2003 in the economy:
Compiled by Gamal Essam El-Din
Ebeid
Abul Oyoun
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29 December, 2002: Prime Minister Atef Ebeid delivers his government's fourth policy statement. In 2002, Ebeid said his government was able to raise growth rates to 4.5 per cent, bring the budget deficit down to 4.2 per cent of GDP, attract a staggering $2.7 billion in direct foreign investments and cut foreign exchange losses from an anticipated $2.5 billion to a mere $9 million. The major objective of 2003 is to raise growth rate to five per cent and move Egypt forward to integrate in the world economy, Ebeid said. The prime minister will deliver his fifth policy statement on 28 December, 2003.
11 January, 2003: Parliament convenes to discuss five interpellations (accusing questions that must be answered by cabinet ministers) directed at Prime Minister Atef Ebeid on banking conditions in Egypt. Ebeid said his government was actively addressing the issue of corruption within the banking system. He outlined that Egypt has 62 banks, with 2,564 branches throughout the country. These banks have successfully attracted LE350 billion in individual deposits (from LE40 billion 15 years ago) and offer 272,000 clients LE270 billion in credit facilities.
22 January, 2003: In what is widely considered the greatest economic crime of the year, Prosecutor- General Maher Abdel-Wahed orders Youssef Abdel-Rahman, chairman of the Principal Bank for Development and Agricultural Credit (PBDAC) and the right hand of Agriculture Minister Youssef Wali, to be tried by the Supreme Security Court for a variety of charges ranging from abuse of power, profiteering, misappropriation of public funds to importing carcinogenic pesticides. A final judgment on Abdel-Rahman's case is expected January 2004.
27 January, 2003: A new law regulating the performance of the telecommunications sector (the New Telecom Act) is finally approved by the People's Assembly. The law is aimed at upgrading the telecommunications sector in a market-oriented economy and opening it up to foreign competition. The National Telecom Regulatory Authority (NTRA) was subsequently established to replace the Telecom Regulatory Authority to supervise regulating bandwidth, granting licences, as well as dealing with issues of national security.
28 January, 2003: In a conference organised by the British Economist Group, Prime Minister Ebeid takes all economic observers by surprise when he suddenly announces that the government has decided to float the Egyptian pound and relax its control over the exchange rate. Ebeid's decision led to a 20 per cent devaluation of the pound in 2003, or more than 40 per cent since the summer of 1998. The floatation raised prices of basic food goods and services by 20 to 40 per cent. Ebeid's floatation decision received harsh criticism from opposition parties and resulted in a disagreement between Ebeid and the former governor of the Central Bank of Egypt, Mahmoud Abul-Oyoun.
29 January, 2003: In another financial scandal, Prosecutor-General Maher Abdel-Wahed orders that Abdallah Tayel, the ex-chairman of Misr Exterior Bank and parliament's economic committee, be tried before the State Security Court on charges ranging from misappropriating around LE260 million to providing several businessmen with millions of pounds in loans without receiving adequate collateral, and for which he received hefty commissions.
10 March, 2003: Prime Minister Atef Ebeid's government gets a renewed vote of confidence in the People's Assembly. The confidence was granted, but only after nearly two months of intense criticism of the policy statement delivered to parliament by Ebeid on 29 December. Most of the anti-Ebeid criticism was focussed on his abrupt decision to float the Egyptian pound.
5 April, 2003: After long years of deliberation and almost five months of discussion in parliament, the People's Assembly finally approves the Unified Labour Law to regulate the relationship between workers and employers in a free market economy. The landmark law gives employers the right to lay off workers, but also, under certain conditions, sanctions strike action by workers.
8 April, 2003: After more than four years of negotiations, marked by periods of uncertainty, the Egypt-EU Association Agreement is ratified by the People's Assembly. The agreement commits Egypt and the EU to the liberalisation of bilateral trade and the creation of a free trade area. The European Union (EU) is Egypt's major trading partner, representing 40 per cent of its foreign trade.
9 June, 2003: After almost three weeks of debate in parliament, the People's Assembly approves the new Unified Banking Law. The law aims at providing the Central Bank of Egypt (CBE) with greater freedom in drawing up monetary policy, as well as empowering it with a supervisory role in the banking system.
10 June, 2003: The People's Assembly approves the 2003-2004 fiscal year budget. The budget includes expenditures of LE158.6 billion, up from LE141.6 billion in 2002-2003, and expects revenues of LE116.5 billion. This creates a gross budget deficit of around LE42.1 billion or about 7.3 per cent of GDP.
23 June, 2003: Robert Zoellick, the US trade representative, sharply criticises Egypt's pace of economic reform. Zoellick said Egypt is still not a country worthy of having an FTA (Free Trade Agreement) with the US.
10 September, 2003: A Cairo Criminal Court sentences Abdallah Tayel, the former chairman of parliament's economic committee and ex-chairman of Misr Exterior Bank, to 10 years in jail for profiteering, forging official documents and facilitating the embezzlement of LE262 million.
6 October, 2003: Orascom Telecom Holding, with two other Arab telecommunications companies, wins the licence to provide mobile phone services in the central region of Iraq.
16 October, 2003: President Hosni Mubarak, in a visit to the Upper Egypt governorate of Qena, says a global rise in the price of food crops led the government to approve an LE1.6 billion increase in food subsidy expenditures.
1 December, 2003: A new governor is appointed to lead Egypt's CBE. Farouk El-Okdah, who headed the National Bank of Egypt (NBE), replaces Mahmoud Abul-Oyoun, who held the position for two years.
