By Nehal el-Sherif Oct 22, 2008, 0:58 GMT
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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