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IdentifierCreatedClassificationOrigin
09CAIRO2189 2009-11-23 12:29:00 UNCLASSIFIED Embassy Cairo
Cable title:  

EGYPT'S ECONOMY: November 23 PRESS ROUND-UP

Tags:   ECON EINV EFIN ETRD ENRG EAGR 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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Mubarak Addresses Economy in Speech to Parliament


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2. (U) President Mubarak addressed a joint session of the People's
Assembly and the Shura Council on November 20, stressing social
justice for the poor, new stimulus and spending programs, rural
development, and energy security. Mubarak endorsed new legislation
to increase pensions and called for reforming the national health
care system. Mubarak declared that the government has met the
challenge of the global financial crisis by passing two fiscal
stimulus packages of LE15 billion (US$2.75 billion) and LE8 billion
(US$1.47 billion). Mubarak called for a third fiscal stimulus
package amounting to LE10 billion (US$1.83 billion) to finance
additional infrastructure projects and public services. Finally,
Mubarak called for ensuring energy security by developing
alternative energies and making the nuclear power program a national
priority (Al Ahram, Al Alam Al Youm, 11/22/09).



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Rachid on Egypt-US Trade Talks


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3. (U) Minister of Trade and Industry Rachid Mohamed Rachid
criticized the US focus on Egyptian politics during the economic
dialogue taking place with Washington, saying that Egypt wants to
keep commercial issues separate from political issues in the
bilateral relationship. Rachid also stated that the GOE is
requesting the designation of at least three new Qualifying
Industrial Zones (QIZ's), and that the GOE would like to see the
expansion of food, leather and electronic products in the QIZ
program (Al Masry Al Youm, 11/22/09).



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Egypt and Canada to Negotiate FTA


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4. (U) During the meeting of the Egypt-Canada Business Council,
Minister of Trade and Industry Rachid Mohamed Rachid told the press
that Egypt will start begin negotiating a free trade agreement (FTA)
with Canada during the Geneva WTO conference that will be held on
November 29. He added that Egypt is searching for new export markets
through bilateral trade treaties. Rachid stated that Egypt would
study the Canada-Jordan FTA as a guideline for the Egyptian-Canadian
negotiations (Al Mal, Al Alam Al Youm, Al Ahram, 11/19/09).



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Central Bank Rejects Bank Privatization, New Licenses


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5. (U) Central Bank Governor Farouk El Okdah denied that the
state-owned Banque du Caire is for sale, arguing that the market
conditions are not right for privatization. Banque du Caire is one
of three public sector banks in Egypt. El Okdah also stated that no
licenses will be given to new banks to operate in Egypt (Al Masry Al
Youm, Al Ahram, 11/22/09).



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Unemployment Rate Up from Last Year


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6. (U) The Central Agency for Public Mobilization and Statistics
(CAPMAS) released unemployment data for the third quarter of 2009.
The unemployment rate increased to 9.36% from 8.55% during same
period last year. Urban unemployment rose by 2.4% from Q3 2008 to Q3
2009, climbing to 13.7%, while rural unemployment increased by 0.4%,
rising to 6.1%. The figures revealed a large gender gap in
unemployment, as 5.3% of men are officially unemployed compared to
22.8% of women. The overall Egyptian labor force grew by 397,000
over the past year, and now totals 25.2 million workers (Al Alam Al
Youm, Al Dustour 11/16/09).



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Increase in Garment Exports to the U.S.


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7. (U) Yehia El-Zananiry, the head of the Ready-Made Garments
Association at the Union of Trade Chambers, said garment exports to
the United States went up during the first half of 2009 in
comparison to same period last year, climbing to $540 million from
last year's mark of $520 million (Al Alam Al Youm, 11/16/09).



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GOE Denies Rumors of Energy Price Increase


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8. (U) On November 17, independent newspapers reported that Minister
of Energy and Petroleum Sameh Fahmy is considering increasing the
domestic sale price of petroleum products. The reason for this
possible price increase, the newspapers reported, is the need to
respond to the dramatic increase in domestic energy consumption,
including an 18% jump in gasoline consumption in FY2008/09. However,
Hamdy Abdel Aziz, a spokesman for the Ministry of Petroleum, denied
the reports and stated that the Ministry would not raise prices.(Al
Masry Al Youm, Al Shorouk, Al Ahram, 11/17/09, 11/18/09).



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Newspaper Alleges U.S. Pressure on Israel Gas Deal


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9. (U) The Al Shorouk newspaper claimed that US Secretary of State
Hillary Clinton pressured Egypt to increase natural gas exports to
Israel during her recent trip to Cairo. The newspaper said gas
exports to Israel amount to $164 million per year, and it alleged
that the gas is being sold for a below-market price. Retired
Ambassador Ibrahim Yousri, who is leading the "No Gas To Israel"
campaign, added that Clinton not only asked the GOE for an increase
of the amount of the gas exports but also a reduction in the price
of the gas (Al Shorouk, 11/16/09)

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