Italian development aid in brief

1. Background and main reasons for the presence of Italian Cooperation

There are several reasons that explain the presence of the Italian Cooperation in Egypt. First, Egypt is the most populated country in the Middle East, and the third most populous on the African continent. In the second place, 6% of the population lives in multidimensional poverty1 while an additional 7.2 percent is vulnerable to various deprivations, with a 2012 Human Development Index that positions Egypt at only 112 out of 186 countries. In addition, one should also consider the proximity of the two countries as well as the long-standing history of sound collaboration and mutual trust, strengthened by cultural and economic links as well as by the common Mediterranean roots. Finally, while, its economy is one of the most diversified in the Middle East, however, Egypt has been going through a particular difficult moment due to the rather unstable political, social and economic situation since 2011: that is why Italy remains firmly committed to supporting the Egyptian government in achieving its development.

2. Other international donors, coordination and opportunities of division of labor, joint evaluation exercises (Harmonization)

The main donors in Egypt are USA, France, Germany, Japan, Sweden, the Netherlands, Belgium, the UK and Spain. Furthermore, several UN agencies have long being operating in the country. The donors’ coordination mechanism includes regular meetings of the Development Partners Group (DPG), as well as the establishment of thematic DPG Sub-Groups aimed at facilitating information sharing and coordination among development partners operating in selected fields, such as agriculture, health, education, gender.

At European Union level, besides regular meetings of the EU Development Counselors, a number of EU - Member States platforms have been created to promote concrete coordination in priority sectors. In the frame of the Agriculture and Rural Development EU-MS Platform, Italy assumed the role of coordinator and participated in the formulation of the EU Joint Rural Development Programme (which will be eventually executed by the Italian Development Cooperation in the framework of a Delegated Cooperation Agreement between EU and Italy). Furthermore, an EU- MS Joint Programming exercise has been launched in February 2012, with a two-year transitional phase before entering a fully-fledged phase in 2015

3. Other expressions of the Italian Cooperation System in the country (NGOs, universities, local authorities, private sector) and strategies for their involvement

The work of Italian NGOs in Egypt has always been appreciated as a valuable contribution to the socio-economic development of the country. Thanks to a regular work in the field, hand in hand with Egyptian Institutions and Civil Society, NGOs have provided continuous support and assistance to their local partners, ensuring at the same time a permanent dialogue with the institutional counterparts.

Moreover, a strong partnership between Egyptian Institutions and Italian Universities has been established in the sector of environment and cultural heritage. In particular, the University of Pisa and the University of Tuscia have been collaborating with the Ministry of Antiquities in archeological sites, such as Medinet Madi in Fayoum Governorate. Finally, it is worth underlining also the important activities carried out by Italian Regions (Emilia Romagna, Lazio, Puglia and Campania).

4. General objectives of the Italian cooperation in the country, sharing with counterparts and consistency with international guidelines on aid effectiveness

The Italian Cooperation acts within strategies and legal framework regularly agreed upon at the highest governmental level, in particular: The Development Cooperation Framework Agreement (2010) and the Memorandum of Understanding regarding a New Development Partnership (2010).

In line with Italian Cooperation Guidelines and with the priorities highlighted by the Egyptian Authorities, the following have been identified as priority sectors:

• Agriculture and Rural Development;
• Social sector, with special attention to civil society;
• Private and Public sector development, with special focus on Micro Small and Medium
• Enterprises (SMEs) and transport (Railways);
• Education, with special attention to Technical and Vocational Education and Training (TVET), as hub for employment;
• Environment and Cultural Heritage.

5. Sectors of intervention and expected results

Agriculture and Rural Development

In the forthcoming years, the Italian commitment in the agriculture and rural development sector will be further strengthened, considering the coordination role assumed by Italy at the European level and the opportunity to manage European funds, through a delegated cooperation Agreement, under the EU Joint Rural Development Programme (22 million Euros from EU + 9 million Euros Italian parallel financing). The Italian Cooperation has an agriculture and rural development portfolio of about 55 million Euros spread over ongoing and planned interventions. The Overall objective of the Italian initiatives in the sector is to improve the quality of life of people living in rural areas, especially in Matrouh, Minia and Fayoum Governorates, with a focus on sustainable management of territorial resources. Indeed, the Italian action combines improving agricultural productivity and agro-business, development of rural economy and horizontal capacity building,

Social sector

The Italian Cooperation supports Egypt in alleviating poverty among the most vulnerable groups of its population, with special focus on children and women. In this sector, a new intervention intended to contribute defining and implementing a pilot model for integrated development and family empowerment in Fayoum Governorate has been approved for a grant amount of 1.5 million Euros.

The main tool for financing the initiatives of development cooperation is the Debt-Swap Programme. Throughout three consecutive phases – the second phase (USD 100 million) is ongoing and the third phase (USD 100 million) is about to start – the initiatives financed by the Debt-Swap Programme were able to create about USD 350 million for the realization of projects in priority sectors of the social and economical development of the country. The other tools used are soft loans and grants.

Private and public sector development

Entrepreneurship, technology transfer and know-how exchange are the backbone of a sound and investment friendly environment. The Italian Cooperation provides technical and financial support to Egyptian SMEs through two credit lines (about 23 million Euros total), one dedicated to Small and Medium Enterprises and one dedicated to Small Enterprises. The objective is to develop Egyptian Small and Medium Enterprises (SME) through the cooperation with Italian enterprises and increase their production for export and employment.

In the transport sector, the initiative to support the Egyptian National Railways in implementing its Restructuring and Development Plan (8 million Euros) is providing technical and managerial assistance to the Egyptian National Railways (ENR) to improve the overall railways system.

The Italian Cooperation also provides support to the Egyptian balance of payment through a Commodity Aid Programme. Its goal is to spur the process of wealth redistribution, create employment and end poverty, and at the same time promote the internationalization of Italian enterprises and the “made in Italy”. The programme is a grant worth EUR 36.7 million (EUR 31 million plus EUR 5.7 million of interests). The initiative is close to completion. The last import projects that have been approved and are being carried out concern supplies for the Ministry of the Environment (EUR 3 million), the Ministry of Antiquity (EUR 1.5 million), the Ministry of Civil Protection - to be allocated in different governorates of Egypt (EUR 10.7 million)

Technical and Vocational Education and Training

Human resources development is a traditional cornerstone of the Italian-Egyptian partnership. Supporting the Egyptian Technical Education System through standard-base qualification and responsiveness to labor market needs is a key commitment of the Italian Cooperation. Several initiatives are under implementation within the second phase of the Italian – Egyptian Debt for Development Swap Programme, for an amount of about 12 million USD, and further support will be ensured as per the third Debt Swap Agreement, allocating 13 million USD for the “Education” sector.

Environment and cultural heritage

The Italian Cooperation provides the Egyptian Government with considerable support in the field of environmental protection, including management of protected areas, sustainable agriculture and tourism, conservation of cultural heritage, environmental legislation, water resources and solid waste management. The Italian technical and financial assistance concretely contributed to the design and implementation of reference models for the integrated management of archaeological-naturalistic sites, as well as the promotion of eco-tourism. The new interventions planned, such as the third phase of the Egyptian – Italian Environmental Cooperation Programme (3 million Euros), intend to consolidate the results achieved so far, strengthening the management of Protected Areas, developing sustainable tourism, enhancing conservation of natural and cultural heritage, promoting socio-economic development of local communities.