(1) Position in economy of Egypt.
(1) Position in economy of Egypt.
Estimations of a modern status of economy ARE which is one
From the largest developing countries, it is essentially separated. According to
To the official statistics, gross national product gain in real terms
Exceeds 6 % a year, inflation is on a low level,
Budgetary deficiency and deficiency of the balance of payments on the flowing
To operations are reduced, gold and exchange currency reserves remain
The stable. At the same time excess of budgetary expenses over
Incomes in coming to the end financial year (its end is necessary on
The middle of calendar year) it has appeared big, than originally
It was predicted, bank interest rates have reached excessively
High level, a conjuncture in the share market last months
It was characterised by the largest recession since 1998. However anything
Similar to crisis in the considered country it is not observed.
In enterprise sphere position in economy ARE
It is estimated a little differently. Businessmen mark shortage
Means in the HARD CURRENCY, proceeding growth of warehouse stocks of production at
Many firms, and also discrepancy of the governmental statistics
To real state of affairs (partially because of existence in the country
Large informal economy). Some observers are inclined
To assert, that the developed situation is close to recession.
Certain optimism call a recognition the cabinet
The errors in the economic sphere, sounded in the end of the past
Year, and the beginning of realisation of measures on their correction. The basic
The governmental initiative undertaken in current year, became
Transition to new system of formation of a rate of national currency
(See BIKI from March, 24th, 2001). It "adjustable fixing
Concerning dollar in strictly limited interval "it is estimated
Observers differently. Some economists consider, that a course
Egyptian pound in relation to monetary unit of the USA still
It is overestimated, and Central Bank ARE yet in a status effectively to work in
Frameworks of new currency system.
In bank circles the regret concerning that expresses,
That the Central Bank has refused in the beginning of 1999 use of the currency
Reserves, increases for some time of the bank percentage
Rates and introduction of a floating rate of Egyptian pound. At the such
Scenarios currency reserves though and in smaller volume, it would be possible
To save, and the real rate of national currency would be reached
Much faster.
Actually (the truth, informally) transition to a floating rate
Has been carried out in the middle of last year. However absence
The accurate governmental policy has led to obvious understating
Pound costs. Prime minister A. Obejd has declared transition on
New system of formation of the rate of exchange. It has been carried out
"Binding" of Egyptian pound to dollar in the ratio 3,85 units for
Currency dealers have acquired the right to carry out 1 dollars of operation with
Deviations from a base course, but no more than on 1 % in both
The parties within days. As a result of introduction of this system
Cost of national monetary unit has gradually decreased to
3,9 eg. f. For 1 dollars However in practice HARD CURRENCY sale till now
It is limited, and banks refuse to sell dollars on
To official rate. Transactions are carried out in a proportion not less than 4
eg. f. For 1 dollars the Majority of bankers out of the Central Bank consider the official
Course the unreal.
If the currency policy of the central authorities has not brought
Expected result, their actions on alignment of the payment
Balance have appeared effective enough. Reduction is observed
Excess of import over export, flight is shown to a minimum "
The capital ". Such tendencies have allowed to stabilise position in
To financial sphere, however for situation normalisation in economy in
Whole restoration of trust from local is necessary and
Foreign businessmen.
Deficiency of the foreign trade balance in first half 2000/01 fin.
(July - December) has made 4814 mln. dollars, accordingly for
All year negative balance, apparently, will not exceed 10 billion
In previous trehletie the given indicator was up to standard of 12 billion in
Year. Progress will reach thanks to considerable growth oil and
Not oil export, and also to deduction of import to the reasonable
Limits. The status of the payment has accordingly improved also
Balance. Its important component are incomes of tourism,
Which at the present stage gradually increase and exceed
4,5 bln. dollars in a year. In 1997/98 fin. They did not reach 3 billion
(Negative influence on branch was at that time rendered by the tragical
Events in Luxor.).
Some trouble calls position with the monetary
Transfers of the Egyptians temporarily working outside of ARE: in July
- December, 2000 they were considerably reduced. The reason consists in
Volume, that private payees estimated an official rate of the Egyptian
Pound as overestimated and consequently forwarded the earned means
On alternative channels.
Deficiency of the balance of payments on current operations in the first
To half 2000/01 fin. Has made 270 mln. dollars, whereas in
The last three years it was equaled on the average 1,8 bln. dollars
The balance of movement of capitals reflects sharp reduction
Receipts in the country of direct investments that is partly caused
Languid course of realisation of the program of privatisation. Sharp change
The indicator appearing in balance of payment relations with the external
The world under article "errors and admissions" (-1312 mln. dollars in 1998/99
fin. And 679 million in first half 2000/01 fin.), it is connected with
In scales of "flight of capitals".
As a result deficiency of the balance of payments in first half of flowing
Fiscal year it has appeared equal 712 mln. dollars, whereas in
The last two years it has exceeded in total 5 bln. dollars
Official currency reserves (14 bln. dollars) were
Sufficient for a covering of national requirements for import
Within 10 months.
In such conditions the Egyptian government prepares to
To original examination: the first issue at official level and
Placing of eurobonds should reveal trust degree
The international investors to a control system Egyptian
Economy. The control over operations with eurobonds it is entrusted
To carry out to influential financial groups "Merrill Lynch" and
"Morgan Stanley Dean Witter".
To strengthening of positive image of Egypt in the opinion of the foreign
Businessmen strengthening of its integration into the world promotes
Economy. The paramount role is played thus by development
Foreign economic relations of this country.
Foreign trade ARE will receive a considerable impulse for
The subsequent growth as a result of agreement signing about
assotsiirovannom membership of Egypt in EU (on a share of the given grouping
40 % of foreign trade turnover ARE) are necessary. Negotiations about it
The conclusion 5 years proceeded. In January, 2001 the total document
Has been paraphed. According to it in 12 years after
Ratifications creation ZST should come to the end. Turns on itself
Attention an exception of subjects of the agreement of trade in cars
And agricultural production. Realisation of the reached
Arrangements will serve as stimulus for attraction to Egypt
The foreign capital and the further rationalisation economic
Lives of this country.
The Egyptian exporters already use duty-free access on
EU market on all goods except for the foodstuffs, a clap and
Cotton yarn. In such conditions there is a question about
Expediency of signing of the specified agreement which will strengthen
Vulnerability of domestic manufacturers owing to an aggravation
Competitive struggle against the West European companies. The minister
Economy and J.Butros-Gali's foreign trade sees a positive role
The given document in creation of preconditions for continuation in the country
Economic reforms. At the realisation initial stage
Arrangements from EU duties on raw materials decrease and
The industrial equipment that is equitable to interests of many
The Egyptian industrial companies. Finished goods,
Made in Egypt, it will appear in the conditions of a rigid competition
Only after the lapse of certain time.
Being the participant of the WTO, Egypt should not sign the such
Agreements about ZST which give to one of contracting parties
Much more advantages, than another. The such
Former arrangements between EU and ARE had a lack. New
The agreement opens to the West European goods wide access on
The Egyptian market (the truth, not at once, and stage by stage). Thus,
"The game field" for both participants ZST is actually levelled.
Remarkable feature of the agreement is inclusion
Costs of materials and accessories from Jordan, Morocco and
Tunis, used in manufacture of Egyptian production,
Exported to EU, in the cost added in ARE. Such
In the image of EU aspires to stimulate trade between developing
The countries, especially in conditions when the similar prepare
liberalizatsionnye agreements of EU with the states of the Near-Eastern
And North African regions.
At the present stage Egypt liberalises the
Customs-tariff system in three basic directions:
First, according to obligations within the limits of the WTO (average
The size of the customs duties should be lowered to 25 %; their level
Has already undergone to considerable reduction); secondly, in frameworks
State policy of reforming of national economy
(Decrease in custom duties on a number of the commodity is carried out
Positions); thirdly, under corresponding articles of the regional
Trading agreements (besides the document signed from EU,
The agreement with the General market for the countries East and Southern operates
Africa - KOMESA, concluded 4 years ago, and Panarabsky
The agreement on free trade).
According to experts of the Egyptian centre of the economic
Researches, arrangements from EU will render deeper
Influence on the Egyptian economy, than prisoners in frameworks
The WTO. Performance of the agreements signed in a course "Uruguayan
No round "multilateral negotiations within the limits of GATT/VTO, has
Strictly binding character.
As a whole it is possible to expect deterioration of the balance of payments of Egypt
Because of strengthening of imbalance of its foreign trade in
Liberalisation conditions mirohozjajstvennyh communications. The general negative
The tendency in payment relations with an external world will be weakened by growth
Incomes of the country of the international tourism.
Tourist business in Egypt develops high rates: in
1999/2000 fin. Record inflow of the foreign is registered
Tourists: 5,5 million persons have visited world famous Egyptian
Pyramids, have made cruises over Nile and-or have visited on resorts,
Located on the bank of Red sea. Currency receipts from
Tourism have made 4,3 bln. dollars, that on 33 % it is more, cham in
1998/99 fin. The Tendency to fast growth is observed and in
Current calendar year. The average visitor from abroad
Spends in Egypt the increasing sums (by data for 2000 -
About 800 dollars, that on 7 % more than in 1999).
Duration of stay also grows (last year it
Has increased in comparison with 1999 for 7 days). Dominating
Position in considered sector of national economy
Occupies public sector. Number occupied in
To tourist sphere reaches 150 thousand
In the last quarters there were signs of deterioration of position in
Tourist business ARE. Owners of hotels, especially on
Coast of Red sea, the prices have been compelled to reduce on
Hotel rooms for prevention of reduction of inflow
The tourists, the current year which has outlined from the beginning. Defined
Influence on a branch status is rendered by external factors. In
The end of 90th years development of resorts on Red sea has received
Additional impulse in connection with recession of tourism in Turkey (because of
Earthquake and performances of Kurdish separatists). However after
Devaluations of Turkish lyre (see BIKI from March, 13th, 2001)
Standard package deal for visitors from abroad in DM
Or English pounds sterling has considerably fallen in price, that
It was favorably reflected in tourist business in Turkey. In that
Time "binding" of Egyptian pound to dollar has led only
To small depreciation of the Egyptian currency (in comparison with the beginning
Last year). In such conditions inflow is not expected
Additional number of tourists from Europe in ARE, as
Euro concerning monetary unit of the USA a little oslabla.
Negative influence on considered branch can render
Strain of relations between Israelis and Palestinians, though to
May of current year of such dependence it was not observed.
The purpose of the Egyptian government is inflow doubling in
The country of foreign tourists (to 10 million persons) and incomes from
The given branch (to 10 bln. dollars). For performance planned
The special marketing program is developed, conducted
Building of the airports and modern motorways.
//* an information Source: BIKI, 2.06.01
//* Reg. Nom. - 1110600219.11-------------------------------------------
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