By Abdel Qader Ramadan
The Federation of Industries is demanding support for domestic industry that includes 40% or more local components by giving them the slogan “Made in Egypt,” and granting them a range of benefits. These will include preferential treatment for government procurement tenders, export subsidies, and customs exemptions provided by trade agreements signed by Egypt, provided that these benefits are not applied to products with less than this ratio of local components, or which are only assembled in Egypt.
Said Mohammed Al Suwaidi, Chairman of the Federation of Egyptian Industries, said at a press conference on Monday that the Federation is working with the Ministry of Industry and Trade to implement the Prime Minister’s decision favoring domestic production in government procurement in order to restore Egypt’s status as an industrial base in the region.
“There are problems with regards to applying the Prime Minister’s decision and there is no obligation, or real enforcement, to carry it out, despite its importance in encouraging domestic production,” said Al Suwaidi, pointing out that the law is currently being prepared, and it will be comprehensive and will overcome the differences in the jurisdictions of the ministries, and will include penalties for those who deliberately violate it.
Al Suwaidi pointed out that the Federation is calling for legislative reform to encourage the informal sector to join the formal economy, to expedite the issuance of the law on microfinance, to launch the Social Fund for Development, and to facilitate the procedures for obtaining loans.
“We are not against the assembly of products in the domestic market, but we need to favor products that contain local components or added value,” said Al-Suwaidi.
The Federation is currently studying, along with the Ministry of Industry, establishing industrial centers for small and micro enterprises.
There are currently negotiations with the Ministry of Investment to establish an industrial zone for small-scale industries in Damietta, said Al-Suwaidi.
He added that the sign “Made in Egypt” will aim to deepen domestic industry in Egypt, “industries unable to provide this ratio in their products need to integrate in order to do so,” he said.
This decision, according to Al-Suwaidi, helps to recognize Egyptian industry in international conventions, which until now have not recognized Egyptian products because of lack of local production.
On the other hand, the Federation is submitting a final proposal to the government to liberalize subsidies for industry over the coming four years, despite the objections of some board members. “There is a price that must be paid for reform. With any reform in the world, a lot of people are going to have to pay, but we must work to benefit the nation and not the industrymen,” said Al-Suwaidi.
Al-Suwaidi called for expediting the issuance of laws on bankruptcy, food safety, and facilitate the process for obtaining land.
