Roundtable Discussions

Promoting Growth and Employment through Development

Date : 10/24/2011

Speakers : Multiple Speakers

The Egyptian Center for Economic Studies (ECES) held a roundtable discussion within the framework of the conference on “Stimulating Growth and Investment during Transition,” organized by the European Bank for Reconstruction and Development (EBRD), the Federation of Egyptian Industries (FEI) and the Egyptian Junior Business Association (EJB) in collaboration with the Ministry of International Cooperation. Building on its success in lending to SMEs in Eastern Europe, EBRD will be embarking on an ambitious lending program in Egypt, catering to the development and growth of SMEs. To that end, the EBRD seeks to define the best and most innovative way to support the development of SMEs in Egypt as main contributors to employment and growth. Despite significant shares in GDP and employment, the support to SMEs has yet to effectively realize their potential in creating and sustaining inclusive growth. Several constraints hamper SMEs operations and growth, including lack of access to financing, inability to hire formally given rigidity in the labor law, weak complementarity with large upstream and downstream enterprises, lack of institutional support and tough competition amidst monopolistic practices by large investors. These hurdles have become even more compounded post the 25th of January revolution as a result of security failure, frequent strikes and tarnished image of the private sector at large.Participants in this session attempted to address the following questions: 1. How to create a conducive macroeconomic environment for SMEs growth: investment and export strategies, inflation targeting and exchange rate management?2. Which type of industrial policy is needed to help SMEs grow: prioritizing sectors, geographic areas and women participation?3. What institutional support is required to foster the growth of SMEs: tax incentives, production subsidies and strengthened forward linkages?4. Who will extend credit to SMEs: the roles of the central bank, the government, commercial banks, the capital market and international donors?