More efforts for maintaining exchange market stability

Egypt's President Mubarak yesterday held a meeting with economic ministerial group for following up the government financial and economic policies.

At the meeting, the president reviewed a report by Prime Minister Atef Ebeid on the policy adopted by the government to rationalize the market movement and modernize financial sector.

The President listened to a report by the Minister of Finance on the government policy to narrow the gap between public spending and current and sovereign resources as well as steps to slash public debt.

Minister of Information Safwat a1 Sherif said after the ministerial meeting that the Prime Minister also presented the government's policy as regards providing bigger resources to finance small projects and encourage youth projects and support faltering establishments and the type of new organizations which might be required to deal with faltering assets.

Minister of Information safwat al Sherif said that Prime Minister Atef Ebeid also offered proposals regarding setting up companies and entities to undertake the operation of providing the necessary finance for real estate activity and the government's policy to formulate a programme to amalgamate small entity banks into bigger entities.

President Mubarak has directed that experts and specialist should play an effective role in the proposed process to amalgamate some small banks into bigger entities and stressed the importance of continuing to follow up the execution of policies and measures to realize balance and discipline as regards the performance of the exchange market and the stress that the central bank should be strengthened and should resolve full support in following up and controlling the market.

President Mubarak has also issued directives that there should be export goals and steps should be taken to realize these goals.

There should be goals at the commodities level to define the markets in which marketing would take place.

The President said it was important that the government should supervise the imports received by government agencies and priority should be given to the use of local products.

The state should continue to have complete sovereignty through the organizations responsible for carrying out the state policy in the fields of defence, national security and internal security, the collection of customs and taxes and strengthening justice, the President said.

President Mubarak directed that regarding the special economic zones, Egyptian laws should be applied where there is no stipulation which refers to the law of the area.

President Mubarak directed that the draft law be discussed by special cabinet committees before it is referred to the People' Assembly.

Minister of information Safwat al Sherif said the President also listened to a report from minister of finance Midhat Hassanein on the government's policy to narrow the gap between public expenditure and sovereignty ,and current resources and the government's policy ,to reduce the general debt and policies which should be followed in this respect.

The Minister of Finance stressed that it was important that the government's policy should ensure that there should be effectiveness in expenditure, in the sense that the expenditure should realize an increase in operation and raise the quality of the services rendered and increase the per capita income .

The state is committed to the principle that all projects should be fully prepared through accurate economic feasibility studies as regards investment projects.

There should also be commitment to the principle that every capital expenditure should realize an economic and social return to recoup the funds spent. The necessary finance should be provided for all new allocations, current or investment, without an increase in burdens on people of limited income, in the sense that those who are well off should bear the cost of the service.

Also the taxation system should be reformed in order to strike a balance and tax evasion should be dealt with at the same time and additional resources should be generated through privatization.

When tax reform policies came under review, president Mubarak stressed that all privileges, incentives and tax exemption in force at present should be maintained.

There should be a balance between the financial goal of the tax and its social goal. Judgments issued in cases of tax evasion should be reconsidered in order to limit this phenomenon.

The minister of finance said that the tax reform process gives priority to reducing burdens on people of low income and to face and deal with problems which were raised in application between the tax department and tax-payers or which affected taxation justice among tax-payers.

Also, tax performance should aim at facilitating and shortening procedures.

Prime Minister Atef Ebeid reviewed the government's policy as regards reforming conditions of economic organizations.

He said that there was a clear improvement in the trade balance.

There was a drop in imports and a reduction in the volume of imports of consumer goods and an increase in the volume of exports.

The deficit in the balance of payments is under control and there is an increase in dollar deposits at banks.

As regards issues presented to President Mubarak, the minister said a draft law on special zones was presented.

The most important point in the draft law deals with the presence of authority in the place with which investors deal whether as regards licenses or services and exercising all authorities granted to bodies with which investors deal before they set up their projects and after and when the project is in operation.

Also what the law realizes as regards the unity of ownership and unity of administration and the method of administration and its systems and to adopt methods in application in the most advanced countries of the world as regards the system of work, the efficiency of employees and the immediate execution of the service.

Discussion also dealt with rules to deal with the political agencies of the state and those regarding disputes.