31 Jan. - 6 Feb. 2002
Issue No.571
|
Al-Ahram Weekly Online 31 Jan. - 6 Feb. 2002 Issue No.571 |
||
| Published in Cairo by AL-AHRAM established in 1875 | Current issue | Previous issue | Site map | ||
Shura's urgent agenda
The Shura Council emphasised this week that greater government measures are still needed to counter the effects of the global downturn. Gamal Essam El-Din reports on an agenda that aims to tackle economic concerns
In a joint effort with the government to battle the nation's economic slump, the Shura Council released a report this week announcing its "urgent agenda of action for the coming period." The agenda focuses on measures to combat the country's primary economic obstacle of a severe deficit in its balance of trade.
The report, prepared by the council's special committee formed in response to President Hosni Mubarak's speech inaugurating the new parliamentary session, envisions a package of measures aimed at countering the effects of the global downturn and getting the country out of its current recession.
The current global turbulence, exacerbated by last 11 September's terrorist attack against America, hit Egypt hard, and caused its long-standing economic problems to resurface. The report highlighted the deficit in the balance of trade as the most critical of Egypt's chronic problems, citing it as the priority issue in the coming period.
The deficit in the balance of trade, the report said, contracted from $12.5 billion in 98/1999 to $11.4 billion in 99/ 2000. It has further decreased to $9.3 billion in 2000/2001.
The decrease, it said, was largely the result of an increase in exports - which grew from $4 billion in 98/1999 to $7 billion in 2000/2001- rather than to a decline in imports.
"It is good that exports are increasing, but it is equally deplorable that imports are steadily growing," the report said.
Lamenting that the government's performance in cutting down on imports was far from commendable, it cited recent statistics from the Central Agency for General Mobilisation and Statistics (CAPMAS), as showing that the value of imported products that had locally- made counterparts reached in 99/2000 a staggering amount of LE8.7 billion (or $1.6 billion).
"Experts reckon that this amount could have been saved to buy locally made products and generate jobs for at least 157,000 persons," the report said.
It was also argued that the government can save $1.5 billion worth of its annual overseas purchases. "This amount," the report stated, "which is equal to around LE5.5 billion, could be a big catalyst for domestic spending by earmarking it to meeting the government's needs of goods from the local market."
Recommended anti-import measures also included that the directives issued by the Central Bank of Egypt (CBE) last November be reinvoked. These measures were initially aimed to stop the use of documentary collection as a means to pay for imports.
Next on the report's pro-active measures is a call for more stringent quality control measures on imported goods in an effort to "protect Egypt from substandard foreign goods."
The cry was loud, and the importance strongly emphasised, calling, as well, for subsidising a variety of industries and agricultural crops in an effort to help gain ground against competitive imports and meet local market needs. This measure, which is a possible violation of the WTO's agreement, was nevertheless highlighted as necessary given that "boosting exports and reducing imports should now be a matter of life and death for Egypt."
Hand-in-hand with the listed measures, the Shura report called for the maximisation of foreign exchange receipts generated by the service balance sector.
"This balance, which largely includes tourism revenues and Suez canal transit fees, secured a surplus of $5.6 billion in 99/ 2000," the report cites. "This is a good amount to cover a part of the deficit in the balance of trade."
It conceded, however, that the service balance sector was hard hit by the 11 September assault against the United States.
"To offset this negative impact, the government should turn quickly to other sources to compensate for the loss of tourism revenues. A case in point is giving greater incentives to Arab Gulf businessmen to tap Egypt's local market.
"After the great losses these businessmen incurred due to the 11 September attacks (estimated as ranging anywhere from $40 billion to $200 billion), the government should move fast, and aggressively fast, to persuade them that Egypt is a safer haven for their investments," the report said.
Within the same context, the report urged the government to regulate the Hajj (pilgrimage) and Omra (unseasonal-pilgrimage) markets more stringently. It is reckoned that Egyptians spend between $3 billion and $4 billion annually on Hajj and Omra visits.
"The number of Hajj and Omra visitors should be strictly limited. People who conduct these visits several times should be banned from doing so," the report said. The Shura report concedes that the economic fallout of 11 September has placed greater pressure on Egypt's foreign exchange reserves. The report points a finger at the government, stressing that it has not done enough to soften this pressure.
"This is why we ask for harsh measures. In this respect, the government is advised to ban the handling of dollars in domestic deals such as the purchase of property or paying the costs of Hajj and Omra in dollars," the report said. It proposed that the interest rate on local currency banking deposits should be raised to discourage people from hoarding dollars.
"In particular, we think this measure will greatly encourage Egyptians working abroad to turn their dollar deposits into Egyptian pound ones," the report said.
The nation's chronic problems have long been known, but the where, and how, and with-what, to begin, have always seemed to leave the nation lingering. With the Shura Council's report, however, the list of to-do's is clear, and the pro-active mode. The question, now, is when the suggested measures will begin to be put in motion.
© Copyright Al-Ahram Weekly. All rights reserved
 |
|
|||||||||||||||||
| ARCHIVES Letter from the Editor Editorial Board Subscription Advertise! |
WEEKLY ONLINE: www.ahram.org.eg/weekly Updated every Saturday at 11.00 GMT, 2pm local time weeklyweb@ahram.org.eg |
 Al-Ahram Organisation |
Recommend this page