Cairo - Egyptian ministers emphasized terms including
'healthy,' 'safe' and 'sound' to describe the local economy during a
two-day Euromoney business conference in Cairo, which concluded
Tuesday.
The theme that they conveyed was: 'We are not worried.'
As panic spreads in markets worldwide amid the international
economic slowdown, the local officials laboured to reassure investors
about Egypt as a place with ample opportunities.
The Egyptian ministers for transport, finance, investment, energy
and information technology took to the stage during the conference to
explain how the global turmoil will have minimal negative effects on
the local economy while highlighting 'the bright side' of the crisis.
'We are working quietly but delivering,' Egyptian Transport
Minister Mohamed Lotfi Mansour told the Cairo gathering on Tuesday.
He said said that Egypt expects an extra 8.9 billion dollars in
private investment in transport over the next three years.
The Egyptian government plans to tender several road projects and
to develop East Port Said on the Mediterranean coast, Mansour said,
noting that 100 investors had already expressed interest in the port
project.
Egypt's location has always been considered an asset. In the
north-eastern corner of Africa, the country connects the
Mediterranean Sea through the Suez canal to the Red Sea and beyond to
the Indian Ocean.
According to officials, the canal will be among the Egyptian
sectors to be affected by the global crisis. The Suez Canal
contributed 3.3 per cent of Egypt's gross domestic product in the
2007-08 fiscal year.
'We encourage companies to come invest in our ports. We are on the
move and will not be left behind,' Mansour said. 'Now is the time to
invest in infrastructure.'
He echoed Communications and Technology Minister Tareq Kamel, who
urged investors to go back to fundamentals, which 'are very healthy'
in Egypt.
The government is seeking to lure 10 billion US dollars in the
current fiscal year to maintain economic growth. Foreign investment
is down from last year's record 13.2 billion dollars, according to
Investment Minister Mahmoud Mohieddin.
Egypt recorded 7.2-per-cent growth in the 12 months through June,
the highest rate in two decades. Amid the rosy picture being painted
by the ministers, there was an admission that Egypt is grappling with
a slowdown that could take its economic growth rate down to 6 per
cent.
'I think it a safe bet to say that growth will be 6-7 per cent,'
Egyptian Finance Minister Youssef Boutrous Ghali told the same
conference on Monday.
Foreign direct investment, exports and tourism are all expected to
be affected as the rest of the world flirts with recession.
In response, Egypt is trying to reposition itself, and the
government will increase public spending on development projects.
The government's plans have yet to convince stock market
investors. Foreigners dumped major Egyptian stocks on Tuesday, taking
Egypt's benchmark CASE 30 index down 2.2 per cent to 5,608.96.
The key index had reached the 12,000-mark in May but has slid
since then. The local stock market suffered unprecedented losses this
month, with the bourse plummeting more than 16 per cent on October 7
alone and hitting a two-year low, amid concerns about the US credit
crisis.
Ministers said that the drop in share prices does not reflect the
real fundamentals of the companies traded in the market. Voicing
confidence that Egypt's banking sector was not in trouble, Ghali said
that deposits are fully guaranteed by the Central Bank of Egypt,
while foreign reserves were held in traditional instruments like
treasury bills.
'We do not have a problem in our financial sector. Liquidity is
available,' said Ghali, who was recently elected head of the
International Monetary and Financial Committee, the International
Monetary Fund's steering body.
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