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Al-Ahram Weekly 17 - 23 February 2000 Issue No. 469 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 17 - 23 February 2000 Issue No. 469
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Focus Profile Travel Living Sports People Time Out Chronicles Cartoons Letters Mixed indications
RECENT figures from the Ministry of the Economy reveal a marked improvement in Egypt's financial and economic indicators. According to the ministry's January Economic Bulletin, GDP for 1998/99 showed a LE22 billion increase compared to the year before. Unemployment fell by 8.3 per cent during the same period, while inflation remained stable at 3.8 per cent.Domestic savings rose to LE50.1 billion, compared to LE44 billion in 1997/98, while domestic investments increased from LE54.6 billion to LE60 billion.
Other indicators, though, were less positive. The balance of trade deficit for1998/99 was $12,524 million, compared to $11,771 million the year before. This was due to a decline in exports, which fell from $5,128 million in 1997/98 to $4,445 million in 1998/99 while the demand for imports remained constant over the same period at $16.969.
Indian experience
THE SOCIAL Fund for Development (SFD), in collaboration with the India-based World Association for Small and Medium Enterprises, (WASME), organised an International Symposium for Technology Management for Small and Medium-sized Enterprises (SMEs) last week.The symposium, attended by businessmen, small investors and entrepreneurs, discussed ways of enhancing the technical and managerial capabilities of Egyptian SMEs.
SMEs "are essential in enhancing economic growth", according to Hussein El-Gammal, SFD's managing director. "They need minimal operation investments, minimal space, and are labour-intensive, thus contributing to the alleviation of unemployment. They also utilise local resources and help create job opportunities in rural areas," he added.
Egyptian SMEs, however, face severe competition in both local and foreign markets, he said. To survive the competition, he argued, they must reduce their operational costs while constantly improving quality. The SFD has set up training centres in different governorates offering several programmes to young entrepreneurs and investors to assist them in developing their technical capabilities.
A protocol was signed on the fringe of the symposium between the National Institute For Entrepreneurship And Small Business Development (NIESBUD) of India and the Social Fund. The protocol, announced at a press conference at the Indian embassy, intends to target up to 50,000 potential Egyptian entrepreneurs, providing them with training. It is hoped that the protocol will eventually result in the creation of 200,000 jobs.
"Since India and Egypt share a similar development experience, small scale industries offer an attractive and mutually advantageous venue for bilateral cooperation between the two countries," said S Tuteja, India's development commissioner for Small Scale Industries. Small scale industries account for over 40 per cent of India's overall exports, according to Tuteja.
IT exemptions
COMPUTER software, currently subject to five per cent customs duties and a 10 per cent sales tax, is to be exempted in the future from customs duties and sales tax, according to Minister of Telecommunications and Information Technology Ahmed Nazif.The minister told the American Chamber of Commerce in Cairo that the new tax exemption package will be expanded to cover computer hardware as well. The 10 per cent sales tax currently imposed on hardware will be cut by half, and a five-year tax holiday is to be extended to all communications and information technology projects.
The decisions are part of the government strategy to boost the local software industry. The government, Nazif said, is very "serious" about establishing a Silicon Valley-like smart village covering some 325 feddans off the Cairo-Alexandria desert road. The village will be designed to house software development industries, information technology, internet and financial services.
"The government intends to create a company [in collaboration] with the private sector to develop and market the area," said Nazif.
