Restrictions on foreign currency exchange will be reduced going forward, to return to normal by the end of 2013, according to Prime Minister Hazem El-Beblawi.
“I am happy with the current government and there are no intentions for a new ministerial reform during the current period,” El-Beblawi said, adding that the government would not abolish subsidies but would rationalise them in stages.
The prime minister added during his meeting with the Egyptian British Association that the Council of Ministers’ investment dispute settlement committee has settled disputes with several companies, including: Al-Maleka for Agricultural Development in Toshka, Emirates Damac Group, Nobasid, Abo El-Fotouh for Investment, El-Hekir subsidiary Commercial Centers, Egyptian-Saudi and Libya for Investment Companies. The committee is also currently settling the dispute with the UAE’s Al-Futtaim and the Egyptian Kuwaiti company concerning Al-Ayat land.
El-Beblawi said the latest amendments in the Investment Law assigned land allocation rights to the owners of the land, which will reduce abusive land valuation and limit the corruption which resulted in the current disputes.
The prime minister went on to assert that “the Armed Forces are more efficient in executing infrastructure projects than private or public construction companies.”
El-Beblawi portrayed the latest Gulf assistance packages as a temporary measure to compensate for the government’s financial losses of the last three years, calling the current government’s budget “daunting”, since half of it is spent on subsidies and debt servicing.
He added that consumption rates represent 85% of GDP and the remaining 15% are savings directed to investments, which he deemed insufficient to stimulate the growth needed to boost employment levels. El-Beblawi said attracting investments to stimulate the economy is “an obligation”, and would be like “moving from illness to recovery.”
The prime minister added that the government plans to develop railway crossings – 900 official and 4,500 unofficial – with 130 to be developed before the end of December and the remaining during 2014, as well as 27 bridges and tunnels.
El-Beblawi said that the execution rates of government budget are always lowest during the first quarter and do not exceed 3% due to tenders, which increases to 100% in the final quarter.
On a macro level, El-Beblawi said that the economy and investment cannot recover without an improvement in the security situation, which he said the government had tackled by breaking up the sit–ins at Rabaa Al-Adaweya and Nahda squares in a single day, in addition to the Kerdasa operation, which he called “a model of police professionalism, since no civilians were injured.”
The Egyptian stock exchange’s recent profits signal movement towards economic progress, the prime minister asserted, adding that Gulf assistance packages had compensated for the flight of foreign investment during political tensions.
El-Beblawi said the government faced the dilemma of a budget deficit and high unemployment rates, and an additional budget for investment of EGP 22-29bn would be needed.
The prime minister added that the government spent only EGP 1bn of this additional budget amounting to 29bn EGP, saying that the Muslim Brotherhood government’s ministerial appointments had been “unsuitable”.
“[They had] one for investment and who understood nothing about economics, and one for industry and who understood nothing about industry,” he said.
The prime minister also cited the approval of EGP 1,200 minimum income as a government success, claiming that the lowest-paid employees will receive a salary increase of 50% starting next January. He added that five million employees are already benefiting from this minimum income, and there would be “income improvement for 19 million Egyptians starting from next January.”
El-Beblawi also said the Suez Canal project is moving forward, with a committee assigned to it in the Council of Ministers in addition to the Suez Canal Authority’s formation of an executive board for the project, which will present studies concerning it to consultants by the end of December.
Translated from AlBorsa Newspaper