Loose ends tied
SMALL and medium enterprises (SMEs) troubled by bank debts might soon get a break. Minister of Finance Youssef Boutros-Ghali told members of the American Chamber of Commerce last week that the government has allocated a sum of LE1 billion to help settle SMEs non-performing loans which range between LE1-20 million.
The smallest loans ranging between LE50,000 and LE100,000 will be settled first.
The minister said the loans to be settled are the ones "the banks [might consider] more trouble than they are worth." He said he hoped this step would help current government efforts to create jobs and take the burden off the banks.
Boutros-Ghali said that economic growth reached 6.1 per cent in the second quarter of the fiscal year 2005/06 compared to 5.7 per cent in the first quarter of the year. "Egypt can easily grow at seven per cent considering that India grows at eight per cent. This is despite the fact that they have twice the illiteracy, and half of the infrastructure [Egypt has]."
He said the economy has "turned a corner " despite some obstacles. The minister referred to the recently undertaken reform measures in tax and customs laws which have long been considered an impediment by investors. "Changing legislation is easy [but] changing administration is more difficult."
Boutros-Ghali invited the private sector to play a role in reform. "We cannot know what the problems are unless the private sector tells us," he said.
He also promised that lower-income groups would not be "overlooked" in the economic reform process. The minister said that the government is currently "re-visiting subsidies, not to eliminate or reduce them," but to make sure they are effective.
The continuation of subsidies will not increase the budget deficit, according to Boutros-Ghali. "When the economy grows at six per cent or more and receipts grow, the budget deficit will shrink".
The minister described the present national social security system as "inefficient" and currently undergoing reform. "We must ensure that everyone is supported. The system has a loose safety net because it supports high-income groups at the expense of low-income ones."
MINISTER of International Cooperation Fayza Abul-Naga met recently with a delegation of representatives from UN organisations operating in Egypt to discuss Egypt's 2007-2011 development assistance framework. Estimated at $300 million, this framework specifies the national sectors targeted for development according to the country's priorities.
The delegation included Antonio Vigilante, resident representative of the United Nations Development Programme (UNDP), Erma Manocourt, representative of United Nations for International Children Emergency Fund (UNICEF) and John Apruzzese, head of the Coordination Unit at the UN.
The assistance programme aims at sustaining different sectors of the Egyptian economy by helping governmental and non-governmental institutions enact policies and draft legislations working in favour of the poor.
It also includes improving the quality of services in education, health, maternity and child welfare. The development strategies also include the reform of public services as well as administrative decentralisation in the urban and rural areas.
Raya acquires Super Net
RAYA, the telecommunications and IT group, has increased its free Internet market share by 20 per cent by acquiring the Internet service provider Super Net. The acquisition makes Raya the second largest company in this market.
Super Net was launched in 2002 and has grown to become one of the most successful trademarks in the free Internet market, with a 1.5 million customer base. The acquisition also grants Raya the Intellectual Property Rights of two of the most successful recruitment Web sites in the Middle East: ArabRec.Com and EgyRec.Com.
The move comes as part of Raya's expansion plans in the telecom business. The company is planning to apply for the international voice Gateway license. It recently also bid for Egypt's third mobile operator license.
MOHAMED El-Mahdi has been appointed CEO for Siemens Egypt. The new chairman executive of the board will take on his position on 1 March.
El-Mahdi told a press conference that his company is seeking to further consolidate its activities in Egypt. The Germany-based multinational has been active in Egypt for over 100 years and occupies a leading position in the sectors of information and communication, power, automation and control as well as medicine and transportation. In 2005, sales to customers in Egypt were estimated at over euro 334 million according to El-Mahdi.
Siemens Egypt was recently awarded a contract for providing an Information Technology (IT) system for Omar Effendi, one of the country's veteran department stores. It will also install the IT system of the Sharm El-Sheikh international congress complex which is due to host the World Economic Forum next May.
El-Mahdi was in charge of Siemens corporate strategies for North and South America, based in Munich. In addition to his position as CEO, he will head the company's Northeast Africa region.