Food prices reduced

The cabinet decided on Sunday that the prices of at least 15 food products available in public retail and wholesale markets will be reduced by as much as 30 per cent. A cabinet statement said the decision was aimed at making basic food stuffs more affordable for low-income citizens. The reduction will lower the price of rice, flour, tea, sugar, food oil, butter, eggs, ghee and macaroni, as well as some red meat, poultry and dairy products.

The cabinet also agreed to establish as many as 130 bakeries to offer subsidised bread to low-income citizens. In addition, custom duties on some basic foods and commodities will be entirely phased out in order to help stabilise their prices at home. The cabinet, however, said a new three-year plan will be mapped out to reduce imports of agricultural goods. "These imports exert heavy pressure on foreign exchange and it is important for the country to be relieved of this pressure through doing away with these imports," a cabinet statement said.

The cabinet said the oil sector is expected to boost foreign exchange revenues between $500 million to $1 billion every year. "Sectors whose needs are met by importing will also be required to boost exports in order to compensate for their dollar-denominated overseas purchases," the statement said.

The way forward

This week, LINKdotNET, the leading Egyptian Internet solutions provider, announced it has upgraded its data network for Internet services in collaboration with some of the top companies worldwide in the field of network communication. Minister of Communication and Information Technology Ahmed Nazif reported that LINKdotNET is the largest company in the field of Internet services in Egypt.

"We should be proud of this private sector success story, which contributes significantly to the national economy," Nazif added.

Khaled Bichara, CEO of LINKdotNET, told Al-Ahram Weekly that the company invested LE60 million in the new data network.

"Our aim is to offer unprecedented services on high-speed technology," Bichara said. He added that the new network system facilitates the quick and competent transmission of data with minimal traffic congestion.

World-class communication services providers such as Juniper, Zhone and Siemens have given the company the ability to transfer data at extremely rapid speed, according to Naguib Sawiris, CEO of Orascom Telecom and chairman of LINKdotNET.

New captain, same course

This week, a new governor was appointed to lead Egypt's Central Bank. Farouk El-Okdah, who headed the National Bank of Egypt (NBE), replaces Mahmoud Abul-Oyoun, who had served in the position for two years. El-Okdah has been appointed by a presidential decree for a four-year term. Before taking on the helm of NBE last year, El-Okdah worked for the Bank of New York.

Speaking to the Middle East News Agency (MENA), El- Okdah announced his commitment to the foreign exchange regime in force since January 2003, saying "The monetary policy is fixed and will not change for the interest of the country." However, El-Okdah also said that the foreign exchange market will be regulated through certain controls.

The regulation of the foreign exchange market has been a major problem area for the CBE governor since the late 1990s, and even more so during the past two years since the government began to gradually devalue the pound. Hope had been pinned on the 29 January 2003 decision to liberalise the exchange rate to stabilise the value of the pound. But although the pound has lost a quarter of its value since then, dollars remain in short supply. As a result, the black market has survived -- the value of the dollar is officially quoted by banks at around LE6.15 per dollar, but is currently trading at close to LE7 in the unofficial market.

The same presidential decree appointing El-Okdah also revamped the CBE board of directors. In accordance with the new banking law, there are 15 members on the board. The ministries of finance, planning, and foreign trade, as well as the banking sector, are all represented in the new board. Notable new members of the board include Capital Market Authority Chairman Abdel-Hamid Ibrahim, Mahmoud Mohieddin, chairman of the economic committee of the National Democratic Party, Hatem El-Qaranshawi, an adviser to the prime minister, and prominent economist Mahmoud Abdel-Fadil.