Egypt unveils $4.9 billion stimulus package

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Egypt unveils $4.9 billion stimulus package

Post by DJKeefy » Mon Feb 10, 2014 11:24 pm

Interim authorities announce new stimulus measures in a move analysts say is designed to shore up public support and curb unrest.

Egypt's interim government unveiled its second stimulus package on Monday, which will inject LE33.9 billion ($4.87 billion) into the economy, with most of that money coming from aid pledged by the United Arab Emirates.

Previously the finance ministry said Egypt planned to spend around LE30 billion. The first stimulus package, amounting to LE30 billion, was launched in August.

Ahmed Galal, the finance minister, said in a statement on Monday that the new spending would be financed mostly by the United Arab Emirates, one of the Gulf Arab countries that has pledged billions of dollars in support for Egypt.

Egypt has already received $3 billion in aid from the United Arab Emirates: a $1 billion grant and $2 billion loan in the form of an interest-free central bank deposit.

At the end of January, official sources announced the UAE would contribute a further $1.8 billion in the form of fuel shipments.

The minister said that any additional expenditure would be covered by additional revenues in order to control the budget deficit.

However, economists believe the deficit target of 10 percent of GDP is unrealistic.

The Emirati aid forms part of a bigger aid package that Gulf Arab states pledged after the military ousted Islamist president Mohamed Morsi in July 2013.

Three years of political unrest since a popular uprising ousted Egyptian president Hosni Mubarak have scared away investors and tourists, weighing on economic growth.

The army toppled Islamist president Mohamed Morsi in July, triggering unrest. Security forces have killed about 1,000 Morsi supporters and arrested many more in a tough crackdown.

Analysts say the interim authorities are anxious to get the economy moving to shore up public support and curb the scope for more unrest as the government moves along a political transition plan leading to elections this year.

Nearly LE20 billion will be spent on development projects and LE2 billion will be directed towards developing a corridor around the Suez Canal under the second stimulus package, according to the statement.

LE12 billion will go towards financing social programmes, including a rise in the minimum wage.

Source: http://english.ahram.org.eg/News/93912.aspx


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Re: Egypt unveils $4.9 billion stimulus package

Post by LovelyLadyLux » Tue Feb 11, 2014 4:51 am

Very cool new Avatar Keefy!

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Re: Egypt unveils $4.9 billion stimulus package

Post by Hafiz » Sun Mar 02, 2014 7:34 am

Have I got this right. There was a 1st stimulus package in August. The government does not proclaim the 'overwhelming...astounding...spectacular' results of this so its safe to assume it was a dud.

This new package is, first, a building program. Why is the answer always more buildings - probably because the Mubarak crooks fill the industry and the opportunities for graft are legion. I wonder whether those 'businessmen' who were proposing a building/housing program for Upper Egypt will participate in this wave of money which must be spent quickly to have an 'effect'.

It will be interesting to follow these buildings which the Egyptian taxpayer owns - or are they owned by the UAE or the developer/builders.

The other part of the 'grant' is a wage increase to the immense, inefficient and downright lazy public service. Why would one use a one off payment to lock yourself into future and higher recurrent wage payments. How will you pay for it in the future and who said they were currently under payed for their work? Only in Egypt. A major funded redundancy program say cutting numbers by 25% to bring it in line with the average for developing countries would be the way to go. You would get rid of waste with a one off payment and reduce your future expenditure by 25%. Cutting public servants and reducing their reach would do a lot to reduce corruption and make it easier for private enterprise to do their stuff. Now that's a good investment.

I've suggested that the building program is rortable but it will also go to the huge building combines not to small business. This is an odd choice to fund the big, rich and powerful because, as the Egypt Treasury well knows, rapid job growth coming out of a slump is overwhelmingly from small to medium businesses. The small have no clout but they could be helped by this money if the banks were forced to loan to them rather than, at present, almost exclusively to the big and influential corporations.

Egypt continues to look like an oligarchy or kleptocracy where state revenues are, probably, siphoned off for the private gain of the big supporters of the regime. One magnate has now returned after several years on his super yacht parked in the Aegean Sea. At least for him business opportunities have improved and, if my memory serves me, he had been lobbying the government for work.

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Re: Egypt unveils $4.9 billion stimulus package

Post by A-Four » Sun Mar 02, 2014 8:46 am

Have been waiting for your comment here Hafiz.

The other day I popped into see my old bank manager here in Luxor. I asked him why it appears the Bank of Egypt's vaults are empty. Suddenly and without warning he got up and burst into song,........for a moment l thought l was on a Mary Poppin's set,.......

"When the money keeps rolling in from all in from all directions,from the Brits, the French and even every aspect of conception.

The cynics claimed a little of the cash had gone astray, Ah, but that's not the point, A-Four my friend.

When the money keeps rolling out, you don't keep books, you can tell you've done well by the happy grateful looks.

Accountants only slow things down, figures get in the way, there has NEVER been a fund like the foundation Si-Si before.

money, money, money,......money, money, money,.......money, money, money,......mo.............."


"Good God" I said "I think I've seen that show many times before in Egypt with you." "Yes, and not once did we ever have to see it at Cairo Opera House". He replied.


Then with that we both walzed off to the Shereton for a large stiff drink, humming a tune by that Andrew Lloyd Webber,.........Oh what a circus, Oh what a show, when they're bring the curtain down,.............................. :wi :wi :wi .

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Re: Egypt unveils $4.9 billion stimulus package

Post by newcastle » Mon Mar 03, 2014 5:26 am

I feel a song coming on....

"Isn't it rich....are we a pair....lah lah lah lalala...


Quick, send in the clowns. Don't bother...they're here" :py

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Re: Egypt unveils $4.9 billion stimulus package

Post by Hafiz » Mon Mar 03, 2014 7:42 am

A-Four your story could be true, couldn't it.

Maybe it contains a truth that all/some believe they will be saved by something beyond their control and for which they patiently waited but for which they have never worked (except to be resolutely poor). Central government/Sisi, IMF, EU, World Bank, the Arab cousins etc are the answer. Internal reform to get Egypt's house in order is always rejected. Trucks of money to get us to Christmas.

On this point the Opera House is an irony. Built and paid for by the Chinese - wanted or needed or not it just appeared.

Suggest your story is a Monty Python set rather than Mary Poppins. Crucified, in pain but determined to believe in positive fantasies (Mary Poppins - new film with Tom Hanks and Emma Thompson worth seeing)

More aid or grants will disappear down the same 50 year old hole until there is major reform to spread the benefits and curtail corruption.

Its interesting to note that the Government will/has passed legislation to protect investors from any legal action to invalidate the sale, for example, because of corruption. The background to this Some that the courts have reversed several major sales of state property to rich Egyptians or overseas investors. In each case the sale was voided for corruption. The Sisi government says it is now necessary to encourage international investment and to protect them from a court action. What type of overseas investment needs to be protected from accusations of corruptly buying state assets? This legislation is a sign that the Mubarak system is back although not even his government needed such legislation to hide its tracks so maybe things are already worse. The effect seems to be that no matter how corrupt the sale contract can't be challanged.

The new legislation to protect overseas investors is at one with the 50 year cat and mouse game by the government to avoid paying compensation for those assets nationalized, with derisory compensation, by the state from private owners. The government of Egypt has repeatedly defied court and international tribunal decisions all of which have been in favor of the expropriated. So corrupt acquisition by the state is OK as is corrupt acquisition of state assets by overseas investors. Symmetry but who is protecting the citizen from being ripped off because we know that, even with a few cases in the past 3 years, many sales were corrupt.

Wonder whether 'corruptly' acquired houses on the west bank (title and permit problems) will be covered by the legislation or whether it will just be billion dollar purchases. Would 'corruptly acquired' cover those situations where westerners are outwitted by local crooks. Would the small time crooks get to keep their spoils.

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Re: Egypt unveils $4.9 billion stimulus package

Post by newcastle » Mon Mar 03, 2014 8:28 am

Interesting.

Makes me wonder just how DUMB .....or arrogantly confident....you'd have to be to invest in Egypt on a personal or corporate level nowadays. :cg

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Re: Egypt unveils $4.9 billion stimulus package

Post by Chocolate Eclair » Tue Mar 04, 2014 6:41 am

At this moment of time I cannot see anyone wanting to invest heavily into the Country, there is no President and no Government as such. Regarding building programs, well these programs are at this moment of time just wasting money, all it does is keep the builders in work, be there a population explosion or not! There has been a big domestic building program going on around the West Bank, have you seen the homes being built on the flood plains? They will suffer in the long run, even if they build them 2 metre's above the flood water level, the materials they are using for infill is porous and therefore the flood water will still be absorbed into the building. But then a again who is there on the West Bank to stop this happening? No One!! i am starting to realise fast the West Bank is totally un-governed and makes its laws up has the days pass.

An interesting question to be asked is, How many motorbikes have been confiscated on the East Bank, and what are the numbers confiscated on the West Bank? I think we all know the answers, but this is just a small example of the West Bank existence. Maybe the way to change this is to bring in Police Chief's from Cairo and Alexandria to organise and to lay the law down on the West Bank.

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Re: Egypt unveils $4.9 billion stimulus package

Post by A-Four » Tue Mar 04, 2014 7:19 am

Chocolate Eclair wrote: Maybe the way to change this is to bring in Police Chief's from Cairo and Alexandria to organise and to lay the law down on the West Bank.
Well actually Choc, I have come into contact with a number of the, shall we call them 5* generals here in Luxor, who are from either Cairo or Alex, on the surface very nice people, but I suppose quite ruthless in work, like any other force in the world. Would have loved to ask them how they deal with the present day WB. Interesting chat though, could say more, but the sun has come out once again, the three day event has passed,...........plus I sometimes look at this Mobinil dongle,........it keeps me in check, rather than check-mate. :wi .

P.S. - l understand that my alter ego wishes to express deep gratitude towards yourself and dear lady wife for a recent wonderful evening.

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Re: Egypt unveils $4.9 billion stimulus package

Post by Chocolate Eclair » Tue Mar 04, 2014 3:23 pm

Thanks A4, a great evening and good humour, another one coming up soon, and we are looking forward to it very much... Our kindest regards to your Alter ego...

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Re: Egypt unveils $4.9 billion stimulus package

Post by A-Four » Sun Mar 09, 2014 1:28 pm

A-Four wrote:Have been waiting for your comment here Hafiz.

The other day I popped into see my old bank manager here in Luxor. I asked him why it appears the Bank of Egypt's vaults are empty. Suddenly and without warning he got up and burst into song,........for a moment l thought l was on a Mary Poppin's set,.......

"When the money keeps rolling in from all in from all directions,from the Brits, the French and even every aspect of conception.

The cynics claimed a little of the cash had gone astray, Ah, but that's not the point, A-Four my friend.

When the money keeps rolling out, you don't keep books, you can tell you've done well by the happy grateful looks.

Accountants only slow things down, figures get in the way, there has NEVER been a fund like the foundation Si-Si before.

money, money, money,......money, money, money,.......money, money, money,......mo.............."


"Good God" I said "I think I've seen that show many times before in Egypt with you." "Yes, and not once did we ever have to see it at Cairo Opera House". He replied.


Then with that we both walzed off to the Shereton for a large stiff drink, humming a tune by that Andrew Lloyd Webber,.........Oh what a circus, Oh what a show, when they're bring the curtain down,.............................. :wi :wi :wi .
Quote - 'That half of the cabinet reshuffle was among the economical team came as no surprise given Egypt's persistent economical woes'. - (Sat 8th March) El Ahram.

Sorry to say that Keefy's favourite newspaper has it wrong again, it is as I have written above. They have jumped ship before being pushed, as for the new lot, well, they are a set of clowns too, but then again El Sisi needs some one still to blame the 'woes' on. Away from the 'caccoon' expect major strikes throughout all Egypt very soon.

I will not give an inflation report at the moment, being that I shall remain in Egypt for a couple of weeks yet, so usual rules apply, but just to wet your appetite,.......

One tonne of cement in Egypt last month cost around 500LE, now its 750LE, this is the same price as Western Europe, inc U.K.,........Wow.

P.S. - Stock up on cigarettes, they are on their way up again.

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Re: Egypt unveils $4.9 billion stimulus package

Post by A-Four » Fri Mar 14, 2014 8:08 am

A-Four wrote: Away from the 'caccoon' expect major strikes throughout all Egypt very soon..
As I predicted there are a number of serious problems in Egypt that are not being reported on.

However it seems there are a couple of quite serious other items going on. 1) The Gulf States, have agreed to give Egypt a further $20 Billion to help it get through its financial woes until September, but is conditional that El Sisi becomes president, if this fails, then the money is immediately cut off. The amount is $5 Billion higher than expected for bail out, and the Arab States are not too pleased about this requested amount, though as I have written above, 'When the money keeps rolling out, you don't keep books'. 2) It seems Egypt has signed a deal with Russia for a few Migs etc, while Egypt's interim government official were in Moscow, last week,...........I wonder if any one has told the Americans yet. :wi .

No further info at the moment, Mobinil dongle, so rules apply.

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Re: Egypt unveils $4.9 billion stimulus package

Post by Who2 » Fri Mar 14, 2014 8:29 am

No doubt that the 'attached strings will be more Wahhabi ideology from those backward Bedouin, keeping this once great Country on it's knees.... :cool:
"The Salvation of Mankind lies in making everything the responsibility of All"
Sophocles.

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Re: Egypt unveils $4.9 billion stimulus package

Post by Hafiz » Tue Mar 18, 2014 12:36 am

Who2 - yes but. They might be Sunni Wahhabi at home - restrictions on alcohol, women in work and female car drivers - but abroad they support the US, a secular Egypt against a moderate Sunni alternative but religious rebels against a secular government in Syria (including extreme elements). They hate al quada but many of recruits used to come from Saudi along with financial transfers that Saudi did little to stem.

I've never been able to understand Saudi objectives (except the royal family staying in power) but their intention in Egypt seems anything but Wahhabi - at least so far.

As an aside the numbers of militant Islamic returning to home in Saudi has led them to establish a state of the art deradicalization facility and program to 'deprogram' them before release into 'normal' Saudi society.

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