Mubarak's economic speech at the 6th of October City factories
Egypt, Economics, 6/23/2005

Here follows is the speech of Egypt's president Hosni Mubarak on his visit to 6th of October City factories:

I'm pleased to meet you today at the Sixth of October city, one of our new constructional communities and one of our industrial edifices that prompt the feelings of pride and glory and it fills our hearts with confidence and hope in the future.

I had the same feelings when I visited a similar industrial edifice at the Tenth of Ramadan city last week and when I inspected several positions of what we have realized in the different fields of production, services and infrastructure.

So, when I talk to you today, I have to repeat that what we realized over the last two decades does not meet our legitimate ambitions towards an overall development.

The main challenge that we have to confront and overcome in the years to come is to achieve economic growth rates over 6 % annually, a matter that can provide vacancies to our sons who would join the work market in addition to absorbing the accumulated unemployment gradually.

This is the challenge and I have a full trust in our abilities to confront it relying on two basic pillars in the stage to come.

The first pillar is based on enhancing the investments of the private sector, in general and investments in the industrial sector in particular, a matter that can provide at least LE 70 billion annually where LE 20 billion are directed to industry investments.

The second pillar is based on taking a lot of steps that make it easy for the private sector to pump these required investments into the veins of our economy.

This is in addition to providing job opportunities to our sons and opening new markets before our exports besides achieving the targeted continued growth rates in the stage to come.

Of course, we will take more steps to facilitate the participation and investments of the private sector and boost its role.

After we realized customs reform, we will go on completing the development of running customs and tax, a matter that can realize the goals of the new law of tax.

We will also boost the incentives of investment with additional ones to compensate the exemptions which the tax law annulled.

We are also keen on continuing the development of the banking sector so as to assume its main role in support of the private sector.

In my speech on signing the new tax law, I presented an overall and integrated vision to the order of our economy being based on a new philosophy that reconstructs the relationship between the State and the community.

I also presented a new thought that brings about a third generation of laws to develop our legislation infrastructure, a matter that opens the door before the private sector to be a full partner in mobilizing investments necessary to development and providing job opportunities to our sons.

It is a new stage of economic reform reached due to what we realized in the last two decades where the private sector undertakes the bigger burden as regards investments and growth.

Yet, the role of the State is to lay down policies, regulate and monitor markets and prepare the appropriate climate in support of the role of private investments, let alone its social role and responsibilities in taking care of the limited-income brackets and working on promoting their living standards gradually.

In this context, I repeat that export issue is in the heart of this integrated order of Egypt's economy in the present and the future.

It is the road to create job opportunities to our sons as every $ 1 billion increase of our exports means providing 170,000 job vacancies to the sons of Egypt.

There are markets that our exports should penetrate, so we have to meet the requirements via enhancing production, modernizing industry, elevating quality and boosting competitiveness.

Increasing the rate of our exports of goods and services in the five years to come from 20% to 40% of our Gross Domestic Product is not far reached, particularly after the great leap we realized in our exports last year compared to 2003, as our exports to the EU increased to 55%, the Arab countries to 31%, Africa to 112% and the US to 36%.

So, realizing this goal is within reach after the free zones and preferred trade agreements we singed with Arab, African and European parties.

Bothers and sisters,

This vision to the future of Egypt's economy is the stage to come is not from scratch, as the aspired goals are based on real and achievable plans which gain trust from the achievements of the last two decades in all fields and sectors including industry sector.

Since the beginning of the 1980s, our investments in industry sector and up till the last year amounted to LE 174 billion in which the private sector participated with 71% where LE 83 billion are directed to investing in the new industrial cities.

So, we have a solid industrial base in these cities and in different governorates that helped provide 20% of the total workforce in which our industrial sector participates with 18% of our GDP.

The value of our industrial production hits LE 230 billion annually and the value of our industrial exports amounts to LE 18 billion which represents 40% of the total of Egypt's non-petroleum exports.

In this context, it is enough to indicate that the number of factories in the new industrial cities raised from 896 in 1992 to 3194 in the last year.

And here in the industrial area of the Sixth of October City, the number of the registered industrial establishments reached 761 where their investment costs amounted to LE 18 billion to provide more than 70,000 job vacancies to our sons and brothers where the value of their wages hits LE 555 million annually and the value of their production hits LE 28 billion.

The establishment of this industrial edifice began in 1985 where the State provided highly-expensive public utilities and services, so it succeeded in luring these investments and provided job opportunities to the Egyptians.

What is happening here in the Sixth of October City is a story of success that is repeated in other positions in the new industrial cities all over Egypt, a matter that boosts our trust in our capabilities to realize the goals of our vision, policies and programs towards a better future.

What feeds this trust is the continued positive development as regards the indicators of the total economy in the last few months and since the entitlement of the current government in the light of what the international funding institutions witnessed.

We managed during these few months to achieve a rate of economic growth that hit 4.8% and we expect to increase it to 5% by the end of this year. And for the first time, we achieved a surplus in the current balance of dealings that hits $ 3.7 billion.

The standard indicator of the Egyptian bourse rose to more than 237% since last July.

And the average of the volume of the daily exchange rose during this period from LE 107 million to 450 million.

Bothers and sisters,

Industry sector occupies an important position in the vision which I presented to the future of our acting in the coming stage. I talked about the necessity of providing 700,000 job vacancies annually to be backed by at least LE 70 billion year after year, as the private sector bears the burden of its mobilization, so where is industry sector and the Egyptian private sector from all this? And what is the track of our acting to boost this important sector in the years to come?

We will work to prepare the climate to lure industrial investments done by the private sector which hit LE 20 billion annually to help establish 200 new factories in every year of the next five years; a matter can provide 200,000 job vacancies to our youths annually.

We will also work on elevating the annual rate of the industrial production growth from 5% to 10% by 2010 besides working at the same time on doubling the rate of our industrial exports to reach 15% of the total of our industrial production by the same year. This matter means enhancing the value of Egypt's industrial exports from LE 18 billion to LE 36 billion after five years.

These are the goals of the next stage and the way to achieve this depends on development, modernization, increasing productivity, competitiveness and quality.

Development and modernization should extend to all sectors of industry whether engineering, electric, chemical, food industry, waving and textile industry and ready-made clothes, construction requirements and others.

This is while paying a parallel attention to software industry and advanced technology for communications and information which the markets of the whole world are opened before it.

In fact, a special responsibility is incumbent on the State and private sector investors as well as the workers of Egypt who are the pillar of this industrial development.

The State will never spare an effort to go on developing legislation and institutional infrastructure to lure investment and to protect the consumer as well as preventing monopolization besides exterminating bureaucracy.

As to industry men, they have to assume their role, seizing this favorable to expand their investments and work and double their efforts so that their products can penetrate into world markets.

They should also abide by the international competition rules, respect of workers' rights and shoulder their social responsibility.

The success of the role of the State and industry men is incumbent on a hoped for and important role the workers of Egypt are to shoulder with their faithfulness, dedication, efforts and keenness to upgrade their production in a world of fierce competition where there is no place but for the best, the fittest, the highest in quality and productivity.

Being with you today is giving me the chance to reiterate some of what I am seeing achieved for the leap of our country and its industrial base and for a promising breakthrough for Egypt and its sons.

The present is the seed and the maker of the future. Our meeting today is among the factories of the 6th October City gives us confidence in ourselves and in our achievements over the last two decades and augurs well for a new tomorrow.

I do believe in our ability to work together to realize it.

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