Egyptian economic reform program goes on, private sector given priority
Egypt, Economics, 4/27/2000

Setting a precedence in Egypt, Economy and Foreign Trade Minister Youssef Boutros Ghali Wednesday held a telephone conference via satellite with international companies and investors on the Egyptian economy and the investment climate.

The companies and investors were asking questions from the US, Britain, Japan, and Canada. The international funding corporation, Merrill Lynch, organized the conference in tandem with the Egyptian trade representation offices abroad with the view of promoting the investment climate in Egypt and enhancing export and marketing prospects of Egyptian products.

Ghali said that similar video-conferences would be held every 15 days to answer the questions of investors from all over the world and develop the way trade representation offices work abroad.

The questions revolved round upgrading economic laws and tax systems, privatization, investment incentives, and the government policy to address the problem of cash liquidity.

Ghali assured that economic reform would accelerate the role of the free market in Egypt and limit the role of the government to supervision, prevention of monopoly, and setting up monitoring institutions.

"The economic reform process will go ahead, with priority being given to the private sector, production and service projects," the Minister said, adding that the government will seek to increase growth rates from 5-6 per cent to 7-8 per cent during the coming phase.

Answering a query on the areas open for investments, Ghali said the government seeks to draw private sector investments into giant projects in the fields of telecommunications, power-generating stations, airports and harbors through floating their shares on the stock exchange or building projects under the Build, Operate, and Transfer (BOT) system.

Egypt will access its exports (services and commodities) to external markets in the coming stage through adopting modern marketing methods and removing impediments.

Asked about privatization of insurance companies and banks, Ghali said that as part of the ongoing privatization program, the government had contracted two major companies to prepare real assessment of the assets of insurance and business companies.

According to Ghali, the assessment process will end within six to eight months.

As for the banking sector, Ghali said that 50 per cent of banks in Egypt were operating under the umbrella of investment law as being private institutions.

As for the state-owned banks, Ghali said that the government tried to create a favorable public opinion for privatizing those banks as such a decision required public support.

Asked about measures taken by the government to beef up liquidity, Ghali denied that these procedures could affect inflation as the government decided to inject L.E. 2.5 billion per month into the market to stimulate it. He added that this particular amount would not have any inflationary impact.

According to Egypt's top economist, these steps include necessary restructuring of government debts due to public and private institutions, an Egyptian statement said.

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