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IdentifierCreatedClassificationOrigin
09CAIRO1601 2009-08-18 03:57:00 UNCLASSIFIED Embassy Cairo
Cable title:  

EGYPT'S ECONOMY: AUGUST 17 PRESS ROUND-UP

Tags:   ECON EAGR EFIN ETRD ENRG PGOV EG 
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1. (U) The following are notable economic news stories that appeared
over the past week in the Egyptian press:



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Agriculture Products Irrigated by Sewage


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2. (U) Food safety continues to be a major concern in Egypt
following the discovery that thousands of acres of farmland in the
Helwan governorate south of Cairo are being irrigated with municipal
sewage water. These farms supply the Cairo market with fresh
vegetables. The GOE is trying to mitigate the impact of these
concerns by resolving the issue quickly. Egypt's fresh fruit and
vegetable exports to Europe are produced in well-managed farms,
mainly in the Delta region and should not be impacted by this latest
problem. (Al Masry Al Youm, Al Akhbar, 8/9/2009 - 8/13/2009).



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New Real Estate Tax Law Approved by Minister of Finance


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3. (U) On August 7, Minister of Finance, Youssef Boutrous Ghali
approved the new real estate tax law. The new law provides
regulations for assessing the rental value of real estate units. The
law exempts housing units whose annual rental value is less than LE
6,000 (US$1085). Amounts which exceed this limit will be subject to
tax. Buildings used for education, government, unions, political
parties, and youths centers will be exempt from the tax. The
Minister said the law specifies the rules for determining the value
of real estate taking into account such factors as geographical
location, desirability, proximity to public parks, and the nature of
the district and the street in which the building is located (Al
Ahram, 8/8/2009).



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Suspension of Sugar Duties


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4. (U) Minister of Finance Youssef Boutrous Ghali announced that
Egypt will exempt imports of raw and refined sugar from customs
duties from August 15 until the end of December 2009. The decree
will be submitted to the Prime Minister for ratification and
issuance. The decision aims to decrease the price of sugar in the
local market during the month of Ramadan and beyond in the face of
high world sugar prices. Egypt consumes around 2.2 million tons of
sugar per year, including about 1.4 million tons produced
domestically. About 60% of Egypt's sugar imports come from Brazil
(Al Ahram, Al Akhbar 8/11/2009).



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Foreign Companies to Market their Gas Locally


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5. (U) A government official indicated that Egypt would allow
foreign partners to sell their share of natural gas in the Egyptian
market through direct contracts with buyers rather than through the
government. A new Oil and Natural Gas Regulatory Authority will
determine the guidelines for such contracts. This new authority is
expected to be approved by the People's Assembly during the next
parliamentary session (Al Masry Al Youm, 8/9/2009).



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Inflation registering 9.9% in July 2009


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6. (U) According to figures released by the Central Agency for
Public Mobilization and Statistics (CAPMAS), year-on-year inflation
was essentially flat from June to July (9.98% in July, vs. 9.96% in
June). The monthly change in the Consumer Price Index (CPI),
however, jumped to 2.2%, from the previous month's 0.4%. Annual
changes reflect that prices of housing and utilities, furniture,
transport, communication, recreation and miscellaneous items were
rising by a lower pace, while prices in hotels and restaurants rose
at a faster pace in July. Inflation has been declining steadily for
the few past months, but spending ahead of Ramadan, could put a
break on further decline (Al Masry Al Youm, 8/12/2009).



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Site Location Studies for the First Nuclear Power Plant


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7. (U) Minister of Electricity and Power Hassan Younis said that the
Australian consulting firm Worley Parsons will complete the updated
site selection study for the location of Egypt's first nuclear power
plant by December 2009. He added that the site of El Dabba, located
on the Mediterranean Sea, is still allocated to the Egyptian Nuclear
Power Plants Authority (NPPA) and that the GOE has begun
reactivating its nuclear cooperation agreements with the United
States, EU, and Russia (Al Ahram, Al Masry Al Youm, 8/10/2009).



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Announcing New Pricing Policy for the Tourism Season


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8. (U) The Hotels and Tourism Entities Chamber of Commerce announced
a new pricing policy for the tourism season, extending from October
2009 to October 2010. The new policy allows tourism companies to
freely set their rates, provided they are not more than 25% lower
than previous rates. This policy would enable the hotels to better
deal with the repercussions of the global economic slowdown (Al Mal,
8/11/2009).

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