Facetime with Ahmed Nazif

SHARM EL SHEIKH, Egypt (CNN) -- With Egypt's GDP running at 7.5 percent and foreign direct investment above $11 billion, the Middle East's most populous country is on the economic upswing. MME's John Defterios (JD) talks with the man responsible for accelerating Egypt's economic reforms and creating a friendly business environment, Prime Minister Ahmed Nazif (AN).

Prime Minister Nazif shares his thoughts on the World Economic Forum, sharing oil wealth across the region, and rising inflation.

(JD): It is the first time that we have a frank discussion at a regional summit about Gulf Oil Transfer -- taking the money from Gulf oil revenues and keeping it closer to home. Should there be a re-think about building up a pan-Arab market?

(AN): I'm not sure that this is the way to go about it, because you can't force money where it doesn't want to go. I think it's important to attract money, and the way to do this is by opening up opportunities for them to do so. Money can either go to opportunities or run away from danger. But, don't try to impose a frame that, you know, will work because it's there.

I believe that real opportunities exist today in the region, whether it's in infrastructure, capacity building, education or other aspects of it. But also in new opportunities that are coming up. Look at the problems with food for example, the food crisis. People now are thinking more about re-investing in agriculture. I think the key is for governments and the business community to start formulating projects, fundable projects, projects with real value to those owning the money, so that they can invest in it.

(JD): We've come from a chronic to an acute stage on inflation very rapidly. It's a huge challenge. Besides throwing money at the problem, realistically, what's in the toolbox to combat inflation for you in Egypt, where it's quite severe?

(AN): Growth. I think that, essentially, what we need to do is to have more growth. Growth is what sustained us last year. Yes, it ate up almost all the gains that we got from the growth in terms of throwing money at the problem, as you said. We can't afford to do this all the time, obviously. But in the end if we have more growth, if we increase our productivity and competitiveness, in the region and outside, then we have a chance to weather away those kinds of inflation reactions that take place.

(JD): Does Egyptian society have the patience for seeing the reforms through? You are four years into what, realistically, is a 10 year process and inflation just complicates that process, does it not?

(AN): Yes, definitely. But people have seen some fruits. One good example is unemployment. You can see clearly that more jobs are being created. Everybody feels that on the street, at the end of the day, because if you have somebody who has been unemployed for a long time and starts getting employed, then it makes a difference to their family, to the income that they get and to the security.

(JD): I heard at the meeting that there are great expectations of President Bush raising the profile of the meeting and advancing the Palestine Peace Initiative. But he took a tone in the speech that many ministers and businessmen that I spoke to said was lecturing, not encouraging. Did you walk away with the same impression from this speech?

(AN): President Bush spent a lot of time speaking about democracy and how to go about it, and what happens in the West in this direction. And many people have interpreted it this way. I think, also, that people were expecting a different speech and that this is in itself what disappointed them a little bit, not just the way the speech was given but in the content of the speech itself.

People wanted to hear from the President some balancing thoughts to those that he gave in his address to the Knesset, more commitment to the Palestinian State theory. He did say it, but I think they wanted it earlier on in the speech and wanted to see maybe a more pragmatic effort towards resolving the problem, rather than just saying that it is going to be resolved.