Hanafy: What is Required Today is to Ease Global Restrictions to Push the Wheel of Economic Movement

  • Virtual Seminar
  • 6 June 2020

During his participation in the virtual seminar organized by the Arab British Chamber entitled "Reactivating The Economy Post-Pandemic & trade Opportunities for Trade & Investment", the Secretary General of the Union of Arab Chambers, Dr. Khaled Hanafy, praised the effort made by the Arab British Chamber, especially during this period in light of the spread of the Coronavirus pandemic and dealing with relations between the Arab world and the United Kingdom.

Hanafy pointed out the importance of the Arab world to the United Kingdom, which is one of its largest trading partners, noting that we must cooperate and enhance the level of cooperation between the two sides.

He considered that the Arab British Chamber is the bridge that links the Arab and British sides to maximize the volume of economic cooperation, and has made in the recent and distant past great efforts to improve the commercial and investment reality.

He added that the world is facing today the worst crisis that affected its economic and social reality, and therefore we must think about the future and what we must do to get out of this crisis with the least possible losses.

Hanafy said: “If we analyze the problem that the world is witnessing, which is the slowdown in the economy, from my point of view the "shock of demand", which can be analyzed in two ways, the first is the overall demand shock related to government policies, and the second is related to the partial level shock, so the key solution must be the stimulation of these demands on the part of the government by adapting some of the monetary, financial and trade policies that would facilitate business, adding more openness to it”.

Hanafy explained that we should be more open in light of the growing talk of imposing more restrictions and taking self-sufficiency measures in some countries to protect foreign currency and the trade balance, while what is required today is to ease restrictions to push the wheel of economic movement that was greatly affected by the "Great Closure".

He considered that stimulating the budget and all aspects of spending will contribute to reducing the money supply in many countries and this is very important by the central banks, and that currency liberalization operations must address all these packages to stimulate aggregate demand, expecting that domestic demand will be stimulated in countries, pointing to the importance of having some measures related to the private sector to increase demand as well.

UAC’s SG explained that the governments in the Arab region started to do some packages, through tax and interest exemptions, which encourages increased demand for goods and stimulates demand locally and thus the development of private business.

He pointed out that the Union of Arab Chambers, in its capacity as a representative of the private sector in the Arab world, is working with federations of chambers in Arab countries to motivate government officials to promote openness and liberalization.

He pointed out that after Britain’s exit from the European Union, we need to rearrange and enhance our trade and investment relations better than before by signing more agreements, and the matter also with regard to the reality of the relationship with the European Union countries, as the partnership agreements with the European Union were somewhat just agreements open the door but never guarantee the passage or flow of goods and services. So what we need to do here is to work on developing the supply chain.

He also stated: “We need to work on strengthening the supply chain by thinking about the logistics package, which packages restrict the flow of goods into services and companies as well. Yes, today we have cuts in tariffs or zero tariffs and this is a good idea but it is not the ultimate goal, it is necessary but it is not enough, so we must work on how to build this relationship again, and here I regret to say that in the past we were dealing with each other as markets, and the Europeans see Arabs as markets for selling goods or even for investing in the local market. So my idea that we today need to make a change, as we need to think about how to enhance the concept of partnership from the mere fact that we are markets and deal with each other as a hub allowing us to enter Africa and Asia by taking advantage of the low cost of labor in some Arab countries, the benefits of the abundance of young generations, and the benefits of abundance of Financial resources, and the benefits of land availability in the rest of the Arab countries, as we cannot deal with the Arab countries as if they are only one part.

Hanafy pointed out that we need to expand the markets, in order to have a bigger market, so the strategic alliance here is the key word, which we need to consider seriously as the UK represents a good partner for the Arab world.

He explained that the Arab British Chamber had already started work to address the issues that were previously pending, but because of the epidemic the work has stopped at this level, but we will certainly work again very soon to encourage the private sector to work not only in order to gain markets but in order to be strategic allies.

He pointed out the importance of strengthening partnership by supporting medium and small companies, and here the governments should do four main things, firstly promoting research and development, secondly promoting what is called market intelligence, thirdly training and developing human resources in the Arab world to be able to keep pace with the business culture that comes from the Kingdom Countries, Europe, or anywhere else to be more productive, and fourth, strengthening the financial support.

Hanafy affirmed that the Arab world has become more open and distinguished than it was in the past, so we must start today before tomorrow by laying down new business rules as they are an essential part of developing our business and our economic relations.

He added that the Arab countries have taken very important measures to combat the Coronavirus, and many Arab countries have succeeded in limiting the spread of the epidemic, but in return the epidemic has left severe economic scars, as the economic epidemic was more severe than the coronavirus one. Whereas Arab countries with diverse economies were able to deal with the new global developments, other Arab countries were negatively affected by this and this was evident through economic indicators.

In conclusion, Hanafy called on the private sector in the United Kingdom to pressure to encourage the government to open up more, so that together we can overcome this reality and gradually return to economic recovery.

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