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Al-Ahram Weekly 1 - 7 July 1999 Issue No. 436 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 1 - 7 July 1999 Issue No. 436
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Profile Features Special Interview Travel Living Sports Time Out Chronicles People Cartoons Letters Import curbs under fire
By Mona El-FiqiThe Egyptian Businessmen's Association (EBA), which met early this week to discuss measures restricting imports applied by the government since last November, is planning to present a memo to the prime minister expressing its dissatisfaction about this change in policy.
A few months ago, in an attempt to resolve the foreign currency shortage in the market and protect local industry from dumping of imports, the government launched a policy of curtailing imports. Under the new regulations, an importer has to present a letter of credit in foreign currency equal to the value of his goods before importing, a matter which places a great burden on their liquidity, businessmen said.
EBA members are not against applying this decree on luxury goods, they say, but they argue that it is not fair to apply it on other consumer goods. Ahmed Abdel-Salam, an EBA member, said it would be better if a negative list including luxury goods, to which the curbs should be applied, were attached to the decree.
Mounir Ezzeddin, chairman of EBA's Industry Committee, said that the new measures constitute a "setback to investment. These regulations, which were issued to tighten the volume of imports, do not differentiate between businessmen who import to trade, and those who import to manufacture."
Moreover, the government should give privileges to businessmen who import capital goods and materials required for production to help them increase local production and exports, Ezzeddin said.
A new decree which did not heed importers' requests to abolish the sales taxes on capital goods, was also enforced. It requires payment of sales taxes in cash instead of in instalments as was previously the case.
At their meeting, businessmen argued that the government, in order to maintain its credibility and attract foreign investment, should not have changed its policy. The instability of Egyptian economic policy is one of the major obstacles that discourage foreign businessmen from investing in Egypt, said EBA Chairman Said El-Taweel.
Due to the frequent changes in policy, according to El-Taweel, some foreign investors have liquidated their operations in Egypt. He said that the new regulations approved by the government should not be applied retroactively "because businessmen lose too much money if they are not given a grace period before new measures are applied."
Yamani Felfela, an EBA member, asserted that these regulations will reflect negatively on companies' productivity, as well as employment and exports because it will be difficult for producers to get the imported materials necessary to make their products.
EBA members recommended that any new decrees should be "well studied" and discussed in advance with business organisations.
