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Égypt-actus
revue de presse sur l'actualité culturelle, archéologique, politique et sociale de l'Égypte
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News Analysis: Egypt's decision to free flour prices faces obstacles in application

News Analysis: Egypt's decision to free flour prices faces obstacles in application | Égypt-actus | Scoop.it

Egypt's decision to free the flour prices is a daring step to combat trading in the black market, but the move, re-enacting an old policy, may look better on paper than in application.

Despite a failure in 2006, the Egyptian government is confident that a comeback of the measure will eventually encourage bakeries' to produce more bread, a daily staple food for Egyptians, instead of selling subsidized flour in the black market for profit.

Most notably, Minister of Supply and Domestic Trade, Bassem Ouda, asserted that the new system will bring the government huge revenues, deliver the subsidies to those who deserve them, and prevent squandering of the public fund.

Ahmed Khorshid, a member of Bread Developing Committee, deemed the system as an urgent step aiming at getting rid of the black market and regulating sales, while noting its work will take time like any new system would.

He also pointed out that citizens' awareness is vital to the successful implementation of this measure, particularly the bakery owners' willingness to accept it.

This policy will not affect "honest bakery owners" as it targets those who sell state-subsidized flour in the black market, Khorshid told Xinhua.

 

According to Attyah Hamad, vice president of the Bakery Branch in the Commerce Chamber, the governmental inspectors had found some bakery owners selling subsidized flour sacks (70 kg) for 14. 81 U.S. dollars while getting it from the government for 2.37 dollars.

 

However, Abdullah Ghorab, president of the chamber, expressed sympathy with the bakery owners. He said the flour black market is not a phenomenon that only exists in Egypt, and that Egyptian bakery owners are going to have a hard time under the new policy.(...)

 

More on: http://news.xinhuanet.com/english/world/2013-03/15/c_124460669.htm

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Egypte : risque d'un effondrement financier

Egypte : risque d'un effondrement financier | Égypt-actus | Scoop.it
Egypt-actus's insight:

De très gros risques pèsent sur l'Egypte et ses finances après le refus du gouvernement de l'offre du FMI pour une aide d'urgence à sa balance des paiements sous la forme d'un prêt relais de 750 millions de dollars en attendant la conclusions d'un accord pour un montant plus large de 4,8 milliards. Depuis le début du printemps arabe et de la période de transition chaotique qui a suivi jusqu'à présent, l'économie s'est effondrée et la livre égyptienne a décroché : son taux de change par rapport au dollars US est passé de 5,80 EGP au 31 décembre 2010 à 6,37 au 31 décembre 2012 et il continue à s'effondrer : 6,77 EGP pour 1 USD le 13 mars..

Ce refus, selon des informations de presse, est à la fois motivé par le rejet des conditions du FMI et le montant, jugé insuffisant. Dans un communiqué publié le 12 mars, le ministre des Finances Al-Morsi Hegazy a indiqué que le gouvernement ayant complété la préparation d'un programme de réforme économique et sociale, son pays, en tant que membre du FMI, avait le droit d'obtenir un prêt équivalant à 300% de sa quote-part dans le fonds, ce qui représente environ 4,8 milliards de dollars américains. Compte tenu du contexte politique marqué par la contestation du régime du président Morsi, cette stratégie des autorités du Caire semble d'autant plus  risquée que le Quatar a annoncé dans la foulée qu'il n'accorderait pas de nouvelle aide financière.

Dans son analyse du risque pays égyptien, Coface notait déjà, en ce début d'année que "la monnaie devrait continuer à se déprécier en 2013, malgré les interventions de la Banque centrale, dont les réserves ont chuté et ne représentent que 3 mois d'importations, niveau particulièrement faible pour un pays qui couvre une grande partie de ses besoins alimentaires par des achats à l'étranger". L'Egypte est, notamment, le premier importateur mondial de céréales, une denrée de base clé pour la population.
CG


http://www.lemoci.com/011-68223-Egypte-le-Caire-refuse-l-aide-d-urgence-du-FMI.html

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Orascom buyout battle scars Egypt stock market

Orascom buyout battle scars Egypt stock market | Égypt-actus | Scoop.it
A regulatory battle over an offer to buy out shareholders in Orascom Construction Industries may inflict damage on the Cairo stock market that lingers long after Egypt's politics stabilise and the economy recovers. 
Until recently, many foreign investors remained willing to buy Egyptian stocks despite the political conflict surrounding President Mohamed Mursi's government and the weakness of the economy, which has been hurt by a currency crisis. They assumed these problems would eventually be resolved.But in the last few weeks, the controversy over Orascom has raised a new worry: that Egypt's post-revolution government may be fundamentally unwilling to let the stock market operate freely, and may feel justified in intervening in the market whenever it feels its interests are threatened. If this perception takes hold, the market could struggle over the long term as businessmen hesitate to list their assets on it and investors shift to more market-friendly jurisdictions.

"There is a lack of transparency in the OCI case, and this is a clear case of mismanagement from the authorities," said Osama Mourad, a Cairo-based independent financial analyst and former chief executive of Egypt's Arab Finance Brokerage. TROUBLEUnder a deal announced in January, US investors including Bill Gates committed to buying a $1 billion stake in Egyptian fertiliser giant OCI NV, which is listed in Amsterdam.

Accompanying the deal was an offer by OCI NV to buy out all the Cairo-listed shares of parent Orascom Construction, which is the market's biggest stock, accounting for nearly 15 percent of its capitalisation of around $55 billion.(...) More on:

http://www.tradearabia.com/news/REAL_232279.html

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Egypt eases rules on taking currency in and out of the country

Egypt said on Wednesday it was easing limits on travelers bringing currency in and out of the country and said visiting foreigners could now export more than $10,000 as long as they declared it upon entering.

Egypt tightened currency controls in December, worried over pressure on the pound and a rush by Egyptians to withdraw their savings from banks.

  

It had prevented all travelers - Egyptian and foreign - from bringing in or taking out foreign currency that exceeded $10,000. On Wednesday it eased some of the restrictions.


 

"Bringing foreign currency into the country is allowed for all travelers as long as they declare it in a document provided for this purpose if the amount exceeds $10,000 or its equivalent in foreign currency," a government statement said.

 

"Foreigners are allowed to, when leaving the country, carry what is left of the amounts that they declared upon arrival if the amount exceeds $10,000 or its equivalent in foreign currency."

 

More on: http://www.reuters.com/article/2013/03/13/us-egypt-currency-idUSBRE92C0PV20130313

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L'Egypte refuse une aide de 750 millions de dollars du FMI

L'Egypte refuse une aide de 750 millions de dollars du FMI | Égypt-actus | Scoop.it

Le ministre des Finances égyptien Al-Morsi Hegazy a indiqué mardi dans un communiqué de presse que l'Egypte a refusé un prêt urgent de 750 millions de dollars du Fonds monétaire international.

 

Le ministre a dit que le gouvernement a pris la décision sur des préoccupations qu'un tel prêt urgent pourrait apporter des risques sur l'économie nationale, ajoutant que l'économie égyptienne est sur la voie du redressement et de la stabilité.

M. Hegazy a également déclaré que le gouvernement égyptien a complété la préparation d'un programme de réforme économique et sociale, soulignant que l'Egypte, en tant que membre du FMI a le droit d'obtenir un prêt équivalant à 300% de sa quote-part dans le fonds, ce qui représente environ 4,8 milliards de dollars américains.

L'Egypte est actuellement en train de se battre pour obtenir un prêt de sauvetage de 4,8 milliards de dollars du FMI pour surmonter une grave crise financière créée par deux années de troubles et d'instabilité après la révolution de 2011 a ont renversé l'ancien président Hosni Moubarak.

Le cabinet égyptien dirigé par le Premier ministre Qandil Hesham tente de frapper toutes les portes afin de soulager l'économie chancelante car le déficit budgétaire devrait atteindre 26,74 milliards de dollars durant l'exercice budgétaire 2012-2013.

 

 

http://www.afriquinfos.com/articles/2013/3/12/legypte-refuse-aide-millions-dollars-219007.asp

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Egypt’s Budget Less Transparent Than Mubarak Era, Survey Shows

Egypt’s budget became less transparent after the 2011 uprising that ousted Hosni Mubarak, as successive governments made fewer documents available to the public, according to a survey.

The North African country scored 13 out of 100 in the 2012 survey, down from 49 in 2010, the Washington-based International Budget Partnership said in a report on its website. That places Egypt in the bottom one-fifth of the 100 nations surveyed, below Nigeria, Lebanon and Jordan.

“The government provides the public with scant information on the national government’s budget and financial activities,” the group said in the report. “This makes it challenging for citizens to hold the government accountable for its management of the public’s money.”

Egypt is seeking a $4.8 billion loan from the International Monetary Fund to plug a budget deficit that reached 10.8 percent of gross domestic product, or GDP, last year, according to official figures. (...)

The widening deficit accompanies a plunge in foreign reserves and a slump in economic output as tourists and investors shunned Egypt amid recurring political tensions after Mubarak’s fall. The country’s benchmark dollar bonds plunged today, sending yields to 7.27 percent at 3 p.m. in Cairo, the highest since June

 

Document Release

The IMF has often required borrower countries to make their budgets more transparent.

The Partnership’s survey looks at whether eight key budget documents are made available to the public. In Egypt, only three were published, down from five in the 2010 assessment, the group said. The latest survey was researched in the second half of 2011 when an army-backed government was in power

 

More on: http://www.bloomberg.com/news/2013-03-11/egypt-s-budget-less-transparent-than-mubarak-era-survey-shows.html

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Egypt Not in Talks With IMF for Emergency Loan, Minister Says

Egypt Not in Talks With IMF for Emergency Loan, Minister Says | Égypt-actus | Scoop.it

Egypt is “not in need” of an emergency loan from the International Monetary Fund and is instead focusing its efforts on completing a $4.8 billion loan agreement with the lender, the country’s planning minister said.

“Egypt wants to implement the fiscal and economic reform program as we have a number of structural problems,” Planning and International Cooperation Minister Ashraf el-Arab said in Cairo today.

The political tensions plaguing the country since the 2011 uprising have prolonged Egypt’s loan talks with the fund. International reserves have plunged more than 60 percent from their pre-revolt levels. Egyptian officials have said the IMF loan is necessary to bolster investor confidence and unlock other funds.

Earlier today, Investment Minister Osama Saleh said in an interview that the government was in contact with the IMF to answer questions the fund has about the economic plan submitted as part of the loan request.

Egypt’s annual urban inflation rate accelerated last month to 8.2 percent, the highest reading since May 2012, amid a weakening currency, the statistics agency said today.

News website Aswat Masriya reported earlier this month that Egypt may study an IMF offer to provide an urgent loan of as much as $750 million. Aswat Masriya cited an unidentified Finance Ministry official.

 

http://www.bloomberg.com/news/2013-03-10/egypt-not-in-talks-with-imf-for-emergency-loan-minister-says.html

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Egypt market rises 2% despite prospect of elections delay

Egypt market rises 2% despite prospect of elections delay | Égypt-actus | Scoop.it

Egyptian stocks continued to rebound for the second consecutive day on Thursday, despite an administrative court order suspending the country's second post-revolution parliamentary polls Al Ahramonline reported.

The benchmark EGX30 index ended the week up by 2 percent to reach 5,365 points, while bellwether stock Orascom Telecom (OT) surged by a whopping 5 percent. In a statement to the Egyptian Stock Exchange, OT announced plans to obtain licences for 3G mobile-phone networks in Algeria, Pakistan and Bangladesh.

The broader EGX70 index, meanwhile, rose by 0.8 percent in a daily trade session that saw some LE373.6 million in turnover.

 

Domestic investors ended Thursday's trading as net sellers to the tune of LE16.3 million, while foreign investors made some LE22 million worth of purchases.

 

More on: http://en.trend.az/regions/met/arabicr/2127450.html

 

 

 

 

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Egypt upper house okays bill scrapping Cyprus EEZ deal

Egypt upper house okays bill scrapping Cyprus EEZ deal | Égypt-actus | Scoop.it

The Shura Council, the upper house of the Egyptian bicameral Parliament, has approved a draft law that cancels the maritime borders of an exclusive economic zone (EEZ) between Egypt and Cyprus, reports said Thursday.

Khaled Abdel Qader Ouda, the lawmaker who submitted the bill, said this invalidates the deal since Egypt had the right to be present at the signing, reports said.

He reportedly said a renegotiation could mean billions of dollars for Egypt.

In the past, Cyprus has signed delineation agreements with Egypt, Israel and Lebanon to pave the way for exploiting hydrocarbon deposits that criss-cross their boundaries.

The deal with Egypt was signed in February 2003.

The bill foresees the delineation of a new EEZ in the presence of Turkey as a third party

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L’Egypte se met aux soukouks pour sortir de la crise

L’Egypte se met aux soukouks pour sortir de la crise | Égypt-actus | Scoop.it

Le projet  des obligations islamiques (sukuks ou soukouks), proposé par le gouvernement égyptien et approuvé par le conseil des ministres, se trouve actuellement en discussion au niveau du Majlis Al-Choura (Conseil consultatif), l’instance exécutive, en l’absence d’un Parlement.

Il s'agit d'une nouvelle mouture, revisitée par le gouvernement, et débattue, après de vives critiques émanant de divers parti et même des experts religieux d’Al Azhar. Les détracteurs de ce projet estiment que les obligations islamiques constituent un risque énorme pour l’Etat, qui risque de se voir déposséder de ses biens stratégiques, dans le cas où il serait incapable d’honorer ses engagements.

 

Dans un débat organisé lundi 5 mars 2013, avec la commission des Affaires financières et économiques du Conseil consultatif, le conseiller du ministre des Finances, Ahmed Najjar a tenté de rassurer les sceptiques en affirmant  que les avoirs de l’Etat seront préservés tout en soulignant que l'Égypte a réellement besoin de ces obligations pour renflouer ses caisses, booster les investissements et redresser le niveau des réserves en devises étrangères(13,6 mrds $) et le déficit budgétaire (qui risque d’atteindre les 12% à la fin juin).  

Plus: http://www.econostrum.info/L-Egypte-se-met-aux-Sokouks-pour-sortir-de-la-crise_a13852.html

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Nour Party launches initiative to 'save' economy

The Nour Party announced on Monday the launch of the National Council for Economic Development, as part of a bid to boost the nation's deteriorating economy.

Ayman Farouk, a member of the party's economic committee, explained that foreign cash reserves have dropped from US$13 billion to US$9 billion, which is not enough to support the import of daily essential goods for longer than two months. Furthermore, the budget deficit has swelled to LE200 billion, Farouk said.

"The council would identify priority projects for each region to contribute to the recovery of the economy,” Farouk said, adding that it would include professors of economics, members of the General Union of Chambers of Commerce, the Egyptian Banks Union, the Central Bank and the economic committees of various political parties.

Edited translation from Al-Masry Al-Youm (Egypt independent)


http://www.egyptindependent.com/node/1542036?utm_source=dlvr.it&utm_medium=twitter

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Égypte : l'économie doit "se remettre sur pied"

Égypte : l'économie doit "se remettre sur pied" | Égypt-actus | Scoop.it
Le secrétaire d'État américain John Kerry est au Caire afin de pousser à un consensus entre pouvoir et opposition pour sortir le pays de la crise.

"Il est primordial, essentiel, urgent que l'économie égyptienne devienne plus forte, qu'elle se remette sur pied", a-t-il déclaré à des hommes d'affaires.

"Il est évident pour nous qu'il faut parvenir à un accord avec le FMI. Il faut pouvoir inspirer confiance aux marchés", a-t-il ajouté. (Le Point)

 

Plus : http://www.lepoint.fr/monde/egypte-l-economie-doit-se-remettre-sur-pied-02-03-2013-1635176_24.php

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Egypte: 119,8 milliards de LE, déficit du budget en sept mois

Egypte: 119,8 milliards de LE, déficit du budget en sept mois | Égypt-actus | Scoop.it

Le rapport du ministère des Finances souligne que le déficit total du budget s'était chiffre à 119,8 milliards de LE soit 6,7% du PNB en sept mois.

Les recettes de l'Etat ont augmenté de 25,7% en sept mois pour atteindre 169,7 milliards de LE contre 135 mds LE durant la même période de l'année précédente, ajoute le rapport.

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Egypt's Shura Council suggests mandatory pricing on cement firms

Egypt's Shura Council suggests mandatory pricing on cement firms | Égypt-actus | Scoop.it

Egypt's Shura Council housing committee (upper house of parliament) suggested imposing mandatory pricing on the country's cement firms on Thursday, following recent cement price hikes made by main cement companies of the market, as the tonne has raised LE200 (about $29) Al Ahramonline reported.

The tonne is currently sold to consumers ranging between LE800 ($118) and LE1200 ($177).

"Egyptian Competition Authority will be tasked with setting the price if the government approves the Shura Council's recommendation," Atef Yacub, the head of Egypt's Consumer Protection Agency, told Ahram online.

He explained that the "unjustified increase in cement prices" is the main reason behind the suggestion of the mandatory pricing. "The rise in energy prices on cement factories doesn't reflect this big lift in prices for consumers," Yacub said.(...)

 

More on: http://en.trend.az/regions/met/arabicr/2129607.html

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Why is the IMF in a Hurry with Egypt?

Why is the IMF in a Hurry with Egypt? | Égypt-actus | Scoop.it

This could be one of the few occasions when the IMF actively seeks to pressure a member state into taking out an urgent loan. The idea is that the funds would serve as a timely bridge until the county’s condition stabilizes, at which point both sides can negotiate a proper reform program in exchange for a substantial package of aid.

 

It seems that the IMF, which announced its offer to Egypt this week and expressed its readiness to provide an urgent emergency loan amounting to USD 750 million, senses the danger the Egyptian economy will soon be facing, after its foreign exchange reserves decreased to less than one third of their 2011 levels.

Deficits in the balance of payments and the budget have also increased, and recent figures have indicated high inflation rates. This is not the first time that the IMF has expressed its willingness to negotiate and sign an agreement offering incentives to Egypt, but all too often domestic politics and tensions have interfered, rendering any agreement meaningless.

The IMF’s fears are justified. Egypt’s economic situation is perilous, as evidenced by its meager energy supplies in certain sectors, and its lack of foreign exchange necessary for imports. Yet the real problem lies in the fact that carrying out an economic reform program requires a state of stability and a minimum degree of social and political harmony in the first place. Unfortunately, this does not exist in the Egyptian political arena at present, given the widespread disagreements between various political currents and powers.

Concluding an agreement with the IMF is never easy, even at times of political stability. This is because the incentives offered—effectively a means for international investors and donors to gain trust as a prerequisite for further aid—are often tied to economic reform programs. These are usually unpopular with citizens, because they often involve cost-cutting measures and privatization. In many cases, economic reform also necessitates currency flotation, whereby the currency is devalued in order to make exports more competitive. At the same time, this causes local prices to soar because import costs rise automatically.

Egypt’s current problem is that there is no time to wait; the economy is declining rapidly to the extent that some expect it will only be two or three months before it reaches a critical point. However, no one seems able to put a stop to this decline because of the growing political crisis that now threatens the state itself, with the incomprehensible subversion and unjustifiable violence taking place on the Egyptian street.

Any agreement concluded with the IMF requires either a strong government or one that is formed by national consensus—not by disagreements and boycotts as is the case now—or through national unity, whereby every single group is represented. Such a government must lead the transitional period, revitalize institutions like the police force, and restore a degree of stability in both the political and security framework so that the economic wheel can begin turning once again.

(...)

 

More on:http://www.aawsat.net/2013/03/article55295734

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Egypt tourism rises in 2012, still below pre-revolt level: MENA

Egypt tourism rises in 2012, still below pre-revolt level: MENA | Égypt-actus | Scoop.it

CAIRO (Reuters) - The number of tourists visiting Egypt jumped in 2012 after plummeting the previous year, but arrivals have yet to recover to levels seen before a 2011 uprising, state media said on Wednesday.

The number of tourists visiting Egyptjumped in 2012 after plummeting the previous year, but arrivals have yet to recover to levels seen before a 2011 uprising, state media said on Wednesday.

Some 11.5 million travellers came to Egypt last year, up 17 percent from 9.8 million in 2011, the state news agency MENA said, quoting the state statistics agency. Western Europeans were the largest group of visitors, followed by Eastern Europeans and tourists from the Middle East.

A popular revolt that overthrew President Hosni Mubarak in February 2011 plunged the Arab country into two years of political turmoil, scaring off tourists and foreign investors.

Tourism was one of Egypt's most important sources of foreign currency, which it uses to import food and fuel.

About 14.7 million tourists visited Egypt in 2010, the last full year before the uprising.

Last month, 19 people, most of them Asian and European tourists, died when a hot air balloon caught fire and crashed near the ancient Egyptian town of Luxor.

Last week, Bedouin gunmen in the Sinai Peninsula seized and briefly held the country boss of U.S. oil major ExxonMobil and his wife as they were on their way to a Red Sea tourist resort

 

http://news.yahoo.com/egypt-tourism-rises-2012-still-below-pre-revolt-072321830--finance.html

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Lettre Economique d'Egypte n°25

Les mois passent et la priorité demeure : l’Egypte doit absolument signer un accord avec le FMI pour pouvoir faire face à la double crise des réserves en devises qui baissent trop vite et de la dépréciation continue de la Livre égyptienne. Bien sûr l’inflation repart, et va accélérer mécaniquement ces prochains mois, et le déficit budgétaire s’accroît. Pourtant les autorités ont commencé à prendre de vraies mesures de hausse des prix pour la première fois depuis des mois d’annonces stériles et l’électricité a augmenté en janvier tandis que le prix de l’énergie pour les industries fortes consommatrices a augmenté en février. C’est un fait important qui, couplé à l’envoi du programme de réformes économiques au FMI, pourrait permettre de reprendre sérieusement les discussions. La volonté d’aider l’Egypte est toujours partagée par l’Europe, les Etats-Unis et les autres grands bailleurs de fonds, et le FMI pourrait se décider rapidement si le plan est pertinent (nous ne l’avons pas vu). Ainsi la signature d’un accord pourrait intervenir avant les élections législatives d’autant plus qu’elles viennent d’être repoussées. Tout cela ne sera bien sûr possible que si la société égyptienne reste relativement stable et que les secousses auxquelles nous assistons actuellement ne perdurent pas trop.

 

http://www.tresor.economie.gouv.fr/6967_lettre-economique-degypte-n25-fevrier-2013

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Egypt will not sign emergency IMF loan - cabinet

Egypt will not sign any "emergency" loan with the IMF, cabinet spokesman Alaa el-Hadidi said on Tuesday, appearing to rule out any recourse to a bridging loan which the IMF said on Monday was available to Cairo.

Hadidi added that any loan agreement would be within the framework of the country's economic programme.

Egypt is seeking a $4.8 billion loan from the International Monetary Fund to stave off a balance of payments crisis, but securing IMF aid would involve commiting to austerity measures that are likely to lead to unrest.

"There will not be a fast or emergency loan," Hadidi told reporters, adding that no timing had been set yet for an IMF mission to visit Egypt.

The IMF said in statements on Monday that Egypt had the option of using the Rapid Financing Instrument (....) and an Egyptian source at the finance ministry said Cairo was studying the offer.

 

"There is no agreement yet over the arrival of the mission and we are waiting for them," Hadidi said.

 

http://www.reuters.com/article/2013/03/12/egypt-imf-idUSL6N0C45RU20130312

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Egypt hits problems over IMF loan

Egypt hits problems over IMF loan | Égypt-actus | Scoop.it
Egypt's efforts to secure a critical $4.8bn loan from the International Monetary Fund have run into fresh difficulty, possibly leading the government to seek emergency financing to avoid economic collapse.


The IMF has expressed reservations over a government economic plan needed to seal an agreement that has been in the works, for almost two years, according to people familiar with the negotiations. (...)

 

The IMF, however, has informed Cairo that its proposed economic reform programme is not sufficiently robust.

 

Masood Ahmed, director of the Middle East and Central Asia at the IMF, would not comment on the negotiations with Cairo, saying only that "the IMF view is that the programme has to have the desired impact on confidence ... [and] needs to have strong measures to address Egypt's broader economic problems".

 

With the prospect of an IMF agreement receding, analysts say a bridge finance package might be put together by the IMF with other donors to tide Cairo over until after the elections.Ashraf al-Araby, the planning minister, played down the idea on Sunday, adding that broad structural measures were needed.

 

Without a reform programme, bridging financing would in any case do little to restore investor confidence. "Any extra funds will help Egypt buy time," said Mohamed Abu Basha, Egypt economist at EFG-Hermes, the regional investment bank. "But the failure to agree an IMF programme will send a negative signal to all those investors waiting for hints of real action on the ground to reform the economy."

 

More on: http://edition.cnn.com/2013/03/11/business/egypt-imf-loan/

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Egypt Inflation at Highest Since May Fuels Rate Speculation

Egypt Inflation at Highest Since May Fuels Rate Speculation | Égypt-actus | Scoop.it

Egypt’s inflation accelerated last month to the highest level since May 2012 amid a weakening currency, bolstering the case for higher interest rates.

 

The annual urban rate climbed to 8.2 percent from 6.3 percent in January, according to the state-run Central Agency for Public Mobilization and Statistics today. Prices rose 2.5 percent in February from the previous month.

 

“The weakening currency is a major driver behind this broad inflationary trend,” Mohamed Abu Basha, an economist at Cairo-based investment bank EFG-Hermes Holding SAE, said by phone. “This increases the possibility of a rate hike.”

 

The pound has dropped more than 8 percent against the dollar since Dec. 30, according to data compiled by Bloomberg, as the central bank started capping the amount of dollars each lender can buy at currency auctions. The regulator has said the policy seeks to conserve reserves, which have plunged more than 60 percent from their pre-revolt levels to $13.5 billion last month.

High prices were among the reasons that fueled the 2011 uprising that unseated former President Hosni Mubarak.

 

http://www.bloomberg.com/news/2013-03-10/egypt-inflation-at-highest-since-may-fuels-rate-speculation.html

 

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Why Egypt’s Survival Depends on Western Investment (& video)

When the Egyptians in Tahrir Square succeeded in forcing out then-President Hosni Mubarak in February 2011, the world thought that Egypt would have the chance to be a shining example of stability in the Arab world. More than two years later that is not the case. Corruption still runs rampant, rolling blackouts are the norm in Cairo, and the country's unemployment rate stands at 13%. President Mohamed Morsi and his allies in the Muslim Brotherhood have not been able to bring much in the way of progress to the country, especially to its economy.

Former Minnesota Rep. Vin Weber says now is the time to invest in and help Egypt find its footing or face the global consequences of instability there. "We [the U.S.] have a strategic relationship with them," he says, "involving security arrangements in the Mediterranean and in the Red Sea and involving the Suez Canal that's tremendously important."

With so much strategic importance Weber says the U.S., and the West, can't afford to let Egypt collapse. In a column on Yahoo! Finance Weber notes that over the last six months, $5 billion in foreign investment has left Egypt. In a letter to President Morsi, E.U. ambassadors to Egypt cited a "deteriorating business environment" and uncertainty in "legal, contractual and policy” issues as key factors in the lack of investment.

 

More on: http://finance.yahoo.com/blogs/breakout/why-egypt-survival-depends-western-investment-135009470.html

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In Egypt, sliding toward ruin

In Egypt, sliding toward ruin | Égypt-actus | Scoop.it

As Egypt’s Muslim Brotherhood government slides toward the financial cliff, what’s the right policy for the United States? That’s becoming an urgent question, as Egypt’s financial reserves decline and the country nears a new breaking point.

The economic facts are stark: Egypt’s official foreign-currency reserves in February were $13.5 billion, which would cover a little less than three months of imports. But U.S. officials say that accessible, liquid reserves total only $6 billion to $7 billion. Already, imports are harder to find, including the raw materials needed by Egyptian manufacturers. The Egyptian stock market tumbled 5 percent early this week, sensing danger ahead.

 

And what is the government of President Mohamed Morsi doing to halt the economic decline? Not a lot. Morsi has been dithering for a year in negotiating a roughly $5 billion rescue package from the International Monetary Fund (IMF) that Egypt desperately needs. He is delaying because he is wary of public anger at the reforms the IMF demands, including reductions in subsidies, which take 25 percent of Egypt’s budget. (Debt service and public-sector employment account for another 50 percent.)

The wolf is two or three months from Egypt’s door, top U.S. officials believe. Meanwhile, the country is facing increasing political turmoil, with riots Tuesday in Port Said that left 50 wounded. Morsi’s government sent a new proposal to the IMF last week, but it may fall short of the IMF’s reform targets, further delaying action.(...)

 

So what are U.S. policy options as Egypt nears the brink? Some of Morsi’s critics argue that the United States should let him fail. That’s certainly the view of Egypt’s secular opposition, along with conservative Persian Gulf regimes. They hope Egyptians will reject Morsi and his party in parliamentary elections that begin in late April but might be delayed because of legal challenges.

 

More on: http://www.washingtonpost.com/opinions/david-ignatius-egypt-slides-toward-financial-ruin/2013/03/06/85974478-85e4-11e2-98a3-b3db6b9ac586_story.html

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LATEST NEWS : Egypt struggles with food crisis

CNN's reports on the country's food crisis and government efforts to control rising costs

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Au Caire John Kerry plaide pour la mise en place de réformes économiques

Au Caire John Kerry plaide pour la mise en place de réformes économiques | Égypt-actus | Scoop.it

Washington estime que les mesures les plus urgentes sont une hausse des impôts sur les revenus et une baisse des subventions dans le secteur de l'énergie, deux réformes qui devraient être hautement impopulaires.

L'Egypte a indiqué jeudi qu'elle entendait proposer de rouvrir les négociations sur le prêt du FMI afin de parvenir à la conclusion d'un accord avant la fin avril.

Le principe de l'octroi d'un prêt avait été établi en novembre mais son versement avait été bloqué en raison des violences urbaines survenues en décembre lors de manifestations contre une hausse annoncée des impôts.

Le président Morsi avait fait machine arrière devant le mécontentement populaire et de nouveaux débordements sont à craindre si de nouvelles mesures d'austérité sont présentées suivant les exigences du FMI.

Les subventions au secteur de l'énergie absorbent environ 20% du budget national et sont responsables d'une hausse du déficit cette année.

Kerry entend adopter une approche prudente lors de cette visite afin de ne pas donner le sentiment de venir faire la leçon à ses interlocuteurs.

Il ne devrait pas explicitement demander aux partis d'opposition de renoncer au boycott des élections législatives qui doivent commencer en avril.

En revanche, il devrait les inciter à participer à ce scrutin afin que "leur point de vue soit pris en compte", a précisé le responsable américain. (Alexandre Buccianti/France 24)

 

Plus : http://www.france24.com/fr/20130302-caire-john-kerry-plaide-mise-place-reformes-economiques

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Stand-off at with port workers strike at heart of Egyptian economy

Stand-off at with port workers strike at heart of Egyptian economy | Égypt-actus | Scoop.it

For 16 days this month, not a single shipping container moved into or out of Egypt's principal port for Asian trade.

Labourers at Ain Sukhna, on the Suez Canal east ofCairo, were busy protesting management's plans to continue using short-term employment contracts.

The roughly 1,200 striking dock workers, who slept each night in empty containers while campaigning for permanent jobs with the port operator DP World, hung a white banner reading "Our one demand is to be hired," alongside a large Egyptian flag.

 

The roughly 1,200 striking dock workers, who slept each night in empty containers while campaigning for permanent jobs with the port operator DP World, hung a white banner reading "Our one demand is to be hired," alongside a large Egyptian flag.

"I'm not demanding more money," says Mahmoud Mustafa, a married father of two girls who earns the equivalent of about US$500 (Dh1,837) a month. "I just want stability for myself and my family."


The stand-off, which ended on February 17 when the government agreed to give the strikers jobs with a new state-controlled port company, showcased workers' growing activism two years after the overthrow of president Hosni Mubarak.

More than 1,000 independent unions are colliding with an Islamist government that has been unable to arrest the economy's deterioration and is pushing to prevent the rise of alternative political forces.

Egypt-actus's insight:

"The government's ability to control workers ended with Mubarak," says Mohammed Abdeen, the general coordinator of legislation for the Egyptian Federation of Independent Trade Unions (EFITU) inCairo. "It doesn't exist anymore. You can't control them."

 

For investors, labour's strength - and its weakness - may prove equally vexing.Egypt's workers are strong enough to interrupt commerce, yet too divided to force a resolution of the country's political stalemate.

Since the 2011 revolution, Egyptian workers have launched more than 3,000 strikes or demonstrations over wages, working conditions and political demands, Mr Abdeen says.

As Egypt averaged 7 per cent annual growth in the three years before the 2008 financial crisis, the promise of a compliant state union and low wages was instrumental in attracting investors from the United States, Europe and the Arabian Gulf. Foreign direct investment soared to more than $13 billion in 2008 from $2bn four years earlier.(....)

 

"The Muslim Brotherhood's policies will impoverish the Egyptian people even more," says Mr Abdeen, adding: "Egyptian workers won't go back. They won't retreat."

 

More on: http://www.thenational.ae/business/economy/stand-off-at-with-port-workers-strike-at-heart-of-egyptian-economy

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