Egypt sees investments flowing from B&R Initiative
Expert says the country’s location is key to mega infrastructure The Initiative by nature provides support for development in Egypt because the maritime path of the Belt and Road Initiative would pass through the Suez Canal.” Mohamed Fayez Farahat , head of the Asian Studies program at the Ahram Center for Political and Strategic Studies
CAIRO—The Belt and Road Initiative will “open up huge opportunities” for cooperation between Egypt and China in terms of mutual trade and investment, said a top Egyptian researcher.
“The philosophy of the Initiative is based on the concept of development as well as trade,” said Mohamed Fayez Farahat, head of the Asian Studies program in the State-run Ahram Center for Political and Strategic Studies.
Proposed by Chinese President Xi Jinping in 2013, the Belt and Road Initiative aims at reviving ancient land and sea trade routes that link China with many countries in Asia, Africa and Europe via trade and infrastructure networks.
“The Initiative by nature provides support for development in Egypt because the maritime path of the Belt and Road Initiative would pass through the Suez Canal,” said Farahat who attended the Belt and Road Forum for International Cooperation in Beijing on Sunday and Monday.
Egypt has recently adopted reform policies and austerity measures, borrowing loans to revive its economy that has been ailing due to the eruption of two uprisings and the ouster of two presidents, which affected investments and tourist inflows.
“The Belt and Road Initiative depends on huge financing capabilities and institutions that stand behind it, and Egypt could benefit by getting support and loans for carrying out developmental projects with better and easier conditions, unlike the difficult system of Western financing institutions,” Farahat said.
The diversity and the richness of the Initiative’s aspects would cover coordinating policies, advancing the infrastructure and integrating the financial cooperation among the partners, thus creating several fields of cooperation with Egypt, he said.
Farahat said logistics, ports, infrastructure and developmental projects would constitute a breakthrough in cooperation between the two countries.
Given the problems facing globalization in recent years, the Asian affairs researcher predicts China will witness “massive transitions”.
“China, which represents a successful model in development, essentially based on industrial fields, would pay more attention to the logistics sector to push the train of economic development in the region, including Egypt,” he said.
Egypt’s parliament recently passed a long-awaited investment law that would create incentives the country needs to bring back investors after years of turmoil.
The new law is expected to boost much-needed investments by cutting down bureaucracy, especially for starting new logistics and port projects around the Suez Canal.
China is the largest investor in the development of Egypt’s Suez Canal Corridor which emerged in 1998. The Suez Canal Economic Zone, covering a total area of 461 sq km and comprising four sections and six ports, would facilitate the presence of foreign investors.
“I expect China would contribute largely to enhancing the developmental sector in Egypt, whose peace and stability are the base of those in the Middle East,” Farahat said, adding that by supporting Egypt, China would secure those mega infrastructure projects that would pass through the Belt and Road Initiative’s path.”
As a member of the Asian Infrastructure Investment Bank, Egypt could also benefit from funding its infrastructure projects with easier conditions, he said.
Farahat said the Belt and Road Initiative needs to be publicized at the people level. “The countries and regions related to the Belt and Road Initiative should work on marketing the initiative as a project that the people believe in, which is the challenge now.”
He said China enjoys a high level of credibility among the developing and growing countries; it has special ties with different international partners, and its history lacks any negative implications with regard to imperialism or hegemony.
Reiterating that “the Initiative was built on the idea of openness and not conflict”, the expert explained the campaign seeks cooperation and integration that manifested in China’s memberships in the Arab League, G20, AIIB and the ASEAN.
He also hailed the Initiative because it does not seek conflict with the existing international system but integration with the world financial institutions like the World Bank.
“This is the first time that an international initiative has been launched for development, especially infrastructure, besides trade,” Farahat said.