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Egypt: Shifting Public Funds from Infrastructure to Investing in People

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Egypt has an opportunity to capitalize on current reforms by enabling more private investment in infrastructure and freeing up public funds for investments in people’s education, health and social protection. This is according to a new World Bank report launched today in Cairo,‘’Egypt: Enabling Private Investment and Commercial Financing in Infrastructure’’, which calls for increasing the public funds available for building human capital by expanding successful energy reforms to other key sectors, such as transport, logistics, water and agriculture.

Egypt can learn from global experience and gain by increasing the use of private sector finance, management expertise and innovation in commercial infrastructure and agriculture, conserving public sector resources for where they are needed most”, said Clive Harris, Head for Maximizing Finance for Development for the World Bank.

Egypt is now beginning to reap the benefits of its transformative economic reform program. Macroeconomic stability and market confidence have been largely restored, growth has resumed, fiscal accounts are improving, and the public debt ratio is projected to fall for the first time in a decade.

Egypt has demonstrated that by having a package aimed at reducing economic risks, pursuing sector level reforms and well-prepared bankable projects, large scale foreign and domestic investment can be achieved, This is visible through the  US$ 2 billion invested in the largest solar park in the world, Benban, as well as US$ 13 billion in the Zohr field and other natural gas projects” said Ashish Khanna, Program Leader for Sustainable Development at the World Bank.

The report indicates that the action plan to further enabling private investment requires clear policy actions to resolve four cross cutting barriers to private investment – namely better management of land, transparency in Government procurement, efficiency in state owned enterprise and encouraging long term domestic financing. This needs to be complemented with developing projects for private investments with maximum economic impact, like the regional energy hub, logistics corridors, freight transport and agricultural transformation hubs.

The gains from reforms would also free up scarce public resources and allow for them to be re-allocated to investments in the education and health of Egyptians, the country’s human capital. Reforms in the energy sector provide an example of what is possible. The reform of energy subsidies freed up US$14 billon, reduced the pressure on the national budget and allowed the quadrupling of the investments in social safety net programs.

According to the report, for Egypt to maintain its reform momentum and focus on investing in its citizens, it will need to broaden and deepen its reform agenda to other sectors. This would be part of a fundamental shift away from the state as a provider of employment and output to an enabler of private investment; with the economy driven by a dynamic private sector generating jobs for the youth.

The report identifies four sectors which have huge potential for private investments and illustrates how successfully attracting those investments would generate growth, create jobs and ultimately contribute to developing Egypt’s human capital. The four sectors analyzed in the report are: transport, energy, water and sanitation, and agriculture.

The World Bank provides technical, analytical and financial support to help Egypt reduce poverty and boost shared prosperity. The focus of Bank support includes social safety nets, energy, transport, rural water and sanitation, irrigation, social housing, health care, job creation, and financing for micro and small enterprises. The World Bank currently has a portfolio of 16 projects with a total commitment of US$6.69 billion.

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Health & Wellness

COVID-19 infections approaching highest rates ever

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COVID-19 infections are approaching their highest rates since the pandemic began just over a year ago, the head of the World Health Organization (WHO) reported on Friday. 

“Around the world, cases and deaths are continuing to increase at worrying rates”, said WHO Director-General Tedros Adhanom Ghebreyesus, speaking during his regular briefing. 

“Globally, the number of new cases per week has nearly doubled over the past two months. This is approaching the highest rate of infection that we have seen so far during the pandemic.” 

As of Friday, there were 138.5 million cases worldwide, and more than 2.9 million deaths. The pandemic was declared in March 2020. 

Tedros said some countries which had previously avoided widespread virus transmission are now witnessing “steep increases” in infections, with Papua New Guinea serving as an example. 

Concern for Papua New Guinea 

The Pacific island nation, which has a population of around eight million, had managed to keep the disease at bay. Up until the beginning of the year, there were less than 900 cases and nine deaths. 

Currently, more than 9,300 cases and 82 deaths have been recorded, and all 22 provinces have been affected. The country’s health Minister, Jelta Wong, who also briefed journalists, said half of all cases and deaths were reported in the last month alone, and health workers are increasingly among those infected. 

 “Our biggest challenge is seemingly to the late adaption or acceptance of the ‘new normal’ and the disbelief in the disease itself,” he said. “This overlaps into much infodemic – and conspiracies and misinformation on the safety and the efficiency of the vaccines.”  

The situation in Papua New Guinea, or PNG, is concerning, Tedros said, as it could lead to a much larger epidemic.  Late last month, Australia donated some 8,000 doses of the AstraZeneca vaccine to its neighbour, and an additional 132,000 doses were delivered this week through the COVAX solidarity initiative. 

Vaccine equity now 

Tedros said PNG was a perfect example of why vaccine equity is so important, an issue which the WHO chief and other senior UN officials have repeatedly highlighted. 

Earlier this week, UN Secretary-General António Guterres told the Financing for Development Forum that “to end the pandemic for good, we need equitable access to vaccines for everyone, everywhere.”  

WHO continues to assess the pandemic’s evolution. Its Emergency Committee on COVID-19 met this week and Tedros said he will receive its latest advice on Monday. 

Update on virus variants 

Monitoring of the COVID-19 virus variant first detected in India continues, WHO said on Friday. 

The B 1 617 variant, which has two mutations, emerged at the end of last year and cases have been reported in other countries across Asia and North America. 

“This is one variant of interest that we are following,” said Dr Maria Van Kerkhove, the agency’s Technical Lead on COVID-19. 

“Having two of these mutations, which have been seen in other variants around the world, are concerning because there’s a similarity in these mutations that confer increased transmissibility, for example. Some of these mutations result in reduced neutralization which may have an impact on our counter measures, including the vaccines.” 

Strengthening surveillance 

COVID-19 variants have been reported in the United Kingdom and South Africa, while a third that was first detected in Japan is circulating in Brazil and elsewhere. 

Dr. Van Kerkhove said WHO and partners have been bringing together countries, researchers and different networks, to strengthen global monitoring and assessment of the new coronavirus

“It’s really important that that assessment is robust so we understand what each variant of interest and variant of concern means for transmission, for severity and for impacts on diagnostics, therapeutics and vaccines”, she said. 

COVID-19 vaccines developed so far have been effective against the variants, she added, “but we want to have a system in place should there need to be a change in some of our counter measures going forward.”

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Environment

Green transformation will rival industrial revolution

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IMF chief Kristalina Georgieva and US Climate Envoy John Kerry discuss climate action on the CNN news channel. Image: IMF

The transition to a global economic model which will slow down climate change and create jobs will be the “biggest economic transformation since the industrial revolution” according to John Kerry, the US climate envoy.

Mr. Kerry expressed the view in a discussion with Kristalina Georgieva, the head of the International Monetary Fund as part of the 2021 Spring meetings of the IMF and World Bank.

They agreed that a “green and resilient recovery” from the COVID-19 pandemic is possible but economic growth globally is likely to be slow and uneven.

‘No bank will fund a new coal plant’

John Kerry: There are many ways that we can address the climate challenge in America. President Biden has put a $2 trillion plan on the table, which will result in 500,000 charging stations for electric vehicles being built in the country, thousands of electric buses, including school buses, and a target of 100 per cent carbon-free power, by 2035.

All these measures will generate actions in the private sector. The decisions of some of the largest financial institutions in the world are being driven by environmental, social and governance (ESG) factors, and trillions of dollars is going to be invested in this new sector to avoid sheer catastrophe. We’re way behind, but we believe that this is going to be the biggest economic transformation since the industrial revolution.

In Europe, no bank or financial institution or even private source will fund a coal-fired power plant, but we have to move away from coal faster. Many old coal-fired plants are operating at less than 50 per cent efficiency. They are losing money and are not even sending energy to the main grid. They could be phased out over a period of time. Gas will, to some degree, be a bridge fuel [to renewables].

The United States could help mobilize finance to reduce risk, and then bring more money to the table for a commercial investment in alternative fuel sources.

Kristalina Georgieva: At the IMF we have identified three pillars in the transition to a low-carbon economy. First of all, put a price on all carbon emissions. Today only 23 per cent of emissions are being priced. The average price is $2 per ton. By 2030, we need to be at $75 a ton.

Second, funding is needed for public investment in green infrastructure. The IMF can support countries in this regard. Five per cent of gross domestic product (GDP) invested now, would generate an additional 0.7 per cent growth every year. This means that the investment would pay for itself within 15 years and create at least 12 million net jobs.

The third, hugely important pillar, is to lessen the impact on those who are currently employed in the high carbon economy. For example, there must be a just transition for miners, so that they can have benefit from new job opportunities. If we raise revenues from carbon pricing, some of that money must be used to provide a buffer, to soften the pressure on those businesses that need to move away from carbon dependency. This is doable, and it must be done.

China and the US

John Kerry : Right now, China is saying that they are going to reach peak emissions by 2030, and that they may be able to reach that target earlier, maybe by 2025. The problem is that the current models shows China peaking but then basically staying at a plateau, rather than sufficiently lowering emissions.

Some 30 per cent of all the emissions on the planet are produced by China, so if we don’t see a reduction between 2020 and 2030, we lose the capacity to keep the global temperature to 1.5 degrees above pre-industrial levels, and we lose the capacity to hit net-zero carbon emissions by 2050.

Every nation must work together on this. If the United States went to zero emissions tomorrow, it wouldn’t make the kind of difference we need because we all have to reduce at the same time. That’s the struggle we’re facing.

China obviously has a need to continue to grow and to develop. We want that, and we’re not begrudging that. We want to work with China and other countries to make sure that they don’t make the mistakes that we made, and that we work together to develop new technologies such as hydrogen fuel, and biofuels for aircraft.

Doing nothing is too expensive

John Kerry: The United States is the number two emitter in the world. We need to do a better job at reducing emissions on an accelerated basis. President Biden is stepping up to do that.  He’s hosting a virtual climate summit in April, he has rejoined the Paris climate agreement, and he has put together a $2 trillion piece of infrastructure legislation.

Climate action means jobs, whether in the creation of new energy sources, or transitioning out of the existing ones, building new cars or retrofitting homes. Those are jobs for workers in all countries. We should embrace this.

The economists have warned us again and again: doing nothing is more expensive to our citizens, our taxpayers, than responding to the climate crisis. We spent $365 billion cleaning up after three storms a couple of years ago, but we haven’t invested the $100 billion in the Green Climate Fund that would have provided resilience and adaptation to climate change, and prevented some of that damage from being done. We’re just not making the right choices.

Kristalina Georgieva:  We’ve already started offering a helping hand, especially to countries devastated by natural disasters.  We have put measures in place to help countries to be in a better position when disaster hits. For example, we are discussing with our membership a provision that will make $650 billion available for countries to not only take the necessary measures to deal with the pandemic and its impact, but also to take on the investments necessary for transformation of their economy.

The urgency to act is evident, and vivid: over the last six months, 10 million people were displaced by floods and other forms of natural disasters. Fast-forward to a world in which there are more climate-related disasters, and more migration.
We have a chance to take advantage of a transformation for growth and for jobs. But we are also under tremendous pressure to prevent a future that would be bleak for those we love the most: our children and grandchildren.

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Human Rights

Human rights experts demand UAE provide ‘meaningful information’ on Sheikha Latifa

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United Nations independent human rights experts on Tuesday demanded that the United Arab Emirates provide “meaningful information” on the fate of Sheikha Latifa Mohammed Al Maktoum as well as assurances regarding her safety and well-being, “without delay”.

Sheikha Latifa, the daughter of the Emir of Dubai, and Prime Minister of the UAE, Mohammed bin Rashid Al Maktoum, was reportedly abducted while attempting to flee the country in 2018. In February, footage was released that reportedly showed her being deprived of her liberty against her will.

Independent rights experts, including the UN Special Rapporteur on violence against women voiced concern that since the February video, and subsequent official request for further information on her situation, “no concrete information has been provided by the authorities”.

“The statement issued by the Emirates authorities’ merely indicating that she was being ‘cared for at home’ is not sufficient at this stage”, they added.

The rights experts also said they were troubled by the allegations of human rights violations against Sheikha Latifa, and of the possible threat to her life.

Evidence of well-being ‘urgently required’

According to the information received, she continues to be deprived of liberty, with no access to the outside world, they added, noting that “her continued incommunicado detention can have harmful physical and psychological consequences and may amount to cruel, inhuman or degrading treatment”.

“Evidence of life and assurances regarding her well-being are urgently required”, the human rights experts urged, calling for independent verification of the conditions under which Sheikha Latifa is being held, and for her immediate release.

In addition to the Special Rapporteur on violence against women, the call was made by the members of the working groups on enforced or involuntary disappearances; and on discrimination against women and girls; as well as the Special Rapporteurs on torture and other cruel, inhuman or degrading treatment or punishment; and on extrajudicial, summary or arbitrary execution.

The Special Rapporteurs and Working Groups are part of what is known as the Special Procedures of the Human Rights Council. The experts work on a voluntary basis; they are not UN staff and do not receive a salary. They are independent from any government or organization and serve in their individual capacity. 

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