13 - 19 June 2002
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Rumpus before recess?Three controversial bills are coming up for parliamentary debate before the People's Assembly goes into summer recess at the end of this month. Gamal Essam El-Din investigates
The People's Assembly is scheduled to conclude its second parliamentary session with a debate over three controversial bills. The three bills have already been passed by the Shura Council, the consultative upper house, but have yet to be discussed and adopted by the Assembly.
The first bill, which was approved by the Shura Council on 4 June, will address the chronic deficit in the trade balance. It aims to boost both visible and invisible exports (commodities and services). To achieve this objective, the eight-article export promotion bill adopts three regulatory measures. First, the Foreign Trade Minister will have exclusive power to issue decrees on matters of external trade. Second, an export promotion fund will be established to raise the competitiveness of Egyptian exports on world markets. "Money for the proposed fund will come from: an annual budgetary allocation [estimated at LE400 million], the net revenues of fees imposed on administrative services (provided by the Foreign Trade Ministry), the net proceeds of administrative fees levied on imports and the revenues of compensatory fees imposed on unfair trade practices (such as anti-dumping fees)," the bill's explanatory note said. As a result, the proposed fund's annual financial resources are expected to exceed LE1.5 billion every year. These resources will be dedicated to upgrading the quality of exports and helping exporters tap new markets.
The bill also states that a central administration at the Finance Ministry will be established to take charge of reimbursing exporters the custom dues they pay on the production inputs they import. The General Export and Import Control Organisation (GEICO) will be exclusively entrusted with supervising the movement of exports and imports. "This aims to abolish the administrative and bureaucratic obstacles that exporters frequently complain of," the bill's note said.
To ensure strict application, fines ranging from LE1,000 to LE20,000 will be introduced.
Members of the Shura Council have agreed that the bill is just one small step in improving Egypt's export performance. "The bill aims to phase out bureaucratic obstacles facing Egyptian exporters," said Adel Beshai, a professor at the American University in Cairo (AUC). Beshai added that other steps must include raising the quality of Egyptian exports to compete on world markets, conducting more research on export markets in Africa and Asia and exempting exports from all taxes.
Beshai's position was also adopted by members of the People's Assembly Economic Committee and the Egyptian Businessmen's Association (EBA). Mounir Fakhri Abdel-Nour, the speaker of the Wafd party, said the proceeds of export taxes were estimated at LE90 million every year. "This revenue is insignificant given the expected positive impact of abolishing these taxes," Abdel-Nour said.
In response, Minister Youssef Boutros-Ghali indicated that the bill was a big step in the right direction. "Egypt has great export potential that needs to be fully tapped. Our agricultural products, for example, are of a high quality, but agricultural exports stand at a mere 32,000 tons per annum. This is a very modest volume. It is hoped that the new bill will boost this," Boutros-Ghali said.
The Central Bank of Egypt reported that in the first half of financial year 2001/2002, receipts from exports were a paltry $3.4 billion, while payments for imports climbed to $7.7 billion. These two figures left the deficit in the balance of trade at $4.3 billion.
The second bill, which was approved by the Shura Council on 3 June, is aimed at providing monthly financial assistance to laid-off workers. The money from this fund, initially estimated at LE750 million, will come from government and private sector contributions. The six-article Emergency Assistance Fund bill stated that one per cent of each worker's salary would be deducted to contribute to this fund.
Addressing the Shura Council on the new bill, Minister of Manpower Ahmed El-Ammawi said it was primarily aimed at giving financial security to workers whose enterprises were facing the risk of closure. "Workers who might be laid off because of the privatisation of their factories or companies will be entitled to emergency assistance from this proposed fund," Al-Ammawi said.
Abdel-Aziz Mustafa, chairman of the People's Assembly Manpower Committee, said that during the period 1 January 1999 to 1 March 2002 as many as 83 enterprises were either forced to close down or went bankrupt. "These enterprises were employing more than 15,000 people. They are now unemployed and have no alternative source of income. This bill will help them stave off financial trouble and is a good example of mutual support and social solidarity," Mustafa said. MPs have asked that the proposed fund should be primarily directed towards cushioning enterprises from financial risks and that laid-off workers be compensated with at least 75 per cent of their salaries.
Closely related to the above bill is the new draft unified labour law. This bill, approved by the Shura Council on 22 April, is designed to regulate relations between employers and workers. The 259-article bill seeks to give employers the right to lay off workers but proposes to sanction "peaceful" labour strikes as a counterbalance. The bill was approved in principle by the People's Assembly this week, but will be discussed, article-by-article, in the next parliamentary session beginning in mid-November.
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