World Economy

Egypt: Breaking ‘the Pharaohs’ Curse

Egypt: Breaking ‘the Pharaohs’ CurseEgypt: Breaking ‘the Pharaohs’ Curse

An economic version of the curse of the pharaohs has cast its shadow over Egypt for the past three years with the country going through seismic political instability. Consequently, it faces a tough battle to turn around its economy, Euronews reported Tuesday.

As a first step, the Cairo government is moving to restore investors confidence by raising money on the international bond markets and is launching a major expansion of the Suez Canal.

After several years of turmoil and economic difficulties, Egypt is talking about raising the equivalent of 1.2 billion euros on the international bond markets.

Kuwait is also being spoken of as a possible financial aid donor as it prepares to sign a trade and industry cooperation agreement with Egypt.

Recently appointed Finance Minister Hany Kadry Dimian says the government is open to different sources of financing, depending on how much it needs and when – either from global investors or even an International Monetary Fund loan package.

President Abdel Fattah al-Sisi has introduced controversial economic reforms – including cutting energy subsidies and increasing taxes – to further reduce the budget deficit.

One way of boosting the economy is the expansion of the Suez Canal, to allow use by bigger ships and to cut waiting times.

Contracts have been awarded to six international firms from the Emirates, the Netherlands, Belgium and the US. The ambitious schedule is for work to be completed in August 2015.

Meanwhile, Moody’s has raised Egypt’s credit ratings outlook from negative to stable, citing greater institutional stability.

Reflecting improving investor confidence, the Cairo Stock Exchange has risen 12% over the last three months.