Monday,23 July, 2018
Current issue | Issue 1286, (10 - 16 March 2016)
Monday,23 July, 2018
Issue 1286, (10 - 16 March 2016)

Ahram Weekly

Calming the fears

Facing serious economic worries and with a cabinet reshuffle on the horizon, President Abdel-Fattah Al-Sisi reaffirmed his commitment to widescale development and to avoid cross border military intervention, reports Dina Ezzat

Al-Ahram Weekly

“We are building and developing, and the future will certainly be better. You have to have faith that it will be better because we are sparing no effort and we are pursuing good, never evil,” said President Abdel-Fattah Al-Sisi during a Monday evening telephone interview with the TV talk show Al-Qahera Al-Youm.

It is the second time in less than 10 weeks that Al-Sisi has shared his assessment on the “state of affairs — economy, security and foreign policy” through the Saudi-owned subscription satellite channel Al-Youm.

During his telephone call, which lasted a little over 20 minutes and was broadcast live, the head of state reviewed what he qualified as “the making of a dream come true for the country and the people”, essentially in Sinai.

He spoke of achievements that he said were underreported, including the pursuit of widescale development and securing the borders.

Al-Sisi, speaking with talk show host Amr Adib, said major development schemes are being implemented east of the Suez Canal. They include agricultural expansion, construction of new housing zones for citizens evicted from along the border with Gaza, and expansion of Sinai’s road network to facilitate trade. The president hinted that the next stage will include industrial expansion, with major foreign investment from Saudi Arabia and Kuwait.

In the next 18 months, Al-Sisi predicted that towns to the east of Suez Canal will become a major economic hub offering a wealth of opportunities for young people.

The president said that following his recent visit to Japan and South Korea he was convinced that Egypt’s enormous wealth of human resources will help boost development. It is discipline and hard work and not natural resources that made the success stories of both Japan and South Korea, “and this is precisely what I wish to transfer to us here in Egypt”, he said.

Al-Sisi repeated arguments he has made before suggesting that the economic crisis that Egypt is suffering is part of a wider international economic crisis. He made no direct reference to the collapse in the value of the Egyptian pound, which has fallen to LE9.75 against the US dollar on the black market this week.

Egypt has been struggling with a foreign exchange crisis since tourists and investors fled the country in the wake of the January 2011 Revolution. Foreign reserves dropped to $16 billion in January.

The Central Bank of Egypt has attempted to support the pound by restricting forex movements, imposing caps on dollar deposits and withdrawing dollar liquidity from the market. The moves backfired, making it harder to open letters of credit and clear imports, raising the anger of investors and businessmen.  

In the last few days the government has unveiled a package of measures to deal with the dollar crunch. It includes efforts to revive tourism and attract Russian tourists back to Sharm El-Sheikh. The move was discussed during a phone call between Russian President Vladimir Putin and Al-Sisi on Monday. Egypt’s tourism revenue has declined by $1.3 billion since the Russian plane crash in Sinai last year.

The cabinet also agreed a comprehensive plan to support exports and rationalise imports during a meeting headed by Prime Minister Sherif Ismail on Tuesday. It includes halting imports of some types of steel. The government said last month it will act to curb demand for currency by cutting imports by a quarter.

The Suez Canal Authority is expected to announce reductions in tolls for empty vessels in an attempt to attract vessels currently using the Cape of Good Hope for their returned journeys, informed sources told Al-Ahram Weekly.

Al-Sisi urged the public to “have faith in God and in me” and said he would serve the country throughout his mandate. Asked by Adib if that mandate would include a second term, as allowed by the constitution, Al-Sisi said: “I think that it is in the hands of God, and of the Egyptian people who can be neither dominated nor fooled.”

Al-Sisi used the phone call to underline his conviction that his economic policies will have started to bear fruit before his first term ends in June 2018, despite attempts by the Muslim Brotherhood and other Islamists “who have repeatedly tried to obstruct” development projects in Sinai.

The president also said he has no plans to deploy Egyptian troops in Libya, though he added that the Armed Forces have been busy consolidating the border, and were doing so even before former president Mohamed Morsi’s ouster on 3 July 2013. He said that the air force has been destroying weapon shipments destined for terror cells inside Egypt for the “past 30 months”.

Having expressed sympathy for the recent terror attack in Tunisia, the president said that Egypt, like Tunisia, will refrain from any direct intervention and would rather opt for prompt and uncompromising self-defence, as is becoming of the “incredibly powerful Egyptian army”.

Al-Sisi warned, however, against not responding to the security vacuum in Libya since the continued absence of government there will draw in “terror groups”, which is in nobody’s interest.

A presidential source said that Al-Sisi’s call to Adib’s show was intended to address two specific issues, development in Sinai and the situation along the border with Libya, and the president’s message was therefore very direct.

While Al-Sisi spoke to Adib, anchor Ibrahim Eissa was speculating about a long-anticipated cabinet reshuffle on the satellite channel Al-Qahera wel Nas. Eissa said that at least 10 ministers, and possibly as many as 20, will be replaced.

According to Eissa, the reshuffle will be overseen by Prime Minister Ismail and will take place before 27 March, the day that Sherif delivers the government’s policy statement to parliament. “Under the constitution, once the government offers itself for parliamentary approval any subsequent reshuffle will require the consent of parliament,” said Eissa.

A government source told the Weekly that the expected reshuffle will “re-work the economic group” to streamline policy.

“There are unmasked differences within the economic group and this has to be managed if we want a coherent policy and to be free to attend to public concerns over the exchange rate, prices and investment regulations,” said the source.

The same source said that four public service ministries are likely to find themselves with new heads — “again, due to widespread complaints”. The minister of water resources, “whose performance and advice over the file of the Renaissance Dam have disappointed public opinion and the head of state”, is also expected to be replaced.

The same government source said he “did not expect that the reshuffle will touch the key sovereign portfolios” of defence, justice, foreign and the interior, despite worries about deteriorating human rights conditions and police violations.

“The idea behind the reshuffle is to get better services to the people and to send a clear message that ministers who do not deliver are dispensable,” said the source.

The president, he added, hopes that the new cabinet will work closely with parliament to pass a package of economic laws to promote a more positive investment environment.

A year after the Sharm El-Sheikh economic conference, little has materialised in terms of foreign investment, a result, complain members of the business community, of Egypt’s convoluted investment laws.

“If we as Egyptians feel apprehensive, you can imagine how international investors feel,” said one.

“Attracting investment is a key objective that the president is working on. It is through investments that the hard currency crunch can be alleviated and unemployment reduced,” said one businessman, stressing the need to support private-sector enterprise rather than the expansion of the public sector and bureaucracy.

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