EU/Egypt Programmes

III. European Commission/ Egypt Co-operation Status of Projects funded under MEDA II I. FOR THE EFFECTIVE IMPLEMENTATION OF THE AIMS OF THE EU/EGYPT ASSOCIATION AGREEMENT, THE FOLLOWING PROGRAMME HAS BEEN APPROVED AND SIGNED OR ARE UNDER PREPARATION:   Trade Enhancement Programme – A EC Financing: €20 million Total Disbursement: €0 million Starting Date: August 2002 Expected Completion Date: 2007 Beneficiary: Ministry of Foreign Trade The Trade Enhancement Programme-A forms part of a family of programmes (Trade Enhancement Programmes) which underline the commitment of the EC to assist Egypt in meeting the challenges of globalisation. The Trade Enhancement Programme-A will contribute to the growth of trading and export activities, thus fostering economic growth and employment creation. With a budget of €20 million, the programme will be implemented over four years and will notably support various departments of the Egyptian Ministry of Foreign Trade and Industry. The programme aims to reinforce the capacity of the Ministry of Foreign Trade in the following areas: (1) strengthening of the Commercial Representation Service and its network of commercial attaches (2) trade-related aspects of the EU/Egypt Association Agreement (3) WTO-related issues (4) export promotion activities carried out by Ministry of Foreign Trade departments and specialised agencies and (5) trade facilitation, through the enhancement of export-import inspection procedures The programme has fully started as from September 2004. The project is mainly providing assistance to the following organizations: the Egyptian Commercial Service (commercial diplomacy), the newly created Egyptian Centre for Export Development, the WTO Unit and the Unit dealing with the Association Agreement. Technical assistance is specifically offered to assist Egypt in the implementation of any trade related aspects of the Association Agreement, including through approximation of commercial laws. The project also includes the provision of TA and equipment for laboratories dependent on the Ministry in order to facilitate certification with the EU (free movement of goods). Trade Enhancement Programme – B The Trade Enhancement Programme-B is a European Commission budgetary support project aimed at supporting the trade reform implemented by the Egyptian government. The overall objective of the programme is the improvement of access of Egyptian producers to international markets and the increasing of competitiveness of Egypt’s export. With an overall budget of €40 million, the programme will be implemented over a 30-month period. The focus of the programme is Foreign Trade Facilitation. Programme activities are the following: Activities aiming at modernising customs services Export promotion activities Activities aiming at improving standards and check on standards The specific objectives of the programme are: The reduction of the deadlines and costs associated with customs import and export formalities. The strengthening of export incentives The reduction of deadlines and costs associated with checks on quality standards. This programme will be fully implemented under the responsibility of the Egyptian government. Through policy dialogue and monitoring of progress, the European Commission will release the funds on completion of the agreed reforms. Trade Enhancement Programme – C The Trade Enhancement Programme-C is a Technical Assistance programme aiming at supporting the Customs Reform implemented by the Government of Egypt. The Financing Agreement for this project was signed in May 2004. The overall objective of this programme is to reduce the cost of doing business in Egypt, especially as regards foreign trade transactions, in order to enhance economic efficiency and foster competitiveness of exports. Customs formalities will be made more predictable and less costly for all operators in foreign trade activities. The beneficiary of the programme will be the Ministry of Finance and more precisely the Customs Administration. With an overall budget of €6 million, the Trade Enhancement Programme-C will be implemented over a three-year period. The programme will endeavour to streamline and harmonise customs procedures according to European and international best practices, to modernise Customs operational tools and to upgrade customs professional capabilities, at the technical, managerial and institutional levels. Programme activities will be grouped under five components: Customs value/Valuation Risk Management System Post-Clearance Control/Audit Capacity building with a focus on Middle Management Internal/External Communication This new programme will take its place alongside the Trade Enhancement Programme-A (Technical Assistance to the Ministry of Foreign Trade) and the Trade Enhancement Programme-B. The Trade Enhancement Programme-C has been designed in co-ordination with other donor programmes, including the USAID programme for Egypt entitled “Assistance for Customs and Trade Facilitation”. The TEP C has been providing assistance to the Egyptian customs since the beginning of 2005. Furthermore, since May 2005 a team of long advisors has been recruited and is directly working with the Egyptian customs from Alexandria. Spinning and Weaving Restructuring Programme Under the National Indicative Programme for 2002-2004, the EU agreed to make available financial resources (tentatively €80 million) to assist Egypt in the restructuring and modernisation of its spinning and weaving industry. A Financing Agreement for this programme was signed in September 2004. The EU programme supports key Egyptian reforms in three main areas: (1) to review the regulatory framework for cotton trade (necessary to attract investment and facilitate trade in raw materials); (2) to restructure individually the public sector companies, including their privatisation where appropriate; (3) to address the social consequences of the restructuring/privatisation. However, the programme focuses on the social dimension and has as a key objective to ensure that the GoE deploys active employment policies when addressing the sector’s social concerns. The programme takes the form of budget support (78 million EURO) with a limited TA component (2 million EURO). A first tranche of the funds (EURO 20 million) was released in January 2005. As a follow-up of this, the Egyptian authorities signed an agreement with the Social Fund for Development for the implementation of a Labour Pool project, aimed at addressing the social consequences of the sector’s restructuring. Promotion of the Association Agreement The overall objective of this €2 million action is to assist Egypt to take full advantage of the EU/Egypt Association Agreement, which entered into force on 1 June 2004. This will be achieved by strengthening public awareness on the benefits and challenges that the new Association Agreement implies and by assisting the individual actors (government, businessmen, etc.) to implement and benefit from the EU/Egypt Association Agreement. The programme should also support Egypt’s administrative capacity to implement the Association Agreement, in particular through the efficient use of the “institutional twinning” mechanism, which will be available to Egypt before the end of 2005. The Financing Agreement was signed in September 2004. Project implementation started immediately and a number of preparatory actions to explore the possibility of twinning operations with Egypt were launched during the first half of 2005. II. SUPPORTING THE PROCESS OF ECONOMIC TRANSITION WILL INVOLVE THE FOLLOWING THREE PROGRAMMES: Technical and Vocational Educational Training Programme EC Financing: €33 million GOE Commitment: €33 million Financing Agreement Signed: April 2003 Starting Date: End 2004 Implementation Period:  6 years Project Authority: Ministry of Industry and Technological Development The Egyptian government is faced with the challenge of finding balanced responses to the political, economic and social implications of the present difficult economic situation and the increased international competition resulting from the gradual economic liberalisation. The development of a skilled labour force will be a key factor for the private sector to be competitive on international and local markets, and in generating employment for a growing labour force. Through this programme, the European Commission will provide training, institution and capacity-building and policy advice with a view to supporting the development of human and institutional capacities for the formulation and implementation of a systemic national technical and vocational educational training reform policy. The European Commission’s assistance will help the Egyptian government to pursue the following reform activities: Development of decentralised and demand-driven technical and vocational educational training institutions This programme component is designed to support the establishment of a number of pilot regional Enterprise-Technical and Vocational Educational Training Partnerships. These partnerships shall include private and public technical and vocational educational training providers in selected regions as well as clusters of enterprises. Educational-Technical Partnerships are supposed to implement demand-driven in-service/pre-service training activities.   Improvement of the quality of technical and vocational educational training delivery This programme component will focus on the development and provision of demand-oriented practical skills training in the framework of the partnerships created under the first component. It aims at improving practical skills and competencies development in technical and vocational educational training institutions and enterprises.   Development of national regulatory and support institutions for a decentralised and demand-driven technical and vocational educational training system   This component is designed to secure that learning experience, expertise and capacities developed by the Educational-Technical Partnerships under the first and second components will contribute to national technical and vocational educational training policy reform formulation and the development of new regulatory frameworks.   TEMPUS Programme The first phase of the Tempus programme was established in 1990 to respond to the needs for Higher Education reform in Central and Eastern European countries, following the fall of the Berlin Wall in 1989. Its aim is to reform and modernise higher education systems by developing inter-university co-operation. In June 2002, TEMPUS programme was extended to the Mediterranean partner countries in order to allow them to benefit from the experience of the Tempus programme and its powerful network of inter-university co-operation. The Tempus programme allows for three types of action: It encourages institutions in the EU Member States and the partner countries to engage in structured co-operation through the establishment of “consortia”. The “consortia” implement Joint European Projects with a clear set of objectives. Such projects may receive financial aid for two or three years.   Tempus also provides Individual Mobility Grants to individuals working in Higher Education institutions to help them work on certain specified activities in other countries.   Tempus may also provide help for certain sorts of complementary actions. Institutions and organisations which may participate in Tempus range from Higher Education institutions through to non-academic institutions such as non-governmental organisations, business companies, industries and public authorities. Egypt received €5.5 million for the year 2003 and 2004 respectively. For 2005 and 2006 6 million Euros are foreseen. Tempus has so far been a success story in Egypt. The funds foreseen for 2003 and 2004 have been fully consumed. In general the upgrading of higher education is a huge need and among the priorities of the Egyptian government. Under the EU-funded TEMPUS programme, a Master’s Degree in Euro-Mediterranean studies has been established at the Faculty of Economics & Political Science (FEPS) at Cairo University. The Master’s programme is based on a consortium including prestigious universities including Cairo University and four European universities: the Paris Institute of Political Studies (Sciences-Po Paris), Universiteit van Amsterdam, Universitat de Barcelona and the Freie Universitat Berlin. For more information on the Master’s programme, please consult: www.masteuromed.com  Financial and Investment Sector Reform Programme With an indicative budget of €15 million, the Financial and Investment Reform Programme is one of a series of new programmes foreseen in 2004. Egypt has taken important steps to modernise its economy in recent years; there is now recognition that financial intermediation needs to be enhanced and modernised in order that the industrial and service sectors may fully achieve their growth potential. Many small and medium sized companies experience difficulties in accessing bank credit, and there is also a shortage of medium and long term lending instruments. The relatively high level of bad and doubtful debts in the balance sheets of some Egyptian banks is a serious issue that will need to be addressed in pursuit of reform. It may also now be time to explore the issue of the future “architecture” of financial sector supervision in Egypt. In this context, a team of senior international experts arrived in Cairo in November 2003. These experts, working under the guidance of the Delegation of the European Commission in Egypt, have started the identification and design work for the programme. This process will continue during the first quarter of 2004. Financial and Investment Sector Co-operation: Rural Development The overall objective of this €18 million four-year programme is to support the efforts of the Government of Egypt to increase income and create job opportunities in rural areas by trying to improve the capacity of the financial system to deal with the credit needs of farmers, small food producers and agro-business. The specific objective of the programme is the reinforcement of the capital base of two credit lines which have been established and supported by the European Commission in the 1990s. The core feature of the programme is the provision of credit to small and medium producers of agricultural products, processors and entrepreneurs, through commercial banks. This credit line will enable banks to finance private activities in the following areas: post-harvest activities and agricultural input supply and marketing. Activities will also concentrate on capacity upgrading of banks and intermediaries (co-operatives and associations) and raising awareness of end beneficiaries (clients).   Financial Investment and Sector Co-operation – Social Component EC Financing: € 17 million Egyptian Government Commitment: none Starting date September 30th, 2004 Implementation period: 3 years Project Authority: Social Fund for Development (SFD) The FISC - Social Component – aims to contribute to job creation and income generation through the provision of financial (credit) and non-financial services (technical assistance, training and business development services) to the economic activities of principally small and micro entrepreneurs who normally have little access to the financial system in the country. The beneficiary of the Financing Agreement will be the Egyptian Social Fund for Development (SFD) which will ensure the delivery of the financial and non-financial services to end-beneficiaries through financial institutions and other specialized organizations. The project includes the following components: Provision of financial services (credit line) to new or small and micro enterprises mainly through SFD’s Small Enterprise Development Organization (SEDO). A smaller part of the overall funds will be channelled through FSD’s Community Development programme (CDP) by using NGO’s. CDP is specializes through its Micro Finance Section (MFS) in distributing micro credits.   Provision of non-financial services (technical assistance, training and business development services) which complement the financial ones and aims at upgrading the capacity of the intermediaries and end-beneficiaries, thus ensuring the sustainability of the overall action. The EC contribution of € 17 million is divided into € 11 million credit line to be used through SEDO, € 4 million credit line to be distributed through MFS and € 2 million for supporting services. TA for the preparation of the project is being recruited and it is envisaged that the project will start by mid July 2005. III. FOR SUPPORTING STABILITY AND SUSTAINABLE AND BALANCED SOCIO-ECONOMIC DEVELOPMENT TWO PROGRAMMES WILL BE LAUNCHED: South Sinai Regional Development Programme EC Financing: €64 million Financing Agreement Signed: 7th of April 2005 Starting Date: upon ratification Implementation Period: 5 years Project Authority: Governorate of South Sinai Over the past decade, South Sinai has seen significant economic growth in the tourism sector, which now accounts for around 25% of all tourist arrivals in Egypt. Unprecedented demographic growth over the last decades has seen the population of the Governorate of South Sinai (GoSS) increase from less than 5,000 in 1960 to an estimated 113,229 in 2003 , accompanied by a marked shift from rural to urban areas. Tourism is the main economic activity in South Sinai. Oil is extracted and processed near Abu Rudeis and manganese is mined and processed in Abu Zeinima. Tourism in South Sinai has flourished in the past decade, accounting for 2.6 million arrivals. It is conservatively estimated that there will be 6.8 million tourist arrivals to South Sinai by 2017. Due to this great demographic and economic growth in South Sinai over the last two decades, it is important that the unique environmental and natural resources are managed in such a way so as to protect the indigenous quality of life, while continuing to attract tourists. The South Sinai Regional Development Programme (SSRDP) has been prepared in a participatory way encompassing views of local stakeholders and authorities. Therefore, the Governorate of South Sinai and the European Commission held a Stakeholders’ Conference at Sharm El Sheikh on 27-29 September 2004 with the participation of relevant ministries and departments, traditional communities, civil society, the private sector and EU member states. The objective of the conference was for the stakeholders of the SSRDP to promote and articulate their participation in strategy formulation and the selection of priority sectors. In six different workshops, the stakeholders identified the keys issues, principal challenges and priorities in the areas of: Environment and Sustainable Development Local Development Cultural Heritage Social Development Equipment & Capacity Building Public Awareness The programme purpose is the development of local economy and activities and the preservation and support of the social, cultural and natural resources of South Sinai. Activities will be split into two components: component 1 will encompass major projects whereas component 2 will be implemented for demand driven projects through the allocation of grants for local development initiatives emanating from the stakeholders in South Sinai The Financing Agreement was signed 7th of April 2005 and ratification will allow implementation to start. Support in the Field of Democratisation, Human Rights and Civil Society EC Financing: €5 million GOE Commitment: n/a Financing Agreement Signed: May 2006 Starting Date: November 2006 Ending Date: December 2009 Project Authority: Ministry of International Cooperation On 7 May 2006, the European Commission and the Egyptian Government signed a Financing Agreement amounting to €5 million for a programme supporting Democratisation, Human Rights and Civil Society. The programme supports Egyptian reform efforts directed at expanding citizens’ rights, strengthening civil society and advocating human rights. The programme is implemented through the UNDP, the National Council for Women and the National Council for Human Rights. The main objectives of the programme are: to support the Egyptian efforts to further consolidate governance in the broad sense; to support the development and implementation of institutions, policies and strategies that are in line with the relevant international human rights instruments and standards; and to increase the capacities of the Egyptian NGOs and of their umbrella organisation. The National Council for Human Rights was awarded a grant of € 900.000 for the establishment of a Complaint/Ombudsman Office to handle the large number of complaints about human rights violations it had been receiving.  The Ombudsman Office’s goal is to function as an efficient mechanism to respond to violations of human rights and fundamental freedoms granted by international declarations, and to serve as both a monitoring body for human rights in Egypt and a mediator between citizens and the authorities. The National Council for Women received € 700.000 to support its already existing Ombudsman Office, which was set up in 2001 as an EC-financed project and received around 20,000 complaints from women between 2001 and 2006.  The Ombudsman Office builds strong linkages with various government authorities that allow it to transfer complaints and ensure that they are duly processed and resolved.  The UNDP was awarded a grant to support the ongoing “Human Rights Capacity Building Programme in Egypt,” whose objective is to familiarise Egyptians with Egypt’s treaty commitments and with international standards for human rights in the administration of justice.  The project provides educational materials to officials and opinion leaders, and organises training courses for law enforcement agents, legislators, educators, civil society organisations, and the media. The UNDP was also awarded a grant to support the General Federation for NGOs and Foundations and empower and transform it into an innovative, democratic, transparent and participatory organisation that will be able to carry NGOs’ concerns to policy makers.  The project also includes the establishment of a Complaint Office, a Technical Coordination Office, and a volunteer unit within the Federation.   Social Development and Civil Society: Children at Risk The main objective of this €20 million programme, signed in May 2004, is to improve the living conditions and the prospects of social re-integration of the most economically vulnerable and socially marginalised groups in the Egyptian society and to enhance the capacity of NGO’s to contribute effectively to social development. The programme purpose is to improve the social situation of the following four groups of “children at risk” needing urgent support: (i) street children, (ii) disabled children, (iii) working children, (iv) girls at risk of female genital mutilation (FGM) and to contribute to the facilitation of girls’ access to education by providing assistance to the national action plan for girl’s education. The National Council for Childhood and Motherhood, Egypt’s largest and most experienced public agency in this domain, was chosen as partner in this programme. The National Council for Childhood and Motherhood will ensure the programme’s co-ordination while implementation will mainly be carried out by NGOs active in the area of child care. The end-beneficiaries will be children falling under the above-mentioned five categories and the girls benefiting of the national action plan for girl’s access to education. One of the components of the project will be the strengthening of capacity of the NGOs and of other implementing agencies involved in the programme. As for the NGOs, training will be provided in combination with the preparation and implementation of project proposals (on the job training). It is expected that the programme will improve the current situation and the prospects of social re-integration of four categories of children at risk, facilitate the access of girls to education and strengthen the capacity of the implementing agencies and service providers (NGOs) active in the field of assistance to the above-mentioned groups of children.