Ghazl Al-Mahalla strike over
WORKERS at Egypt's largest textiles spinning and weaving company resumed work on Tuesday after a nine-day strike. The workers had been demanding an increase in wages and bonuses and the sacking of corrupt management as well as better working conditions. They agreed to suspend their strike after promises that their financial demands will be met.
Consumer confidence drops
EGYPTIAN consumer confidence in economic performance declined 0.7 per cent from April to June 2012, a recent Information and Decision Support Centre (IDSC) report shows. The report attributes the drop to a decline in people's confidence in prevailing economic policies and expectations of an improvement in families' and society's overall living and economic conditions.
Indeed, the report showed that consumer confidence in prevailing economic policies declined by 7.9 per cent in June 2012 compared to April 2102. The decrease in confidence is attributed to the decline in the number of individuals who see that the country's economic conditions this year are better than last year.
Meanwhile, the report revealed that the income level per family increased by 12.3 per cent in June 2012 as a result of an increase in the number of people who believe that their financial conditions are better than last year.
"THERE is a 3,000 Megawatt increase in electricity loads at peak times," Minister of Electricity Hassan Younis said this week. He added that this is costing the state dearly, at levels that surpass available resources.
Younis was addressing a press conference following a cabinet meeting to discuss the problem of continuous power outages in many parts of the country. To deal with the problem, Younis said that his ministry would implement a plan to rationalise power use.
He said that two new power stations in West Damietta and Abu Qir in Alexandria are being tested. An agreement will also be signed with Saudi Arabia to exchange electricity current with them, as the peak hours for electricity usage in Saudi Arabia are in the morning while peak hours in Egypt are in the evening.
Reining in public expenses
EGYPT'S Finance Ministry has announced new public procurement regulations to rationalise expenses in a bid to support the country's small- and medium-sized enterprises (SMEs) as well as local products.
Momtaz El-Said, the finance minister, said that the new measures came in light of the cabinet's decision to allocate 10 per cent of the government's purchases to SMEs in addition to prioritising local products.
To support local industries, El-Said said that he recommended public entities to buy local products. Further, all new investment projects would be obliged to use 40 per cent local goods and services.
Other measures include that less intensive industries would get butane gas cylinders at commercial prices, rather than subsidised prices, until applying to the Ministry of Petroleum to be officially allocated natural gas.
All Egyptian governors and ministries are being asked to shorten any trips outside the country and limit the size of their delegations. Also, no local conferences would be held on public entities' expenses unless the prime minister agrees.
In a further bid to rationalise expenses, the Finance Ministry, in an earlier statement, has issued regulations that include restrictions on car purchases for governmental bodies. The new measures prohibit the purchase of new cars equipped with special equipment unless absolutely necessary. The minister said that public purchasing of cars would be done centrally, starting the current financial year, through a gradual process that would involve each governorate separately.
Egypt's total expenditure in the 2012/13 budget stands at LE635.4 billion of which LE28.7 billion is allocated to governmental purchases and LE55 billion for public investment.
Private funds contribute to budget
THE MINISTRY of Finance announced it would start collecting 20 per cent of private fund revenues to be incorporated into the budget.
According to Egypt's 2012/13 draft budget, private funds would contribute some LE10 billion to LE15 billion.
Private funds are monies raised by state institutions through means other than customs or taxes, such as hospital and car toll fees.
In a press statement last week, Minister of Finance Momtaz El-Said said that the new regulations apply to all private funds, which should commit to paying 20 per cent of their net revenues, without any deductions. Money would be deposited with the Central Bank of Egypt (CBE) in the Single Treasury Account (STA).
He added that the money would then be injected into the state budget with financial auditors at various institutions responsible for collection.
El-Said stated that the collecting process would be on a monthly basis and managers of funds should submit monthly statements to the Finance Ministry, including total fund revenues and expenses.
In a later statement, El-Said said no new private funds would be established.
According to El-Said, around LE36.1 billion is currently being held in 4,737 private funds, 4,225 of them in local currency and 512 in different foreign currencies. Many experts, however, have voiced suspicions that the true figure is much higher.
Egyptian exports to Brazil soar
EGYPT'S exports to Brazil shot up by 104 per cent in 2011 to reach $344.7 million, according to figures from the Arab-Brazilian Chamber of Commerce (ABCC). The trade flow between Egypt and Brazil increased by 38.9 per cent in 2011 to reach over $2.96 billion. Brazilian exports to Egypt climbed by 33.3 per cent.
The chamber stated that trade flow between both countries continues to register positive growth in 2012 where Egyptian exports to Brazil from January to April 2012 increased by 1.13 per cent compared to the same period in the previous year and Brazilian exports to Egypt climbed 3.6 per cent.
Egyptian exports to Brazil include fertilisers, rubber, glass and glassware, salt, fabric, optic and medical instruments, vegetables, and furniture and beddings while Brazilian imports to Egypt include meat, sugars and ores, slag and ash.
Egypt's overall exports increased by 17 per cent in 2011. Exports amounted to LE130.7 billion in 2011, compared to LE110.2 billion in 2010.
IMF loan awaits new government
MINISTER of planning and international cooperation, Fayza Abul-Naga, stated that the International Monetary Fund (IMF) is waiting for the formation of Egypt's new government in order to finalise a $3.2 billion IMF loan.
She said that the new government would be responsible for implementing the economic reform programme that Prime Minster Kamal El-Ganzouri and the fund agreed upon.
IMF head Christine Lagarde has told President Mursi that the IMF is ready to help Egypt under his new leadership. Abul-Naga said that the lack of broad consensus among the country's various political currents about the loan has pushed the fund to postpone it until the new government is formed.
Abul-Naga underlined the importance of resuming loan talks with the IMF as Egypt is in a dire need to rein in a budget deficit that amounts to LE135 billion in the current financial year, in addition to a widening balance of payments deficit that reached $11.2 billion by the end of the last financial year.
Egypt's interim government has over the last year held sporadic talks with the IMF regarding a possible $3.2 billion loan to help it bridge fiscal shortfalls.