Request under Study to Turn Egypt's EU Debts into Finance for Development Projects

Spanish Ambassador: No Ban on Tourist Visits to Hurghada, Sharm El Sheikh, Luxor and Aswan  

Egyptian economic performance indicators prior to the recent developments showed budget deficit declining to 7.9% for the current fiscal year, while the national economy growth rates amounted to about 5.8%, said Dr. Samir Radwan, the Minister of Finance. This improvement has contributed to absorbing the repercussions of the events of January 25 and the following class sit-ins and strikes, which would overpress the Public Budget and affect growth rates, he pointed out.

The government has taken a number of urgent measures to face those consequences, including establishing a compensation fund for the facilities and institutions that were damaged in the wake of the  events, paying income tax in three installments, writing off insurance premium and sales taxes delay fines, he noted.

About 1.5 million Egyptian workers are now returning from to Libya, which represents a further burden on Public Budget: returnees need employment opportunities or other means of living for their families, the minister expected.

These statements were made during a meeting between Egypt's Finance Minister and Spain's Ambassador to Egypt Mr. Fidel Sendagorta in which they discussed the developments of the economic conditions in Egypt and the Spanish investments in the Egyptian market.

The Egyptian government focused on 3 pivots while managing the crisis and its repercussions, said the minister. The first involved a number of measures to quickly create jobs in public works projects currently being completed, while the second aimed at creating an atmosphere favorable to small and medium enterprises (SMEs), through a number of measures to improve the business climate; especially with regard to funding and commercial and industrial licensing procedures for small enterprises. The government is now studying setting a unified framework to organize and sponsor the work of these projects and facilities, which should have a multiple economic role, particularly in creating new jobs and raising incomes, he added.

The third focuses on a number of giant national projects such as the Development Passage, East Port Said, field irrigation development, waste recycling projects, as well as low income (rather than low quality) housing projects. These projects will contribute into the redistribution of population to new areas and create more rooms for investment growth and job opportunities, Radwan indicated.

The government launched a new employment and salary program, focusing on practical, rather theoretical, training to meet the needs of various economic sectors of skilled labor, and ensure the achievement of the desired results of such policies, Radwan stressed.

On the other hand, the meeting dealt with a request to use Egypt's EU debts in financing development projects in Egypt, as well as benefiting from European and international experiences in the development of public business sector and the modern management of its companies to increase competitiveness and boost human resources, which would ultimately reflect on productivity and incomes.

Spain has no restrictions on Spanish tourists travel to Hurghada, Sharm El Sheikh, Luxor and Aswan, the Spanish ambassador said in reply, expecting to abolish the travel ban to other places soon, pointing out that this is a kind of indirect assistance to Egypt.

The Egyptian-Spanish Business Council, which was recently established, represents an effective mechanism to encourage Spanish businessmen to increase their investments in the Egyptian market, which will work on technology transfer and provide more job opportunities, the ambassador noted.

Resumption of work in the projects based on the Public–private partnership (PPP) system will be a strong sign to foreign markets that Egypt is committed to its policies to encourage the serious private sector which generates employment opportunities, he added.

Once economic and political stability is restored, there will be a return to complete the Spanish projects in Egypt, including  an irrigation water treatment project, which is being implemented in collaboration with the World Bank (WB), said Mr. Sendagorta.

(Source: Ministry of Finance)