Cabinet reviews four key economic reports
The Egyptian Cabinet, under Prime Minister Atef Ebeid endorsed the strategy of oil sector, priorities of the plan adopted by oil sector for increasing Egypt's resources of foreign exchange through rationalizing importation of oil products, benefiting from new gas prices, expanding the volume of exported liquefied gas and enlarging investment base in the projects of fertilizers, petrochemicals and butane gas.
Moreover, the cabinet, reviewed results of President Hosni Mubarak's European tour during which he visited Romania, Germany and Russia at the economic and bilateral relations level.
The Cabinet adopted a number of recommendations to reactivate bilateral relations, particularly the Joint Committee with Romania and to activate agreements signed with Russia.
Minister of Information Safwat al Sherif said that the Cabinet also reviewed the results of the visit of Ebeid to Tunisia and the results of the meetings of the Joint Egyptian -Tunisian Committee and steps to push forward and activate relations between the two countries.
The Cabinet reviewed a Foreign Ministry report on conditions in the Middle East area in the light of President Mubarak's Labor Day speech.
President Mubarak's assignments to the government as regards a number of economic issues and exports and programs of operation and creating new job opportunities were also reviewed.
A Ministerial Committee will be set up to lay down urgent executive programs to carry out the assignments contained in President Mubarak's Labor Day speech.
Safwat Al-Sherif said the Cabinet discussed four important reports on economic conditions which consecutively concern: the economic activity, the budget estimates for fiscal 2001/2002, the development of non-petroleum industrial exports and the development of services exports.
Economic Conditions
As regards economic conditions, the report showed that Egyptian economy has regained its activity and strength as shown by several indicators, foremost among which is an increase in the volume of the sales of a large number of companies and also an increase in market activity and a rise in revenues accrued from an increase in the volume of sales of 40 companies according to reports of the General Assemblies.
Privatization shares offered amounted to 22 billion pounds. They included 8 billion pounds for cement exports in the past three years.
Reports of 2000 indicate an increase in investment activity in the field of buying privatization shares in which the share of the foreign partner reached 60 per cent.
The Cabinet discussed a report on the currency budget. Estimates of use and resources in the new fiscal year indicate a deficit estimated at 267 million dollars compared to 398 million dollars in the past year. Improvement amounted to 131 million dollars.
This is due to the fact that current revenues are expected to rise in the new fiscal year to 24 billion and 196 million dollars compared to 23 billion and 438 million dollars, an increase of 758 million dollars and improvement rate of 3.2 percent.
Reports showed that current use has been relatively stable. The increase between what is targeted in 2001/2002 of current use amounts to 342 million dollars in order to face inevitable needs of the economic and social plan.
The new budget shows that the expected surplus in the balance of current operations will amount to 564 million dollars against a surplus of 68 million dollars, an increase of 496 million dollars. The relative deficit will be offset by a group of exceptional resources. The final deficit will be 267 million dollars.
Plan Goals
In the field of discussing the currency budget for fiscal 2000/2001, the Cabinet underlined a number of important goals, namely:
To maintain the general foreign currency reserve which amounts to 15 billion dollars and to raise it to 17 billion dollars.
To lay down a policy to ensure the stability of the exchange rate of the pound against foreign currencies.
To provide foreign currency to serve external debt (installments and interest).
Making for the increase of foreign currency through increasing commodity exports and raise the increase rate to 15 percent.
Making for the increase of oil and natural gas exports which provide a direct income of foreign currency.
To promote the revenue of foreign currency through increasing the revenues of services commodities particularly tourism by increasing the number of tourists and to invest new potentials.
To exert efforts to open new markets for Egyptian labor maintain the present labor abroad, and provide programmes to rehabilitate labor to meet the needs of outside markets with the aim of increasing revenues received from Egyptian expatriates.
To capitalize on Egypt's geographical position which is represented in the Suez Canal and the East of Port Said and the northwest of the Gulf of Suez.
To develop means of attracting international investments to Egypt and carry out development projects and produce goods for export.
Exportation Infrastructure to be developed
Safwat Al Sherif said the Cabinet conducted a wide discussion about President Mubarak's assignment to the government to increase exports.
The Cabinet considered new ideas presented by all Ministers. Dr. Atef Ebeid said that it has been decided to allocate 400 million pounds to modernize the infrastructure of exports and to concentrate on the export of the products of spinning, wear, food commodities, construction materials, chemical materials, iron and steel, pharmaceuticals and components of electricity networks to bring the target up to 4800 million dollars as a minimum instead of 4215 million dollars.
Oil Sector Strategy:
The Cabinet approved the strategy of the oil sector and priorities of the plan that was laid down by the sector to raise State revenues of foreign currency in accordance with the following:
To expand investment in projects with multiplied value such as fertilizers, petrochemicals and butane gas.
To rationalize the import of oil products by using the available refining capacity in full.
To realize the targeted revenues resulting from the success realized by the oil sector recently through the amendment of gas agreements that Egypt concluded with other parties, this amendment checked a drain of losing foreign currency.
To stop signing new agreements to buy Egyptian natural gas until conditions of purchase are improved and in order to realize a bigger revenue for the Egyptian treasury.
To increase the volume of Egyptian natural gas which is exported, either liquefied or through pipelines in accordance with agreements which have been signed and to develop new exploration areas in addition to concluding additional agreements in future.
To carry out project to lay gas pipes, east and west, according to timetables in order to open the door before exporting surplus natural gas.
To attract and encourage international and national investments to work in Egyptian territory for more discoveries and to maintain the success that was realized by the oil sector represented in a continued increase in Egypt's reserve of oil and natural gas.
Safwat Al Sherif said that the Cabinet would continue discussions, at successive meetings, to increase and develop state revenues of foreign currencies in various sectors.
A meeting will be held next month between exporters and government agencies to lay down solutions to problems facing exports and to set up a "Rapid Intervention Group" to deal with export problems. The group will be available at the Foreign Ministry for 12 hours daily.
All agencies concerned will be represented on this group that will be in direct contact with the Prime Minister to resolve any difference from any government agency in addition to the following steps:
To set up joint companies to benefit from the privileges of taking part in the government auctions in the outside world.
To expedite approval of free trade agreements with 5 countries.
To complete the project of refrigerator containers and to provide incentives to invest in transport fleets which use containers.
To sign an agreement with an international consultant house to deal with dumping claim.
To set up two Ministerial groups to develop commodity and services exports. The Minister of Finance will take part in these groups.
To review figures of exports and solve problems in the way of using funds earmarked to modernize the export infrastructure.
To develop Trade Representation Offices and unify their efforts with the Union of Industries and Chamber of Trade.
Safwat Al Sherif said in his statements that the Cabinet reviewed at its meeting today maps to define use of State land and expressed thanks to the Ministry of Defense and branches of the Armed Forces which completed the project of carrying out an overall survey of the land of the Arab Republic of Egypt which makes it possible to define use on maps with a drawing scale of 1 percent in accordance with what was presented by ministries and agencies concerned with dealing with State land.
The maps define strategic land of military importance in addition to land included in the state plans for land reclamation and mining and industrial activities and land of new urban areas, tourist activity land and land necessary for the Ministry of Transport and land necessary for the activities of the Suez Canal Authority.
The maps show archaeological sites and natural reserves and desert areas for which no specific use is defined and its use will be decided by the Council of Ministers in accordance with what is presented by the National Planning Council and use of State land which will be introduced by a Republican decision.
Safwat Al Sherif said that the Cabinet approved a draft Republican decision defining strategic areas of military importance and rules governing these areas.
Some quarters are forbidden to act in some strategic areas of military importance. Detailed maps that define the boundaries of these areas will be deposited at the notary offices concerned.
The decision defines these strategic areas and rules governing them. The Minister of Defense shall, by a decision issued by him, set down conditions and detailed rules to use these areas as required by the affairs of the defense of the State.
The Cabinet approved a draft Republican decision defining the use of State land up to 2017 and a draft Republican decision to set up the National Council to plan the use of State land with its headquarters in Cairo and it may set up branches inside Egypt.
The decision lays down in detail the authorities of the National Council and set up a central board to run the center under the Deputy Prime Minister or his delegate.
The board will be appointed by a decision of the Prime Minister.
Safwat Al-Sherif pointed out that Cabinet had asked the Ministry of Defense to ask its experts, in collaboration with the ministries and agencies concerned, to make a review of requests and needs of land to be used for economic and social development up to 2017.
This took a full year during which final maps were drawn for the use of all sectors and coordinate among them.
As a result of coordination among the different State agencies, land has been defined for various activities.
Safwat Al Sherif said that these decisions facilitate the use of land and settle differences and make it easy for investors to have land according to definite rules governing the use of land.