Political output , return of stimulus package  and reforms are the most  important grounds for optimism in the future

  Minister of Finance – Dr. Ahmed Galal said that the Government and Ministry of Finance were pro increasing spending on education and health sectors and improving  such services , as they are the  most important pillars of social justice , before formulating the draft  constitution,  adding that the government shall be committed   to articles of the draft constitution related to the   increase of spending on health , education and scientific research sectors to  specific ratios of GDP and shall seek provision of resources therefor needed  , of which wasteful  funds on energy subsidy, pointing out that the government has an organized and gradual program to remedy  subsidy imbalances , he added that subsidy of public transport ,for example , is acceptable , explaining: While I was working in the World Bank in Washington , I used to go to my work by Metro or by  bus and, so do the vast majority of Americans. Since we are a poor country, not richer than America , it is not reasonable for such number of Egyptians to go to their work by  private cars , and also it is unreasonable not to subsidize, improve and promote public transport.

 The Minister expressed that he hopes that growth rate shall reach the ratio of  4,5% in 2014/2015  and  then  5.5% in the following year , revealing that the Macro Economic  Policy Unit in Ministry of Finance has prepared different scenarios for the situation, if the current government didn't made the reforms , which it actually carries out.

             This was yesterday evening during a meeting of Minister of Finance with leaders and members of the Egyptian Council  for Foreign Affairs managed by  the Ambassador Abdul Ra'of El Redy and Dr. Mushera Khatab.  

             In a response to the audience questions, Dr. Galal said that people evaluation, their opinion and feeling are more important than international institutions ratings, however this doesn't prevent from saying that the improvement of Egypt rating by Standard & Poor's was useful. He added that, for sure, Egypt will not deteriorate economically if it is on the right direction, and the current government has faced this problem by concluding a precise diagnosis for the most important aspects of economic and social deterioration and financial deficit which were dominant till 30^th of last June, accordingly the government set the correct remedy for such problems.

The Minister said that there are 3 main grounds to be optimism towards the future, First: political return of implementing the road map and electing a new president and parliament, this will encourage local investors, tourism, and foreign investment; Second: the stimulus return resulting from implementing the first and second stimulus packages, a full positive impact of such two packages will appear clearly after this transitional government " a vehicle that commences to move slowly now will reach its speed after several months"; Third: the returns are being achieved and will be achieved from the current financial and economic reforms, such as: the transform towards VAT (Value Added Tax), adoption of real estate tax, settlement of tax dispute and arrears, besides improving business environment, establishing the principals to transform from goods subsidy to individuals subsidy, establish  data base identifies precisely who deserve the social targeting, all of the above mentioned will also appear after this government. There is no doubt that the next government shall have the opportunity to realize better achievements.

The Minister said that Egypt's progress or lack of progress mainly depends on Egyptians' work, rather than external powers either international institutions or countries. He confirmed that the Egyptian government is not in a rupture with the IMF (International Monetary Fund) or the WB (World Bank), however it seeks to benefit from their comparative advantage, as an evidence ; we asked for the assistance from the Fund's technical experiences in  VAT amendments, and we cooperated with the World Bank in many areas such as development of education, health, and social protection network.

 The Minister said that we shall  not prevent the next government to deal with the International Monetary Fund (IMF). But after  appropriate diagnosis  of Egypt’s economic situations, the current government sees that it neither need  a loan from the IMF, nor  a certificate but it needs a combination of accelerating  growth ,achieving justice and adjusting public finance, while the IMF concentrates  only on " budget adjustment" ,in addition it causes more complications in other reform areas. 

The Minister added, that he thinks that any negotiations with IMF at the current time will have a negative impact, as this will be reflected  to  the outside world as  Egypt has difficult situations . Any procedure will be taken by the government  in presence of the IMF will be understood as it is dedicated by the fund, whatever we clarify that it is a national sincere act.

The Minister said that the performance and program budget needs more time and the Ministry of Finance exerted best efforts in holding discussions with different ministries with regard to their budgets and  the outcomes must be achieved from public expenditure. As well as the Ministry showed , in the approvals of preparing  new budget (2014/2015), that every entity shall disclose spending aspects of public allocations and the expected outcomes of such spending.  

The Minister assured that the political system, which is being established by the Egyptians,  shall allow creating wealth once again , only through creative , serious ,  hard and productive work.

The Minister mentioned that he is worried all the time on both budget sides of resources and spending . He said although the government decided non increase of taxes on business sector at the present time, to cope with  its expansion plan, but this does not mean not to reconsider it afterwards and reconsider amending escalating current income tax in case of the improvement of economic situation. 

The Minister denied the alleged disagreement between members of the governments concerning the  principal of individuals and family subsidy rather than in kind subsidy, but there are many point of views on its application .

The Minister did not define a certain number for funds would be provided for applying the maximum wages , till the completion of  database by the current government, subject to which money will be paid for any person from any entity by his ID number.

The Minister said that he understands the call for connecting wages to inflation rate (raising standard of living) ,but he warned that there are many experiences in Latin America pursued this methodology,  leading to serious problems .He added that he wishes to connect income to inflation rate and production.

He also mentioned that the government's trends are so obvious. He explained that the large portion of the second stimulus package  shall be directed to finance social housing projects to achieve social justice, whereas the government provided the amount of EGP 3 billion within the first stimulus package to support social housing .

The Minister also said that it is important to balance between investing in human and investing in buildings and facilities when allocating public resources.

The Minister confirmed the keenness of both government and The Central Bank to play their roles in reducing inflation impact on economic and financial policies .

The Minister also mentioned that complying with supply and demand  law is an important matter, but in unusual cases of extraneous factors in market, we should encounter  it,  as there is someone who tries to  tamper with the exchange market .

The meeting was attended by eight students from British and American universities .