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Expert: Egypt's market will remain strong:
(31/05/2011)
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Goldman Sachs, a global investment banking and securities firm, said it is optimistic about the future of the Egyptian stock exchange and economy. These statements were made at the conclusion of a series of meetings an Egyptian Exchange delegation made in London on Thursday.
Brian Griffiths, a Goldman Sachs international advisor, said Egypt’s location and advantages ensure it will remain a strong market and a favorite destination for investors and businessmen looking for revenues in young markets.
According to a statement issued on Friday by the Egyptian Exchange, the delegation met with officials from 46 financial institutions. The meetings centered on opportunities for foreign investors, investment banks and financial institutions.
Osama Saleh, head of Egypt's General Authority for Investment and a member of the delegation, said Egypt is seeking to attract new investments and redraw its investments map through introducing mechanisms to protect investors and investments.
Specialized analysts and experts expect the political developments in Egypt to impact the value of Egyptian stocks this week, saying they predict the benchmark index to gain 5600 points as a result of news about economic aid to Egypt.
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IMF sees $160 billion in Middle East financing needs:
(31/05/2011)
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Washington/Deauville - The external financing needs of oil-importing countries in the Middle East and North Africa will exceed US$160 billion over the next three years and donor countries must step in to help, the International Monetary Fund said on Thursday.
IMF staff projected that Egypt lost about US$15 billion in foreign exchange reserves over a four-month period until the end of April. Staff also put the country's external and fiscal financing gap at about US$9 billion to US$12 billion for fiscal year 2011/12.
"Pressures on the balance of payments will ease only gradually with continued net capital outflows, and weak tax revenues and higher food and fuel subsidy costs will weigh on the budget," the IMF said.
An agreement on aid for Egypt, which formally approached the IMF for aid earlier this month, could be reached "within weeks," Ahmed said.
In a report to the Group of Eight meeting in Deauville, France, the IMF urged G8 industrial nations and rich Arab partners to develop an action plan that lays out what help they could provide countries in need.
"The region needs to prepare for a fundamental transformation of its economic model," Masood Ahmed, in charge of Middle East and Africa at the IMF, told journalists on the sidelines of a Group of Eight meeting in northern France.
"This will be greatly facilitated if international players including the G8 can enter into strategic partnership with these countries...where incentives are linked to a social agenda."
G8 leaders, meeting in the northern French seaside resort of Deauville for a two-day summit, said in an early draft of their joint statement that they "stood ready" to meet the region's financing needs.
Countries such as Egypt and Tunisia are facing economic pressures following mass protests that toppled their autocratic rulers. Uprisings have also roiled Yemen, Jordan, Morocco and Syria, and left the government of Libya fighting to stay in power.
"In the immediate future, there is a need to restore confidence in the oil-importing countries, which face surging global commodity prices and domestic pressures associated with the initial transition shocks," the IMF said.
The fund also said it was able to provide about US$35 billion to try to stabilize countries' economies.
Over the next 18 months the bulk of the financing will need to come from the international community, the IMF said, because markets were uncertain about the political and economic transitions in countries.
Ahmed said the group of oil importers would need to create 55-70 million jobs, mostly for young people, in the coming decade while stimulating a private sector economy that has long been neglected in favor of state-run businesses.
In addition, countries such as Egypt, Jordan, Lebanon, Morocco, Tunisia and Syria are facing inflationary pressures due to a surge in global food and energy prices, it added.
For Tunisia, IMF staff forecast budgetary financing needs of about $3.7 billion in 2011, or 8 percent of gross domestic product. External financing needs, after foreign direct investment and short-term capital flows, are likely to be $4.4 billion this year, or about 9.5 percent of GDP.
An IMF aid program for Yemen, currently rattled by heavy fighting between supporters of President Ali Abdullah Saleh and opponents who want his ouster, had been suspended until the situation became clear, Ahmed added.
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Egypt to form free trade zone with Africa:
(31/05/2011)
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Egypt’s economic policies will soon gear more toward African markets and Nile Basin countries, experts said.
“The prime minister said the government is inclined to form a free trade zone with Africa,” said Ministry of Trade and Industry Undersecretary Saeed Abdullah. He added that Africa constitutes 20 percent of Egypt’s total foreign trade, while the European Union makes up 40 percent.
Meanwhile, officials from the American Chamber of Commerce said the United States intends to form a free trade zone with Egypt in an attempt to boost its economy.
“But such a step would be considered after the parliamentary and presidential elections,” said chamber member Pascent Fahmy.
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Economists praise increases in commodity subsidies:
(31/05/2011)
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Economic experts have praised the prime minister’s decision to increase subsidies of strategic commodities from LE90 billion to LE115 billion in this fiscal year.
“We cannot let the poor pay the bill for inflation,” said Ahmed Galal, former World Bank economist and Managing Director of the Economic Research Forum. “Even if this means an increase in the state budget deficit.”
Galal called on the government to resort to loans in a wise and careful way, and to direct them to small and medium-size industries in order to combat unemployment, which now stands at 12 percent.
For his part, economics expert Khaled Abu Ismail said the decision was a pivotal step in offsetting inflation and global price increases.
Enayat al-Naggar, also an expert in economics, said the government would have to offset new loans by offering more treasury bonds.
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Arab Web clampdown hurts own economies, says Google:
(31/05/2011)
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Deauville, France - Arab leaders were wrong to block Internet access in an effort to quell popular revolts as such moves only hurt their own economies, Google Chairman Eric Schmidt said on Thursday.
Speaking at a briefing on the sidelines of the Group of Eight summit in northern France, Schmidt said Iranian and Syrian measures to cut off Internet access were "desperate moves."
"It is a terrible mistake for them to do so," he told a briefing on the sidelines of a summit of Group of Eight leaders in the seaside resort of Deauville.
"Among other things it completely screws up the economy, communications, the exchange of goods, the electronic commerce, the flow of information into these countries... It's not a good idea to shut down the Internet in your country," he said.
After a two day meeting in Paris at the so-called e-G8 summit earlier this week, Schmidt, Facebook founder Mark Zuckerberg and others were in Deauville to submit proposals on regulating the Internet and protecting intellectual copyright.
The panel said there were few technical means to circumvent moves by governments to restrict internet access, as the infrastructure was frequently controlled by the government.
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