Policy decisions, timelines, mechanisms, follow up; enhancing exports competitiveness
Egypt, Economics, 5/29/2002

Economists have underlined the importance of enhancing the competitiveness of the national economy through a number of procedures, decisions and policies which are aimed at sponging out the effects of the latest world incidents and slackness which has afflicted foreign markets.

They also called for rationalizing importation and organizing utilization of the foreign exchange reserve and providing foreign exchange in banks.

Gouda Abdel Khaleq, Professor of Economy at the Faculty of Economics and Political Sciences noted that the aim of issuing any economic decision will not be sufficient as long as it is not coupled with the bent methods for achieving the economic and social goals of this decision.

Abdel Khaleq added that rationalization of imports at the present time is urgently needed, quoting figures of the year 1999/2000 which show that the imports bill has exceeded $ 17 billion, a mater which widened the gap between imports and exports by 14-15 percent of the Gross Domestic Product (GDP).

On his part, Mohammed Al-Morshedy, Deputy Chairman of the Chamber of Weaving Industries has stressed the necessity of coordinating mechanisms for carrying out those decisions so that they may not contradict with previously taken decisions, thus undermining confidence in commercial dealings and stability of the markets.

Hany Seif El-Nassr, Chairman of the Arab Banking Corporation said the Egyptian market is one of the most sensitive ones which can directly be affected by foreign events, adding that this necessitates the introduction of an integrated package of financial and monetary decision.

Moreover, economists stressed the importance of adopting an importation system that takes into account industry reactivating mechanisms.

There is a dire need for a well-designed system that ensures foreign exchange for banks to open credits for the importation of commodities which have no substitute at the domestic level, along with eliminating any foreign exchange speculation, economists elaborated.

Mohammed Al-Shafei, Director General of Banks Control at the Central Bank of Egypt (CBE),said the Bank has taken a wide array of measures for organizing importation.

'The monetary policy is not the main element influencing the exchange rate, as the responsibility starts with the financial policy and the techniques used in redressing the deficit in the balance of payments, increasing state foreign exchange resources and rationalizing importation,' Al-Shafei noted.

Abdel Khaleq further pointed out that the current economic situation does not tolerate the capital flight phenomenon which disrupts reserve. Other experts underlined the need for taking measures in order to tackle the economic slowdown, overcome the effects of the latest economic events, as well as giving priority to enhancing the competitive capacity of Egyptian products.

Abdel Khaleq expounded that any decision-maker should take into account Egypt's obligations before the World Trade Organization (WTO) in order to maintain the stability of exchange rate to control imports.

He also stressed the need for organizing import and export activities far from any breach of customs duties.

Other experts underlined Egypt's need for increasing customs in order to rationalize the importation of luxury commodities and goods which have domestic "substitutes.

Concluding, experts underlined the need for securing coordination among banks in order to regulate measures for improving luxury commodities and putting an end to the irrational wave of importing unnecessary commodities.

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