Developing transport, logistics contributes to investment rise, prices decline: Al-Samdouni

International trade movement is expected to decrease between 13%-32% during 2021

Providing financing packages to support civil aviation is essential to protect it from bankruptcy

Amr Al-Samdouni, Secretary General of the International Transport Services and Logistics Division at the Cairo Chamber of Commerce, expected that the economic and social repercussions of the Coronavirus pandemic will outweigh those of previous crises, including the global economic crisis 2008/09.

He stressed the need to continue developing the customs system and facilitating custom clearance procedures, to ensure that goods do not accumulate in ports, so that production components supplied to factories can continue smoothly.

The Ministry of Transport, he noted, has set an ambitious plan to develop transport networks, and develop logistics centres in border areas, which will contribute to attracting local and foreign investments, and facilitating the trade movement.

Al-Samdouni said: "The Transport Ministry is currently establishing roads with a total length of 1,250 km, at a cost of EGP 17bn. In addition, there is an integrated strategy for developing the maritime transport system."

He added that Egypt has many success components, such as the new corridor of Suez Canal, and the Suez Canal axis which puts Egypt on the map for global supply chains, besides being the gateway to Africa.

Al-Samdouni pointed out that Egypt has become a major exporter of agricultural crops in the world, and started to launch huge industrial projects.

The World Trade Organization expects a 13%-32% decrease in world trade by the end of 2021, compared to 2020, subject to the coronavirus control and its impact on global economic growth.

Moreover, the global container trade is expected to decrease by more than 10% due to the health crisis, surpassing its previous decline of 7%-8% during the 2008/09 economic crisis.

As for air transport, Al-Samdouni said that the International Civil Aviation Organization (ICAO) expected a decline in the global sector to an unprecedented level.

Moreover, the International Air Transport Association (IATA) predicted that air freight will be less affected than passenger transport, as most countries rely on it for shipping supplies and preventive and medical goods. The decline in cargo freight during 2021 is estimated between 14%-31%.

Al-Samdouni added that the pandemic’s impact on Egypt’s foreign trade will outweigh that of the global economic crisis and the January 2011 Revolution.

The Egyptian foreign trade declined significantly during the second quarter (Q2) of last year, due to the closure imposed in China and the global economic turmoil. However, it rebounded with the recovery of China.

Al-Samdouni explained that the lack of logistics services negatively affects the performance of trade. Therefore, the policies adopted by countries to facilitate trade, simplify the customs system, raise the efficiency of logistics, and digital transformation, have improved their ability to increase the circulation of goods.

He stressed the necessity of preparing a database for all companies operating in the aviation sector, so that the state can provide support in light of the actual needs.

He also drew attention to the importance of supporting the Egyptian private airlines as they face the same crisis and are threatened with bankruptcy and permanent exit from the market.

Al-Samdouni called for improving credit conditions to companies operating in the civil aviation sector, and to provide interest-free financing to pay wages and lease aircraft.

He referred to the €600m package provided by the European Union to companies operating in maritime transport, shipping, and storage in the form of loans, grants, and tax exemptions.

Other countries, such as the USA, Germany, and France, have also provided financial support to airlines to help them overcome the crisis.