World Bank loans Egypt $5.5 million to strengthen private sector
The World Bank has approved a $5.5 million loan for the Skills Development Project in Egypt. The loan will help support the Government of Egypt in stimulating private sector demand for skills training. In turn this will help achieve greater economic growth, increased competitiveness and labor productivity.
“This project is part of a coordinated strategy by the Government of Egypt and donors working in the area of training and vocational education to strengthen the competitiveness of the private sector” says World Bank Lead Operations Officer in the Middle East and North Africa, David Steel. “The Bank will work in partnership with the Government of Egypt to provide relevant short-term ‘demand-driven’ training for small and medium enterprises.”
In the early 1990s, Egypt tackled its slow economic growth by embarking on an economic liberalization process, which included privatization, deregulation and financial sector reform. The need for a skilled labor force was identified as critical to economic liberalization. However, the lack of skilled labor worsened between 1996-2000 and remains an important constraint to economic development in Egypt.
“Egypt signed an Association Agreement with the European Union in 2001. Once the Agreement comes into effect, it has only a twelve year grace period before it must face full-blown competition from the European countries,” Steel explains.
In 2000, with assistance from the World Bank and the European Commission, the Government of Egypt developed a strategy for reforming its technical and vocational training system. The Skills Development Project supports one part of the strategy, financial reform, and is designed to establish a training system responsive to labor market needs of the private sector.
The project also aims to improve the internal efficiency of training, including the more effective use of public training funds, by establishing incentives, and feedback systems for employers and providers. Companion projects, funded by the Government as well as by the European Commission, Germany and France, support the other elements of the strategy.
The project will offer technical advisory services for awareness, promotion and outreach programs as well as monitoring and evaluation surveys, training sub-projects that will finance a demand-driven training program on a cost shared basis with beneficiary firms, and strengthening of the institutional capacity of eligible project intermediaries.
A project management unit will be created under which goods and technical advisory services will be financed. “The project will help improve the employability and labor productivity of individuals by bridging the gap between their skills and those required by businesses,” explains World Bank Country Director for Egypt, Mahmood Ayub.
The overall country assistance strategy for Egypt specifically identified the need for a skills development lending in the context of promoting broad-based, private sector-led growth. The project will be carried out over four years from November 2003 to December 2007 by the Ministry of Industry and Technological Development. The loan for this project has a 17 year maturity with a five-year grace period. — (menareport.com)
© 2003 Mena Report (www.menareport.com)