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AIDCO A2 / 2010 / 237668
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MEMORANDUM TO THE ENPI COMMITTEE
CONCERNING THE
Annual Action Programme covered by the programming
document "The national indicative programme for 2007-2010"
for the ENPI in favour of Egypt for 2010
1.
2.
Identification
Budget heading
19 08 01 01
Total cost
€ 192 million (EC Contribution)
Legal basis
ENPI Regulation (EC) No 1638/2006 of 24 October 2006
Country
EU bilateral relations with Egypt are based on the Association Agreement (AA)
signed in 2004 and the Action Plan (AP) in the context of the European
Neighbourhood Policy (ENP) agreed on 6 March 2007. The Action Plan sets an
ambitious political, economic and social reform agenda based on joint ownership,
common interests, shared values and reciprocal commitments. The implementation
of the AP will allow Egypt and the EU to further develop their strategic partnership
through a significant degree of economic integration, deepening of political, cultural
and social co-operation, aiming at promoting the modernization of the Egyptian
economy and society.
At the national level, Egypt’s reform strategy is being accompanied by relevant
regulatory, legislative and institutional measures to improve the performance of its
public administration and create an enabling and competitive business environment.
In its plan for 2006-2012, the Egyptian government considers the quality of and
access to public services at the forefront of its reform agenda and priorities include
transport, energy, health, and education.
As far as the economy is concerned, after experiencing another year of sound
macroeconomic performance in the first half of 2008, growth in Egypt slowed down
in the second half of 2008 on the back of the global financial crisis. As in other
emerging economies, the crisis in Egypt is mainly affecting the real sector (exports,
investment). The Egyptian economy may experience a decline in its growth rate to
4% in 2010. On the other hand inflationary pressures seem to have come to a halt,
and the outlook for the 2009-2010 period sees inflation decline to 8-12% (compared
to 20% as of December 2008).
Unemployment will be affected by slower economic growth in the near to medium
term and poverty reduction targets may be difficult to achieve. The current subsidy
system (food aid and cash transfers) while being reformed still benefits close to 50
million people out of a population of 75 million and places a burden on public
expenditure. More than 50% of Egypt’s population live in the rural areas where
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poverty is concentrated and agriculture is the main economic activity accounting for
about 17% of Gross Domestic Product (GDP), about 20% of total exports and 30%
of total labour force.
In this context, the Egyptian government will have to balance the prerogatives of
economic and social reform (e.g. removing costly subsidies) and its response to the
international economic slowdown while maintaining social protection for lower
income groups. Egypt’s long-term development programme is set out in its National
Plan 1997-2017.
Political governance has not progressed at the same pace and although some progress
has been made in the field of women's rights, reforms in the political field could be
further enhanced in particular in the areas of good governance and human rights.
3.
Summary of the Action Programme
(1)
Background:
This 2010 Annual Action Programme in favour of Egypt amounts to €192 million
and consists of the following seven programmes:
 Water Sector Reform Programme – Phase II (WSRP-II, €120 million, €80 million
in 2010, additional €40 million commitment from 2011 funds subject to the
availability of budgetary resources);
 Research, Development and Innovation Programme - Phase II (€20 million);
 200 MW Wind Farm in Gulf of El Zayt Project (€20 million);
 Support to the implementation of the Action Plan Programme and the Association
Agreement (€10 million);
 Support for Modernization of Administration of Justice and Enhancement of
Security (€10 million);
 Support to Public Administration and Local Development (€9 million);
 Support to cultural diversity and creativity in Egypt (€3 million).
The programmes are designed to further support Egypt's efforts to tackle major
challenges in key sectors of its economy and society, in line with the EU-Egypt
Action Plan, Country Strategy Paper and NIP (2007-2010). This AAP builds on
previous AAPs with Egypt, in particular in the area of water, RDI, SAAP and Wind
Farms. Justice is a new area of cooperation as is the cultural programme (the first in
the region) which seeks to improve access to culture and cultural expression. The
public administration programme has links with earlier programmes supporting
Egypt's Governance agenda. The water sector reform programme will support the
GoE to continue the reform programme in the water sector in accordance with the
objectives of the National Water Resources Plan (NWRP) 2005-2017.
(2)
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Coherence with the programming documents:
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This AAP 2010 builds on ongoing reform programmes, especially in the water sector
and the field of research and innovation and the support to the implementation of the
Action Plan Programme and the Association Agreement. These reform areas are
covered through programmes launched in the framework of previous AAPs, hence in
line with the NIP and the CSP. New designed programmes in renewable energy,
justice, public administration and culture cover other topics identified in the
programming documents and are in line with the reform agenda in Egypt.
(3)
Identified actions
Water Sector Reform Programme – Phase II
This WSRP-II supports the ongoing reform of the water sector, in line with the
NWRP 2005-2017, National Water Strategy and Waste Water Development Plans. It
aims strengthen the institutional structures; promote more efficient use of water
resources while protecting public health and the environment.
Research, Development and Innovation Programme – Phase II
The RDI II supports the Egyptian Government's efforts to enhance research,
development and innovation performance, facilitating Egypt's move towards a
knowledge-based economy, building on an earlier EC programme. It will foster an
'innovation' culture and improve research collaboration between the public and
private sectors, enhancing the impact of Egyptian researchers' participation in EU
funded programmes and promote Egypt's scientific and technological capacity.
200 MW Wind Farm in Gulf of El Zayt Project
This project to construct a wind farm of up to 200MW on the West Bank of the Gulf
of Suez will improve access to electricity for the Egyptian population and contribute
to global environmental protection by producing environmentally sound electrical
energy limiting CO2 and other emissions.
Support to the implementation of the Action Plan Programme and the Association
Agreement
This builds on previous programmes to strengthen cooperation between the EU and
Egypt as well as contribute to Egypt's reform process in the context of the ENP
Action Plan. It will support the Egyptian public administration in upgrading its
legislative and institutional framework, in particular via twinning. It will support
approximation to EU legislation and best practice thereby improving the capacity of
governmental administrations.
Support for Modernization of Administration of Justice and Enhancement of
Security
This is a capacity building within the Justice sector which seeks to address key issues
in the sector. As well as supporting the objective of improving the efficiency of the
court system and reducing the backlog of cases, the project also targets the juvenile
justice system and the fight against trafficking in human beings.
Support to Public Administration and Local Development
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This programme will contribute to building capacities of key beneficiaries to further
enhance the efficiency, effectiveness, accountability and transparency of public
administration in the areas of policy formation, public finances, performance
measurement and decentralisation.
Support to cultural diversity and creativity in Egypt
The objectives are to contribute to and promote the diversity of cultural expressions
and to have a better impact on sustainable socio-economic development, across the
whole of Egypt. In particular, by helping to provide increased access to culture all
over Egypt, foster dialogue between cultures, and by protecting and promoting
diversity of cultural expressions at local, national and international levels.
(4)
Expected results:
Water Sector Reform Programme – Phase II
Improved water supply and sanitation policy, better enforcement, improved service
and performance in the water supply and sanitation sector and a higher
environmental sustainability as well as operational practices in Water Resources
Management are the expected results of this programme.
Research, Development and Innovation Programme – Phase II
The expected results are: stronger innovation policy formulation capacity of the State
Ministry of Scientific Research and enhanced collaboration between the academia
and industry. In addition to that an increased quantitative/qualitative participation in
FP 7 and other EU funded projects with an enhanced success rate plus an established
base for the Centers of Excellence (CoE) are also expected.
200 MW Wind Farm in Gulf of El Zayt Project
The production of environmentally sound electrical energy at a reasonable economic
cost is the main expected result of this project.
Support to the implementation of the Action Plan Programme and the Association
Agreement
This project should lead to an improved legislative and regulatory context through
approximation to EU legislation and regulation in key priority areas. Improved
institutional capacity of the Egyptian public administration particularly in fields
specified in the ENP AP and the Association Agreement are also targeted.
Support for Modernization of Administration of Justice and Enhancement of
Security
Improved administrative services, more efficient case-management and better trained
professionals in the area of justice are expected as results of this programme. The
programme should also help to improve conditions for juvenile prisoners and
strengthen Egypt's capacity to fight new forms of crime.
Support to Public Administration and Local Development
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This project covers several areas aimed at strengthening administrative and financial
procedures in the Egyptian administration. These include helping to strengthen the
PFM system, improving the way in which policies are formulated and helping the
government develop its decentralisation agenda.
Support to cultural diversity and creativity in Egypt
Expected results are an increased number of people having participated or assisted in
a cultural event, a better dissemination of artistic production all over Egypt,
improved capacities of cultural operators and an increased number of people being
interested in the valorisation of intangible and tangible heritage.
(5)
Past EU assistance and lessons learnt.
AAP 2010 programmes are mainly based on previous programmes covering similar
areas and reform topics. Conclusions from these programmes were drawn and taken
into account wherever possible in the design of the new phases. For programmes
covering new areas of intervention, such as justice and culture, lessons have been
drawn from similar projects in other countries and this will be supported with
monitoring and evaluations over the duration of the projects.
4.
Communication and visibility
Each programme of the present AAP has a separate budget foreseen for visibility
actions. The European Commission visibility guidelines shall be used for the
programmes in order to assure quality of the actions foreseen under visibility
measures. The actions range from printed materials, workshop and events to specific
communication strategies that will be developed for the purpose of high-quality
visibility for programmes.
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5.
Cost and financing
Water Sector Reform Programme – Phase II
€120 million
Research, Development and Innovation Programme - Phase
II
€20 million
200 MW Wind Farm in Gulf of El Zayt Project
€20 million
Support to the implementation of the Action Plan
Programme and the Association Agreement
€10 million
Support for Modernization of Administration of Justice and
Enhancement of Security
€10 million
Support to Public Administration and Local Development
€9 million
Support to cultural diversity and creativity in Egypt
€3 million
Total amount of the action programme
€192 million
Cumulated changes of the allocations to the specific actions not exceeding 20% of
the maximum contribution of the European Union or extensions of the
implementation period not exceeding 20% of the initial duration of the
implementation period are not considered to be substantial provided that they do not
significantly affect the nature and objectives of the Annual Action Programme. This
may include an increase of the maximum contribution of the European Union up to
20%.
The Committee is invited to give its opinion on the attached Annual Action
Programme for Egypt.
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