Tourist sector suffers losses of LE 13.5 billion in 100 days, and factories are operating at half capacity

Qatari offer to build largest sea harbour in the world in Alexandria.

LE 200 billion from Saudi Arabia to finance small and medium enterprises

 Plans to build 200,000 low-cost residential units annually

Meeting with BEBA members, Dr. Samir Radwan:

The Egyptian economy is expected, according to IMF assessments, to join the world emerging economies in the next five years, said Egyptian Finance Minister, Dr. Samir Radwan, stressing the importance of overcoming the current state of unrest and demonstrations by various interest groups which have cost the economy around LE seven billion. In addition, the consequent tourist sector losses have amounted so far to around LE 13.5 billion. Meanwhile, the industrial sector operates at half its capacity, and exports show a retreat by around 40% compared to pre-January 25 levels.

The minister asserted that despite these losses, the infrastructure of the Egyptian economy is solid and remains unscathed. The achievements of the revolution and the consequent real democratisation will offset the losses and the other repercussions.

Dr. Radwan made these statements in an open dialogue with members of the British Egyptian Business Association (BEBA) on Thursday. The dialogue enjoyed the participation of a large number of BEBA members from both Egypt and Britain and was conducted by the Association Chairman, Hazem Hassan.

The taxation policy in the coming period, the minister added, targets three major themes: increasing public revenues, maintaining the increase, and accomplishing social justice through a fair distribution of tax burdens on the various brackets of the society. Reformation of the financial policies will certainly continue with no going back.

The Egyptian Finance Minister added that there is a larger number of Arab investors who are willing to come to Egypt and pump new investments in its markets. The Qatari Emir has shown willingness to establish the largest harbour in the world in Malahat, Alexandria. Moreover, Saudi Arabia has already allocated LE 200 million to finance small and medium enterprises in Egypt through an Egyptian bank which has been authorized by Central Bank of Egypt Governor, Dr. Farooq Al-Oqda, to handle such projects.

Demands of various interest groups, through strikes and protests, are the major cause of exacerbating the budget deficit which is now close to 9% of the DGP. It was previously expected to retreat to 7% next year with a growth rate of between 5.8% and 6%.

The current economic support plan requires the united efforts of the government and the public in all fields, especially when foreign investors are watching what the local investors are doing before they take decisions of partnership.

Direct foreign investments in Egypt, the minister added, were at record levels (USD 13 billion) before the international monetary crisis. However, they retreated after the 25 January Revolution because of the subsequent strikes and protests of the various interest groups, together with the interruption of production and tourist activities.  The government is keen on restoring security to the Egyptian street, and will support the ministry of interior in rebuilding its capabilities in order to play this vital role efficiently.

As regards salaries and wages, Dr. Radwan said the file of minimum and maximum levels is still under study, so are the clauses of the new state budget of the fiscal year 2011/2012 which will be declared soon.

Incentives must be linked to productivity as is the case in advanced nations, according to the minster who mentioned that the productivity of the Chinese worker is three times that of his Egyptian counterpart.

The minister also emphasised the necessity of establishing a partnership between the public and private sectors in investment and economic support whether in the medium term through more care of the small and medium enterprises, or the long term through giant projects planned by Egypt such as developing east Port Said and the development passage projects. The government is currently considering a giant housing enterprise at low costs while maintaining good quality, targeting the construction of a million residential units within five years, with 200,000 units annually.