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Technical Assistance for Policy Reform in Egypt

2005-2010 || U.S. Agency for International Development

Abstract

 Egypt Technical Assistance for Policy Reform (TAPR II)was a five-year, $134 million project to provide a broad and integrated source of technical assistance to Egyptian reformers to help them define and implement their visions for economic policy and institutional reforms. Structured along seven components, TAPR II promoted foreign and domestic trade; improved financial structures, services and skills; supported macroeconomic stabilization and tax administration; improved the investment climate; strengthened the private sector and improved competitiveness; and supported higher education programs in law, economics and business. It provided technical assistance and support to reduce government’s role, deregulate burdensome regulatory regimes, streamline processes, and harmonize policies, laws, and regulations that govern economic institutions and the private sector. The project built the human and institutional capacity across Egypt so that the policies, processes and procedures that were implemented and adopted could be sustained and institutionalized over time. TAPR II established relationships with Egyptian reformers within government and the private sector to support critical, demand-driven reforms that were responsive to changing circumstances in Egypt.

The Challenge

Egypt’s ambitious economic growth and reform goals were in danger of being derailed by critical policy, regulatory, human and institutional capacity challenges. The reform effort required massive institutional reorganization, the merging of disjointed systems, personnel, and policies, and the institution of broad-based regulatory reform across specific sectors of the economy.  Moreover, inadequate human and institutional capacity prevented many public and private sector organizations from developing the qualified staff and operating systems and processes necessary to meet the demands of a modern, market-based and increasingly private sector oriented economy.

How We Helped

Component A: Trade Environment
Deloitte provided assistance to the client to achieve measurable improvements in Egypt’s trade environment for businesses and individuals. We assisted the client to bring Egyptian import and export policies and procedures in line with international standards, increased the efficiency and institutional capabilities of border agencies, protected and enforced intellectual property rights, and promoted competition policies to create an environment conducive to trade expansion and attracting foreign direct investment. We assisted the Customs Authority to reorganize along functional lines to streamline the delivery of client services while maintaining appropriate levels of social and revenue protection. We assisted in implementing a National Customs Information System and the first group of Modern Customs Centers and integrated Logistics Centers.

Component B: Financial Sector
Deloitte supported financial sector reform priorities to lay the foundation that supports private sector growth. For the Central Bank of Egypt, Deloitte implemented an Oracle Human Resource Management System. We supported risk management efforts, introduced BASEL II, and developed a Corporate Communications Department. For Egypt’s Capital Markets Authority, we provided recommendations for transitioning to a risk-based approach for market supervision and for establishing individual licensing and qualifications for brokers and other market participants.

At the Egyptian Banking Institute, we assisted with implementing activities to achieve international accredidation. Deloitte provided technical assistance to the Egyptian Insurance Supervisory Authority to adopt risk-based supervision, including restructuring of its organization. Also, we developed a strategy and plan for the establishment of the Egyptian Financial Services Authority, a unified non-bank financial regulator combining the pension, insurance, capital market regulators into a single organization.  

Component C: Macroeconomic Stability
Under this component, Deloitte focused its efforts on assisting the client to implement market-oriented macroeconomic policies to create sustainable economic growth. We provided legislative review and commentary on the regulations for the Income Tax Law and drafted a framework for a new Property Tax Law, Public Pension Law and Private Pension Law. Most notably, Deloitte developed a broad strategy for the integration of the tax departments and provided a road map through a number of detailed papers on specific integration issues. In addition, we helped our client in its efforts to design, develop and implemente an automated Audit Selection System for the Income Tax Department.

Component D: Enabling Policy Environment for Business
Deloitte supported the development of a body of commercial legislation, policy, and governance practices that created an enabling environment for business. We provided guidance to modernize specific commercial laws and regulations and to improve adherence to the rule of law through judicial education.  We worked with the industrial property offices to improve the efficiency and productivity of the intellectual property system and assisted the Competition Authority to develop competition policy and the Consumer Protection Agency to provide protection for consumers. Deloitte assisted in creating an Alternate Dispute Resolution Center to effectively mediate commercial cases.

Component E: Facilitating Services for the Private Sector
Deloitte assisted enterprises increase their competitive position and implement streamlined measures within targeted ministries and agencies. We assisted in creating the Smart Services Business Center facility providing expedited license issuance services to the Alexandria business community. We supported the move of industrial policy and industrial parks from state-led to a Public Private Partnership model and developed an investor pipeline of over 500 companies in the automotive sector representing inflows of US$240 million. We transformed the Egyptian National Competitiveness Council into a globally recognized entity and a founding member of the Global Federation of Competitiveness Councils.

Component F: Human Resources
Deloitte assisted the client to further human capital development by building the institutional capacity of leading law, economic and business educational institutions to produce graduates prepared to meet the needs of a competitive economic system, fully integrated into the global economy.

Component G: Program Support
Deloitte supported enhancing the efficiency and effectiveness of USAID monitoring, evaluating Egyptian achievement of goals required to obtain funds under the U.S. Government Direct Support Program to Egypt, improving the availability and dissemination of information on economic reform to the public, and providing opportunities for greater involvement of civil society in the process.

Solution

In its march toward reform, Egypt has been assisted by the confluence of a number of contributing factors that supported its recent success: the appointment of high-quality leaders in specific economic ministries that have become a remarkable reform team; the development and strengthening of targeted institutions that have helped support the reform agenda and ground it in the real economy; the significant level of available financial resources from willing donors, led by USAID, dedicated to support the reform agenda; and the effective technocrats and consultants who have worked closely with the reform team to bring international standards to the effort and support the implementation of sustainable reforms.

As used in this document, “Deloitte” means Deloitte Consulting LLP, which provides strategy, operations, technology, and human capital consulting services, Deloitte Financial Advisory Services LLP, which provides financial advisory services, and Deloitte & Touche LLP which provides governance and risk oversight and reporting advisory services. These entities are separate subsidiaries of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

 

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