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Cablegate: Egypt's Economy: November 17 Press Round-Up

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DE RUEHEG #2156 3211350
ZNR UUUUU ZZH
R 171350Z NOV 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 4263
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS CAIRO 002156

SIPDIS

STATE FOR NEA/ELA

E.O. 12958: N/A
TAGS: ECON EINV EFIN ETRD EAGR PGOV EG
SUBJECT: EGYPT'S ECONOMY: November 17 PRESS ROUND-UP

1.(U) The following are notable economic news stories that appeared over the past week in the Egyptian press: --------------------------------------- First Chinese Bank Established in Egypt ---------------------------------------

2.(U) Minister of Investment Mahmoud Mohieddin inaugurated an office of the China Development Bank, the first branch of a Chinese bank to be opened in Egypt. The bank's establishment comes on the heels of the China-Africa summit in Sharm el-Sheikh, in which Egypt and other African nations pledged expanded economic ties with China. Mohieddin commented that 953 Chinese companies are currently operating in Egypt (Al Mal, 11/12/09). ------------------------------------------ Egypt's External Debt Statistics Announced ------------------------------------------

3.(U) Egypt's private external debt decreased in the past year, while public external debt increased. Minister of Finance Youssef Boutros Ghali announced that Egypt's private external debt decreased by 54% from June 2008 to June 2009, dropping from US$12.3 billion to US$5.7 billion. Meanwhile, government external debt rose from US$21.6 billion to US$25.8 billion, a 19% increase (Al Ahram, 11/12/2009). -------------------------------- Urban Inflation Rises in October --------------------------------

4.(U) According to new data released by the government's Central Agency for Public Mobilization and Statistics (CAPMAS), urban inflation increased to 13.3% during the month of October, up from 10.8% in September 2009. Alia El Mahdi, Professor of Economics at Cairo University, told Al Masry Al Youm that the rising inflation rate mainly impacts low and middle-income households, leading to higher poverty rates (Al Masry Al Youm, 11/11/2009). --------------------------------------------- ------ Egyptian Banks Establish Nile Basin Investment Fund --------------------------------------------- ------

5.(U) The National Bank of Egypt, Banque Misr, Banque du Caire and the Export Development Bank of Egypt established a joint fund for investment in Nile Basin countries with US$1 billion in capital. The banks announced that Ethiopia will be the first country targeted for investment (Al Alam Al Youm, 11/15/09). ---------------------------------------- Drop in Public Support for Privatization ----------------------------------------

6.(U) The Al Alam Al Youm newspaper wrote that public support for privatization has decreased, blaming government missteps in past privatization measures (Al Alam Al Youm, 11/10/09). ----------------------------------- GOE Proposes Increasing Crop Prices -----------------------------------

7.(U) Following President Mubarak's call for more government support for farmers at the recent NDP conference, a ministerial committee will consider a Ministry of Agriculture proposal to increase the prices paid to farmers for "strategic crops." The proposal would increase the prices paid by the government for wheat, corn, cotton, rice, and sugar cane by 20-25% from their current levels to match the international prices. (Al Ahram, 11/15/09). SCOBEY

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