Planning Minister Ashraf al-Araby: No fear if Gulf aid is withdrawn

The Euromoney Conference:
Euromoney is an opportunity to present the government's attractive reform plans and advantages for investment …
No fear if Arab aid is withdrawn. We need to inject investments …
Partnerships transformed to the Investment Ministry …
Four new projects are being implemented …
Q. What is the message you would like to give to investors on the occasion of the Euromoney conference?
A. The conference, attended by many businessmen and officials, provides the right climate to present the Egyptian government’s vision for the economy. It is an opportunity to meet directly with Egyptian, Arab and foreign investors, exchange views and answer questions.
Q. What new ideas will you present?
A. Egypt still has an attractive investment climate, and investors are interested in the government's plans and actions for the future.
We will present the reform steps that we took and the developments that have occurred over the past few months in terms of resolving inverstors' disputes and problems. We will also present our plans to deal with poverty and unemployment.
There were complaints about complicated regulations in Egypt for industry and commerce. We are amending those regulations in order to improve the investment climate and attract investment.
Q. What do you think is the most important advantage for investment in Egypt after the 30 June revolution?
A. Egypt has many advantages that are rarely found combined in one country. We have the central geographical location, trade agreements with several countries that grant Egyptian exports many advantages, wages are low compared to other countries, and the political transition and the roadmap meet the will of the people and make them partners in the decision-making process. This increases the investors' confidence.
Q. How would you reply to fears of the security situation in Egypt?
A. This has become redundant. People have begun to feel the improvement in the security situation. Many countries have already lifted travel bans to Egypt, which is a positive indication. We will reply to any questions. We have nothing to hide.
Q. What about the roadmap?
A. We are committed to it. It will make our lives better.
Q. Is the government going to cooperate with the private sector and build joint projects?
A. By all means, now that the management of partnership projects was transferred from the Finance Ministry to the Investment Authority.
Q. Have you already signed such partnership agreements?
A. There will be agreements this fiscal year with investments amounting to LE3.6 billion.
Q. What are they?
A. The Rod al-Farag axis that will ease traffic jams, two hospitals in Alexandria, a water treatment plant in New Cairo, and plenty of other projects with the private sector.
Q. What is the targeted growth rate and how do we get to it?
A. The growth rate has fallen to 2 percent after the January revolution, which has hindered the economic sector from achieving social justice. Our target for 2013-14 is to reach 3.8 percent and achieve sustainable development.
Factors contributing to this are resolving of the security situation, the application of policies and procedures that boost production, and the settlement of debts for contractors and oil companies, which have all begun already.
Also, the government is keen on reducing the budget deficit, which strengthens the confidence of financial institutions in the safety of the Egyptian economy and its ability to meet its obligations and increases foreign reserves. People know that achieving dignity, justice and freedom, the objectives of the revolution, cannot happen without a strong economic basis.
Q. How will you solve the problems of the factories that are unable to pay their debts?
A. There are not as many as was reported. We give this dossier special attention, and the banks are negotiating settlements with them. About 850 factories have applied for support from the central bank, and we have allocated some LE500 million for that purpose.
Q. Will the new policies give the private sector more leeway with the banks?
A. Our monetary policies have reduced interest rates by 4 percent. This will encourage the private sector to borrow and expand. The government was not hindering credit facilities. It was the the security situation, the demonstrations and a blurry vision for the future.
Q. Are you planning to turn the Egyptian economy into a service economy, considering the Suez Canal Development Project that hardly caters to heavy industries?
A. That would not be a bad idea, but we are keen on diversifying our economy.
As for the Suez Canal project, part of it caters to heavy industries in the northwest Gulf of Suez. The whole project amounts to LE4 billion and will be implemented by the armed forces.
Q. What about shortages of energy for the new factories and industrial zones?
A. Energy saving is a priority. We plan to import natural gas, but this needs infrastructure and equipment. We are also working on rationing local consumption and encouraging foreign partners to increase their investment in this field.
Q. Will the average citizen be aware of the government’s plans and actions?
A. We are involving the youth in our planning. And we are posting everything on our website for the people to monitor. We also post data on population density, poverty levels and income distribution. This allows for a strong partnership with civil society.
We are also reforming the Supreme Council for Planning and granting it more powers in all provinces.
Q. What are the effects of Egypt’s reduced participation in the meetings of the International Monetary Fund?
A. This was in response to the fund saying it would consult the member states about Egypt’s participation in the meetings. Also, the invitation to the last meeting arrived late.
However, Egypt is keen on continuing relations with all international institutions, including the International Monetary Fund and the World Bank.
Despite Egypt's limited participation, the fund said it will continue to support the Egyptian economy.
Q. Are there new bases for dealing with the World Bank and the International Monetary Fund in the future?
A. Egypt will cooperate according to its vision and needs and without conditions. We received a World Bank delegation a few days ago to follow up on a number of development projects, and another IMF delegation to help the Egyptian Tax Authority in the value-added tax.
Q. What about the IMF loan?
A. We said clearly that we do not need it at the moment. This is not a political decision. It is an economic decision. Also, the policies we have adopted are contrary to those of the fund. We have reduced bank interest rates and pumped more funding into public investments to complete infrastructure projects, whereas the IMF favors reducing the budget deficit and increasing resources.
Q. To what extent has GCC support helped?
A. Support from the Gulf states has helped us a lot, but we now need to encourage investments.
Q. Do you think Arab countries could be pressured by the United States to stop supporting Egypt?
A. Not at all.
Edited translation from Al-Masry Al-Youm

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