Ladies and Gentlemen,
Good evening… Ramadan Kareem
Welcome to the EU annual Press Iftar for journalists and media professionals. Thanks for attending this important occasion which is an opportunity to discuss the most important aspects of the bilateral EU-Egypt relations. It is also an opportunity to meet you in person. Free media and well-informed citizens are bases for a modern democratic country. Access to information and freedom of media are essential in order to formulate and successfully implement government policies. The media should be able to present reports to the whole society on different issues without restrictions. Hence, accountability could not be applied unless there’s transparency.
I would like to stress the importance of the rule of law, human rights and fundamental freedoms. Protecting and supporting human rights, democracy and the rule of law are guiding principles to the EU’s External Action. We support and defend these principles within the framework of our partnership with Egypt as well as with all our partners around the world.
Of course, Egypt is a key partner to the EU and one of the countries that play a crucial role in the region. Egypt’s sustainable stability and security are not only important to the Egyptians but also to the entire region as well as to the EU. We have the firm belief that democracy, human rights and fundamental freedoms are essential to achieve such goal. In this regard, I would like to emphasize the importance of the civil society which is a key participant in the economic, political and social development. Therefore, The NGOs should have the opportunity to work in an enabling environment in order to perform their role.
Ladies and Gentlemen,
You are well aware of the challenges facing the world today. The European Union has become more indispensable than ever, therefore, we do understand that we also need to work on strengthening our Union. On May 9th 2019 and on the occasion of Europe Day, the EU leaders and member states met in a summit held in Sibiu, Romania, to discuss the joint European future, particularly prior to the elections of the European Parliament that will be held this week.
The summit issued “Sibiu Declaration” that contains 10 commitments to provide support to the EU for a brighter future. On top of the summit priorities were the issues of combating climate change, protecting the rule of law, finding a modern growth model in addition to ensuring working with our partners around the world to uphold and develop the rules-based international order, to make the most of new trading opportunities and to jointly tackle global issues.
Ladies and Gentlemen,
With regard to working with our partners, I would like to mention that we in the EU believe that my neighbour’s strength is my strength and we apply this principle in our foreign relations.
Before I talk about our strategic relations with Egypt, I must refer to the first summit that was held in Sharm El-Sheikh last February and attended by the heads of states and governments of both the EU and the League of Arab States. The summit witnessed in-depth discussions on different topics that aim to enhance cooperation between Europe and the Arab World. In their discussions, the EU and the League of Arab States reaffirmed that stronger regional cooperation is the key to find common solutions to common challenges. They renewed their commitment to create new opportunities through a collaborative approach, by placing people, in particular women and youth, at the heart of joint work. Leaders recognised the important role played by civil society. Both sides also agreed to strengthen economic cooperation and committed to develop a concrete agenda especially in the fields of trade, energy, science, research, technology, tourism, agriculture and other mutually beneficial areas.
I have full confidence that this summit will be a first step on the right path to boost cooperation between the two parties. For the Summit Declaration, please visit our website. This declaration will undoubtedly be the groundwork for the coming summit that will be hosted in Brussels in 2022.
At the EU, we work to enhance our partnership not only with the Arab World but with the African continent as well. Since Egypt has chaired the African Union (AU), this will be a good opportunity for a trilateral cooperation among the EU, Egypt and the AU.
Within this framework, the EU Commissioner in charge of International Cooperation and Development, Neven Mimica, paid an official visit to Egypt this May and met the Egyptian President, Abdel-fattah El Sisi; the Egyptian Foreign Minister, Sameh Shoukri; and the Minister of Investment and International Cooperation, Sahar Nasr. This visit was a good opportunity to discuss Africa-Europe partnership and related support to the African Union agenda, in particular in relation to taking forward commitments of the 5th AU-EU Summit of 2017 and building on priorities of the Egyptian Chairmanship.
As I mentioned, Egypt is our most important partner in the EU southern neighbourhood and we have strategic relations that have significantly developed over the past years.
As you are well aware, the EU and Egypt jointly agreed in 2017 on three partnership priorities till 2020, namely; 1) Egypt's sustainable modern economy and social development; 2) cooperation on foreign policy; and 3) promoting stability. The Egyptian and European authorities maintain a high-level dialogue in order to implement these priorities.
The total EU aid commitments to Egypt, which amount to over 1.4 billion Euros in the form of grants, is a clear expression of our fruitful cooperation. Our support to Egypt covers different sectors including infrastructure, water, energy, education, scientific research, entrepreneurship, social development, governance as well as other fields of benefit for the people of Egypt.
Allow me to give you some examples of our mutual cooperation for the good of Egypt and the Egyptians. We stood with Egypt hand in hand and jointly celebrated the launch of the first edition of Cairo Water Week (CWW) in October 2018. We are also working closely with Egypt to prepare for the second edition of CWW later this year. Our participation in the CWW aims to enhance and protect access to basic resources for both the present and the future generations as well as to express our commitment of achieving the sustainable development goals related to the water sector in Egypt. We will continue to cooperate with several partners to achieve sustainable development and boost regional cooperation in managing and developing water resources in Egypt.
Moreover, I would like to note that in addition to the huge financial support provided by the EU to Egypt for the water sector – about 450 million EUR including projects covering 12 governorates that will improve the lives of around 12.5 million Egyptians, we also participated in cooperation with the Egyptian Ministry of Water Resources and Irrigation in the “National Competition for Water Conservation”. Building on the success of the last year’s competition, two contests will be launched this year. Thus, we are committed to work with partner countries such as Egypt to help them fulfil their commitments with regard to the provision of safe potable water and wastewater services as well as achieving food security.
Ladies and Gentlemen,
Energy is an important area in our bilateral cooperation. Egypt and the EU have signed a memorandum of understanding for strategic cooperation in Energy in April 2018. There is no doubt that Egypt's vast untapped energy potential holds immense opportunities for citizens and businesses to fully benefit from the sustainable energy transition.
The EU is keen to support Egypt's vision to become a regional gas hub and potentially use the Egyptian LNG facilities in Idku and Damietta to export gas and to facilitate regional cooperation with other countries in the East Mediterranean. This will give a welcome boost to Egypt's economy, while improving energy stability in the region. The Port of Antwerp in particular will provide needed support to help Egypt becoming a central hub for bunkering including LNG and oil and will be working with Egypt in the coming period to achieve that purpose.
But our cooperation already covers other sectors too. We all know that Egypt’s electricity demand is growing rapidly due to its growing population and the economic & industrial development. The Egyptian government is taking action in the right direction with its new "Sustainable Energy Strategy 2035", which was funded by the EU. The EU has also co-funded with the European International Financial Institutions the Wind Farm of 240 MW Gulf in El Zayt and is currently funding the another 250 MW under construction Gulf of Suez.
The Sector has shown significant progress across the Oil, Gas and Electricity fields. In the EU Delegation’s view, one of the strongest achievements has been the continued commitment to the withdrawal of energy subsidies, the approval by the Supreme Energy Council (SEC) of the Integrated Sustainable Energy Strategy to 2035, and the passing of modernizing and market reform-directed legislation (such as the Electricity, Renewable Energy and Gas Laws). All these achievements provide the investor community with more transparent, stable, non-discriminatory and cost-recovery foundations to regain confidence to invest in this sector.
Ladies and Gentlemen,
With regard to education, it is the basis for the progress of nations. Therefore, The EU is a strong supporter of the Egyptian Education sector as a whole, and is focused on increasing the access to, and quality of, education for the most vulnerable children. The EU has also been supporting the modernisation and quality enhancement of the Egyptian HE, notably through ERASMUS+.
I would like also to mention the importance of technical education in formulating Egypt’s present and future. The EU provides funds to the Technical and Vocational Education and Training (TVET II) Programme (with 50 million EUR) which will be implemented until 2021 and aims at improving and enhancing the structure and performance of the TVET system to better respond to the new socio-economic needs and increase competitiveness.
With regard to the EU future cooperation, the EU has identified the support to the government's reform in the education sector as a priority for our funding in Egypt in 2019, with an indicative amount of 25 million EUR. This will be devoted to provide the necessary expertise and capacity building to the Ministry, to teachers and to the local directorates to manage efficiently the ongoing reforms and to succeed in shifting and upgrading the education quality.
Both the EU and Egypt share a common strategic vision of research and innovation (R&I). Our collaboration is mainly pursued through H2020. Horizon 2020 - the EU R&I funding programme - aims to promote R&I as contributors to economic growth and job creation, social inclusion and sustainable development, and addressing pressing global challenges. Similarly, one of the pillars of Egypt's sustainable development strategy, Vision 2030, focuses on "Knowledge, innovation and scientific research" to address challenges and meet national objectives. Horizon 2020 has supported the participation of 41 Egyptian organisations and various R&I projects covering a range of areas, such as food security, water management and climate action. The overall budget of these projects is around 100 million Euros.
It is worth noting that our mutual cooperation in the field of R&D is of vital importance in the regional context. We face pressing common challenges in the Mediterranean. The region is highly vulnerable to climate change; it is predicted to become even warmer and drier than it already is. There is growing competition for freshwater and energy resources for different uses. Due to demographic growth, there will be some 520 million persons to feed in the region by 2020. As a result, achieving greater food security is a major issue for economic, social and political stability.
R&I have a critical role to play in addressing these issues… this why we funded PRIMA, the Partnership for R&I in the Mediterranean area. PRIMA is the largest R&I initiative in the history of the Mediterranean (2018-2028, EUR 497 million). The partnership aims to devise new approaches to improve water availability and sustainable agriculture production in a region heavily distressed by climate change, urbanisation and population growth. It will also address upstream, pressing issues such as health and well-being, and the root causes of migration. PRIMA is partly funded by Horizon 2020 (EUR 220 million), with the rest of the budget coming from the 19 Participating States. Egypt itself contributes EUR 30 million and is very active in the management of the initiative.
Ladies and Gentlemen,
I must point out the important role of women in shaping the present and future of countries. Gender Equality is at the core of the European Union's values. The EU is known as an important driving force which promotes and protects women and girls' rights. We are committed toward that end, within and outside the Union.
In the framework of the EU Gender Action Plan (2016-2020), the EU Delegation and EU Member States are committed to support Egypt in areas of (1) Prevention of, and protection from, violence against women and girls; (2) Economic, social and cultural rights, and empowerment of women; and (3) Supporting voice and participation of women.
The EU commitment toward gender equality and women empowerment is a key priority for its cooperation with Egypt that is reflected in framework of the EU-Egypt's Partnership Priorities. I am pleased to say that such strong commitment is translated through EU Development assistance. Since 2012, EU funded support on women's rights and empowerment exceeded EUR 20 million.
For instance, within the framework of the National Citizenship Initiative, we helped half a million women to have their national IDs issued for the first time in their lives which will help them exercise their rights. We continue to support this important initiative through a new program that begins in 2019. Furthermore, we support women’s access to economic opportunities to get jobs and micro finances.
With regard to initiatives aiming to combating violence against women and girls, the EU has been one of the main supporters to Egypt to combat FGM over the past years, and will continue supporting through an integrated program.
In addition to the projects funded by the EU aiming particularly to support the rights of women and girls, I would like to mention that around 50% of the ongoing EU development cooperation with Egypt (around EUR 1.4 billion) targets improvement in key infrastructure and access to services. Through improved infrastructure and services, women and girls, especially in poor areas, can have better and safer access to their work places and schools.
As I mentioned before, there’s a substantial support provided by the EU in the fields of Technical and Vocational Education and Training (TVET II) where many women benefit from such programmes so that they could have better access to economic opportunities and decent jobs.
We also support the implementation of the “National Population Strategy” with a particular focus on voluntary family planning. This project raises awareness and provides support to women on their reproductive health.
Investment and trade are essential in our relation with Egypt. The EU is the largest source for foreign direct investment (FDI) in Egypt. The FDI inflows from the EU member states to Egypt accounted for about 8 billion dollars in 2017/2018 (more than 60% of the total FDI inflows).
Latest figures indicate that the EU FDI inflows to Egypt in the third quarter of 2018 were about 1.6 billion dollars, followed by the much lower US FDI that was only 600 million dollars. Moreover, the European FDI inflows to Egypt are significantly increasing from 5.6 billion dollars in 2012/2013 to 8 billion dollars in 2017/2018; a growth percentage of 43% over the past six years (Source: the CBE data).
Allow me to seize this opportunity to announce that as part of our EU commitment to support private sector, investments and job creation we will organize together with our Egyptian counterparts a Suez Canal Investment Conference. It will take place in November to coincide with the 150th anniversary of the Suez Canal. The event aims to promote investments in areas including Ports Services, Logistics, Manufacturing and SMEs. More details will be announced soon.
With regard to trade, the EU is still Egypt's biggest trade partner (the share has been oscillating around 30% for several years). To put it in perspective: The second most important trade partner of Egypt, United Arab Emirates, represent around 7%, China 6% and USA 5%.
Thanks to the Association Agreement that came into force in 2004, bilateral trade has more than doubled from around €12 billion in 2004 to around €28 billion in 2018.
Since January 2019, the European Commission, with the help of independent consultants, is conducting a detailed study on the impact of the trade chapters of EU's Association Agreement with Egypt. The study will take 14 months and its results will be published.
We are funding a strategic project in Egypt (TDMEP) to develop the industry and enhance trade. One of the objectives of this project is to harmonise the Egyptian standards of industrial goods with the European system in order to improve access of Egyptian industrial exports to the EU.
Furthermore, the project is supporting capacity building at the Ministry of Trade in relation to international trade negotiations, which helped Egypt conclude important Free Trade Agreements. The Africa Continental FTA is an example. Trade agreements are important as they open new markets for Egypt's exports.
The EU has also supported the establishment of the Egyptian Export Development Authority. All these actions have helped Egypt to significantly increase its exports to the EU: Over the last two years, such exports increased by 27% while Egypt's trade deficit with the EU decreased by 23%.
I must mention that Egypt could benefit from much higher levels of European investments in the country that would help create jobs, transfer knowledge and add value to national products. However, although Egypt's business climate has improved over the last years, the country still significantly underperforms in this respect, ranking only 120 out of 190 in the World Bank ranking "Doing Business 2019". The investors and traders are also discouraged by the existence of significant and persistent trade barriers, the most burdensome of which is related to the compulsory registration of foreign exporters, where many European companies have to wait for 2 years or more to be allowed to export their products to Egypt.
Ladies and Gentlemen…Distinguished Guests,
I would like to welcome you once again to this Iftar event. Ramadan Kareem. As the African Cup of Nations is about to take place, we wish all success to the Pharos Team.