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Cablegate: Egypt's Economy: December 1 Press Round-Up

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DE RUEHEG #2221 3351323
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R 011323Z DEC 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 4358
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS CAIRO 002221

SIPDIS

STATE FOR NEA/ELA

E.O. 12958: N/A
TAGS: ECON EINV EFIN ETRD EAGR ENRG PGOV EG
SUBJECT: EGYPT'S ECONOMY: December 1 PRESS ROUND-UP

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

------------------------------------------
Cement Producer Requests Ending Export Ban
------------------------------------------

2. (U) The Lafarge Company, a large multinational firm with a branch
in Egypt, announced that it will ask the Ministry of Trade and
Industry to end the export ban on cement if demand and sales in the
local market remain at current levels during January and February
2010. Hisham Ragab, the Assistant Minister of Trade for legal
affairs, hinted that the Ministry might cancel the ban if local
demand continues to decline and the available reserves increase.
Cement sales have dropped due to the slowdown in new construction
projects since the summer (Al Shorouk, Al Mal, 11/25/2009,
11/24/2009, 11/22/2009).

--------------------------------------------- -------
New Draft Law for Public-Private Partnership Program
--------------------------------------------- -------

3. (U) The Ministry of Finance will present to the Cabinet of
Ministers a draft law regulating the Public-Private Partnership
(PPP) program. Pending the Cabinet's approval, the draft law will be
referred to the Parliament for discussion and ratification. Minister
of Finance Youssef Boutrous Ghali stated that the law is designed to
be a tool for regulating joint infrastructure projects between the
public and private sectors (Al Ahram, Al Mal, Al Masry Al Youm,
11/24/2009).

--------------------------------------------
GOE Considers Extending Sugar Duty Exemption
--------------------------------------------

4. (U) The Ministry of Trade and Industry is studying the
possibility of extending the customs duty exemption on sugar imports
beyond December 2009. Sayed Abul Qumsan, Senior Advisor to the
Minister of Trade and Industry, stated that the government will
extend the exemption only if local sugar production fails to
increase to a level that meets demand (Al Shorouk, 11/23/2009).

--------------------------------------------- ----
Cost of New Health Plan Estimated at $6.8 Billion
--------------------------------------------- ----

5. (U) Minister of Health and Population Hatem El-Gabaly estimated
that the proposed new health insurance system will cost LE 37
billion (US$6.8 billion), with the government paying for LE 30
billion (US$5.5 billion) and private citizens and business paying
for the rest through subscription fees. The proposed law was
described by President Mubarak as a universal coverage plan in his
recent address to Parliament (Al Ahram, 11/25/09).

------------------------------------
Current Account Deficit Rises by 50%
------------------------------------

6. (U) The Central Bank of Egypt released new statistics for Q3
2009, revealing that Egypt's current account deficit rose by 50%,
climbing to $1.5 billion from $1.0 billion in the same quarter in
2008. Declining tourism, falling Suez Canal revenues, and the
decrease in Egyptian exports were cited as the main reasons for the
increase (Al Masry Al Youm, Al Ahram, Al Alam Al Youm, 11/25/09).

--------------------------------------
Egypt Plans Solar Power Plant for 2010
--------------------------------------

7. (U) Speaking to reporters in India, Minister of Electricity
Hassan Younis announced that Egypt's first solar power plant will be
operational by the end of 2010, with a 140 megawatt capacity. In a
meeting between Minister Younis and Jerzy Buzek, the President of
the European Parliament, Buzek expressed the European interest in
purchasing electricity generated by solar energy in North African
countries, including Egypt (El Ahali, 11/23/09, 11/25/09).

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