Basic requirements to enhance private sector's role in Egypt's economy
Egypt, Economics, 12/4/2002

In light of the government's firm commitment to develop the private sector which is responsible for about 75 percent of the country's development investments, the private sector's experience, which started two decades ago still requires further efforts to be exerted by both the government and the business community.

ÊÊÊ The private sector is regarded as the sole pillar on which the Egyptian economy can depend within the coming years especially to generate new job opportunities, according to Foreign Trade Minister Youssef Boutros Ghali.

ÊÊÊ So far, the private sector's experience is considered extremely successful in comparison to other countries passing through the same economic reforms, Ghali believes.

ÊÊÊ "The private sector's share of the GDP reached 75 percent, besides being the source of all technological developments introduced into the Egyptian economy," the Minister elaborated.

ÊÊÊ "Moreover, the private sector has succeeded in accessing period foreign markets with new goods and technologies," he added.

ÊÊÊ On the negative side, Ghali said that the private sector has, however, failed to lay down regulations to streamline the business activity, or an institutional framework to regulate inter-business relations in order to have a say in the economic policies.

ÊÊÊ Moreover, the private sector still prefers to operate in line with the public sector's way of thinking like the protectionist measures, administrative intervention in supply and demand and isolation, rather than integration into the world economy, according to Ghali.

ÊÊÊ The private sector's investments are one of the effective pillars in development as 11682 investment companies with investment costs of L.E. 201 billion have been set up until June 30, 2002, said Head of the General Authority for Investments and Free Zones (GAFI), Mohamed El-Ghamrawi, noting that about one million job opportunities have been provided.

ÊÊÊ Moreover, some 772 private companies with investment costs of $ 15 billion were established in the free zones until June 30, 2002, providing about 100,000 job opportunities, he added.

ÊÊÊ In order to have a more effective role in the national economy, the private sector has to pay more attention to feasibility studies, use technological means, enhance research and development and increase disbursements on marketing and training, Ghamrawi said.

ÊÊÊ In his turn, Chairman of the National Company for Construction Development Hussein Sabbour sees that the private sector, which has been launched since 1975, has not played a sufficient role. The private sector is, however, still facing some problems including the red tape, the increased costs of taxes on projects, high tariffs imposed on production means and intermediary goods and high bank interest rates, he noted.

ÊÊÊ However, Chairman of the People's Assembly's Economic Committee, Saeed El-Alfi called for the necessity of adopting a practical programme involving the legislative as well executive branches together with the private sector and the civil society to enhance the national development. The government has already prepared a number of key economic legislation aiming at activating the market, El-Alfi added.

ÊÊÊ The government also intends to introduce some amendments to the investment law to provide a conductive competitive environment for investment, he said.

Previous Stories:
  Workshop for one-stop shop in creation and regulation of small and medium size business   (12/3/2002)
  Egypt's long-staple cotton hits 40% of world production   (11/30/2002)
  New U.S. investments in petrochemicals   (11/28/2002)

Please add a link on your webiste pointing to ArabicNews.com and bookmark ArabicNews.com & subscribe to our daily email news bulletin.

Search