Building Back Better: Supporting Egypt’s efforts at inclusive recovery

In much of the world, the COVID-19 pandemic has caused economic recessions so severe that together they comprise the worst global economic crisis since the Great Depression of 1929-33. Recent World Bank findings show the fallout of the 2020/21 pandemic could potentially bring the total number of new people living in extreme poverty to between 110 million and 150 million.

Egypt’s macroeconomic reforms of recent years helped stabilize the economy, allowing the country to enter the pandemic with a level of economic stability that somewhat cushioned the blow of the COVID-19 crisis. The pandemic’s impact has however impacted the country’s prospects of growth — exacerbating longstanding issues but also highlighting what Egypt can do to recover and build back better in a way that enables the country to fulfill its potential.

For this, a multi-dimensional approach is needed to put Egypt on the path to inclusive and green development, to protect the poor and strengthen human capital, to help create private sector jobs, and to strengthen policies, institutions and investments.

The Bank’s support is as follows:

1. Protecting Poor Citizens and Strengthening Human Capital
   • Since its launch in 2015, the US$400 million Strengthening Egypt Social Safety Nets project and US$500 million in additional financing have reached about 3.4 million households (about 12 million citizens). Support for the "Takaful and Karama" conditional and unconditional cash transfer program has helped strengthen Egypt’s human capital, including in health and education. Three-quarters of the program’s beneficiaries are women and 67% of the payments are directed to Upper Egypt. The operation added 411,000 households during the pandemic, boosting the reach and efficiency of Takaful and Karama to more poor and vulnerable households. To encourage the financial independence of beneficiaries, the project is piloting economic inclusion and graduation models in eight governorates under the FORSA program. These pilots provide links to economic opportunities through asset transfer, wage employment and training, with a special focus on women and youth.
   • Launched in 2020, the US$400 million Supporting Egypt’s Universal Health Insurance System project aims to support efforts to ensure inclusive, equitable, higher quality public health care. In addition to putting the building blocks of a Universal Health Care System (UHIS) in place by establishing financial, operational, and insurance systems, and by backing four new organizations, this project supports the Phase One rollout of the UHIS in Port Said, Ismailia, Suez, South Sinai, Luxor and Aswan governorates. It has offered temporary financial protection to the most vulnerable citizens nationwide from high out-of-pocket health costs resulting from COVID-19.
   • To help prepare students for the jobs of the future and equip them with academic and life skills to become impactful and productive citizens, Supporting Egypt’s Education Reform project was launched in 2018 to support government reforms. The operation aims to improve teaching and learning in public schools, through: (i) improving the quality of kindergarten education to help children’s readiness for school and learning; (ii) promoting effective professional development systems and practices for teachers, supervisors and educational leaders; (iii) the intensive use of digital resources for teaching and learning; and (iv) comprehensive student assessment reform for improved learning, primarily focusing on secondary level examinations (governing the transition to university).
2. Creating Jobs
   • The Egypt Country Private Sector Diagnostic was released in December 2020 to support private sector-led growth by analyzing challenges the sector was facing. It also aimed to highlight private investment and job creation growth possibilities to create a more dynamic business environment. Trade and logistics, the role of the State, competition, and commercial justice are identified by the report as critical areas in need of reform, while Agribusiness, Manufacturing, and Information and Communication Technology (ICT) are identified as sectors that represent significant opportunities for growth and expansion.
   • The Catalyzing Entrepreneurship for Job Creation project was launched in 2020 to provide a comprehensive package of financial and non-financial support to traditional Micro, Small, and Medium Enterprises, as well as to high-growth start-ups with a focus on women and youth. The project partners with financial intermediaries to facilitate debt financing and mobilize extra capital. To date, the operation has created and sustained more than 30,000 jobs, and it aims to create 100,000 jobs by 2025.
3. Strengthening Policies, Institutions, and Investments for Sustainable and Resilient Recovery
   • The Greater Cairo Air Quality Management and Climate Change project was launched in September 2020 to contribute to resilient and sustainable recovery, including specific COVID-19 responses, in support of government efforts to mitigate health and environmental hazards. Its activities are focused on building responsiveness and resilience in institutions and systems, with an emphasis on the health sector treating and minimizing contaminated waste and on the service sector enhancing worker safety and raising awareness on the links between the increased risks of respiratory infection from air pollution. As well as working within university hospitals to support better management of health care waste, the project’s COVID-19 related activities are considered particularly important given the large number of workers, both formal and informal, who participate in waste management in the Greater Cairo area and who might not otherwise have access to protective equipment and training. The operation aims to accomplish its overall objectives through: i) modernizing Egypt’s Air Quality Management System; ii) supporting solid waste management in Greater Cairo; iii) contributing to vehicle emissions’ reduction by supporting the piloting of electric buses; and, iv) implementing activities aimed at behavioral change by communities and by service providers, and ensure citizen engagement in project design and implementation.

The comprehensiveness of the Bank’s approach complements a second wave of structural reforms the country is embarking upon and will help Egypt pave the way to a more resilient, sustainable and inclusive post-pandemic recovery.  Although the ramifications of the pandemic will most likely take years to unfold, the World Bank is proud to partner with Egypt on its journey to build back better and achieve the sort of economic growth that stands the test of time and benefits all Egyptians.

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