Main outlines of the government's policy statement in Egypt

The Cabinet, meeting Tuesday under Egyptian Prime Minister Atef Ebeid, reviewed the main outlines of the government's policy statement which will be delivered by the Prime Minister before the Shura Council on January 8.

Minister of Information Safwat Al Sherif said that the statement will review economic policies and priorities of economic action in the light of the impacts and consequences of the September 11 events and strengthening Egyptian economy to face threats imposed by those events at the international level which reflected on effective sectors of the economy in addition to maximizing the role of the private sector and providing more opportunities for it to participate in development and investment projects.

Ebeid will present the government's policy in the fields of attracting new investments, removing obstacles and providing facilities in order to attract more investments and confront bureaucracy which affects performance in existing investment projects or new projects.

The government's policy will also review major projects in the fields of production and services.

It will focus on the development of the Egyptian village and boosting development and services projects through financing programmes which have been drawn up in their optimum form after lengthy discussions by the government.

The statement will review the modernization of the State through policies which deal with the stages of modernization in accordance with definite planes in addition to government policies in the fields of employment, job opportunities and government's policy to facilitate the life of citizens in their dealings in addition to the legislative plan of draft laws which the government will present to the People's Assembly in its present session.

Ebeid will give an account of what the government has achieved and to which it had committed itself in the previous statement.

Information Minister Safwat Al Sherif said that the Cabinet discussed at its meeting three reports and working papers.

The first dealt with economic, financial and currency performance during the first six months of the investment plan and the general State budget.

The second report deals with a vision and the broad line which govern the first year (2002/2003) of the investment plan which is being drawn up.

The third report deals with discussions of the committee which drew up the future vision of the third five-year plan up to 2020 and the bases to be followed by ministries and authorities through recommendations of committee met under the chairmanship of the Prime Minister in the past weeks.

The Minister of Information said that as regards what has been carried out of the investment plan the first quarter and what is expected in the first quarter- the Minister of Planning reported on the results of preliminary studies in the first quarter of 2001/2002 which indicate that the government sector and the public and private sectors, are expected to amount to about 65 billion pounds.

The Council of Ministers recommended that the government carry out the approved volume of investments and urged the private sector to carry out investments not less than 37 billion pounds.

The Council of Ministers stressed a number of guidelines which should be observed when drawing up the investment plan for the year 2002/2003, foremost among which is to give first priority to projects which will be completed in 2002/2003, to maximize investment return.

Next in priority will be projects which will be completed in the following year and not to add to investment use any outside expenses such as wages and requirements of previous projects which entered service and to rationalize the foreign component and not to buy products from abroad when there are similar locally-produced products and not to include any investment s except within the limits of available currency and the required investments should be translated into achievement in kind which is a target in accordance with suitable priorities fixed by the council of ministers when discussing the plan in detail.

Minister of Information Safwat A1 Sherif said that Finance Minister Midhat Hassanein reported to the Council of Ministers on the situation as regards investment projects and expenditure of the state general budget.

He said that an inventory has been made of investment dues which includes investment expenses carried out and the value of executed works which were not paid to contractors or suppliers and were accumulated since the budgets of 97/98 and which, in total, amounted to about 22.3 billion pounds up to 30/6/2001.

The amount paid by the government since it assumed responsibility in payment and settlement of dues up to 15/12/2001 amounted to 18.3 billion pounds. The remainder which has not been paid is about 3.8 billion pounds.

The Council of Ministers decided that 1.5 billion pounds be paid in the second week of January 2002. A review of 2.4 billion pounds should be completed after the ministries and organizations present documents after checking them with the Ministry of Finance and the Central Auditing Agency.

Payment should be made immediately for all the sums checked by the ministries. All dues to the value of 2.4 billion pounds should be paid in full up to 30/6/2002.

As regards the investment plan for the current year 2001/2002, total government investments defined in the plan amount to 16.5 billion pounds. Finance has been provided to the value of 7.6 billion pounds for the first half of the year. The sum has been deposited in the account of ministries at the Central Bank to cover investment projects in the first half of the year.

Minister of Information Safwat A1 Sherif said that the Cabinet reviewed an overall report on economic performance in the light of effects of the September 11 events and economic policies to be adopted by the government to regulate the rhythm of national economy.

All reports presented by international organizations, in addition to what became clear from figures and documents of Egyptian organizations, said that in the light of the big repercussions of conditions through which international economy is passing and in the light of the performance of Egyptian economy, what is being faced by Egyptian economy does not represent any danger.

The performance and economic policies show the ability and safety of performance of economy and its ability to deal with these impacts within a narrow circle of harms.

Media reports are away from truth and mostly reflect the point of view of work sectors, particularly those which face difficulty in repaying due loans.

Government policies in the coming stage will deal with several issues: First: To deal with the reduction in money as a result of conditions facing world economy. Policies will be drawn up to increase local demand side by side with export policies to increase outside demand and maintain the ability of the private sector in development and open horizons of work before it and deal with faltering in repayment without foregoing rights.

Dealing with faltering repayment will not be confined to big borrowers but will include owners of small projects.

Policies will be carried out to provide protection to the exchange rate against sudden shocks while, at the same time, maintaining flexibility in the exchange rate and its ability to balance between offer and demand in foreign currency and increase the rates of lending to the private and productive sectors to reach the aspired level which ensure flow in money and operation of projects and increase local product in addition to laying down policies to encourage the movement of money through reducing the cost of lending and the interest rate on debt and to carry out policies related to export programmes to realise a tangible increase in the volume of exports which reflect on increasing manpower and employment and increasing the amount of foreign currency received and to carry out new policies in the field of marketing and open new tourist markets.

To form a working group to conduct an economic, financial and currency study and to present programmes of financing to increase additional resources in addition to sovereignty resources while maintaining the volume of external debt.

The committee will study amending the components of internal debt to give a chance for the flow of money to maximize the cycle of Egyptian economy in productive development projects. The committee will be chaired by the Prime Minister and will draw up policies to realise balance between imports and exports.

The Minister of Information said that the Minister of Supply reported on the actual position of consumer goods as of 27/11/2001.

Appropriations have been provided to import consumer goods.

The total reserve of wheat and maize amounts to 2 million pounds, sugar 605,000 tons, edible oil (issued under ration cards) 78.000 pounds. All appropriations have been made and goods will arrive gradually in the first half of January 2002.

The Cabinet declared that Egypt rejects Israel's operation of coercion, provocation and siege of Palestinian towns. The Cabinet condemned Israel's decision to prevent Palestinian President Yasser Arafat from attending Christmas Mass at Bethlehem.

Meeting Tuesday under Prime Minister Atef Ebeid, the Cabinet stressed that measures taken by Israel cannot be considered part of the policies of a responsible state.

The Cabinet expressed great regret for Israel's failure to comply with all decisions issued by international organizations.

Minister of Information Safwat Al Sherif said that the Cabinet reviewed four reports presented by Foreign Minister Ahmad Maher.

The first report dealt with the deteriorating conditions in Palestinian occupied territories as a result of Israel's acts of provocation and challenge of not heeding the demands of the international community. Israel does not respond to and rejects United Nations resolutions.

The Minister of Information said that the second report concerned decisions passed by the Council of Ministers of Islamic countries.

The third report was in connection with decisions of the Arab Foreign Ministers who met in Cairo recently.

Egypt has agreed to activate these decisions and President Mubarak seeks to reach an Arab position which reflects a true vision of the situation and to exert efforts to clear the Arab atmosphere.

The Cabinet stressed the importance of the effective Egyptian movement and Egypt's investing all channels with the parties to the peace process and confronting Israel's attempts to evade commitment to agreements signed between Palestine and Israel and efforts to steer the effective movement of the international community to save the elements of the peace process.

The Foreign Minister presented a report on the meeting of the Egyptian-Tunisian working committee which will meet in March under the co-chairmanship of the Prime Ministers of the two countries.