EGYPT'S ECONOMY: MAY 12 WEEKLY PRESS ROUND-UP

UNCLAS CAIRO 000807

SIPDIS

STATE FOR NEA/ELA

E.O. 12958: N/A
TAGS: ECON EINV EFIN ETRD EPET PGOV EG
SUBJECT: EGYPT'S ECONOMY: MAY 12 WEEKLY PRESS ROUND-UP


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

--------------
Draft Budget and Annual Civil Service Raise
--------------


2. (U) On May 6, the Shura Council, the upper house of the Egyptian
parliament, approved the draft fiscal budget for FY2009/2010. The
budget reflects total revenues of LE228 billion (US$40.71 billion)
and expenditures of LE319 billion (US$56.96 billion). The resulting
deficit of LE91 Billion (US$16.25 billion) is approximately 8% of
GDP. The Budget and Planning Committee of the People's Assembly, the
lower house of the Egyptian parliament approved a 5% annual
base-salary increase for civil servants. The government has been
indicating that it could not finance a higher salary increase
without reducing capital spending. The Ministry of Finance compared
the raise to last year's 30% increase saying there were significant
financial challenges, including low tax revenues, falling Suez Canal
income, and increased spending to stimulate the economy. (Ahram,
Akhbar, Al Masry Al Yom, 5/7/2009)

--------------
Falling Remittances
--------------


3. (U) Minister of Economic Development Osman Mohamed Osman
confirmed that, according to data from the Central Bank of Egypt,
remittances of Egyptians working abroad are declining because of the
global economic recession and the drop in oil prices. During
2009/2010, remittances are expected to be US$6.8 billion, down from
$8.6 billion in 2007/2008. In 2005/2006 and 2006/2008, remittances
were US$5 billion and US$6.3 billion, respectively. (Al Youm Al
Sabee, 5/7/2009)

--------------
Unemployment Rises
--------------


4. (U) According to the official government statistics agency, the
Central Agency for Public Mobilization and Statistics (CAPMAS),
Egypt's unemployment rose to 9.4% in the first quarter of 2009 from
8.8% in the last quarter of 2008. The number of unemployed reached
2.3 million workers. Some officials stated that the segment of the
labor market most affected is semi-skilled labor, mainly young
university graduates. (Al Masry Al Yom, 5/6/2009)

--------------
Gold Production
--------------


5. (U) Minister of Petroleum Sameh Fahmy announced initial steps to
establish the first integrated gold production factory from the
Sokary mine in the Eastern Desert. The Australian-based company
Centamin is responsible for the mining and production of the gold.
Production reserves in the projects are estimated to be 13 million
ounces, worth approximately US$13 billion, according to the chairman
of the Mineral Resources Authority, Hussein Hammouda. Production is
expected to begin in July 2009 with a capacity of 200,000 ounces in
the first year, rising to 500,000 ounces in the future. (Ahram,
5/5/2009)

--------------
Ration Cards
--------------


6. (U) The Ministry of Social Solidarity will issue an additional
400,000 ration cards in May 2009 for new beneficiaries including
seasonal laborers, drivers, individuals with special needs and
chronic diseases, craftspeople, minors, and members of single-parent
families. The additional cards, through which the beneficiaries will
receive fully subsidized food products, will increase the total
number of ration cards to 11.5 million cards benefiting 63.5 million
Egyptians. (Ahram, 5/4/2009)

--------------
Oil and Gas Field Discoveries
--------------


7. (U) On April 30, the Apache Corporation, a Houston-based oil and
gas exploration and production company, reported two new oil and gas
field discoveries in the Faghur Basin in the extreme southwest part
of Egypt's Western Desert and the first discovery in the North Tarek
Concession along the Mediterranean coast. The discoveries
flow-tested a combined total of 6,537 barrels of oil and 30 million
cubic feet of gas per day. (Zawya, 5/11/2009).
SCOBEY