CAIRO: Egypt has spent around 40 percent of the stimulus package allocated by the government to deal with the effects of the global economic crisis, Minister of Trade and Industry Rachid Mohamed Rachid said.
“I’m confident that the approach we have taken has given us flexibility to deal with the changing circumstance of this crisis, Rachid said.
“We’ve spent about 40 percent of the available money to date, with LE 8 billion into infrastructure projects. The next step is to plan our strategy for the coming fiscal year, he said with a tone of optimism about its impact so far.
The Ministry of Trade and Industry hosted a roundtable discussion with Rachid Wednesday, which provided a forum for journalists to discuss current issues in Egypt’s business sector.
Rachid fielded questions on a variety of topics, ranging from government stimulus spending to the performance of different industries in the current financial climate.
Aside from languishing areas including tourism, exports and the Suez Canal, Rachid identified consumer durables including passenger cars, furniture, and luxury housing as the hardest-hit industries in Egypt.
While the food, pharmaceutical and healthcare industries have remained stable, the minister explained that the construction sector has actually fared better as a result of the crisis.
“Egypt is one of only about five countries where construction is still booming and sales of cement and steel are going up. The demand for housing at all price levels is high and this is fueling the boom. The export ban imposed on cement was intended to ensure that construction continues at this rate and that there is a proper amount of competition in the market, he said.
Rachid also focused on actions the ministry is taking to promote exports and to regulate and increase internal trade.
“Exports are crucial, and we have been steadily diversifying our trade partners over the past five years. We are also doing as much as we can to aggressively promote exports – we have introduced business support programs to help companies export efficiently and are continuing to explore new opportunities with different markets.
The minister stressed the need for the growth of Egypt’s internal trade in all governorates as a prerequisite to national prosperity.
“Not enough has been done in the past four to five years to promote internal trade in terms of infrastructure and legislation. It is being promoted now due to demand and the need to promote competition and productivity – this will serve all industries as well as consumers and help to take internal trade into the official economy, he said.
Taking countries like Malaysia and Turkey as role models, minister Rachid hopes that an emphasis on internal trade and localized consumption will push Egypt’s economy in the right direction while minimizing the effects of the crisis locally.
“Promoting internal trade and consumption is one of the most basic ways to strengthen the economy, promote industry and create jobs. We want to focus on building new supermarkets and shopping centers – look at CityStars, it employs 52,000 people. But this is just one area, we are looking for a full overhaul of the internal sector, he said.
Funds have been dedicated to a new government body charged with dealing with impediments to internal trade including difficult bureaucracy and a lack of access to land. The ministry’s aim is to take internal trade from 2.5 percent to 8 percent and to implement new infrastructure in 15 governorates over three years.
Wrapping up the session, the Minister spoke of marginal improvements in the economy for April, with some in the automotive and tourism sectors reporting gains. Despite this, he expressed uncertainty about what the future could bring.
“The one lesson we’ve learned is not to trust the predictions of economists; things are looking better now, but there could be more setbacks in the coming weeks, he said. On Thursday, the local press reported that Rachid proposed the formation of a committee to study the reduction of tariffs on imported poultry in order to provide the poultry at reasonable prices to consumers and to reduce the cost of production. He also announced there is no intention to impose antidumping tariffs on imported sugar to maintain lower prices.
