Egypt Independent

Industry and Trade Minister: Egypt to reveal achievements at Euromoney conference



The Minister of Industry and Trade Mounir Fakhry Abdel Nour told Al-Masry Al-Youm
in an interview that the cabinet has made many achievements, but failed to market them locally and internationally in media, adding that the Euromoney Conference would be a good chance to announce what has been accomplished over the past months.
 
Abdel Nour added that political reconciliation was required, but not with groups pursuing violence and not abiding by the constitution and the law. Abdel Nour also called on fugitive Egyptian businessmen to return to Egypt.
 
He also said the government seeks to reduce the budget deficit to 9 percent and to pump investments worth LE290 billion to achieve a growth rate of 3.5 percent in order to contribute to solving the problem of unemployment.
 
Abdel Nour said the government does not seek to pass a law to immunize the ministers from trial but would introduce amendments to the Penal Code on judicial rulings that are not applicable.
 
How can we use the Euromoney Conference to deliver a reassuring message to foreign investors about the climate in Egypt?
 
There are many messages that could be delivered through the conference locally and abroad. But, the current government's communication with local and global media is weak. There is no doubt that the conference will be an opportunity, but I do not expect intensive international presence as in previous years due to fears of the political developments in Egypt.
 
Are some still afraid after the US recognized the 30 June revolution and many countries lifted travel ban to Egypt?
 
I think things are getting better and I expect many foreign investments to flow to Egypt in the coming days, even before the end of the transitional phase and the completion of the roadmap. Major companies will enter Egypt to confirm their confidence in the investment climate in Egypt.
 
What do you think of the bill on immunizing ministers?
 
Such law does not exist. The Cabinet will only introduce amendments to the penal code regarding the judicial rulings that could hardly be applicable.
 
What about settlements with Arab investors, especially since they showed great support for 30 June revolution?
 
Problems with a very large number of Arab investors have already been solved and we strive to settle accounts with other investors from countries such as Saudi Arabia, the United Arab Emirates and Kuwait which deserve to be thanked for supporting the Egyptian economy.
 
Do you uphold the return of fugitive businessmen?
 
Nobody prevents them from returning if they want to. The country needs them.
 
Do you think the Muslim Brotherhood is serious about reconciliation?
 
The economic and political challenges we are facing require achieving reconciliation, but not with parties that do not recognize the constitution and law and pursue violence because the Egyptian people will not reconciliate with terrorist groups.
 
What is your comment on the achievements of the 50-member constitutional committee?
 
I follow up their achievements and I feel relieved toward the article on the economic identity of Egypt, but I am afraid of the proposed wording of articles on the budget and taxes, as it contains many details that had to be stated in the law, and not the constitution.
 
Did the Cabinet succeed to reinstate security?
 
Indeed. The current Cabinet, represented by the Interior Ministry, succeeded to achieve security which has returned to normal levels. Also, after 4 November the Muslim Brotherhood realized that they no more could mobilize people, and the toppled President Mohamed Morsy realized that he was no longer the legitimate president of Egypt.
 
The Cabinet used to attribute its weak achievements to loose security. What do you think of that now?
 
The Cabinet realized that security is improving and that this is no longer an excuse. Security is not a condition to achieve growth anymore. What we need now to prevent the deterioration of security. Participants in the latest poll conducted by the Cabinet on the reason behind the closure of factories, did not mention loose security as in the poll conducted in January 2012 did.
 
Prime Minister Hazem al-Beblawy Cabinet faces charges of extreme weakness, what do you think?
 
In fact, the government is facing a very harsh criticism and injustice in media despite achieving in three months only what former governments failed to achieve over years. Maybe the Cabinet's failure to market its achievements in local and international media is to blame.
 
What did the Cabinet achieve over the past three months?
 
The Cabinet succeeded to get aid from Arab states, which saved the country from a real economic catastrophe. We have enough funds until the end of 2014. They are sufficient to overcome the current impasse and restore former economic rates.
 
The government allocated a package worth LE29.4 billion to stimulate economy. The general budget's law has been amended and these sums were added to the public expenditure section. The package will be used in labor-intensive projects to address the problem of unemployment which exceeded 13 percent, the construction of residential projects, and infrastructure projects to boost the contracting sector, improving the efficiency of power stations and public transport and railway. Three billion have been allocated to complete the construction of facilities in industrial zones. 
 
The Cabinet's policy also succeeded to stabilize the exchange rate after the dollar was in constant increase compared to the Egyptian pound. The foreign reserves rose to more than US$18.6 billion and are expected to reach in the coming period $21 billion. 
 
The budget deficit is expected to increase during this fiscal year especially after adopting a minimum wage rate, what do you think?
 
The government has a target to reduce the budget deficit to 9 percent instead of 13.8 percent and the finance minister is strict in this regard and is determined to achieve this goal.
 
What about the growth rate targeted for the current year, especially that international studies mentioned that growth rates would not exceed 2.7 percent? 
 
The government plans investments worth LE290 billion this year, of which 120 billion are government investments and 170 billion belong to the private sector to achieve an economic growth rate of 3.5 percent.
 
But the public debt reached unprecedented levels, by hitting LE1.5 trillion. How is the government going to deal with this dilemma?
 
There is no doubt that reducing the budget deficit will contribute to reducing the size of government borrowing and thus reduce debts and provide liquidity for banks. This liquidity will be used to lend the productive sector.
 
Did the government succeed to achieve social justice, which was one of the 25 January revolution objectives?
 
The current Cabinet succeeded to apply the minimum wage rate, which we have been advocating for five years. It will be applied starting next January.
 
Will prices hike following the application of the minimum wage rate?
 
The government will monitor markets to ensure that the oversupply of goods leads to further price cuts.
 
The government also ended the crisis of doctors and exempted student fees. Providing school meals will be applied starting February, especially in poor areas. It also focused on providing suitable prices for wheat to encourage its cultivation and has plans to eliminate the black market in fertilizers.
 
Are these the Cabinet's sole plans to achieve social justice?
 
Of course not, the Cabinet has an integrated plan that cannot be summed up in the former few point. But we seek to achieve now a relative degree of social justice. The integrated plan includes the improvement of health, education, transport and social solidarity systems, which cannot be achieved overnight.
 
There is no doubt that issuing laws on conflicting interests, corruption and the right to demonstrate is also very important.
 
What about subsidies?
 
Subsidies are a major dilemma including the energy subsidies which cause a heavy burden to the state budget and have a negative economic impact. But I assure you that the Cabinet vows to put the budget on the right track. 
 
When will ordinary citizens see the efforts of the Cabinet?
 
In the next few weeks when the first package to boost economy will be activated. It will be allocated to pay the dues of construction companies, benefiting thus laborers mainly. It is allocated also to complete the construction of low-cost housing projects. Citizens will touch these efforts by the end of the year, provided that prices do not increase.
 
How did European-strained relations affect the Egyptian economy?  
 
Investors are reluctant to establish projects due to describing what happened in Egypt as a coup and a military rule, beside security problems. 
 
Verdicts to return companies that have been privatized had a negative impact on confidence in the government, how would the government deal with that?
 
In my opinion, the business sector must have a completely independent management body because they have heavy and special problems that put a burden on the ministry. The Ministry of Investment must be devoted to attracting foreign investments as it plans to restore investment rates prior to the 25 January revolution.
 
The final report of the Doing Business issued by the World Bank mentioned that Egypt fell by 20 points, how do you see that?
 
If we are serious about improving the investment environment, we should revise economy laws which date back to the 19th century and impede growth. We have to revive "Erada" (Will) initiative which made considerable achievements in this regard.
 
Do you feel concerned about the deficit in the balance of trade, which reached unprecedented levels by amounting to US$ 35 billion? 
 
No, I am not worried because this is a natural result of the poor economic conditions. Besides, exports have recently increased. I was worried last year due to the low levels of imports. Part of imports were raw materials, which affected local production. The Egyptian economy must be open to foreign markets to be able to compete overseas and transfer of modern technology to Egypt and open new markets. 
 
I believe that building a strong base for the automotive industry in Egypt will start through exempting imported European cars from customs starting from 2019.
 
What's your vision for the Suez Canal project and whether the current government is committed to this project?
 
The current government is committed to the project and we have a plan for it. There are meetings on regular basis between different ministries and head of the Suez Canal Authority Ehab Mamiesh to finalize its details. The Ministry of Industry contributed to the project as being a national pure Egyptian project.
 
Will Qatar take part in the project? And did the Cabinet replace Qataris with Emiratis?
 
No, the Cabinet did not replace Qatar with the UAE. There are industrial zones where foreigners would be allowed to establish investments under unified conditions for all nationals.
 
Do strained relations with Qatar and Turkey have a negative impact on joint investments?
 
Qataris have nothing new to offer to Egypt, but Turkey has major investment projects worth $2.1 billion. Moreover, 51,000 Egyptians work in Turkey. The Turkish prime minister has smeared the 30 June revolution and Al-Azhar grand sheikh, beside criticizing the trial of Morsy, which are unacceptable stances. I think Egypt will have to take a decisive stand if he continues such statements.