WTO calls on US to cut farm subsidies

The Egyptian Gazette, 30 September,2010--GENEVA – The World Trade Organisation (WTO) called on the United States yesterday to cut its farm subsidies, saying that they were so “considerable” that they could affect market prices. In a report analysing Washington’s policies since 2007, the trade body said that while promoting its exports, the United States should also reduce “distorting measures … including … support for agriculture”. The WTO noted that support granted to the sector under the multi-billion-dollar 2008 Farm Act are mostly “linked to prices and or production”, according to AFP.

New land for industry

The Egyptian Gazette, 30 September,2010--Egypt’s Industrial Development Authority (IDA) said it would seek bids for seven million square metres of land for industry in January in three regions. Egypt is seeking to promote local industry to double exports to LE200 billion ($35 billion) by 2014 and create more employment opportunities in a country where about 600,000 to 700,000 people join the jobs market each year. Amr Assal, the head of the authority, told reporters the land would be offered in Port Said on the Mediterranean, Ismailia next to the Suez Canal and in an area south of the capital around Fayoum.

National Economy to grow at 6 %

The Egyptian Gazette, 29 September,2010--Egypt’s economy is on track to grow by six percent this year with foreign direct investment (FDI) seen at $9 billion, we aim to reduce the budget deficit from 8.4 percent to 7.5 percent of GDP (gross domestic product) Ghali said yesterday. Egypt’s estate budget deficit hit 8.3 percent of gross domestic product (GDP) in FY 2009/2010. Egypt’s revenues totaled LE269 billion ($47.3 billion), while public outlays stood at LE367 billion. Egypt economy grew by 4.7 percent in the fiscal year (FY) 2008/2009 despite the global financial crisis. It grew by 5.2 percent in FY 2009/2010. In the last quarter of FY 2009/2010, growth was at six percent, which is likely to sustain this year, and domestic demand has played a key role in withstanding the global downturn.
Around 40 percent of the most populous Arab country live on $2 a day. The population of Egypt, currently at 80 million, is expected to reach 99 million by 2025. “We keep an eye on what’s happening in the world. We need a healthy world economy to grow. Growth is picking up in Southeast Asia and Europe. But they are back the same way as before the crisis, relying on exports.”  Ghali explained.
In June Egypt’s Parliament approved a pension and social insurance law, raising the retirement age and forcing employers to contribute to pension payments and introduces unemployment cover for the first time. The Government has said the bill will help increase growth to nine percent in 2012. The number of new established companies in Egypt jumped from 2,860five years ago to 7,269 in FY 2009/2010. FDI totaled $49.2 billion over the past six years.

PM: GDP growth of 6 %

The Egyptian Gazette, 24 September,2010--The Egyptian economy may grow at least six percent in the fiscal year through June, helped by tourism and foreign investment. The indicators of the first quarter which will be out in mid-October show that there is economic growth, especially in tourism, foreign investment and the Suez Canal. Those three sources of revenue were key to helping Egypt’s gross domestic product grow by an average of seven percent in the three fiscal years through June 2008. The global financial crisis slowed growth to 4.7 percent in the following 12 months. It accelerated to 5.3 percent last fiscal year, and the Government is targeting a rate of 5.8 percent this year.The Government would reallocate the land for Talaat Moustafa’s Madinaty project back to the firm after a court ruled the State land sale contract should be scrapped. The cabinet spokesman also said a group of ministers was drawing up details of the arrangement for final approval by the cabinet on Sunday. Egypt’s Government sold land to TMG, the country’s biggest listed developer, for its estimated $3 billion Madinaty project in 2005. But a court ruled in June the contract was illegal because the land was not put up for public auction. A higher court upheld the decision last week, sending the firm’s shares crashing 16 percent in three sessions. The Government has since come under pressure from investors in TMG to find a resolution to the row. A state- appointed legal committee said on Wednesday that the Government could reassign the land to TMG after scrapping the original contract because it was the public interest.
Building has already started on Madinaty, which is meant to include shops, hotels, homes, schools and a golf course. The plot makes up about two third of TMG’s land and its shares slumped 16 percent in the three days after the ruling last week. Rady said the group of ministers were aiming to organise the formal cancellation of the contract, the return of the land and the signing of a new contract reallocating the land to the firm in the same session. An Egyptian State- appointed legal committee said late Wednesday the Government had the right to reassign land to the country’s biggest listed developer after a court ruled to scrap a contract for the firm’s main project. The recommendations proposed satisfy all parties, while respecting the rule of law and avoiding the negative implications that could have come if any harm was done to the project. The committee said the land should be returned to TMG if the project is proven to be benefit to society and the economy. 

Egypt down by 11 slots in GCI

The Egyptian Gazette, 22 September,2010--Egypt lost 11 places from a year ago to 81st place on the 2010 Global Competitiveness Index (GCI), which ranked 133 countries. The Global Competitiveness Report 2010-2011 published yesterday said that Egypt’s score came the same of last year, adding that there were several concerns on the work of the National Competitiveness Council.
According to the same report, Egypt has not achieved any improvements in the areas of infrastructure, health, basic education, higher education and training, market efficiency, technology or innovation. Yet, the report mentioned that Egypt’s best performance came in the market size, being local or international, in addition to the institutional performance, which indicated huge prospects for the future.
Chairman of the Egyptian National Competitiveness Council (ENCC) Helmi Abul Eish attributed the lower ranking to the entry of six new countries in this year’s index that were not previously included. “There are also the economic recoveries of a number of countries that were hit hard by last year’s global financial crisis”, he added.

New specialised trade zone

Al-Ahram weekly, 16-22 September, 2010--A 500 million square metre plot of land will be put on auction for specialised trade zones next month. The land is divided into eight zones located in six governorates, and is expected to attract about LE750 million worth of investments, the move comes as part of an effort to double the growth rate of internal trade to 12 percent and increase investment in the sector. The bidding process, starting October and continuing through the end of November, will be open to local and foreign investors with contracts awarded in December.
The ministry plans to issue a second tender by the end of the year to raise the number of such zones to 16 in governorates including Port Said, Beni Sweif, Tanta and Mansoura.

Ramadan pushes inflation upwards

Al-Ahram weekly, 16-22 September, 2010--In August, the year-on-year urban inflation rate accelerated to reach 10.9 percent from 10.7 percent in July, mainly due to increased food costs in the holy month of Ramadan, during which Egyptian frequently hold large banquets to break their daily fast. Prices rose by 2.9 percent in Ramadan, the highest monthly increase since at least 2005. On the other hand, core inflation rates calculated by the Central Bank of Egypt, which exclude regulated prices of goods such as petrol and volatile items including fruit and vegetables, hit 8.2 percent in August, compared to 7.08 percent in July.
Analysts believe the increases will raise the likelihood that the Central Bank will start moving interest rates up before the year is out. The bank, which has kept its benchmark overnight deposit rate unchanged at 8.25 percent since September last year, will meet today to review its monetary policy. Egypt’s economy expanded at a 5.9 percent annual rate in the second quarter of 2010. During the fiscal year that ended in June, the economy grew 5.3 percent.

FDI decreases

Al-Ahram weekly, 16-22 September, 2010--The value of foreign direct investments (FDI) flowing into Egypt during fiscal year 2009/2010 reached $6.8 billion. The figure shows a 16 percent decline in the value of the foreign investments compared to the previous fiscal year, which had under the pressure of the financial crisis, witnessed a retreat in the amount of investments injected by foreigners to reach $8.1 billion compared to its all-time high of $13 billion in 2007/2008. The oil sector kept the lion’s share in its stake of FDIs, attracting around $3.59 billion, almost 53 percent of the overall figure, compared to 67 percent in the previous year.
In the real state sector, FDIs reached $305 million or 4.5 percent of the total, compared to one percent in the previous year. Egypt had a good chance of luring more Arab, foreign and local investments within the framework of the improved investment climate and the procedures the country had adopted in a bid to facilitate the process, adding that 40 percent of FDIs in 2009/2010 have been used to set up new companies and increase existing companies’ capital.

23.7% rise in sales of Cairo Oils ...  Kora: the marketing efforts have succeeded in raising sales to LE199.8 million

Al Alam Al Youm, 15 September 2010--Cairo for Oils and Soap Company achieved a net profit of LE 1.06 million during the fiscal year ending June 30, 2010 compared to about LE2.412 million during the previous one. Kora said that the company’s main target is to increase its market share which has successfully managed to achieve the targeted sales plan in advance to reach total sales to LE200 million, added that during the coming period the company will focus to increase their share in the domestic market and try to get some export’s contracts to Arab and African countries.
Kora expected  that the current financial year stable relatively in cost of sales as demand for the company's products, which will result in higher net income under the fixed costs and high sales value, pointing out that the company was able to achieve 27.7% growth in sales during the month of July after achieved sales of LE20.8 million, compared to 16.28 million during the same month in the period in comparison with achieved during August sales growth rate of 18.8% after they arrived in sales this month to 26.3 million.

August core inflation rises to 8.2%

The Egyptian Gazette, 15 September,2010--Egypt’s core inflation rate unexpectedly surged in August, hitting 8.2 percent, but analysts attributed the rise to a spike in food prices during the Muslim fasting month of Ramadan and said it was unlikely to prompt a rate rise this week. However, the data does raise likelihood that the Central Bank of Egypt (CBE) will start to raise interest rates before the end of the year. The core inflation rate, which excludes regulated prices of goods such as petrol and volatile items including fruit and vegetables, rose from 7.08 percent in the year to July and contradicted forecasts it would fall to 7.05 percent in August. The increased followed data last week showing that urban inflation - the most closely watched indicator of prices – had accelerated to 10.9 percent year-on-year in August, up from 10.7 percent in July.
And higher wheat prices had begun to put pressure on prices in Egypt, the world’s biggest wheat importer. Soaring global wheat prices have been largely linked to drought and fires in Russia, which had been the world’s No. 3 wheat exporter before it imposed an export ban this summer. Egypt has paid about $280-$290 a tonne for wheat from France, Canada and the United States in August and September, whereas in June it paid around only $165 a tonne for some Russian wheat. Barclays forecast inflation would be between 10.6 – 11.8 percent by the end of June 2011 if wheat prices rose between 20 percent and 40 percent. Egypt’s economy grew by an annualised 5.9 percent in the quarter that ended in June. For the fiscal year that ended in June, the economy grew 5.3 percent, accelerating from 4.7 percent growth the previous year.

FDI slips 16%; oil investment dips

Egyptian Mail, 14 September,2010--Foreign direct investment in Egypt fell 16 percent for the fiscal year 2009/2010, pulled lower by slowing inflows to the oil and gas sector. Foreign investment in the twelve months to the end of June was $6.8 billion, down from $8.1 billion in the same period a year earlier.

Egypt nets $6.8b in FDI – report

The Egyptian Gazette, 13 September,2010--Egypt has attracted foreign direct investments worth $6.8 billion in the fiscal year (FY) 2009/2010; the figure was estimated according to Egypt’s balance of payments for FY 2009/2010. Net foreign direct investment (FDI) totalled $49.2 billion from July 2004 until June 2009. In FY 2004/2005, FDI jumped by 85 percent to $3.9 billion from $2 billion in FY 2003/2004. In FY 2005/2006, FDI totalled $6.1 billion. A year later it jumped to $11.1 billion. In FY 2007/2008, it reached $13.2 billion. Affected by the global downturn, FDI inflows contracted to $8.1 billion in FY 2008/2009.
Roughly $2.7 billion of total FDI, or 40 percent, was allocated to expansion and capital increases. The real state sector netted $305 million, or 4.5 percent of FDI, while the oil sector took $3.59 billion, or 53 percent of FDI.
Private-sector companies stood at 70,000 of total capital worth LE655 billion ($115 billion) at the end of June 2010. Local private investments totalled LE140, accounting for 11.6 percent of gross domestic product (GDP) in FY 2009/2010. Upper Egypt has seen a significant improvement in its ability to attract investments. It attracts around 3,756 firms over the past six years. The figure accounts for 55 percent of total companies operating in Upper Egypt since 1970.

July budget deficit falls to $2b

The Egyptian Gazette, 8 September,2010--Egypt's budget deficit fell to LE11.5 billion ($2 billion) in July from LE14.8 billion in the same month a year ago.  Revenues jumped by 12 per cent to LE11 billion in July, against LE9.9 billion in the same month the previous year,  Sales tax receips rose by 15.3 per cent to LE4.3 billion in July, compared to LE3.7 billion in the same month a year ago. Customs duties totalled LE1.2 billion.
The Government’s public spending fell by 8.1 per cent to LE22.7 billion in July, against LE24.7 billion in the same month a year earlier. Spending on subsidies plunged by 25.2 per cent to LE2.8 billion in July, against LE3.7 in the same month a year ago. Domestic debt rose to LE574.2 billion in July, accounting for 47.9 per cent of gross domestic product (GDP), from LE467.1 billion in July 2009.

Read More...

Moderate recovery underway – IMF

The Egyptian Gazette, 6 September,2010--The world economy is recovering moderately but still faces challenges such as the need for medium-term fiscal consolidation. There is a moderate recovery underway globally, referring to delegates at the G-20 meeting of deputy finance and central bank chiefs in South Korea. Obviously there are risks and challenges, but things seem to be moving more or less in line with the forecast. Some good progress has been made in discussing changes to the IMFs executive board. G20 members have pledged to reach an agreement on the issue by the time leaders meet in Seoul in November.
The United States, frustrated at Europe’s refusal to share more IMF power with emerging economies, took unprecedented action last month to block plans that would have kept Europe’s long-running dominance over 24-member board. Emerging economies have called for a bigger say in international institutions such as the IMF in line with their increasing contribution to the global economy and the resultant importance in global economic policy co-ordination. For emerging markets, the important thing is not only the size of the increase of the quota, but the general idea of the relationship between the quota and governance of the IMF – and that needs to come in one package. Japan is grappling with the yen’s soaring to 15-years highs against the dollar and policymakers have repeatedly said they could take decisive action on the yen – normally a code phrase for currency intervention. South Korea will host the November 11-12 summit of G20 leaders in Seoul, with key issues also including reforming the global financial regulatory framework and drawing up plans to put the world economy on a balanced and sustainable growth path. There was an agreement that the (global) recovery will continue even though the speed may slow from the level of two to three months ago. And there was discussion about the issue of read justing representation on the International Monetary Fund’s executive board but declined to elaborate.      

Egypt to grow crops in Sudan

The Egyptian Gazette, 6 September,2010--CAIRO- Egypt has signed an agreement with Sudan to grow wheat, maize and sugar beets on one million feddans (acres) in the latter. Companies from Egypt’s public and private sectors are expected to benefit from the agreement, which is part of the North African country’s efforts to secure its growing needs of food crops.
The legal framework of the deal will be outlined by October when Prime Minister Ahmed Nazif will lead Egypt’s delegation in the Egyptian-Sudanese higher committee.  Sudan has a varied climate, with heavy rainfall in some areas and water from the Nile which means it can grow a range of crops from wheat and animal feed to citruses and oilseeds. According to the agreement, Egypt will provide Sudan with seeds,  fertilizers, pesticides and machines to the Gezira Rehabilitation Project. Sudan’s Gezira Rehabilitation Project is planned to raise crop yields of two million feddans through the rehabilitation of the Gezira irrigated area and its supporting services.
 Maize, wheat and sugar beets will be allocated to Egypt’s Poultry Association, the General Authority for Supply Commodities (GASC) and the Holding Company for Food Industries
The project will improve the region’s irrigation, drainage, and pumping systems; rehabilitate the infrastructure including roads, communication network, railway, staff housing and ginneries; provide critical inputs such as farm machinery; improve farmer training, research, and extension; and support improved health through schistosomiasis control and sanitary water systems.
Egypt, the world’s top wheat importer, consumes around 14 million  ones of wheat annually and relies on foreign supplies for about half of its requirement. In April, a unit of Egyptian private equity firm Citadel Capital signed a 30- year lease agreement for land south of Khartoum to build Sudan’s first largescale commercial rice farm.
Gulf and other Arab countries have been investing in a range of farming projects in Sudan, Africa’s biggest country by area and long viewed as having huge agricultural potential. The land leased by El-Nahda for Integrated Solutions, a portfolio company of Wafra, Citadel’s platform company in the Sudanese agricultural industry, spans 60,000 feddans. Earlier this year, Egypt, the most populous Arab country of 80 million people, said it was evaluating three options for growing wheat in Uganda in a bid to safeguard its supply of the staple. Egypt added it wanted to set up farms in Nile Basin countries in order to protect its water supply and boost supply of staple crops.