EGYPT'S ECONOMY: APRIL 7 WEEKLY PRESS ROUND-UP

UNCLAS CAIRO 000587 SIPDIS STATE FOR NEA/ELA E.O. 12958: N/A TAGS: ECON EINV EFIN EAGR ETRD ENRG PGOV EG SUBJECT: EGYPT'S ECONOMY: APRIL 7 WEEKLY PRESS ROUND-UP ¶1. The following are notable economic news stories that appeared over the past week in the Egyptian press: New Pension Law to be Proposed -------------- ¶2. At a recent financial conference, Muhammad Ma'it, Deputy Minister of Finance, said that a new law on pensions would guarantee additional benefits for pensioners. The law would create an investment council to specialize in managing pension funds. A minimum contribution would be established for pensions along with a mechanism to increase their value. Pension payments would increase annually to account for inflation. Under the new law, the social insurance payment would be calculated on gross pay, rather than simply fixed salary. The current law for pensions would remain in force until the government had fulfilled all its obligations under the current pension system. (Ahram, 4/1/09) Electricity Deregulation -------------- ¶3. Sources at the Ministry of Electricity and Energy indicated that the government will submit a draft law to the People's Assembly in the current session that would liberalize the production and distribution of electricity, opening up what is currently a nearly complete government monopoly on generation and distribution. (Al Masry Al Yom, 4/1/09) Suez Canal Revenues Slip -------------- ¶4. Suez Canal revenue accounted for 34.5% of Egyptian foreign exchange revenues during the FY2007/08 fiscal year. The global economic slowdown, along with shipments diverted due to piracy concerns, has led to a gradual decline in daily canal transits and revenue since mid-2008. Some reports estimate full year 2008/09 (July-June) Suez Canal receipts may fall by as much as 15.3% from US$5.16 billion in FY2007/08 to US$4.37 billion in 2008/09. Suez Canal revenue during the month of February 2009 was US$301 million, 26% less than February 2008 revenue. (Al Badeel, 3/31/09). GOE to Promote Eco-friendly Projects -------------- ¶5. Minister of State for Environmental Affairs Maged George announced that the Egyptian Council for a Clean Environment approved financing 52 ecological projects at a total cost of US$1.27 billion dollars. At a conference on the environment organized by the Egyptian Industries Federation, George pointed out that the projects aim at improving the quality of energy and greater reliance on natural gas as a fuel along with minimizing toxic emissions generated by the fertilizer industry. According to the minister, the projects will reduce carbon dioxide emissions by 8.1 million tons and create investment and job opportunities. George also said Egypt is also preparing a new strategy for dealing with the impact of global climate change. (Ahram, Alam Al Yom, 4/2/09) No Crying over Spilt Milk -------------- ¶6. The Ministry of Trade and Industry rejected requests by milk producers to impose trade restrictions on imported powdered milk. Minister Rachid M. Rachid confirmed that the government does not intend to put safeguard measures on products that would not result in lower prices for consumers. Rachid pointed out that the government also does not want to impose measures which could lead to an increase in prices of food commodities. (AMAY, 4/2/09) SCOBEY