Impact of the strongeconomicstrong crisis on trade, foreign investment,.pdfVIP

Impact of the economic crisis on trade, foreign investment, and employment in Egypt Dr Arne Klau Senior Trade Economist The Global Jobs Pact in Egypt: Roundtable on Mitigating the Impact of the Global Economic Crisis on Egypt‘s Economy and Labour Market. Cairo, 20 December 2009 Overview 1. The crisis in Egypt – some basic facts 2. Trade policy and trade flows 3. Investment policy and FDI inflows 4. Employment policy and the labour market (1) Labour market challenges before the crisis (2) The labour market during the crisis 5. Outlook and recommendations 1. The crisis in Egypt  GDP growth: 7.2% in 2007/08, but 5.8% in Q1 2008/09 and 4.1% in Q2 2008/09  A real sector crisis  Consequences: (1) Increase of unemployment (2) Change in the composition of the working age population  Transmission channels: (1) Exports (2) FDI inflows (3) Remittances (4) Official transfers The transmission channels in comparison Decrease of foreign exchange inflows (US$ billion), 2007/08 to 2008/09 6 5 4 3 2 1 0 Merchandise Service FDI inflows Remittances Official exports exports transfers Sources: Central Bank of Egypt, Balance of payments data, CAPMAS (FDI) Egypt in international comparison Impact of the economic crisis on the value of exports, countries covered by ILO rapid impact assessments (Index, 1st half of 2007=100) 200 1st 2007