Egypt 13 steps less attractive for foreign investment
Egypt fell 13 spots to 107th place in the World Economic Forum's 2012/13 Global Competitive Index (GCI) ranking, which tracks 144 countries worldwide.
With an overall score of 3.7 points, Egypt's scores in several sub-categories – including security, efficiency and macroeconomic environment – all fell in the latest index.
According to the GCI, Egypt's downgrades were fuelled by uncertainties associated with the country's post-revolution political transition.
Egypt showed improvement in some areas, however, rising 31 spots to 96th place in terms of favouritism (or the lack thereof) among governmental officials, and rising 17 spots to 73rd place in the corporate ethics category.
Egypt should also benefit from the large size of its market, which stood at 29th place in the global list. Meanwhile, its macroeconomic environment deteriorated in recent years to 138th place, mainly because of the country's widening fiscal deficit and rising public debts, the report noted.
Earlier this month, Abdullah Shehata, advisor to Egypt's finance minister, announced that the government's main short-term challenge would be to implement a raft of harsh reforms aimed at reducing the country's budget deficit to between 5 and 6 percent of GDP within five years.
Egypt, which is in the process of finalising an economic reform programme upon which a long-awaited $4.8 billion IMF loan is conditional, expects its budget deficit to hit 11.5 percent of GDP – roughly LE200 billion (some $28.75 billion) – by the end of the current fiscal year ending in June.
According to the latest Egyptian Central Bank bulletin, total domestic debts had stood at LE1.3 trillion until the second quarter of the current fiscal year.
The GCI report also pointed out that Egypt's plan to reduce subsidies would likely enhance its fiscal policies.
Egypt's government hopes to reduce its annual energy subsidies bill to LE99.6 billion (roughly $14.2 billion) in the coming 2013/14 fiscal year, compared to a projected LE120 billion ($17.2 billion) in the current fiscal year.
Several Middle Eastern countries – including Qatar, Saudi Arabia, the United Arab Emirates, Oman and Bahrain – made it into the first 50 places of the global list.
The GCI was topped by Switzerland for the fifth consecutive year, followed by Singapore in second place and Finland and Sweden in third and fourth places respectively.
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