May  27, 2001

Economic conditions in Egypt show improvement

    In statements to newspapers and the Middle East News Agency chief editors the President said that more Arab investments are being-pumped into Egypt, especially from Saudi Arabia, Kuwait, and the UAE. President Mubarak added, in his statementabroad the Presidential palne en route to Cairo from his two visits to Saudi Arabia and UAE, that foreign investments from France, Britain and Italy are rising.

    President Mubarak, at the same time, warned against over optimism. "Economic reform naturally needs continuous work and time according to a set timetable as the situation cannot turn from recession to development overnight," he said.

    We would be mistaken if we imagined that the state of recession was solely an Egyptian case because it was a common experience in most world countries. "Egypt was affected by the financial crisis in Southeast Asia and all-over the world," he said.

    President Mubarak described his visits to Riyadh and Abu Dhabi as calls on his brothers King Fahd, Crown Prince Abdullah, President Sheikh Zayed and his Crown Prince Khalifa, as he had not seen them for a while.

    "The visits were also an occasion to exchange views on the situation in our region, especially in the occupied Palestinian lands. Each party also briefed the other on contacts and efforts they made to stop the Israeli attacks," he said.

    President Mubarak said that King Fahd apprised him of about his contacts with Washington as he sent two messages to President George W. Bush in a fresh attempt to stop the Israeli aggression.

    The President said he seized the opportunity to discuss bilateral relations with the two countries, noting the existence of full agreement on boosting and expanding the standing cooperation.

    "Sheikh Zayed Bin Sultan Al Nahayan instructed his delegation to increase cooperation and investment with Egypt and set up joint projects," President Mubarak said.

    On Israeli Prime Minister Ariel Sharon's announcement of a unilateral ceasefire, Mubarak said: "The Israeli Prime Minister spoke of a ceasefire when the reality said that they (the Israelis) were still hitting the Palestinians and would not stop."

    On the domestic situation and national mega projects under construction, President Mubarak said: "There is a certain plan on the move and it is being implemented by the government and I follow it up step by step." President Mubarak expounded the causes of the recession during the past period as follows:

    "Our expenses have increased during the past few years.... and the investment expansion was not studied."

    Also, there were measures that led to cutting down state resources and revenues without realistic calculation.

    "But I can assure you that the improvement has begun and will go on gradually," he said.

    President Mubarak indicated that moving the dollar exchange rate contributed to improving the economic situation in general, especially after a freeze in the exchange rate of the dollar, which was one factor of the crisis.

    Queried about imposing a new sales tax, President Mubarak said the sales duty has been imposed long ago and it will not increase commodity prices. "It will have very slight effects," the President added.

    President Mubarak said he refused to proclaim the new duty in a Republican decree to give the People's Assembly an opportunity to discuss it.

    "All merchants, with the new tax, will have to open their books and register their sales, and this matter will spare the state many cases of tax evasion," he said.

    President Mubarak told the press chief editors that what has been stirred up recently on the stock exchange is the duty of the state, which has to move with calculated steps as regards the economic reform.

    "We have to protect the Egyptian skills, encourage them, and attract them to Egypt, and at the same time we should build new cadres and skills," he said.

    "Some people spoke of high salaries in the bourse, nepotism, and other things, but I personally demanded from the Prime Minister and the officials concerned to conduct a full investigation into this...and it was clear that most of what has been raised was not true...We have to realize that some domains such as the stock exchange, technological institutions, and banks need highly skilled cadres, and people having such expertise and knowledge cannot be attracted...except by giving them the incentives they deserve," he said.

    President Mubarak, however, said that the state will not hesitate to prosecute the corrupt, once excesses are discovered.

    On the pace of work in national mega projects amid the current recession, President Mubarak said the state "works according to a certain plan governed by budgets...Toshka is making good progress and so are the Northwest Suez and East of Port Said projects.

    "All projects go on and there is progress...at a good and constant rate.... and we should not exceed the budgets available and plans made," he noted.