EGYPT'S ECONOMY: AUGUST 24 PRESS ROUND-UP

UNCLAS CAIRO 001629

SIPDIS

STATE FOR NEA/ELA

E.O. 12958: N/A
TAGS: ECON EINV EFIN ETRD EAGR ENRG PGOV EG
SUBJECT: EGYPT'S ECONOMY: AUGUST 24 PRESS ROUND-UP


1. (U) The following are notable economic news stories that appeared
over the past week in the Egyptian press:

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Moody's Raises Egypt's Sovereign Rating
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2. (U) Moody's raised Egypt's sovereign rating from "negative" to
"stable" citing lower inflation, efforts to contain the budget
deficit, and relative economic and financial sector stability.
Moody's had downgraded its outlook for the Egyptian economy in
mid-2008. In raising the rating, Moody's said the Egyptian economy
was less affected by the global financial crisis than some other
regional economies but noted that increasing debt and deficit
levels, persistent inflation and unemployment remain continuing
challenges (Al Mal, 8/20/2009).

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Public Sector Bank to Sell Stakes in Joint Venture Projects
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3. (U) Bank Misr, Egypt's second largest public bank, is preparing
to sell stakes it owns in a number of joint venture projects,
following approval of the Ministry of Investment. The Bank has
started preparing the paperwork and will coordinate with the
ministry the timing of the sales, originally scheduled to occur in
the first quarter of fiscal 2009/10 (Jul.-Sep. 2009). The Ministry
of Investment has said that the offering should be made at a time
when the stock market is active, especially for construction stocks
(Al Mal, 8/16/2009).

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Polluted Water for Cultivation
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4. (U) Independent and opposition newspapers continue to uncover new
cultivated areas which are using untreated sewage water for
irrigation. Official sources at the Ministry of Agriculture
indicated that President Mubarak has asked the cabinet to prepare an
immediate plan to eliminate such violations by allocating additional
funds for development of irrigations projects in the older
agricultural lands. The total cost of development of new irrigation
systems in Nile Delta and the Nile Valley could amount to about LE
30 billion (US$5.5 billion)(Al Masry Al Youm, 8/20/2009).

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Egypt Signs US$2.3 Billion Oil and Gas Exploration Agreements
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5. (U) On August 16, Minister of Petroleum, Sameh Fahmi, signed six
agreements for oil and natural gas exploration that are expected to
bring in new investments amounting to US$2.3 billion (Al Ahram,
8/17/2009).

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Plans for Mitigating Air Pollution in Cairo
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6. (U) Amr Assal, Chairman of the Industrial Development Authority,
announced the Authority's decision to relocate seven cement
factories from Helwan (a suburb south of Cairo) to a new location in
the Governorate of Beni Suef within the next three to seven years.
He added that this plan still faces objections and concerns from
industry experts and officials that will need to be considered
during the implementation. The decision to relocate the polluting
factories from Helwan to other areas away from urban districts was
made by the Prime Minister in December 2008 (Al Masry Al Youm,
8/20/2009).

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Establishment of Investment Centers in Governorates
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7. (U) Minister of Local Development, Abdel Salam El Mahgoub
announced that integrated investment centers will be established in
each governorate by next year. He added that 22 new industrial zones
will be established in the Delta and in Upper Egypt governorates.
The ministry plans to provide an array of support to investors
including technical assistance, licensing, and land allocation
services. (Al Alam Al Yom, 8/19/2009).

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