF, have helped to stabilize the economy; growth has rebounded, the external and fiscal deficits have narrowed, inflation has declined, and foreign reserves have increased.
''Extending Egypt's partnership framework will enable us to further support the government's ongoing reform efforts which ultimately aim to improve the livelihood of Egyptians.'' said Marina Wes, World Bank Country Director for Egypt, Yemen and Djibouti. '' Operations under this extension include reforming the health and education sectors, strengthening social safety nets and social inclusion, enabling job creation and private sector growth, and transitioning Egypt into a digital economy. The objectives of these interventions are to improve productivity and encourage innovation and competition, and accordingly contribute to the country's economic and human capital development,''
Almost 77% of the original CPF objectives have already been achieved or are on track to be achieved by the end of the original framework period. Stronger macroeconomic management has made the business environment more conducive for the private sector, and key fiscal reforms have allowed the government to improve its debt sustainability outlook and redirect scarce budget resources to new social programs targeted at poor and vulnerable Egyptians. Important legislation to support the business-enabling environment has been enacted, and automated government processes have reduced the bureaucratic hurdles to doing business. As such, Egypt's ease of doing business ranking climbed from 131st out of 189 economies in 2016 to 120th out of 190 economies in 2018.
Despite the significant results achieved across all three focus areas, gaps remain. More efforts are needed to accelerate economic inclusion and absorb a growing labor force. Some 60 percent of Egypt's population is either poor or vulnerable, and inequality is on the rise. The national poverty rate was close to 30 percent in 2015, up from 24.3 percent in 2010 as reported in the CPF. There are striking geographical variations in poverty rates, ranging from a low of about 7 percent in Port Said governorate to a high of 66 percent in some governorates in Upper Egypt. Furthermore, the economic reforms took a toll on the middle class, who face some higher costs of living as a result of the reforms.
The extension of the CPF to 2021 will allow the World Bank Group to deepen support in areas where the achievements are substantial. The World Bank Group will put more emphasis on human capital development by encouraging more rapid implementation of education and health reform projects, while supporting Egypt's transition to a digital economy and e-government services. An ongoing focus will be the support of the government's efforts to strengthen the country's social safety net system, including the development of programs that help vulnerable groups build their own livelihoods and graduate from cash transfers. The extension will allow for further support to enable private sector-driven growth by addressing sector-specific reforms and local economic development in less developed regions.
Source: The World Bank