Democracy Key to Egypt's Economy: Prime Minister
Anchor, CNBC (EMEA)
Ahead of large-scale protests planned for this Friday, Egyptian Prime Minister Essam Sharaf stressed that the government respects the right of citizens to demonstrate peacefully.
“In several events, I benefitted a lot from what comes out of these demonstrations”, Sharaf told CNBC in an exclusive interview in Bahrain.
Sharaf was active in the protest movements that eventually unseated then-president Hosni Mubarak in February. He became prime minister in March.
Egyptians are planning to take to the streets again, as concerns rise about the country's progress since the end of the Mubarak government. Their complaints include the ambiguous transitional path to democracy and the glacial process of bringing former regime officials to justice. The Supreme Council of the Armed Forces took control of the country after the revolution earlier this year.
Asked about the fragile security of the country, Sharaf explained that security, as an institution, had to be built from scratch, and that now “things are much better”.
On Monday, armed gunmen blew up a gas pipeline in the north of Sinai that carries gas from Egypt to Israel and Jordan. It was the third attack since February, and follows renewed clashes in Tahrir Square on June 28, considered the epicenter of the revolution.
Egypt is currently facing a budget deficit close to $23 billion for the fiscal year 2011/2012, or roughly 8.6 percent of GDP. Offers of support from the World Bank and International Monetary Fund were rejected by Egyptian officials, a move that puzzles the investor community and sent the Egyptian pound to six-year-lows.
The Egyptian Prime Minister explained that the government wanted to depend on itself, and as a transitional entity did not want to commit any incoming administration to loans. He also added that, although progress had been made in terms of securing investments, there was still work to do.
Sharaf was in Bahrain for talks with officials after a visit to the United Arab Emirates saw the passing of a$3 billion aid package. The security of the gulf, he told CNBC, is important to the security of Egypt.
The Egyptian Stock Exchange remains the worst performing emerging market in the world, with the benchmark having lost just under 25 percent year-to-date.
Parliamentary elections are expected to take place in September, although some analysts argue that a postponement may be inevitable given the current security circumstances.
As the most populous Arab country, Egypt serves as a crucial test case for the Arab Spring. In his Middle East speech in May, US President Barack Obama said the country “can set a strong example through free and fair elections”.
Sharaf dismissed speculation about a possible election delay and emphasized that the government was committed to the transition, and that democracy was the only way forward.
“Democracy will set the stage for a whole new Egypt, and with a good democracy there will be a good economy”