CBE law sees the light

AFTER almost two weeks of debate in parliament, the People's Assembly finally approved the new Unified Banking Law on 28 May. The law, reports Gamal Essam El-Din , aims at providing the Central Bank of Egypt (CBE) with greater freedom in drawing up monetary policy, as well as furnishing it with supervisory powers over the banking system.

The law is composed of seven chapters. The first two concern the objectives and internal structure of the CBE and its new system of supervision over the banking sector. The next five chapters deal with the administration of public sector banks, the confidentiality of bank accounts, the mortgage of banking assets, the handling of foreign exchange and penalties for banking offences.

Although the law was approved in a relatively short time, some of its articles were extensively debated by opposition and majority MPs alike.

Article 63 now obligates clients to secure their banks' approval if they want to change the nature of business for which they borrowed money. Zakaria Azmi, a prominent MP belonging to the ruling National Democratic Party (NDP), as well as many other MPs, insisted that the article be amended, arguing that a large part of the current loan default crisis in Egypt was due to businessmen freely changing from one type of work to another without gaining approval from their banks.

The opposition also complained about the law's first article, which placed the CBE under the authority of the president. Abul-Ezz El-Hariri argued that the CBE has to be a fully independent institution, "because this is the only condition under which it can be protected from being manipulated by politicians". Opposition MPs also attacked Article 5, which stipulates that the CBE's monetary policy be formulated by a "seven-member coordination council".

Majority MPs and Finance Minister Medhat Hassanein thought differently, arguing that putting the CBE under the president's authority is important simply to ensure that it is not working in isolation from the government. Hassanein said the coordination council will not strip the CBE of independence because it comprises experts highly proficient in monetary and economic policy.

"These experts will make sure that monetary and financial policies are in harmony with securing national economic interests in general," Hassanein said.

ECES probes economic reporting

MORE than 30 Egyptian economic journalists attended a two-day seminar last week on means of modernising economic reporting in Egypt. The seminar was organised by the Egyptian Centre for Economic Studies (ECES).

"We are facing an economic slowdown these days," said Mahmoud El-Maraghy, head of the economic reporters division of the Press Syndicate. "The role of economic journalism and communication is to inform readers of what that means to them."

Poor training and lack of an economic background were two of the main problems pinpointed during the sessions. "When a journalist confuses the figures of the balance of payments and the budget in a front page story the readers get seriously wrong data," said Abdel-Fatah El-Gibaly, head of the economic studies unit of Al-Ahram Centre for Political and Strategic Studies. "This means that we need to stop and reevaluate our capabilities."

Journalists identified a number of problems facing economic reporters in Egypt, ranging from poor access to data and obligatory self censorship, to the absence of much-needed training and the need for better pay. Other limitations, such as difficulties in acquiring licenses to issue newspapers and harsh defamation laws were broached.

The seminar also included sessions on current major economic issues, mainly the Free Trade Area, the role of international organisations like the IMF, the World Bank and the EU in the reform of the Egyptian economy and the budget.

US business influx

AN INCREASING number of US enterprises are finding opportunities in the Egyptian market. There has been a 10-fold increase in the number of companies that have found partners in Egypt during the past three years, according to Maria Cino, assistant secretary and director-general of the US Commercial Service.

Heading a delegation of small and medium-sized US businesses on a visit to Cairo last week, Cino said at a press meeting that the role of the commercial service is to help US companies open new export opportunities. The delegation, which included 11 businesses from the medical, services and IT fields, met with over 100 Egyptian businessmen in an attempt to find partners.

"US businesses are looking to cut through red tape," Cino said, pointing out that as further reforms of the Egyptian economy are carried out and ease of business environment continues, "that will enable more businesses to want to come to Egypt."

Boosting ancient commerce

MINISTER of Foreign Trade Youssef Boutros Ghali signed a cooperation agreement this week with Italian Minister of Productive Activities Antonio Marzano. The agreement aims at boosting trade and investment relations between the two countries.

Italy is Egypt's second biggest trade partner after the US. Trade between the two countries amounted to 2.3 billion euros in 2002. Of that amount, 1.1 billion euros are Egyptian exports, which include agricultural and food products, textiles and marble.

No to biotech food

EGYPT has decided against joining the US in a complaint against the European Union, through which the US aims to force the EU to accept genetically modified food and crops. According to M2 Presswire, the US had said last month that it would be joined by Argentina, Canada and Egypt in filing a World Trade Organisation (WTO) case against Europe over its five-year moratorium on approving agricultural biotech products.

Europeans are concerned that GM crops pose a threat to food, farming, the environment, as well as health.

According to the M2, the Egyptian government took the decision because it recognises "the need to preserve adequate and effective consumer and environmental protection".