Egypt prepares for facing global challenges
Egypt, Economics, 10/30/2001

Economic variables and their implications to the Egyptian economy will be the core of in-depth studies by the government in the upcoming stage, especially after the September 11 incidents in the United States and the associated war which will surely overshadow economic performance in the Mediterranean countries including Egypt.

Though experts acknowledge that what is currently taking place on the international scene will inevitably affect the sectors of tourism and exportation, yet they said our problems should not be attached to the September 11 incidents, calling for differentiating between structural problems which were existing before the incidents and those which have resulted from the incidents. The Egyptian economy is still suffering many problems which necessitate the adoption of flexible financial, economic and monetary policies, they added.

A number of legislations are also to be developed, mainly in the field of conflicts and labour legislations, reports said.

Experts say the September 11 incidents make it incumbent on Egypt to reconsider its foreign relations and international-economic groupings, adding that more emphasis should be laid on the Arab region which is the most important source of investments.

The Arab free trade area should be given wider attention as rate of inter-Arab trade from 1997 to the year 2001 accounted only for 8 per cent of the Arab foreign trade.

Ambassador Gamal Bayoumy, Chairman of the European Partnership Unit at the Foreign Ministry said the world economy crisis is attributed to many phenomena such as the Asian crisis starting in 1997 and which has jolted Indonesia, Malaysia, Thailand and Taiwan.

Ambassador Bayoumy also referred to the Mexican crisis in 1993/1994 and the slackness phenomenon witnessed by the US economy, after recovery during the rule of President Clinton.

He noted that the trouble lies in the fact that for the first time since the second world war, slackness and depression are concurrently taking place in the American and the Japanese economies.

The incidents of September 11 will have economic effects pertaining to the problems of aircraft industry as Boeing Companies has laid off about 30,000 employees and closed some factories, Bayoumi added.

Ambassador Bayoumy said Egypt should be prepared for facing implications of those events through a host of measures based on the following:

Adopting flexible financial and monetary policies which could affect economic performance as means and not targets.

Introducing taxation reform system, as high taxation rates ( 42 per cent in some cases) do not increase receipts.

High level of customs should be corrected as Egypt's contractual obligations with EU, Arab free trade area and COMESA would put Egyptian producers in an uneven position with their competitors.

Some legislations need to be developed, mainly labour legislations and conflict settlement mechanisms should be developed.

Previous Stories:
  Toshka pumping station building goes ahead   (10/29/2001)
  Ministerial Committee probes rate interest cut, customs tariffs   (10/29/2001)
  Mubarak opens new Cairo tunnel   (10/29/2001)

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