معلومات الوزراء: مصر تستهدف إنشاء مركز القاهرة المالى العالمى

The Information and Decision Support Center of the Council of Ministers issued the fifth issue of the Future Cities Report, entitled “Cairo is a global financial center… Cities of the future… Global framework and practices,” in which it explained that international and local institutions have recently adopted a new approach to urban development based on the determinants of the concept Sustainable smart cities, especially with the expansion of countries around the world in establishing new cities with technological and green standards and technologies at the same time, and within the framework of the center’s work on the Egyptian Cities 2050 project, the report highlights the concept of global financial centers, and the tools used by the institutions concerned to evaluate the level of progress of those centers. Centers, and deals with global frameworks and internationally approved measurement indicators for financial centers around the world, in addition to shedding light on the applications and practices of those standards and indicators on the ground in an attempt to understand the process of building financial centers by integrating information technology applications and networks into the reality of urban daily life.

During the report, the Center pointed to United Nations expectations that by 2050, 68% of the world’s population will live in cities, and it is expected that by this year cities will become larger and more densely populated than they are today. In this context, expectations are increasing regarding what cities may face in the future. The future presents challenges that affect the level of quality of life. Therefore, the Future of Egyptian Cities Project aims to anticipate the future of a number of Egyptian cities and formulate future visions that contribute to bringing about positive transformations in the reality of the lives of the residents of those cities, based on the most important future trends, potential challenges and opportunities, the best international concepts and practices, and innovative solutions. .

The report included a section on the importance of global financial centers, noting that they play an important and pivotal role in the global economy, especially in light of the rapid developments and changes that the world is witnessing today. They also work to provide various financial services, support financial innovation, facilitate international trade, and enhance financial stability, despite the challenges that face them. Faced by technological developments and geopolitical variables, these centers remain major drivers of growth and prosperity in our interconnected world.

In this context, the importance of global financial centers can be presented through four main axes as follows:

Firstly, the role of financial centers in promoting global trade:

Financial centers act as intermediaries between buyers and sellers, allowing the smooth flow of capital, goods and services across borders. These centers also act as a catalyst for economic growth by attracting investment, encouraging entrepreneurship and facilitating the creation of new businesses. These centers provide a wide range of financial services, including Banking, insurance and asset management are essential for businesses to thrive. For example, the financial center in London has been a major driver of the UK economy, contributing significantly to GDP growth and job creation.

-Financial centers provide companies and governments with access to capital and serve as a hub for capital markets; Companies can raise money through initial public offerings (IPOs), bond issues or venture capital investments. For example, the New York and Nasdaq Stock Exchanges in the United States are prominent financial centers that enable companies to raise capital by listing their shares and provides access to… Capital for companies to expand, invest in research and development and explore new markets.

-Financial centers also play a crucial role in mitigating the risks associated with international trade as they provide various financial instruments such as “trade financing, letters of credit, and insurance, which help manage risks related to currency fluctuations, default, and political instability,” for example. The financial center of Singapore has a strong trade finance infrastructure allowing companies to mitigate risks and ensure smooth transactions.

-Financial centers are hotspots of innovation and knowledge transfer that attract skilled professionals, entrepreneurs and researchers from all over the world; Concentrating expertise and financial resources in these centers enhances cooperation and the exchange of ideas, which leads to the development of new financial products, services and technologies. Financial centers also work to enhance international cooperation by facilitating cross-border transactions and strengthening partnerships between companies and governments, and they serve as meeting points for global organizations such as The International Monetary Fund and the World Bank, which allows dialogue and coordination on macroeconomic policies and financial regulations. The role of financial centers in international cooperation is particularly evident in cities such as Geneva and Zurich, which host many international organizations and serve as centers for diplomacy and finance.

Secondly, the increasing role of financial centers in stimulating foreign direct investment:

-It plays an important role in high-tax regions around the world, as investors are often better able to structure their capital commitments to countries that impose high taxes by combining their investments in countries that impose high taxes with investment in international financial centers, and for investors located In countries that tax business income earned elsewhere; The use of international financial centers can facilitate the deferral of home country tax on foreign income, which increases returns on foreign investments. Financial services, goods, and other intermediate services that are obtained at low after-tax costs in international financial centers increase the productivity and competitiveness of economic operations in countries. High taxes and thus increased demand for production in those locations.

International financial institutions also contribute to controlling markets in other parts of the world and reducing the degree to which banks and other large institutions may be able to exploit local monopolies in a way that harms individuals and companies. The ability of investors to direct financial transactions through international financing centers reduces From imposing interest rates, arbitrary allocation of credit, and other problems associated with excessive market power on the part of local financial intermediaries. As a result, international financial institutions work to enhance the stability of the global financial structure. International financial institutions also contribute to tax collection and tax competition among major countries, as they allow governments Major countries implement the domestic tax policies they want and need in the face of international economic pressures. The evidence from the past 30 years is that there has been very little tax competition among OECD countries, with tax bases expanding at the same time and to the same degree as tax rates fall.

International financial institutions, as a group, have enjoyed rapid economic growth in the past twenty-five years, which reflects the increasing importance of financial sectors in modern economies.

Third, the role of international financial centers in enhancing competition and meeting investors’ needs:

International financial centers have the ability to address problems associated with uncompetitive financial sectors by providing competition to local banks and other financial intermediaries. The importance of being located nearby lies in the fact that investors from rich countries invest much larger capital in nearby international centers compared to those far away. As it has become important in global financial markets today for the International Finance Corporation to be close to the investor’s home, this may reflect that companies in international financial centers design their services to suit the needs of nearby customers, and there is evidence that the competition provided by nearby international financial institutions is effective. Commercial banks in countries with nearby international financial centers have lower interest rate spreads (the differences between borrowing rates and the rates paid by depositors) compared to other countries, which is an indicator of increased banking competition. International financial centers also play a crucial role in enhancing competition in sectors. Local banking.

The presence of international financial centers greatly affects neighboring economies. Private companies in these countries tend to obtain larger and more accessible loans compared to companies in countries far from these centers. This means that borrowing and investment activity in these economies is much higher, and international financial institutions contribute. Deep into the financial sector of neighboring countries as international finance facilitates domestic finance The evidence is that economies with more competitive financial sectors have higher levels of per capita income and show faster rates of GDP growth compared to other economies.

Fourth, the role of financial centers in providing innovative solutions by utilizing technology:

FinTech companies are disrupting traditional financial services by providing innovative solutions that leverage technology to deliver faster, more convenient and cost-effective services. These companies are often distinguished by their speed, customer-focused approach and ability to harness the power of data analytics, and with financial centers embracing fintech. It can attract new companies, foster innovation, and create an ecosystem that supports entrepreneurship. Singapore has emerged as a leading example of a financial center that has successfully embraced the digital age. The city’s Smart Financial Center initiative aims to leverage technology to create a vibrant financial technology ecosystem. Singapore has implemented initiatives Different such as a regulatory sandbox to encourage innovation while maintaining regulatory oversight, the government has also invested in digital infrastructure, cybersecurity measures and talent development to support the growth of fintech companies. As a result, Singapore has attracted many fintech startups and established itself as a global fintech hub.

Through the report, the Center reviewed the Global Financial Centers Index, its methodology, sections, sub-indices, and the elements for the success of distinguished international experiences. It also reviewed the top five positions of the index, which were represented by (New York, which still leads the top of the index and surpasses London, which occupies second place in the index and occupies Singapore). Hong Kong ranked third and fourth, while San Francisco retained fifth place).

The Information and Decision Support Center discussed the Cairo International Financial Center project, as the General Authority for Investment and Free Zones is taking steps to implement this project in the New Administrative Capital. The Cairo International Financial Center will be established as a financial city that operates according to the systems and business models of similar global centers. The main goal of the center will be to facilitate access to international financing and investments to finance entrepreneurship risks and develop capital markets, industries, and infrastructure projects. The state also aims primarily to achieve its goals. Economic and attracting capital and direct investments through the center.

The report presented a set of recommendations and proposals so that Egypt can achieve the target and implement the Cairo International Financial Center (CIFC) project in the New Administrative Capital, which can be clarified through the following axes:

1- Economic stability: One of the basic factors that determine the success of global financial centers. A stable economy provides a solid foundation for financial activities and attracts local and international investors.

2- Skilled workforce: which is another crucial factor in determining the success of financial centers. The highly skilled workforce ensures the availability of expertise in areas such as finance, accounting, risk management, and legal services.

3- Innovation and technology: Adopting innovation and taking advantage of technology is increasingly important for financial centers to remain competitive. Adopting advanced technologies such as “block chain, artificial intelligence, and big data analytics” can enhance operational efficiency, enable faster transactions, and improve management. Risks.

4- Tax policies: which can greatly affect the attractiveness of financial centers, as low tax rates and favorable tax policies can motivate companies and individuals to establish their presence in a specific financial center.

5- Infrastructure and communication: The availability of which plays a crucial role in the success of financial centers. Advanced transportation networks, including airports, seaports, and railways, facilitate the movement of goods, services, and capital. In addition, advanced communications networks are essential for seamless communication and real-time data exchange. .

6- Regulatory environment: The presence of a transparent and well-regulated financial system is vital to the success of financial centers, and strong regulatory frameworks help maintain market integrity, protect investors, and ensure fair competition.