Egypt important to the global economy and ready for an integrated financial economy: President of BRICS’ dev’t bank

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Rousseff made the statements during her speech during the first international seminar of the bank that kicked off on Tuesday in the New Administrative Capital.

She added that Egypt holds a significant share of global trade and is one of the most industrially advanced African countries, and has a large population with immense human capacity to achieve high economic growth rates.

“Egypt has a pioneering experience in its national projects to support the local economy,” Rousseff affirmed.

She explained that a mission of the NDB visited several major national projects in Egypt, observing the country’s capability to design and implement strategic projects aligned with the sustainable development goals and the vision of the bank.

These projects include the fully-smart New Administrative Capital built according to the latest global technological standards, the expansions of the Suez Canal, the Suez Canal Economic Zone (SCZone), and various energy and digital infrastructure related projects that mark a significant shift in the nature of the local Egyptian economy, serving as success models for other member states.

Rousseff also stated that Egypt’s membership in the NDB supports the bank’s focus on cooperation among developing countries, enabling significant growth rates for these countries.

She emphasized the bank’s commitment to supporting Egypt through financing and technical assistance while expanding support to new members, primarily Egypt and Bangladesh.

“Through this seminar, the bank will work closely with Egypt to understand its needs and goals more deeply, aligning with sustainable development goals, particularly in digital infrastructure, transport, and water sectors,” Rousseff noted.

Rousseff is scheduled to visit the Suez Canal Economic Zone on Wednesday.

Growth of developing countries
 

Rousseff said that the bank has invested approximately $35 billion in green projects, allowing developing countries to follow global steps and face global economic challenges in a world confronting successive economic crises.

She stressed that developing countries are currently the main driver of the economy, with their contribution to global trade increasing from 37 percent in 2016 to 41 percent in 2022, while the contribution of developed countries decreased from 62 percent to 58 percent during the same period.

On his side, Egypt’s Prime Minister Mostafa Madbouly said during his speech that the strategic orientation towards the BRICS group and its NDB should not be interpreted in any way as antagonistic towards any party or as an attempt to confront the existing system.

Accessible financing
 

“The government has adopted an open approach to all countries and their financial institutions without discrimination or favouritism,” according to Madbouly.

He explained that this strategic direction aims to work in the medium and long term to reform the current system, which was built on outdated premises. Therefore, the establishment of the NDB was an essential step to address existing shortcomings and facilitate access to concessional financing without imposing unjust and illogical standards.

Madbouly expressed his hope that the bank will stimulate transactions in local currencies and pursue innovative mechanisms, guarantees and technical support for governments and private sectors in order to create an international environment more supportive of emerging economies and developing countries

He stated that today’s seminar is taking place at a very critical time against the backdrop of severe regional and international tensions that have negatively impacted many major and less-developed economies.

“This situation underscores the significance of the role assigned to the NDB in supporting member states to implement their development plans amid declining access to concessional financing and lowered credit ratings due to heightened risks and the current international system’s failure to address these challenges with its outdated mechanisms,” he added.

Madbouly asserted Egypt’s full understanding of the international challenges and the need for increased efforts to reform the governance framework of the global financial system. He stressed the necessity for all member states and the NDB to collaborate in overcoming current crises and achieving a more just and equitable international system.

Balance in the global monetary system
 

Madbouly emphasized that the admission of new members to the bank and the expansion of BRICS membership would contribute to achieving the desired balance in the global monetary system and lend significant international weight to the bank.

The newly joined countries possess substantial sovereign wealth funds and are major energy producers, enhancing the bank’s financing capabilities and expanding its operations in the Middle East, North Africa, and Southeast Asia. Among them are three of the world’s leading grain producers, which will bolster global food security.

Interest-free loan
 

Egypt is seeking to obtain a $1 billion interest-free loan from the NDB by the end of 2024 or the beginning of 2025, according to press statements by Egypt’s Minister of Finance Mohamed Maait on the sidelines of the event.

He indicated that the loan aims to finance projects to be agreed upon with the bank and may be disbursed in dollars or other currencies.

Maait explained that Egypt is discussing with the NDB the issuance of bonds denominated in local currency, and the bank will provide a guarantee for the targeted issuances of these bonds.

Economic integration
 

During his speech at the conference, he stated that Egypt is keen on enhancing joint development investments among member countries through the NDB by exploring new horizons for regional cooperation and achieving economic integration to address cross-border challenges, aiming to build a more resilient and sustainable economic future led by the private sector.

He pointed out that Egypt possesses the necessary resources to become a regional hub for production and exports, while the state has implemented numerous investment-promoting measures, initiatives, and policies that open promising prospects for the private sector.

Open new horizons
 

From her part, Egypt’s Minister of International Cooperation Rania Al-Mashat pointed out that the exceptional economic and geopolitical conditions faced by developing and emerging economies, which suffer from successive global crises, as well as the inability of the current multilateral development banks system to meet these countries’ aspirations.

The challenges enhance the importance of this seminar in opening new horizons for effective development cooperation.

She noted that the NDB seminar represents an opportunity to generate ideas that contribute to shaping the bank’s vision within the framework of multilateral development banks, such as expanding the use of national currencies, increasing the use of debt swap mechanisms to address climate change, and facilitating the private sector’s access to concessional financing.