(MENAFN- Gulf Times) After four years of political turmoil, Egypt is staking its economic revival on an investment summit in Sharm el-Sheikh it hopes will burnish its image and attract billions of dollars.
The gathering, to be attended by global chief executives and officials including the International Monetary Fund's Christine Lagarde and US Secretary of State John Kerry, is not just about money.
Egypt hopes the March 13-15 event will put it back on investor radar by projecting an image of stability, despite an Islamist insurgency in northern Sinai and militant attacks across the country.
Economic reforms, including cuts in energy subsidies, a long-awaited law cutting red tape, and efforts to eliminate the currency black market, have won praise. But some in the international community still doubt Egypt-a US ally that controls the Suez Canal and has a peace treaty with Israel-is serious about democratic change and human rights.
If the summit in the Red Sea resort of Sharm el-Sheikh succeeds, President Abdel Fattah al-Sisi could claim to be making progress on the economy and keep attention away from one of the fiercest crackdowns on dissent in Egypt's history.
Analysts say the economy could make or break Sisi, who as army chief deposed elected President Mohamed Mursi in 2013 after mass protests against Mursi's rule.
Hundreds of deaths and thousands of detentions followed, raising questions about the country's democratic credentials four years after an uprising toppled Hosni Mubarak.
Sisi has restored a degree of stability and raised hopes of economic recovery with the announcement of infrastructure mega-projects, including a multi-billion dollar expansion of the Suez Canal-reminiscent of the grandiose programme of late Egyptian leader Gamal Abdel Nasser.
Sisi has promised to make a clean break from the past, when the state dominated the economy and businessmen close to Mubarak profited under crony capitalism.
The investment conference, where at least a few international companies are expected to announce deals with the government, has put a spotlight on whether Egypt can deliver on lofty promises. "It's putting on a show and saying this is what we want to show you, and if they don't meet those targets then obviously they will be deemed to fail," said Angus Blair, chairman of business and economic forecasting think-tank Signet. Saudi Arabia, the United Arab Emirates and Kuwait, who backed the Brotherhood's overthrow, have kept Egypt's economy afloat with $23bn in oil shipments, cash grants and central bank deposits.
'Tax cut before meet'
Egypt said it will cut its maximum income tax rate before the start of a conference seeking to boost investment in North Africa's largest economy, according to Bloomberg report.
Ministers approved a top rate of 22.5%, the Ministry of Finance said in an e-mailed statement. That will replace the ceiling of 30% for incomes exceeding 1mn Egyptian pounds ($132,000) a year, Minister Hany Kadry Dimian said in a television interview.
The decision needs to be signed into law by the president. "It's a kind of a fiscal stimulus," Mohamed Abu Basha, a Cairo-based economist at EFG-Hermes Holding SAE, said by phone.
"Considering the possible impact on government revenue, the decision is still positive because it frees up cash for investments."
The new rules won't affect companies that currently enjoy special tax rates, the minister said. "We want to have a tax system that remains stable for at least ten years," he said.
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