In Focus – Daily News Egypt http://www.dailynewsegypt.com Egypt’s Only Daily Independent Newspaper In English Sat, 25 Feb 2017 15:52:01 +0000 en-US hourly 1 Challenges that new ministers face http://www.dailynewsegypt.com/2017/02/21/challenges-new-ministers-face/ http://www.dailynewsegypt.com/2017/02/21/challenges-new-ministers-face/#respond Tue, 21 Feb 2017 06:00:42 +0000 http://www.dailynewsegypt.com/?p=615847 On 16 February, Prime Minister Sherif Ismail got parliamentary approval for the new ministers that he had chosen for the cabinet reshuffle. The reshuffle comes during a time that is seeing extreme instability of the economy. The new ministers will also have to deal with the heavy burdens that citizens face after the implementation of …

The post Challenges that new ministers face appeared first on Daily News Egypt.

]]>
On 16 February, Prime Minister Sherif Ismail got parliamentary approval for the new ministers that he had chosen for the cabinet reshuffle.

The reshuffle comes during a time that is seeing extreme instability of the economy. The new ministers will also have to deal with the heavy burdens that citizens face after the implementation of major economic reforms that include subsidy cuts, inflation, and price hikes.

Therefore, the current time is a very sensitive one for the new ministers, who will face a lot of challenges if they are to improve the currently bad situation.

Daily News Egypt asked experts about the most pressing challenges that they are facing and about possible solutions for these issues.

Minister of International Cooperation Sahar Nasr
Minister of International Cooperation Sahar Nasr

Civil Service Law and Investment Law, main challenges for ministries of investment, planning 

Since Dalia Khorshid came to office as minister of investment in March 2016, she said that the ministry will issue the new Investment Law, which it didn’t actually do. She also worked on solving the problems between investors and the government.

The Investment Law is one of the main problems that Egypt has been facing since the revolution of 25 January 2011, after the outflows of foreign capitals from the Egyptian market.

On 16 February, the cabinet asked Minister of International Cooperation Sahar Nasr to take over the Ministry of Investment, becoming the first minister in Sherif Ismail’s cabinet to head two ministries.

Nasr said that Khorshid did what she could with the ministry, and it’s now the time for her to work on the challenges that face it.

Daily News Egypt asked experts about Khorshid’s performance and about what they expect to see from Nasr as the new Minister of Investment.

Aliaa El-Mahdy, the former dean of the Economics and Political Science College at Cairo University, said that Khorshid didn’t change anything worth mentioning during her tenure, explaining that she didn’t finish the Investment Law, which was supposed to have been issued.

She added that the investments in Egypt didn’t noticeably change, especially the foreign investments, because investors are waiting for the new law.

“The only thing that she made was the Supreme Council of Investment, which also didn’t make a noticeable change in the investment climate.”

Regarding Nasr, El-Mahdy believes that there is a difference between the two ministries, and Nasr shouldn’t have taken over the ministry, adding that the Ministry of International Cooperation deals with international institutions and donors, unlike the Ministry of Investment, which has a different scope of work.

“The minister of investment needs to work on attracting investments as the main job,” El-Mahdy noted.

Moreover, Abubakr Emam, the head of the research department at Prime Holding, said that the performance of Khorshid was extremely unsatisfying, adding that she wasted a lot of time and didn’t propose the Investment Law.

However, he believes that Nasr achieved great progress with the loans and grants that she received, but if she faces the same milestones, then it could not achieve anything with the Ministry of Investment.

“Khorshid achieved great success with Orascom Company,” says Emam, explaining that the problem is with the minister’s team, who could prevent any progress rather than enhancing it.

The minister should focus on choosing the right team, while all of the ministry should be reformed, including employee restructuring, Emam noted, adding that the government must fight bureaucracy.

Hala El Saied , the minister of planning
Hala El Saied , the minister of planning

Challenges of Ministry of Planning

Since he took over the Ministry of Planning in 2012, Ashraf El-Araby hasn’t left his office until the cabinet reshuffle under Prime Minister Sherif Ismail, who replaced him with Hala El-Saied, who left her position as dean of Economics and Political Science at Cairo University.

El-Araby, who struggled to get the parliament’s approval for the Civil Service Law, has left the ministry that will face a lot of challenges in the next period under El-Saied.

El-Mahdy said that the Ministry of Planning does not have a tangible structure. She believes that it does study the different classes of society, from the grass-roots level up until the middle class, in order to know the requirements of society and hence plan accordingly.

She stated that El-Araby was completely doing his job in the part of planning.

She added that he also has done his job with issuing the Civil Service Law, which was approved by the parliament. “It’s her job to implement the law on all of the country’s employees,” she noted about El-Saied.

And about administrative reform, El-Mahdy stated that what Egypt needs is to fix a lot of its governmental institutions, adding that if the new minister did solve the problems of the administrative structure, Egyptians will feel a lot better.

From another view point, Emam said that El-Araby was doing a great job, although there’s no problem with El-Saied.

He stated that he wants to see an effective role for the ministry, as well as for there to be a real plan regarding everything to the country, in order to predict how the country is going to grow.

Emam believes that the government must plan for the future in order to know how and what types of investments it should attract, along with what type of education it should provide its people to ready them for the targeted future investments. This, Emam said, is the role of the Ministry of Planning.

“I hope that El-Saied will keep the same good performance of the previous minister and will work to improve the administrative structure of the government,” Emam noted.

 

The new Minister of Transportation Hesham Arafat
The new Minister of Transportation Hesham Arafat

More reforms needed, smaller budget available: new challenges for a new minister

The new Minister of Transportation Hesham Arafat took office on 16 February. When Arafat started his job as a minister, he promised to look for ways to keep the price of metro tickets as cheap as it currently is, and he also called for the authorities responsible about conducting the research about the train system’s level-crossings that have caused a lot of accidents in previous years.

He stated that he is not satisfied with the current railway situation, stating that it needs reform.

Moreover, Omar El-Shenety, managing director at Multiples Group, said that the government needs to understand that it must depend more heavily on the private sector by giving it more space to expand in the economy or by privatising some of the current projects, which is one of the challenges the ministry faces and the new minister will have to take on.

Another challenge is to implement reforms with a small budget, he added, explaining that the government has to cut the budget because of the economic crisis it faces. El-Shenety stated that the minister has to find solutions to improve the efficiency and the quality of services on a smaller budget, which is not an easy challenge to overcome.

Regarding the metro, he believes that the price of the tickets is going to go up sooner or later. He stated that increasing the price would not change everything, so the minister has to find a solution to the core of the problem, claiming that increasing prices would not turn losses into gains.

The Ministry of Supply and Internal Trading has witnessed a reshuffle, making Ali Meselhy head of the ministry
The Ministry of Supply and Internal Trading has witnessed a reshuffle, making Ali Meselhy head of the ministry

Subsidies are the main challenge for the new Minister of Supply

The Ministry of Supply and Internal Trading has witnessed a reshuffle, making Ali Meselhy head of the ministry.

Meselhy held a meeting—after he assumed office on 16 February—with the directors of the ministry, in order to talk about food reserves, especially wheat and other grain supplies.

It seems like the new minister has to find solutions for a lot of problems that might take great efforts to be resolved.

Daily News Egypt asked Sherien El-Shawarby, professor of economy at Cairo University, about the challenges that might face the new minister.

She said that it will take a lot of effort in order for the new minister to succeed, stating that the subsidy system is transforming from food subsidies to cash subsidies, which is one of the main challenges. The ministry needs to work around the advantages of both systems in order to make the poorest segments of society benefit from it.

She also believes that the prices of products are increasing and that the people are not satisfied with that.

Concerning the aspect of internal trading, she believes that the minister must understand the supply and value chain in order to draw up plans for a new infrastructure, to revise the available reserves, and to stabilise the market.

Furthermore, a professor of economy at the American University in Cairo, who preferred to remain anonymous, stated that the change in leadership does not make a difference at all, as long as the system remains the same.

The post Challenges that new ministers face appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/02/21/challenges-new-ministers-face/feed/ 0
Dabaa prepares to receive nuclear power plant http://www.dailynewsegypt.com/2017/02/20/615776/ http://www.dailynewsegypt.com/2017/02/20/615776/#respond Mon, 20 Feb 2017 06:00:08 +0000 http://www.dailynewsegypt.com/?p=615776 40% of construction of the nuclear school to be completed in May at cost of EGP 70m

The post Dabaa prepares to receive nuclear power plant appeared first on Daily News Egypt.

]]>
Dabaa City in Matrouh governorate is currently witnessing a cultural shift after the announcement of the start of implementation of the nuclear power plant project on a part of its territory. A number of development projects are currently being inaugurated for the advancement of the city and the providence of service for the power plant project.

Daily News Egypt conducted a field tour to highlight the development projects established in Dabaa.

 

Investing in Dabaa

Governor of Matrouh Alaa Abu Zeid said that Dabaa entered into the strategic development of the governorate in order to keep pace with the nuclear power plant project, through development projects that include a new residential city, Dabaa-Rod El-Farag axis, a sewage project, the nuclear school, El Alamein-Natrun Valley axis, and Dabaa hospital. It is also planned to conduct urbanisation projects in the South Dabaa area.

Mohamed Gaber, managing director of investment in Matrouh, said that the governorate consistently receives requests for investment in Dabaa. He added that Dabaa includes about 28 tourism projects with investments between EGP 50m and about EGP 800m, and these projects provide between 100 and 250 opportunities.

Daily News Egypt interviewed former head of Dabaa City Al-Husseini Ahmed Sanusi two days before Minister of Local Development Ahmed Zaki Badr issued on 27 January decision No. 52 of 2017 to appoint 91 general managers to work in leadership positions including six heads of cities in Matrouh governorate.

Ahmed Mohamed Abdou El-Eskandarani was appointed head of Dabaa to follow Sanusi.

 

The school will accommodate 375 students and includes 15 classes on three floors with a total built-up area of 3,260sqm.
The school will accommodate 375 students and includes 15 classes on three floors with a total built-up area of 3,260sqm.

The nuclear school

Sanusi said that 40% of the construction work on the nuclear school was completed. Governor of Matrouh had issued a decision No. 374 for 2015 to allocate land on an area of 33,600sqm (equivalent to 8 acres) in west Dabaa to establish the advanced technical secondary school for energy technology in Dabaa. The Authority for Educational Building offered the school project.

The total cost of the school amounts to about EGP 70m, divided between the establishment of the school buildings at a cost of EGP 43.5m, school furniture worth EGP 7.8m, and workshop and laboratory equipment worth EGP 1.5m. The cost of radiation protection workshops and laboratories amounts to EGP 12.75m.

 

The school will accommodate 375 students and includes 15 classes on three floors with a total built-up area of 3,260sqm. This is in addition to two dormitories with 436 beds on an area of 11,580sqm. Each building consists of a ground floor and four upper floors.

The school also has workshop buildings, which include mechanical and electricity workshops, electronics workshops, stores, and a radiation protection laboratory, as well as a football stadium, volleyball court, basketball arena, green areas, and a Roman theatre.

The establishment of a station using 130KW solar cells is planned for the roofs of the buildings, using an on-grid network, as well as using solar light columns in the school’s internal streets and walkways.

 

Sanusi explained that the implementation of works at the school started in June 2016, and is planned to be ready for delivery in May, to start operating in the new academic year in September.

The period of study extends to five years, and lecturers are supposed to be graduates from the College of Engineering. It is planned that school graduates work in the nuclear plant. There will be training courses for applicants before their enrolment in the school.

In terms of curriculum, it will review the courses of technical and industrial education, besides forming working groups of representatives of the nuclear sector and representatives of technical education to prepare and review the curriculum—electronics, electricity, and mechanics—and materials for the nuclear field—nuclear technology, radiation protection, and maintenance of components and systems of nuclear plants.

He added that the school is one of the first schools specialising in teaching energy technology in the Middle East and will provide students with a number of skills, including the identification of concepts related to nuclear technology; programmes for radiation protection; the diagnosis, repair, and maintenance of electronic devices and mechanical equipment; and the identification of the systems and components of nuclear plants.

He pointed out that the land has been allocated for the public benefit of the Egyptian Nuclear and Radiological Regulatory Authority, on an area of 1,000sqm east of Dabaa, to oversee the nuclear plant project.

 

The total cost to develop the Central Hospital of Dabaa is worth about EGP 84m.
The total cost to develop the Central Hospital of Dabaa is worth about EGP 84m.

Developing Dabaa Hospital

The total cost to develop the Central Hospital of Dabaa is worth about EGP 84m.

Mahmoud Al-Halawani, director of the Central Hospital of Dabaa, said that the development work included the construction of buildings and departments of internal fittings, and it increased the hospital’s capacity to 50 beds. It also added a number of new sections and units, including the inner section, CT scans, clinics departments, an emergency reception, laboratories, and pharmacies.

He added that a unit for dialysis that includes five machines was established, as well as six premature babies nurseries. The work included developing and processing an operations department that receives a variety of surgeries, including for bones surgeries, obstetrics, and women’s diseases.

He added that the hospital is being developed in stages to keep work going in the hospital as usual. The area of the hospital after the development work amounts to about 1,500sqm.

He pointed out that the Health Affairs Directorate of the governorate is considering adding a radiation treatment department at the hospital or the establishment of an independent centre.

The post Dabaa prepares to receive nuclear power plant appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/02/20/615776/feed/ 0
Freedom of expression in Egypt in 2016: an overview  http://www.dailynewsegypt.com/2017/02/18/freedom-expression-egypt-2016-overview/ http://www.dailynewsegypt.com/2017/02/18/freedom-expression-egypt-2016-overview/#respond Sat, 18 Feb 2017 21:00:15 +0000 http://www.dailynewsegypt.com/?p=615723 AFTE highlights freedom challenges, experts provide their evaluation

The post Freedom of expression in Egypt in 2016: an overview  appeared first on Daily News Egypt.

]]>
The Association for Freedom of Thought and Expression (AFTE) issued Tuesday its annual report titled “More Than One Authority to Oppress” in which it monitored the situation of freedom of expression and speech in Egypt in 2016.

The report tackled the problems facing different types of freedom of expression within the legislative circumstances organising freedom of speech, information, academic work, and creativity.

Daily News Egypt further obtained experts’ observations on the same points.

Press and media freedom

Press and media freedom came on top of the problematic issues in Egypt, reaching new levels in 2016 with the assault on the Press Syndicate and the sentencing of its leaders to prison.

According to AFTE, “this might not be the worst year of violations against the press in numbers, but certainly a historical turning point.”

The case is still open before an appeals court—while, at the same time, the syndicate is hosting new elections for the position of head and board members.

This comes as AFTE traced 438 incidents of assault against press and media workers. Those varied between a judicial action taken against them, detention, physical assault, dismissal from work, censorship, security raids, closure, and travel bans.

As for entities responsible for the violations, they included security apparatuses with 191 incidents, newspapers and media entities with 17, judicial authorities with 69, the parliament with 30, and government officials with 35, with 86 incidents attributed to civilians and 8 to private security guards.

This comes as a new legal environment is being shaped for the press and media, which AFTE doesn’t see promising, given that a law was recently issued organising press and media institutions under national councils partly formed by the president and other state institutions, in comparison to lesser representation of members designated by the Press Syndicate.

AFTE argued that while the point of new legislations was to protect the independence of press and media, the laws that are actually issued push for more control.

Media expert Yasser Abdel Aziz told Daily News Egypt that, in general, the status of press freedom in Egypt isn’t well, despite the ambitions for openness and independence after the revolutions of 25 January and 30 June. “However, challenges of terrorism, economic crisis, and political and security pressure led to a retreat in reform plans,” he explained.

Abdel Aziz argued that the current constitution set the basics to build an independent media but that they are not effectively translated into legislations.

However, he stated that the new legislations, particularly the law organising media institutions and forming national press and media councils, pave the way for an improving environment.

“For the first time in a hundred years of broadcast, Egypt will have a media syndicate,” he said. Moreover, he argued that there was a variety of members forming the upcoming national press and media councils. “Some state institutions will appoint members, but also independent organisations—such as syndicates, the Supreme Council of Universities, and the State Council—will appoint members,” he said.

While Abdel Aziz admitted that new legislations might not completely eliminate suspicions of state control of the media, he claimed they provide a more independent atmosphere for the media and press.

“Because before the revolution, the media and press were controlled by the legislative and executive powers, including the former ruling National Democratic Party,” he stated.

Abdel Aziz further commented on the trial of the press syndicate leader and two of his deputies by saying that “the incidents that led to the trial were unfortunate and miscalculated on both sides,” referring to the syndicate and the Ministry of Interior.

To him, the ideal solution, on one hand, would be for the court to acquit the three of charges and for the state to acknowledge the special position of the syndicate, and for the syndicate to focus, on the other hand, on its professional and services roles rather than to be involved in politics.

Despite that he would not blame the judiciary in case of a verdict being issued, Abdel Aziz said the sentencing of the trio would negatively impact the image of Egypt worldwide, and that the executive power would have little gains in comparison to the damages.

Freedom of artwork creativity

AFTE argued that the “year 2016 was the harshest in ten years in terms of the number of violations committed against the freedom of artwork creativity.”

The NGO reported a total of 78 violations in 2016, compared to 46 in 2015 and 21 in 2014. The reasons were mainly related to censoring or banning artworks and restricting artists.

Besides the three taboos of politics, religion, and sexuality, AFTE reported that artwork is also being banned on grounds of breaching public morale, stating the example of the recently released novelist Ahmed Nagy, whose novel was judged “publicly immoral” because of writing about “drugs, sex, and offensive words.”

Political satire art is generally oppressed such as in the case of “Street Children”, a musical band whose members were imprisoned over a video mocking the controversial Red Sea islands’ maritime deal, and the arrest of the administrator of the satirical Facebook page titled “Translated.”

This comes as Magdy El-Afifi, writer and former editor-in-chief of Akhbar El-Adab, a literary publication where Nagy’s chapter was published, provided a different approach to evaluating the status of freedom of creativity.

In comments to Daily News Egypt, El-Afifi first pointed out his rejection of restrictions on creative artwork, saying that “a society that doesn’t breathe creativity is like a patient in an ER unit at a hospital.”

“A real creator is one who clashes with society; writers and intellectuals are always ahead of society in their visions, and without them it’s just a silent society,” El-Afifi said, explaining that “real creativity is that reaching to humans before authorities.”

El-Afifi discussed the three traditional taboos, assuring that real creators are those who can break taboos. According to him, religion is supposed to be a positive factor helping society move forward; and even in current unfortunate times where those who claim to represent religion are fostering negative images, it is not among artwork creativity to insult divinity and prophets.

As for the taboo of sexuality, El-Afifi highlighted that the topic itself is the essence of humanity. “Great writers like Ihsan Abdel Qouddous, Youssef Edris, Naguib Mahfouz, and Nizar Kabbani tackled the topic but from a humanistic approach that went beyond sensuality,” El-Afifi said.

On the other hand, he opposed the “grotesque” depiction of sexual scenes in written and visual artwork—which would have been accepted in the past—because they would never be accepted in today’s society.

As for the political taboo, El-Afifi argued that intellectuals should rather tackle ideologies instead of wasting time and energy on the politics of daily life, which eventually die, while their artwork will remain.

He concluded that the evaluation of artwork creativity in Egypt should be based on actual art and creative work, by looking at the great intellectuals and artists rather than work aimed at commercialising these concepts.

Meanwhile, AFTE highlighted that the new VAT law has affected the costs of TV, cinema, broadcasting, and theatre production. This is in addition to an increase decided by the Supreme Antiquities Council to increase fees for filming in historical and monumental places.

As for the entities responsible for the violations, AFTE listed monitoring bodies, security and military institutions, religious institutions, judicial bodies, professional syndicates and ministries, and governmental institutions.

Furthermore, AFTE criticised the pursuit of the syndicates of actors and musicians of the right to arrest members breaking the law in a legal case. “As so, syndicate officials have the right to search, arrest, receive complaints from citizens, file reports against artists, and refer them to prosecution authorities so that they can be penalised by jail and fines,” a statement read.

However, actor and senior member of the syndicate’s board of directors Sameh El-Sereity denied in statements to Daily News Egypt that this would be the point of having that legal authority.

“There are legal violations happening that cause damages to the syndicate’s members and public funds. The legal authority doesn’t make me arrest people but allows me to monitor violations which, if found, my job is to report it to the police who can take legal action,” El-Sereity said, giving as an example of violation the unlicensed media production companies or actors that are not licensed by the syndicate, as required by the law.

Legal environment for freedoms

In 2016, the parliament approved several legislations that were supposed to represent the needs of the transitional phase the country faced after the revolution. But according to AFTE, most laws were passed without social dialogue or the inclusion of different communities and social groups concerned with the topics, resulting in mounting criticism to the parliament.

Examples of law that was approved without these dialogues, was the Non-Governmental Organisations (NGOs) Law related to civil society work, which legal experts and civil groups have criticised, urging that it includes an article restricting civil work and could completely eliminate it.

Moreover, in bills related to freedom of expression, AFTE noted that the parliament’s Legislative Committee issued contradicting bills and decisions. For instance, the committee approved a law submitted by memeber of parliament (MP) Alaa Abdel Moneim and 60 other MPs that required removing the region section from the national ID and all official papers, which was seen as a positive step against discrimination.

Meanwhile, the same committee rejected a draft law calling for the abolition of Article 98 from the penal code related to imprisonment in cases of contempt of religions, which have significantly increased in the past years.

AFTE further pointed out to laws restricting citizens’ freedoms in terms of pre-trial detention, arguing that “throughout the past years, the prosecution has been continuously using pre-trial detention in all types of crimes, especially after 30 June,” and that more forms of so-called precautionary measures are being implemented.

The NGO referred to a new amendment for law No. 145 of 2006, adding alternatives to pre-trial detention, such as releasing prisoners on precautionary conditions, which includes banning them from leaving home or the country or requiring them to check in at police stations at scheduled times, along with not visiting certain places in the country. The prosecution continued using the aforementioned punishments despite lawyers’ calls for other alternatives, such as medical reasons, AFTE stated.

On the other hand, experts and officials commented to Daily News Egypt on some of the above mentioned examples.

Regarding the parliament, member Ahmed Sherif, the deputy head of the Legislative Committee, denied to Daily News Egypt the claims of his committee passing any law without community dialogue, adding that they made community discussions for all the bills that required it. “Such claims would be only for the sake of media propaganda,” he said.

But MP Ihab Ramzy told Daily News Egypt that not all laws were properly open for social dialogue with concerned groups. “There should have been more inclusion of different groups for discussions, and the outcomes of such meetings with MPs should have also been published in the media to give more transparency to the public opinion,” Ramzy said.

He concluded saying that every MP should also be aware of the topic of a law, prior to his participation in the discussion, for the sake of issuing fruitful laws.

As for detentions and conditioned releases, former head deputy of State Council, Mahmoud Fahmy, told Daily News Egypt that renewal detention punishment in Egypt is regulated, and that the prosecutions are practicing in accordance to law.

Famhy explained that the aforementioned measures are required to prohibit any defendants from changing any legal document or commiting any illegal act, or cause any action that would hinder the justice work.

Major General Hamdy Bakhit told Daily News Egypt that this legal method is required to serve requirements of current security conditions in Egypt. “No one can deny the difficulty of security conditions in Egypt, and such claims are for shaping people’s opinions, as it neglects the state situation,” he added.

Freedom of information flow, academic work  

AFTE’s report stated that there was a media blackout, non-transparency, and gags in certain issues in the country, such as the Red Sea islands issue and the dismissal and trial of former head of the Central Auditing Organization (CAO) Hisham Genena over corruption statements. The report depicted this situation as a violation of freedom and people’s rights to information.

According to Yasser Abdel Aziz, restrictions on circulation of information on sensitive issues could stem from the state’s concern of maintaining national security in face of terrorism challenges, where a balance of media is difficult to achieve.

On a different note, AFTE further mentioned some restrictions facing academics in their work as university professors and researchers, including the control of travel under the supervision of security authorities.

At the end of the report, AFTE advised against the control of social media channels as the latest means to restrict freedom of expression.

The post Freedom of expression in Egypt in 2016: an overview  appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/02/18/freedom-expression-egypt-2016-overview/feed/ 0
Egyptian economy is gaining momentum: Bank of America Merrill Lynch http://www.dailynewsegypt.com/2017/02/15/615499/ http://www.dailynewsegypt.com/2017/02/15/615499/#respond Wed, 15 Feb 2017 07:30:57 +0000 http://www.dailynewsegypt.com/?p=615499 With the trade in Egyptian Treasury bills (T-bills) gaining ground, the witnessed drop in T-bill yields at auctions is an indication of the increasing foreign investor participation and is providing support to the USD/EGP trade with a better tone, according to Bank of America Merrill Lynch’s February insight report. The report cites the unofficial announcement …

The post Egyptian economy is gaining momentum: Bank of America Merrill Lynch appeared first on Daily News Egypt.

]]>
With the trade in Egyptian Treasury bills (T-bills) gaining ground, the witnessed drop in T-bill yields at auctions is an indication of the increasing foreign investor participation and is providing support to the USD/EGP trade with a better tone, according to Bank of America Merrill Lynch’s February insight report.

The report cites the unofficial announcement that the Central Bank of Egypt (CBE) cleared the backlog of investors seeking to repatriate funds, which was the main driver behind abolishing a source of downside risk near term, adding that the CBE continues to accumulate foreign currency reserves, and the 2003 devaluation episode suggests the non-oil trade deficit could narrow because of increased competitiveness.

The CBE said, in a press statement last week, that foreign investments in T-Bills amounted to almost EGP 11.5bn in January, excluding the value of the consumed bills.

Furthermore, the completion of the International Monetary Fund’s (IMF) first review in February/March could act as an incentive, dependent on whether the fiscal targets within the economic reform programme would be reviewed, which could ease fiscal reform, in addition to the slippage risk in light of the increasing inflation and in run-up to the presidential election mid-2018, according to the report.

reportThe Central Agency for Public Mobilization and Statistics (CAPMAS) has announced earlier this week the annual rate of inflation hiked to 29.6% in January compared to January 2016. While the month to month inflation rate registered at 4.3%.

The relatively flat T-bill curve shape and the external funding profile implied by the IMF programme—fully funded for the first year but much tighter afterwards—argue for short-dated T-bill exposure.

Moreover, the report states that CBE data suggest that foreign holdings of T-bills increased to $1.2bn in January, from $0.1bn prior to the November devaluation. Previously the recorded peak in foreign holdings was $11.9bn in October 2010, before the 2011 revolution, which represented 23% of the total T-bill stock.

Average T-bill yields for the 6-month and 12-month maturities in recent auctions have decreased by 240 basis points (bps) and 280bps to reach a flat 17.7%. The value of the USD to the EGP has gone down, reaching 17.7, after nearly breaching EGP 20 per US dollar in December, said the report.

“We suspect the clearing of the backlog of investors relates to portfolio investors in the equity and bond market, and not to corporate flows,” said the report, adding that the backlog of corporate foreign exchange (FX) demand is more difficult to assess and depends on corporate operations and the prevailing exchange rate. Thus, timing of such a demand could be drawn out.

Consequently this would add to Egypt’s external funding needs. If the assumed backlog stands at $8bn, at least 40 days will be needed with the pre-2011 $0.2bn FX interbank market volume. The report adds that the use of the CBE repatriation fund mechanism by foreign investors could indirectly hold back volume in the FX interbank market.

The CBE guards these foreign currency inflows in order to prevent them from being used for balance of payments (BOP) purposes and help guarantee convertibility at exit. CBE deposits not included in official reserve assets registered at $1.3bn in January. However, these deposits are partially injected into the domestic banking sector, which may support the FX liquidity of domestic banks.

The continued accumulation of CBE reserve assets will act as a buffer, since past reversals in T-bill flows have been pronounced and sharp in response to shocks. Net international reserves (NIRs) stood at $26.3bn in January, from $17.5bn in June 2016, and after repaying $0.75bn to the Paris Club, $0.25bn to Libya, and outstanding obligations to Italian oil company Eni and other foreign oil and gas companies operating in Egypt.

However, while T-bill exposure appears to be a consensus trade—as during the second and third year of the IMF programme Egypt will face difficulties in external funding and a financing gap of about $35bn during the three years of the IMF programme—the margin for error or room to withstand major portfolio outflows is small, according to an IMF Egypt report.

The launch of the initial public offering privatisation programme, with a target of $10bn over the next 3-5 years, will have a positive impact.

The report mentioned that according to the 2003 devaluation, it is suggested that the trade deficit could narrow on increased competitiveness. After the 2003 devaluation, non-oil exports sustained a growth of 15% year over year in 2004. It was led by exports of finished commodities, which represented about 50% of total exports in the fiscal year (FY) 2016. However, overall import contraction was relatively short-lived in 2004, but it has a prominent effect on durable goods. Consumer goods, investment goods, and intermediate goods represented 25% of total imports in FY 2016.

The report states that the completion of the first IMF review in February/March could act as a positive catalyst. “We expect a positive review based on end-of-December targets, which should unlock US$1.25bn in IMF financing. The key aspect of the review is whether fiscal targets would be reviewed in light of the weaker-than-anticipated USD/EGP exchange rate—EGP 12-14 per US dollar is implicitly assumed in the program. This could, in our view, ease reform slippage risk,” said the report.

Furthermore, Egypt has no major reforms to implement until June 2017, and the next IMF review would be completed in November. Yet, Egypt faces a presidential election in mid-2018, and it is expected that President Al-Sisi is set to run for a second term. In case inflation has not significantly reduced, or there is a rising of social tensions, the Egyptian reform programme slippage risk will increase, according to the report.

This is particularly the case on the fiscal front, as the next round of reforms from July 2017 onwards is likely to be inflationary and includes an increase in the value added tax (VAT) rate by 1% to 14% and a further hike in administered energy prices as a result of reduction in subsides.

The report concludes that the relatively flat T-bill curve shape and the external funding profile implied by the IMF programme argue for short-dated T-bill exposure. Furthermore, the CBE is unlikely to tighten monetary policy further after its pre-emptive tightening. Disinflation is likely to be gradually helped by the reduction in CBE deficit monetisation operations, but negative real interest rates are likely to be needed to put government debt in a downward path.

The post Egyptian economy is gaining momentum: Bank of America Merrill Lynch appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/02/15/615499/feed/ 0
Sales of pharmaceutical companies increase by EGP 10bn, growing by 31% http://www.dailynewsegypt.com/2017/02/13/sales-pharmaceutical-companies-increase-egp-10bn-growing-31/ http://www.dailynewsegypt.com/2017/02/13/sales-pharmaceutical-companies-increase-egp-10bn-growing-31/#respond Mon, 13 Feb 2017 09:30:34 +0000 http://www.dailynewsegypt.com/?p=615316 Factories’ revenues amounted to EGP 5bn in November, despite calls for raising prices

The post Sales of pharmaceutical companies increase by EGP 10bn, growing by 31% appeared first on Daily News Egypt.

]]>
Sales of pharmaceutical companies operating in the Egyptian market rose by EGP 10bn at the end of 2016, registering EGP 41.6bn, up from EGP 31.7bn in 2015—an increase of 31%.

A report issued by IMS Health, an information technology company, stated that pharmaceutical companies’ sales—excluding tenders—exceeded EGP 13bn in the fourth quarter of 2016, which saw many calls from companies to raise prices to counter the hike in production costs, following the Central Bank of Egypt’s (CBE) decision to float the pound, leading to the national currency’s depreciation from EGP8.88 against the US dollar to EGP18.

The report pointed out that when the flotation decision was introduced in November, companies achieved sales of EGP 5bn—equivalent to 12% of 2015 total sales—up from EGP 3.8bn in October 2016, while December saw sales of EGP 4.3bn.

The growth rates achieved by the pharmaceutical sector in 2016 are considered to be the highest in 10 years, with growth exceeding 30%, compared to rates between 12% and 15% in previous years.

The year 2016 also saw the biggest debates so far between the Ministry of Health and Population and pharmaceutical companies about prices. Many factories called for price hikes, while the minister refused these calls. However, eventually, the ministry gave in and agreed to raise prices twice, in May 2016 and February 2017.

A source at the Pharmaceuticals, Cosmetics, and Appliances Chamber of the Federation of Egyptian Industries (FEI) said that the cabinet decision to increase the prices of medications that are below EGP 30 up by 20% in May drove the sales surge in 2016.

He told Daily News Egypt that the growth rates achieved in sales do not signal a significant increase in companies’ profits, which have been suffering losses for years due to selling at lower prices compared to their costs.

He added that the first decision to move the prices saved the companies from making huge losses, which could have driven some of them to shut down following the difficulties they faced in 2016, starting with a major shortage in US dollars, depreciation in the value of the pound on the black market due to the flotation of exchange rate, exchange rates surging to EGP 18 against the US dollar, and the rising cost of production input.

The sources pointed out that the decision in May helped companies to continue their business with lower losses. “But the flotation in November eliminated the positive effects, which meant it was necessary to raise prices again,” the source said.

Moreover, he added that an increase in sales in November and December do not mean that companies were not impacted by the flotation. “Fourth quarter financial results are usually higher compared to other quarters,” he said, noting that the impact of flotation will appear in the first quarter of 2017, as companies do not rely on immediate production and sales, but on the inventory they have in stock.

The source expected the sector sales to rise to EGP 50bn in 2017, following an increase of 15% of local medication and foreign medications by 30-50%.

The sources suggested that if only ten major companies continue dominating 43% of sales, foreign companies will achieve higher profits and public companies will suffer more losses.

According to a report by IMS, 20 companies—local and foreign—account for 62% of the sector sales, with a volume of EGP 26.1bn.

The top ten companies, Novartis, Global NAPI Pharmaceuticals (GNP), Pfizer, Evapharma, Amoun Pharmaceutical, Egyptian International Pharmaceutical Industries (EIPICO), Sanofi, Glaxo Smith Kline, Pharco Pharmaceutical, and Hikma Pharmaceuticals, achieved 43% of market sales, while only four of these companies accounted for a quarter of all sales.

Swiss company Novartis reached the top of the listed companies in 2016, with sales amounting to EGP 3.4bn, up from EGP 2.6bn in 2015—a growth of 30%.

Glaxo Smith Kline followed in second place with sales closing in on EGP 3bn, while Sanofi kept its third spot—with sales of EGP 2.3bn.

Pharco Pharmaceutical came in fourth—leading the local companies—with sales of over EGP 2bn, followed by EIPICO with sales of EGP 1.8bn, and Amoun Pharmaceutical with sales of EGP 1.79bn.

For the first time, Evapharma took over Pfizer’s seventh spot, with sales exceeding EGP 1.4bn, more than Pfizer sales of EGP 1.37bn.

GNP and Hikma Pharmaceuticals maintained their rankings with sales of EGP 870m and EGP 847m respectively. Medical Union Pharmaceuticals and Marcyrl Pharmaceutical Industries are likely to compete in 2017, especially as sales of the four companies are very close to each other.

The report showed that foreign companies are still holding the largest market share compared to local private companies and public sector companies, with a share of 41% and sales of EGP 17.1bn.

Sources at foreign companies stated that sales of multinational companies are usually higher than those of their domestic counterparts as their prices are higher due to the fact that they provide mostly innovative products and treatment of incurable diseases.

The sources added that foreign companies have not achieved high profits last year despite the increase in sales volume, due to the exchange rate and the large increase in production costs.

The sources said that a number of multinational companies have achieved high sales in Egyptian pounds, but actually made losses due to currency differences between the Egyptian pound and the US dollar.

They noted that some companies made over EGP 1bn in 2015. With a US dollar price of less than EGP 8, this indicates that they made around $125m. Sales of these companies increased by 30% to reach EGP 1.3bn; but with the greenback changing hands at EGP 18, their sales in dollars fell to $72m. “Companies, in fact, lost sales worth $53m in 2016,” the sources said, adding that the growth in sales of Egyptian pounds not equaling a growth in the sales of US dollar is something that needs to be addressed.

The post Sales of pharmaceutical companies increase by EGP 10bn, growing by 31% appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/02/13/sales-pharmaceutical-companies-increase-egp-10bn-growing-31/feed/ 0
New “Shared Development” HR model may be the answer to the challenges in the wake of economic downturn http://www.dailynewsegypt.com/2017/02/13/new-shared-development-hr-model-may-answer-challenges-wake-economic-downturn/ http://www.dailynewsegypt.com/2017/02/13/new-shared-development-hr-model-may-answer-challenges-wake-economic-downturn/#respond Mon, 13 Feb 2017 06:00:44 +0000 http://www.dailynewsegypt.com/?p=615254 Throughout history, despite the evolution of society, the foundations of the economy remained unchanged. In the era of agriculture, the economy was based on fertile lands. During the industrial era, it was based on production; and, now, in what we can call the era of informatics, the foundation consists of communications, information, and computer technology. …

The post New “Shared Development” HR model may be the answer to the challenges in the wake of economic downturn appeared first on Daily News Egypt.

]]>
Throughout history, despite the evolution of society, the foundations of the economy remained unchanged. In the era of agriculture, the economy was based on fertile lands. During the industrial era, it was based on production; and, now, in what we can call the era of informatics, the foundation consists of communications, information, and computer technology.

The beginning of the 2000’s marked a new era of talents, mostly because their success on the market created more skilled workers. The new millennium is driven by globalisation, liberalisation, and technological development.

Developments of information and communication technologies (ICT) made the world one single connected system. A new era brings new challenges. These raised new questions regarding the nature of current practices, and the role of specialists in the field of human resources (HR); finding new approaches in functioning and the delivery of their “goods and services.”

Human resources management (HRM) is now faced with a new challenge, creating new models for achievement of global mobility, efficiency, and competitiveness, in order to deal with a severe economic downturn, which has brought many challenges and opportunities to the forefront. The HR department can play a remarkable role, concerning its revised HR strategies, consistent with adverse economic circumstances.

HR 1What is the Shared Development model?

To tackle challenges such as creating new models for achievement of global mobility, efficiency, and competitiveness, Mahmoud Mansi, founder of HR Revolution Middle East and four times TEDx speaker, has founded a new “Shared Development” HR model, which applies strengths, weaknesses, opportunities, and threats analysis (SWOT) on the individual level, since all HR approaches now are human capital focused.

According to Mansi’s model, the HR department will introduce the ideas to the employees of different departments, which will reflect how each employee is distinctive and how the organisation is willing to fully utilise the talents and knowledge of each employee. Consequently, each employee will list their own strengths and weaknesses, which include their professional and personal talents.

Moreover, the criteria for choosing the strengths and weaknesses will be inclusive, comprised of every talent, even those that might not be directly related to the job. For example, for an office job, one can list personal talents like these: photography, drawing, painting, cooking, knitting, handwork, etc. They could also include talents directly related to the department and to the organisation.

This data will then be submitted to the Human Resource Information System (HRIS) department, where the employees will be matched, depending on their learning preferences and their teaching capabilities.

The Learning and Development department will take it from there, where they can actually match the suitable employees to “mentor and coach” one another in matters related to work and personal skills. This means that each employee will be both—a mentor and a learner—and, after each coaching session, the learner will grade the mentor and the other way around. This data will reflect in the “performance appraisal sheet,” where learning and mentoring will be added as two new categories. Hence, by the end of the year, there will be a “mentor of the year” and a “learner of the year,” with bonuses being issued upon that.

The Shared Development model can be divided into two sides: One side of it is responsible for increasing the loyalty and engagement between employees from different departments all over the organisation, in order to strengthen trust between them when it comes to work. According to the model these connections, which will be built between employees, can also encourage the emerging of new ideas and projects that would empower the mission and overall strategy. Meanwhile, the other side of the model focuses on increasing the loyalty and engagement towards the organisation itself.

The next step is to encourage “employee branding” and the social responsibility of employees towards their environment. The employees will be also graded upon their civil work activities, using the new skills they have learned from each other to show how employees should have an impact on the society.

Mahmoud Mansi receives honorary award from AHRA (Alexandria Human Resources Association) after sharing his model “Shared Development”
Mahmoud Mansi receives honorary award from AHRA (Alexandria Human Resources Association) after sharing his model “Shared Development”

How will the model benefit both the organisation and the employee?

As a result of the contemporary global economic crisis, cost control became the organisations’ top priority, so they started to cut down on expenses that do not seem necessary. One of these expenses is the training budget. This leads employees to suffer from a lack of development and HR management.

The severe economic downturn has brought to the forefront many challenges and opportunities. The HR department can play a remarkable role with its revised HR strategies, adopting the Shared Development model, which will allow employees to provide training to one another, in exchange for learning from others. This, in turn, will save the organisation some of its training budget and allow them to completely utilise its human capital.

The cornerstone of the new model is the psychological fact that humans tend to feel happy and greatly enjoy learning a new skill. The same applies to teaching as well, which leads the person to feel their importance and capability to add value to others. Employee happiness is one of the important HR trends nowadays, so through this model, HR management will encourage leadership across all employees and each will witness the two types of achievements: continuously learning and continuously teaching at the same time, all year-round.

Moreover, employees will learn countless skills that are both related and not related to their career. This, in turn, will provide assistance to both the HR department and the employee himself, in cases of career shifts or job rotations, also assisting the employee to be prepared for a manager position while assisting any manager to understand the employee’s interests all over the organisation.

The lesson to be learned from previous recessions, and financial crises, is the erosion of employee commitment to organisations. Cost-cutting measures and other effects from the economic downturn have taken their toll on the employees’ level of trust and loyalty. As a result, many of them are feeling stressed and nervous. The upturn will see some of an organisation’s best and brightest workers leaving, in order to join competitors if their employers do not take immediate steps to motivate and retain them.

Consequently, HR professionals face the problem of employees finding jobs in other organisations, despite their own organisation having invested a lot of money and time into training them. These can be viewed by the organisation as lost assets, and this is part of the problem itself, according to Mansi. He explained in his model that when the employees realise that they are treated as assets, not as human beings, they tend to lose loyalty. “In the Shared Development model, we treat employees as human beings when it comes to development, because we as HR people tend to develop their professional and personal talents,” says Mansi.

This model will also connect different generations and will absolutely diminish any sort of stereotyping by different generations. A step like this is set to aid in giving a voice to Generation Y, the millennials. As an example, a junior employee in a department can have strengths in a certain skill, while a senior employee in another department can have a weakness in the same area. In this case, the junior employee will mentor the senior employee.

Furthermore, employee engagement is one of the issues tackled by the model, as it works on enhancing employee engagement by connecting employees from different departments and establishing a new relationship between them. According to Mansi, “when someone teaches a skill to another, this creates loyalty. So imagine the amount of loyalty created across the organisation. This will indeed empower the organisational culture and encourage creativity.”

The post New “Shared Development” HR model may be the answer to the challenges in the wake of economic downturn appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/02/13/new-shared-development-hr-model-may-answer-challenges-wake-economic-downturn/feed/ 0
Too early to predict US foreign investments policy: Nafea http://www.dailynewsegypt.com/2017/02/09/614965/ http://www.dailynewsegypt.com/2017/02/09/614965/#respond Thu, 09 Feb 2017 09:30:49 +0000 http://www.dailynewsegypt.com/?p=614965 In spite of the harmony between Egyptian President Abdel Fattah Al-Sisi and US president Donald Trump, economic experts believe that it’s hard to guarantee bilateral relations are going to improve and that Trump’s good personal relation with Al-Sisi doesn’t mean economic relations will improve. According to Trump’s statements, which voice his putting America first to …

The post Too early to predict US foreign investments policy: Nafea appeared first on Daily News Egypt.

]]>
In spite of the harmony between Egyptian President Abdel Fattah Al-Sisi and US president Donald Trump, economic experts believe that it’s hard to guarantee bilateral relations are going to improve and that Trump’s good personal relation with Al-Sisi doesn’t mean economic relations will improve.

According to Trump’s statements, which voice his putting America first to make it “great again,” Medhat Nafea, economic expert and member of the World Federation of Exchanges, said it is early to predict the foreign policy of the USA under Trump, especially the bilateral relations with a country.

He explained that US institutions—nonetheless of which are the legislative branch, the media, and the presidency—are in conflict with one other, and it seems like Trump has to end Americans’ domestic problems before looking into the country’s relations and foreign affairs.

“The presidency is competing with the judiciary system, the media, and even the government’s employees over who will prevail in the current US internal conflict. I believe the other institutions will win,” Nafea noted.

He added that the US economy under Trump will be more closed, especially in aid programmes and grants, which will lead to the suffering of many countries. Trump repeatedly said that to maintain domestic issues and internal affairs, he puts the American people first.

“It’s not beneficial to talk about personal relations when it comes to relations between countries,” he noted, adding that experts believed Trump’s good talks about Russian president Vladimir Putin and the bilateral relation between them will improve the US-Russian relations. Trump has since changed his tone, Nafea continued, after knowing that Russia played an illegal role in the US elections.

Nafea said that it is important to note that the Egyptian-Russian relations were good, but when the Russian aeroplane crashed in Sinai, Putin suspended all Russian flights to Egypt, despite it being a precious source for foreign currencies back then. It is not right to bet about bilateral relations between countries based on personal relations between presidents. We do not live in the age of the Pharaohs, he noted.

Nafea said that Trump is unconditionally backing Israel, which means he puts Israel at the top of any possible benefits in the region either for investments or grants.

“American investments are as any other: they need well-established infrastructures, stable and investment-attractive laws and regulations, better services, and better investment climates, all of which are currently not up to par in Egypt,” he stated.

Nafea believes Egypt cannot attract foreign investments unless it fixes its interior economic problems.

From another view point, Abou Bakr Emam, head of the research department at Prime Holding, said that knowing the direction of the relation is not granted, adding that former US president Barack Obama started his period with an amazing speech at Cairo University. In the end, however, the relation actually declined, Emam stated.

He believes that military aids to Egypt will continue, but he doesn’t believe Trump will not work on improving American investments overseas.

“Trump probably might help Egypt indirectly through credit facilities and grants,” he noted.

The post Too early to predict US foreign investments policy: Nafea appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/02/09/614965/feed/ 0
The social, financial impacts of economic reforms: where do poorer classes stand? http://www.dailynewsegypt.com/2017/02/07/614493/ http://www.dailynewsegypt.com/2017/02/07/614493/#respond Tue, 07 Feb 2017 06:00:28 +0000 http://www.dailynewsegypt.com/?p=614493 Nearly 28% of Egyptians are living around the poverty line, and the percentage continues to increase, based on data provided by CAPMAS in 2015

The post The social, financial impacts of economic reforms: where do poorer classes stand? appeared first on Daily News Egypt.

]]>
The Egyptian economy has witnessed several economic fluctuations in 2016, leading the government to take several extreme economic measures and carry out a number of reforms over the past few months to address the economic issues.

With the introduction of the value-added tax (VAT), the flotation of the Egyptian pound, and the increased cost of fuel, water, electricity, and many other goods and services, it is easy to wonder what kind of impact these changes and reforms have had on the poorer classes of society. Exacerbating the issue is the fact that the inflation rate is expected to increase by 30-35% in the first half of 2017, according to a Beltone financial report, issued in November 2016.

The poverty line is defined as the minimum level of income deemed adequate in a particular country, according to the World Bank. The Egyptian poverty line was changed to EGP 482 per month and EGP 5,787.9 per annum by the Central Agency for Public Mobilization and Statistics (CAPMAS) in its most recent statistics survey for 2015, which means that individuals with an income of less than the aforementioned amounts are considered to be living below the poverty line. Egypt’s population reached 92,000,178 in December 2015, as also confirmed by the most recent report by CAPMAS.

Takaful aims to offer healthcare to children from their birth until the age of 18
Takaful aims to offer healthcare to children from their birth until the age of 18

Official data of poverty within Beltone’s “Income, Expenditure and Consumption” report for 2015 showed that nearly 28% of Egyptians are living around the poverty line, and the percentage continues to increase, according to the report. It showed that 57% of rural residents of Upper Egypt are unable to meet their basic needs, compared to around 20% in rural Lower Egypt. The increased percentage of poverty is highly connected to the level of education these individuals have received. Beltone estimates that 40% of illiterate citizens are considered to be on the poverty line, compared to only 7% of those who have a university degree.

Heba El-Laithy, professor of statistics at the Faculty of Economics and Political Science of Cairo University, said that the percentage of poverty in Egypt at the present day may reach 35% with the continuous increase of prices. She explained that the effect of the recent reforms may have been extremely severe for poorer families and individuals.

After the flotation of the pound— a decision made by the Central Bank of Egypt (CBE) on 3 November 2016 to alleviate the dollar shortage, stabilise the country’s ailing economy, and as part of the government’s obligations before the International Monetary Fund (IMF) to complete the obtainment of a $12bn loan— concerns were raised by experts on behalf of citizens who were left with more financial burdens as a result of the Egyptian pound losing almost half its value in 2016, leading to an increase in the prices of many basic goods and services while wages remained the same.

Mohamed Marzouk, a 42 year-old janitor in one of the government schools with a General Secondary Education Certificate, said that his family of four has been struggling financially for the past year, especially after he was diagnosed with diabetes. “I feel like I have to pay more than I make. Healthcare and education cost me the most, but all other goods are just as costly as well,” Marzouk said.

A report issued by The Egyptian Centre for Economic and Social Rights (ECESR) said that the sudden flotation of the currency will have severe impacts, not only on a social level, but also on an economic level.  “The subsidisation system is acting very slowly in terms of activating social projects such as developing a health insurance system, or restructuring the social insurance system as well as providing subsidies for the unemployed,” the report added.

El-Laithy believes that the government must improve sewage, drinking water utilities, and agriculture. It should enhance the efficiency of agricultural lands, as well as starting to operate factories that had been shut down in order to create jobs, if it seeks to eliminate poverty.

About 88.6% of Egyptian families are covered by the food subsidy card system
About 88.6% of Egyptian families are covered by the food subsidy card system

“Improving the services provided to poorer citizens will help them greatly,” El-Laithy said. “All national real estate and major road projects do not provide any benefit to the poor; however, if one small road was constructed to connect a poor village to a city nearby, the impacts of a project like that on the residents of the village will be significantly positive.”

On the other hand, the Egyptian government has taken initiatives in an attempt to address the price increase and help ease the financial burden of citizens. Some of these include the “Takaful Wa Karama” (Solidarity and Dignity) programme. The third phase of the project was launched in late October 2016 by the Ministry of Social Solidarity, with the aim of enhancing the lives of poorer families and unemployed citizens.

Takaful aims to offer healthcare to children from their birth until the age of 18, on the condition that both parents are unemployed. Parents receive EGP 325 per month. If they have children in elementary school, the child receives EGP 60 per month, EGP 80 if in the preparatory level, and EGP 100 if in the secondary level. The Karama programme aims to provide financial support to people over the age of 65.

In 2015, the Ministry of Defence’s Public Services of the Armed Forces Device opened several mobile sales outlets in several neighbourhoods in Cairo, Giza, Qaliubiya, Gharbia, and several other governorates with the aim of selling products such as meat, poultry, and dairy products for lower prices to citizens in an attempt to counter the increased prices of these goods in the market.

About 88.6% of Egyptian families are covered by the food subsidy card system, which was introduced by the government mid 2014. 95.4% of the families in rural areas are covered by this system and about 80.5% of them in urban areas, as CAPMAS statistics show. About 96.1% of Lower Egypt families benefit from the new subsidy system, compared to 72.5% in urban governorates.

El-Laithy explained that the attempts made by the government to help reduce poverty, such as subsidies and the social security pension, as well as the recently launched initiatives and programmes, can help counter the effects of increased prices and difficult living conditions, but only to a certain extent. She pointed out that monetary and in-kind aids act only as “temporary painkillers,” whereas the correct way to address poverty, according to El-Laithy, lies in providing more job opportunities, social justice and better services to citizens in general. “There is a need for drastic solutions rather than temporary ones, because despite the government’s efforts, poverty is still increasing, and this shows that there is a need for more drastic efforts,” she said.

She wondered why burdens are not equally distributed on all classes of citizens through well-enforced laws. “Why are there no incremental taxes on incomes? There was also a decision to impose taxes on stock exchange profits, but applying the decision was postponed for about three years, which makes me wonder why it was postponed,” El-Laithy concluded.

While poorer classes continue to suffer the most from economic fluctuations, Egyptians on the poverty line still cling to the hope that one day their lives will improve when they are provided with better education, healthcare, and social justice. The only question that remains is: when will conditions improve?

The post The social, financial impacts of economic reforms: where do poorer classes stand? appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/02/07/614493/feed/ 0
The economics of football championships between fans and coffee shops  http://www.dailynewsegypt.com/2017/02/06/economics-football-championships-fans-coffee-shops/ http://www.dailynewsegypt.com/2017/02/06/economics-football-championships-fans-coffee-shops/#respond Mon, 06 Feb 2017 06:00:44 +0000 http://www.dailynewsegypt.com/?p=614297 Since the 2006, 2008, and 2010 African Cup of Nations, football became very important to Egyptians, as the country won the title three times in a row. Egyptians are very keen and excited to watch football matches with friends or family. Moreover, they prefer to watch the matches while having hot drinks and smoking shisha …

The post The economics of football championships between fans and coffee shops  appeared first on Daily News Egypt.

]]>
Since the 2006, 2008, and 2010 African Cup of Nations, football became very important to Egyptians, as the country won the title three times in a row.

Egyptians are very keen and excited to watch football matches with friends or family.

Moreover, they prefer to watch the matches while having hot drinks and smoking shisha or cigarettes at coffee shops, which turns the airing of football matches into a business opportunity for coffee shop owners resulting in higher revenues and profits.

Egyptian local coffee shops use football matches to increase or double their income through creating an attractive atmosphere to a large segment of Egyptian football fans.

It is cheaper for the fans than subscribing to the service at home, and increases the income for coffee shops.

But why do Egyptians like to watch matches at coffee shops? And how does that affect the coffee shops?

Daily News Egypt took a peak into the new economy of football tournament fans and coffee shops.

 

For a lot of Egyptians, there is nothing better than watching a football match while drinking mint-flavored tea and smoking shisha, and babbling with their friends about the players’ performance.
For a lot of Egyptians, there is nothing better than watching a football match while drinking mint-flavored tea and smoking shisha, and babbling with their friends about the players’ performance.

Shisha and hot drinks: how Egyptians watch football

Since the age of the pharaohs, Egyptians have always had their own traditions and unique approach to many things.

But Egyptians did not stop at celebrating their events with special dishes, building their tombs as pyramids, and creating their special dancing styles. Egyptians created their own way of cheering for their football teams, be it football clubs or the national team.

For a lot of Egyptians, there is nothing better than watching a football match while drinking mint-flavored tea and smoking shisha, and babbling with their friends about the players’ performance.

However, some people prefer to watch their favourite matches with their families.

Daily News Egypt asked people about how they prefer to watch their football matches.

Sherief Sobhy, a 32-year-old lawyer, said that he cannot feel the game without watching it in a coffee shop, adding that he prefers to watch the matches with his close friends and his favourite drinks.

He added that the atmosphere in the coffee shop makes him feel the spirit of cheering for his team, adding that when the national team won the match against Burkina Faso or Morocco, the people celebrated in the streets, and their happiness was indescribable.

Ahmed El-Shazly has the same preference of watching football matches with his friends, adding that friends can enhance the experience by exchanging comments and opinions.

“Usually, we cheer for different football teams, and we always fight when my team loses,” El-Shazly said.

The graphic designer added that sometimes, he watches the matches with his family because he hates when the streets get crowded.

“I love to watch the matches with my wife and my little daughter,” Zamalek-fan and father Haitham Emam said, adding that he likes to share these moments with his wife.

He said that he usually supports Barcelona FC, while his wife likes Real Madrid, and whoever supports the losing team gets teased by the other person.

However, Emam said that sometimes he might take his wife and daughter to watch a match in a coffee house to change the routine.

Mina Wiliam, a driver, said that he likes to smoke shisha while watching the match, adding that it’s a tradition of his during important matches.

However, on the other side of the society, women do not have the same opportunities as men in Egypt.

Dina Khaled, an accountant working in a bank, says that she cannot watch the match at any place but home. He added that she cannot go out to such crowded places.

She believes that local coffee shops which provide football matches aren’t usually suitable for females, and families feel that they aren’t safe for women.

Graduate of the faculty of law Youmna Tarek said that she sometimes watches football matches in coffee shops but she has to go with one of her family members or her whole family.

Aliaa Hassan, a business administrator, has more freedom to watch a football match at a coffee shop with her friends. She said that watching a match with her friends is one of her favourite things to do.

“My father dismissed the idea but I convinced him,” she said, adding that nowadays, she likes to watch the Egyptian national football team with her friends at malls in 6th of October City.

 

They like to work in such atmospheres, in which everybody is generous, likes to give more tips, and also consumes more than usual.
They like to work in such atmospheres, in which everybody is generous, likes to give more tips, and also consumes more than usual.

The business behind airing football matches in coffee shops

They provide coffee, tea, sahlab, and shisha in their customers’ favourite flavours—the coffee shops that air football matches.

A lot of coffee shops in Cairo opt to air Egyptian and international football matches for their customers in order to attract even more.

They like to work in such atmospheres, in which everybody is generous, likes to give more tips, and also consumes more than usual.

Daily News Egypt asked coffee shop employees about how football matches affect their business, why people like to watch football matches at their place, and how much this service costs them.

Mahmoud El-Masry, who works in a coffee shop downtown, believes that during a football match, the number of customers more than doubles, adding that people like to watch any important game in a coffee shop while having drinks and smoking cigarettes or shisha.

He said that the cost of subscribing for a three-month airing contract for a coffee shop is EGP 1,400, adding that providing the African cup alone costs EGP 565.

El-Masry said that workers’ wages aren’t affected by any profit increases, adding that he takes EGP 100 a day.

He said that Egyptian customers prefer to watch important international matches and the Egyptian national football. The most popular matches tend to be Al-Ahly and Zamalek matches, as well as European championships.

“People love to watch European and national teams,” according to Asaad Saber, who works in a local coffee shop downtown.

He added that many people love to hang out in coffee shops all day long, whether there are matches or not.

Saber said that acquiring the necessary contract to allow airing football matches costs around EGP 2,500, including all the relevant channels that air the matches.

However, according to Saber, shisha consumption is lower during the matches than usual. He explained that usually, people consume 100 servings of Shisha, but during a match, they consume less.

For Mohamed Taison, who works in a coffee shop on King Faisal Street, the matches are the “best thing ever”. In the coffee shop he works in, the price of any drink increases to EGP 10, which brings in a lot of tips for him and his colleagues.

He said that watching a match with friends in a coffee shop enhances the atmosphere of the game and makes the overall experience better.

Taison said that if on a normal day the shop makes EGP 500, on a match day, that same shop may make over EGP 1,000.

He also said that a lot of people stay after the match to talk about the game and the players’ performance.

Mahmoud Shokry agrees with Taison. In his coffee shop in Dokki, people tend to consume more than normal and the shop’s income almost doubles.

He said that people prefer to watch the game in a coffee shop because he creates a nice atmosphere for them, and they can watch the game on a big screen which they otherwise may not have at home.

In his coffee shop, the price of tea is EGP 3, Turkish coffee is EGP 6, soft drinks are EGP 8, and any other fresh cold drinks cost EGP 10.

Outside of match days, Shokry’s coffee shop is quiet. He said that he and his colleagues love working on match days because their customers’ spirits are high and the banter is funny.

The post The economics of football championships between fans and coffee shops  appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/02/06/economics-football-championships-fans-coffee-shops/feed/ 0
Weakened purchasing power decreased economic growth to 3.4% during Q1 of FY 2016/17  http://www.dailynewsegypt.com/2017/02/02/613786/ http://www.dailynewsegypt.com/2017/02/02/613786/#respond Thu, 02 Feb 2017 06:00:11 +0000 http://www.dailynewsegypt.com/?p=613786 Large projects and the improved climate for investment will increase economic growth, exports, and foreign trade growth, says Minister of Planning

The post Weakened purchasing power decreased economic growth to 3.4% during Q1 of FY 2016/17  appeared first on Daily News Egypt.

]]>
The drop of the Egyptian pound against the US dollar by more than 70% put Egypt through a number of difficult economic circumstances. This pressured the rate of the population’s consumption, which is the main engine of the Egyptian economy.

Last Sunday, the Ministry of Planning issued its report on economic and social performance indicators during the first quarter (Q1) of fiscal year (FY) 2017/2016, which revealed a decline in GDP growth to 3.4% from July to late September 2016, compared to 5.1% in the same period of the previous year.

The value of the GDP reached about EGP 514bn in the first three months of the current FY, which ends in late June 2017.

Economic analysts explained the slowdown as the beginning of a period of stagflation, which means a rise in prices and a decline in supply in the market.

They predicted that the Egyptian economy will continue to slow in light of increasing inflation rates, especially after the government introduced the value-added tax (VAT), raised fuel and diesel prices, increased tariffs on imports of hundreds of goods, and limited imports.

The analysts believe that all the reforms—which President Abdel Fattah Al-Sisi described as harsh—will directly contribute to the inflated prices of the majority of products available in the markets of subsidies and services, especially since Egypt relies on imports to secure the majority of its needs.

Weak consumption decreases growth

The retreat in consumption has become one of the main reasons behind the decline in the growth rate after it had been a catalyst for economic growth. The rapid price hikes prompted people to reduce their consumption..

Consumption represents about 80% of the GDP in Egypt according to Prime Holdings.

The contribution of consumption to economic growth fell during Q1 to 2%, compared to 6.2% in Q1 of last fiscal year.

People are shocked of the prices of goods and services of which some rose to more than 100%. This was the main reason behind the significant decline in consumption in recent months, especially after the Egyptian pound’s flotation, according to Abobakr Emam, head of the research department at Prime Holdings.

This was confirmed by Mohamed Farid, chairperson and CEO of Dcode for Economic and Financial Consulting, who said that the high inflation in the prices of subsidised products, which was not accompanied by a simultaneous increase in wages, was a strong indication that people’s consumption will decline significantly during the current FY, and that consumption will grow at a slower pace than ever before.

According to the Ministry of Planning, the average annual inflation rate in Q1 of the current FY has reached about 14.5% compared to 8.5% in the same period in last FY, due to the devaluation of the pound.

From July to September 2016, the repercussions of the lack of foreign currency crisis led to the devaluation of the pound against the dollar on the unofficial market. The importers were forced to secure their needs of US dollars from the unofficial market, which led to the increase of import costs, especially for production inputs. Thus, the prices of local and imported products increased significantly.

The annual inflation rate in urban areas jumped to 24.3% in December compared to about 19.4% in November.

In a report issued two weeks ago, Prime Holdings expected that this dramatic rise in the inflation rate after the flotation of the pound would contribute to the decline in household consumption growth rate in the current and next FY, to record 3.5% maximum compared to 4.6% in the previous FY.

The report also predicted that the contribution of household consumption to the GDP growth would decline to 2.9% by the end of the current FY, compared to 3.8% in the last FY.

Emam said that the decline in consumption started before the flotation of the pound, as the increase of dollar’s price on the unofficial market increased most products’ prices. After the flotation, some commodities prices had increased by more than 100%, while the purchasing power of the pound has fallen by about 50%.

When the Central Bank of Egypt (CBE) liberalised the exchange rate of the pound in November, the local currency lost more than 100% of its value against the dollar, registering EGP 18.7 on Sunday at the National Bank of Egypt (NBE) compared to EGP 8.88 before the flotation. Meanwhile, the CBE increased the interest rate on the pound to 3%.

Emam added that the local consumer would change his pattern of consumption to face the recent price hikes in the market.

He explained that consumers now resort to buy less amounts of products, while others abandoned expensive products and are searching for cheaper alternatives.

Some companies started to offer smaller packages or reduce their products’ weight and maintained their prices to cope with the recent changes. According to the Income, Expenditure, and Consumption report issued in 2015, Egyptians spend 34.4% of their income purchasing food.

On the other hand, the government expected to achieve a growth rate of 4% during the current FY, instead of 5% as it expected at the beginning of the year.

1Lack of foreign currency and slowdown in the private sector

Hany Farahat, senior economist at CI Capital, said that the recent economic measures did not cause the slowdown in growth in Q1, but were linked to the challenges experienced in 2016, represented in the shortage of foreign currency and the decline of private sector growth.

He added that the growth rate in the current FY will be lower than last year due to the negative short-term impact of the recent economic measures, despite their positive long-term effects.

Arqaam Capital investment bank had issued a report in November after the flotation, expecting that low- and middle-income societal segments will witness great pressure due to the recent economic reforms, but will benefit on the long-run.

Arqaam Capital said that most of the burden will fall on middle-class consumers, while the high-income societal segment will not change its pattern of consumption. The report expected that the higher segments of the middle-class would abandon their unnecessary expenses for a period of three to six months following the flotation.

Estimates of the fund reveal that the contribution of consumption in GDP growth will decline from 4% from 2011 to 2016 to 2.6% from 2017 to 2021, against an increase of the contribution of investment from 0.3% to 2%, and an increase of exports contribution from 0.6% to 1.2%.

Farid expressed his concern about the increase of the banks’ interest rates and its negative effect on investment plans of private companies over the upcoming period; however, he believes it is a necessary step to enhance the demand on the Egyptian pound, and thinks of it as a complementary step to the flotation. “Increasing private sector’s investments will not be easy without strong motivation by the government,” he added.

3Does investment compensate the slowdown of consumption?

In a press conference to announce the indicators of economic growth by the end of Q1 of 2017, Minister of Planning Ashraf El-Araby said that the contribution of investment during Q1 of this FY was estimated at 1.8% compared to 1% in the correspondent quarter.

“The source of growth during Q1 came through investment, although it usually comes from consumption. An unexpected growth took place in private investments,” El-Araby said.

The rate of consumption contribution to growth during Q1 has declined to 2%, compared to 6.2% during the same quarter in FY 2015/2016.

El-Araby said in the press conference on Monday that private investments have acquired 69% of total investments in Q1, while the plan was for them acquire only 51%. He added that he considered that a success of the model adopted by the government to plan large projects and assign their implementation to the private sector.

“This quarter has witnessed a noticeable growth of mega projects which the state is implementing, in addition to a noticeable improvement of the business environment. This reflected on increasing the contribution of investment in economic growth and the growth of exports and foreign trade,” El-Araby noted.

According to a previous statement by the cabinet, the investment rate increased during Q1 of FY 2016/2017 to 12.1% compared to 11.3% during the same period last year, as a result of the growth of the private and public sectors’ investments.

Farid believes that the consumption slowdown will be compensated by the increase of private and public investments, especially with the activation of economic reforms to improve the business climate and the issuance of the new investment and bankruptcy laws, as well as a gradual provision of hard currency.

He said that both the increase in investments and the inflation rate’s gradual decrease will contribute to getting back consumption growth, especially since investment contributes to the creation of new jobs and the increase of incomes.

For his part, Farahat believes that the country’s success in attracting foreign direct and indirect cash inflows, in addition to the legislative amendments to the Investment Law for instance, are able to improve economic growth rates starting next FY.

Documents released by the International Monetary Fund (IMF) on Egypt’s loan, which it posted on a site about the Egyptian economy’s indicators in the next five years, reveals that the IMF believes that local and foreign investments and exports will lead the way for the recovery of economic growth, raising it to 5-6% in the medium-term.

Sectors that shrank and those that achieved growth

The ministry’s report notes that the sectors of hotels and restaurants, extractives, the Suez Canal, and manufacturing industries shrunk in Q1 of the current FY, compared to the same period last year. The sector of restaurants and hotels shrunk by 37.5%, while the manufacturing industries shrunk by 1.6%. As for the extractives sector, it contributed to the growth rate after it shrunk by 3.4%, while the Suez Canal’s contribution was negative, after it shrunk by 1.8%.

Farid said that industry in particular suffers from the problem of resorting to importing to meet its needs of production inputs, as its work does not only depend on local production. Moreover, the industrial sector in general saw a break in the chain of production due to the currency crisis.

In contrast, the sectors of building and construction, communications, wholesale and retail, and public government were the ones that grew the most in the same period. The building and construction sector grew by 8.2%, contributing to the growth rate by 20.8%. As for the communications sector, it grew by 11.2%, contributing to the growth rate by 19.3%.

The Egyptian government has relied on infrastructure projects, such as paving roads and building bridges and power plants on a large scale, in order to push growth forward.

Both sectors of trade and retail, and the public government are the largest contributors to the growth rate by 39.2% and 31.2%, respectively, registering growth of 5% and 5.7%, respectively.

The post Weakened purchasing power decreased economic growth to 3.4% during Q1 of FY 2016/17  appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/02/02/613786/feed/ 0
Could Saudi challenges become Iraqi opportunities for Egypt? http://www.dailynewsegypt.com/2017/02/01/613652/ http://www.dailynewsegypt.com/2017/02/01/613652/#respond Wed, 01 Feb 2017 08:00:45 +0000 http://www.dailynewsegypt.com/?p=613652 In the 1970s, the alliance between Egypt and Saudi Arabia was formed as a result to the countries’ mutual interests and threats. The ties between the two countries were stronger than ever, especially after Egypt had led the Arab participation in the international coalition against former Iraqi president Saddam Hussein in the early 1990s, after …

The post Could Saudi challenges become Iraqi opportunities for Egypt? appeared first on Daily News Egypt.

]]>
In the 1970s, the alliance between Egypt and Saudi Arabia was formed as a result to the countries’ mutual interests and threats. The ties between the two countries were stronger than ever, especially after Egypt had led the Arab participation in the international coalition against former Iraqi president Saddam Hussein in the early 1990s, after the Kuwait invasion.

Egypt, which has been plagued by economic and political turmoil, and security challenges following the 25 January Revolution that toppled former president Hosni Mubarak, has built solid economic and political ties with Saudi Arabia, the United Arab Emirates, and the rest of the Gulf states following the election of President Abdel Fattah Al-Sisi.

However, the Egyptian-Saudi relationship has been significantly strained. Over the last few months, the rift between the two counties started to show, following Egypt’s vote on the Russian-backed draft resolution in the United Nations security council in October, in favour of a Russian resolution regarding a ceasefire in Syria excluding Aleppo. Saudi Arabia interpreted the move as a betrayal, as Saudi envoy to the UN Abdullah Al-Muallami called Egypt’s stance “painful”. The Egyptian vote was followed by Saudi Arabia’s Aramco deciding to halt the five-year agreement to import 700,000 tonnes of petroleum products a month to Egypt, at a time that oil imports were very critical for the Egyptian economy.

Deterioration of ties

Egyptian-Saudi relations have always been characterised by some invisible tensions and sensitivities. The differences in their views and strategic position in the MENA region came to light, especially through their stances regarding Syria, and the Egypt’s refusal to be dragged into the conflict with Yemen.

Saudi’s support for Al-Sisi in 2013 was catalysed by the fact that former King Abdullah bin Abdulaziz Al-Saud, who ruled from 2005-2015, wanted to counter Iran and the Muslim Brotherhood simultaneously. This came in contradiction to his predecessor King Salman, who viewed the Muslim Brotherhood as a tactical partner against Iran, especially in Yemen, where one of the main forces supported by the Saudi-led coalition is Al-Islah party linked to the Muslim Brotherhood.

Moreover, Egyptian government officials do not see Iran as an existential threat and are reluctant to enter the Sunni-Shi’a struggle. Egyptian Foreign Minister Sameh Shoukry said after signing of the Joint Comprehensive Plan of Action (JCPOA), known commonly as the Iran deal, that Egypt’s relations with Iran “are unrelated to the attitude of the Gulf states towards it.” Instead, the Egyptian state has prioritised countering its most direct political opponents, the Muslim Brotherhood, and other Sunni Islamist groups.

Additionally, the mutual sensitivities burst forth in April 2016, when Al-Sisi had reached an agreement to cede ownership of the strategically located Red Sea islands Tiran and Sanafir to Saudi Arabia, in a move that was received with public outcry. Judicial intervention scuttled the move—to the Saudis’ extreme annoyance. No less annoying was Egypt’s refusal to participate in the Saudi-led military operations in Yemen. Following the Egyptian resistance to militarily commit to the Saudi coalition in Yemen, Riyadh started its financial pressure. Al-Sisi had gotten angry and defiant. Saudi Arabia, which had not made good on its financial promises from 2014-2015, cut off its oil supplies and other aid to Egypt.

In November, Egypt and Iraq signed a memorandum of understanding (MoU) for Egypt to receive 1m barrels of Basra light oil each month. The MoU with Iraq, which has grown closer to Iran in recent years, plus one with Azerbaijan, are indicative of Cairo’s quest to find new sellers of oil and gas outside of the GCC, as Egypt’s energy production has fallen and its national consumption has increased.

Habib Al-Sadr, the Iraqi ambassador to Egypt, has called Egypt “the backbone of the Arab world.” He said the countries share similar pressures and risks from armed groups. Furthermore, Iraqi minister of foreign affairs Ibrahim Al-Jaafari recently said that “Egypt is the Arabs’ greatest,” referring to the country’s people, history, and culture.

Russia’s closer relationship with Egypt was the cornerstone of the latter’s shift in stance. Egyptian-Russian ties started to grow stronger in recent years. Consequently in September 2014, Egypt and Russia signed a $3.5bn weapons deal. In May 2016, Egypt announced plans to build a nuclear power plant to be financed with a $25bn loan from Russia. Moreover in October, Egypt hosted a joint military exercise with Russia.

Furthermore, the Egyptian and Russian stances in Syria and Libya are almost similar. Al-Sisi has previously announced his support for the Syrian and Libyan armies. This is considered a stab in the back from Riyadh’s perspective, since it has armed forces opposing Al-Assad and provided them with financial and diplomatic support.

The Yemeni crisis played a major role in the deterioration in Egyptian-Saudi relations. Although Cairo joined the Saudi-led coalition’s campaign (“Operation Decisive Storm”) in March 2016, Egypt has been reluctant to be dragged into the Yemini swamp, since Egypt’s history of fighting in Yemen during the 1960s and accruing massive losses is certainly a major factor explaining Al-Sisi’s reluctance to make a substantial contribution to the anti-Houthi military campaign. This comes in addition to the fact that Saudi Arabia’s warming up to the Muslim Brotherhood branches in both Egypt and Yemen to secure Sunni support for the kingdom’s war in Yemen has created tension in the Cairo-Riyadh relationship.

In December, a high-level Saudi delegation visited the Grand Ethiopian Renaissance Dam, which stirred anger in Cairo, and worsened the already strained Egyptian-Saudi status. The move was viewed as part of Saudi’s pressure on Egypt in regard to the maritime demarcation deal of the two Red Sea islands which was annulled and considered void by an Egyptian court ruling. During the visit, the prime minister of Ethiopia had called for Saudi financial support to the dam.

However, Saudi Arabia has to learn that it cannot buy influence using its petro-dollars. Egyptian officials are leaning toward the Moscow-Baghdad axis, and Al-Sisi has delivered a message to Saudi Arabia that Cairo’s alliance with Riyadh is not irreplaceable and that Egypt has other options, should the Saudis decide to diminish their support for his country.

Future of Egyptian-Iraqi relations

Since the ousting of former president Mohamed Morsi on 3 July 2013, Saudi Arabia and other GCC members have provided the Egyptian government with strong support, in both direct aid and loans. Yet, Egypt’s refusal to follow the kingdom’s policy in Syria and Yemen—in addition to the closer ties between Egypt, Russia, and Iraq—have stirred anger in Riyadh.

Deputies from the National Iraqi Alliance are calling on the Iraqi government to export crude oil to Egypt with facilitated payments
Deputies from the National Iraqi Alliance are calling on the Iraqi government to export crude oil to Egypt with facilitated payments

Since 2013, Saudi Arabia provided Egypt with a $5bn aid package in the form of non-refundable grants, deposits, and petroleum products. The Saudi aid was divided into $1bn in cash, a five-year $2bn interest-free deposit at the Central Bank of Egypt (CBE), and $2bn in the form of petroleum products.

While the bilateral trade volume between the two countries has grown over the years, it was registered at $2bn in 2010 to reach $5.3bn in 2013, $6.10bn in 2014, and $6.3bn in 2015. Moreover, remittances to Egypt from the around 1 million Egyptian expats in Saudi Arabia registered $7.57bn in 2015.

The Iraqi-Egyptian rapprochement will carry numerous benefits for Egypt, as Iraq can provide Egypt with all its oil needs at a lower cost than Saudi Arabia. Additionally, an alliance between the two countries will pull Iraq away from the GCC, specifically from Saudi Arabia, which has the final say in matters of the Gulf.
The Iraqi ambassador to Egypt had announced earlier that after the completion of the ongoing Iraqi army and security forces operations against the Islamic State (IS) and after the expulsion of IS fighters, the affected cities will need total reconstruction so that people can be relocated there once again. He added that the Iraqi government welcomes Egyptian companies and workers to lead the reconstruction process of such cities.

Moreover, he emphasised the importance of the Egyptian expertise in the rehabilitation of factories and establishments, as well as supplying logistical medical support to Iraqi hospitals.

The Iraqi government’s decision for closer ties with Egypt is praised by various politicians and parliamentarians. Deputies from the National Iraqi Alliance are calling on the Iraqi government to export crude oil to Egypt with facilitated payments. Fatima Al-Zarkani, National Iraqi Alliance parliament member, has announced that Egypt and Iraq will form an alliance to fight terrorism and prevent extremism in the region.

Moreover, the Iraqi foreign minister has stressed that the relations between Iraq and Egypt are strategic on all levels—economic, security, and political—adding that rapprochement between the two countries could turn into an alliance or cooperation to face terrorist risks and economic crises.

On the other hand, official spokesperson of the Egyptian presidency Alaa Youssef said that during the December meeting with Al-Sisi, the Iraqi foreign minister called for Egypt’s participation in fighting terrorism.

The post Could Saudi challenges become Iraqi opportunities for Egypt? appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/02/01/613652/feed/ 0
Egypt’s treasury bonds: high interest, but for what? http://www.dailynewsegypt.com/2017/01/31/egypts-treasury-bonds-high-interest/ http://www.dailynewsegypt.com/2017/01/31/egypts-treasury-bonds-high-interest/#respond Tue, 31 Jan 2017 06:00:51 +0000 http://www.dailynewsegypt.com/?p=613459 The government of President Abdel Fattah Al-Sisi promised to carry out a lot of economic reforms in the country, which require excessive effort and financing, as the president had mentioned many times during different speeches. The government has been asking for foreign help since Al-Sisi came to office, from Saudi Arabia, Kuwait, the United Arab …

The post Egypt’s treasury bonds: high interest, but for what? appeared first on Daily News Egypt.

]]>
The government of President Abdel Fattah Al-Sisi promised to carry out a lot of economic reforms in the country, which require excessive effort and financing, as the president had mentioned many times during different speeches.

The government has been asking for foreign help since Al-Sisi came to office, from Saudi Arabia, Kuwait, the United Arab Emirates, and other countries like China, Russia, and Germany.

Ahmed Kojak, Deputy Minister of Finance for Monetary Policies
Ahmed Kojak, Deputy Minister of Finance for Monetary Policies

The government also asked for loans from different international bodies such as the World Bank, the International Monetary Fund (IMF), and the African Development Bank, because it needs to bring together the money that will help it implement the reforms at a time during which Egypt is witnessing a foreign currency shortage.

The government also issued US-dollar denominated treasury bonds, in order to earn $4bn, which would help the country complete the finances needed for its $24bn economic reform programme.

The issuance is divided into three types of bonds: five-year bonds with an interest rate of 6.125%, 10-year bonds with an interest rate of 7.5%, and 30-year bonds with an interest rate of 8.5%.

The bonds’ interest rates were high, and the money needed for the economic reform programme was raised from $2.5-3 to $4bn, due to the unexpected high demand, according to deputy minister of finance for monetary policies Ahmed Kojak.

Kojak said in a conference held on Sunday that 729 investment bodies offered to buy Egypt’s bonds, compared to only 230 investment bodies in the previous issuance in 2015.

Daily News Egypt asked experts to find out what they think of the bond issuance and how the government should allocate the incoming resources.

IMF expects that Egypt’s external debt to reach $102.4bn by 2020/2021
IMF expects that Egypt’s external debt to reach $102.4bn by 2020/2021

The unknown, unclear purpose 

Aliaa Mamdouh, a former economist at CI Capital, said that the idea of selling bonds is not bad, adding that the loans Egypt is currently receiving from the IMF and other international and regional bodies are important, because they imply that the economy is on the right track towards sustainable development.

Unlike what Kojak said during the conference that the current fiscal year’s gap is totally covered and probably more than 50% of the 2017/2018 gap, Mamdouh said that the money Egypt is receiving is not enough to finance Egypt’s deficits.

The expert said that Egypt still need foreign currency resources to finance its financial gap, and different sources of financing, which is why the government issued the bonds.

However, Mamdouh believes that the interest rate is higher than what she expected, explaining that the higher the interest rates are, the more investors do not currently trust Egypt. Interest rates of bonds usually increase in order to attract investors when countries do not have other attractive opportunities to offer.

She also said that the interest is high because a lot of countries are selling bonds as well, such as Saudi Arabia, Argentina, and Israel.

Regarding the interest rates, Kojak had said that the rate is “fair” compared to the previous issuance in 2015. He had stated that if some countries with similar conditions offered bonds at lower interest rates, it is probably because they have better economy indicators.

It is worth noting that Argentina had also offered three types of bonds—just like Egypt—with similar interest rates. The five-year bonds of Argentina had an interest rate of 6.875%, which is higher than Egypt’s. Argentina’s 10-year bonds had the exact same interest rate as Egypt’s (7.5%), and the 30-year bonds stood at a rate of 8%, which is 0.5% lower than the Egyptian bonds.

“This means that investors around the world do not trust us,” Mamdouh noted, adding that after the flotation of the Egyptian pound, the government expected that it would be possible to attract investments. However, this is not an easy task, and the government must improve economic conditions to attract investments, she added.

Mamdouh stated that nobody knows how the government is going to spend the money and on what, adding that until now, the government did not secure any investments, which means that it is spending the money on financing its gap. She believes that the external debt’s interest rates are getting higher, explaining that offering 30-year bonds puts massive burden on the coming generations.

The government needs more foreign currency reserves, as the rate of borrowing will not get any slower, she noted.

It is important to mention that the IMF had published its expectations about Egypt’s external debt and gross international reserves in a statement on 25 January, expecting Egypt’s external debt to reach $102.4bn by 2020/2021, and international reserves will increase annually to record $37.58bn by fiscal year 2020/2021.

“I do not believe that the Central Bank of Egypt (CBE) will use the money to increase foreign currency reserves,” Mamdouh said. She explained that the government must announce how it is going to spend the money, adding that spending on anything but improving the economy and investment environment will not help Egypt in its current crisis.

The expert believes that the foreign currency gap that Egypt has to fill is around $35bn.

However, Kojak had said that the long-term bonds might be used as foreign currency reserves.

Kojak had said that the rate is “fair” compared to the previous issuance in 2015
Kojak had said that the rate is “fair” compared to the previous issuance in 2015

For the government, there are no other options

Abobakr Emam, head of the research department at Prime Holdings, said that there is no other option but to issue bonds.  He believes that Egypt has no different options to choose from, adding that the country has to offer bonds in order to earn foreign currencies.

He also said that the money Egypt would get from the issuance is not enough, but it complements the loans Egypt has been receiving, which is needed for the government’s economic reform programme.

He added that the money should not be used to import important commodities such as petroleum products or wheat, and that it may be used to increase foreign currency reserves to make investors feel safer.

Emam believes that the money targeted was increased due to a problem between Saudi Arabia and Egypt. He added that nobody knows the truth, but Egypt was willing to receive financing from Saudi Arabia before an incident at the United Nations security council (UN).

Since Egypt’s vote on a Russian-backed draft resolution regarding Syria in the UN security council in October 2016, the relation between Saudi Arabia and Egypt had been tense. Egyptian officials, however, are denying any political disagreement between the two countries.

Days following the voting, Saudi Aramco halted its oil supplies to Egypt.

“The interest rates on the bonds are high, but the rates are based on Egypt’s credit defaults swap,” Emam said, adding that the country is offering bonds at a time when other countries are doing the same. Hence, with the problems Egypt’s economy is facing, it is important to raise the interest rate to attract the targeted money.

A credit default swap transfers the credit exposure of fixed income products between two or more parties. It may involve municipal bonds, emerging market bonds, mortgage-backed securities, or corporate bonds.

In Egypt, the credit default swap is more than 4%, which is very high, Emam noted.

The rate is high but there are no other options, and Egypt has already asked several international bodies to finance its economic reform programme, and bonds are a last resort for generating funds, he said.

 

The post Egypt’s treasury bonds: high interest, but for what? appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/01/31/egypts-treasury-bonds-high-interest/feed/ 0
Despite efforts, investors have not flocked to national mega projects http://www.dailynewsegypt.com/2017/01/26/612538/ http://www.dailynewsegypt.com/2017/01/26/612538/#respond Thu, 26 Jan 2017 08:00:00 +0000 http://www.dailynewsegypt.com/?p=612538 The government headed by Sherif Ismail has repeatedly said that it wants to attract investment to all national projects which were announced by President Abdel Fattah Al-Sisi. However, experts believe that the government is wasting precious time by not establishing the infrastructure of these mega projects. These projects are the Suez Canal Economic Zone, the …

The post Despite efforts, investors have not flocked to national mega projects appeared first on Daily News Egypt.

]]>
The government headed by Sherif Ismail has repeatedly said that it wants to attract investment to all national projects which were announced by President Abdel Fattah Al-Sisi.

However, experts believe that the government is wasting precious time by not establishing the infrastructure of these mega projects. These projects are the Suez Canal Economic Zone, the Golden Triangle, and the 1.5m feddans reclamation project.

Daily News Egypt asked various experts about their opinions on these projects and why they think the projects have been delayed.

No investor has signed a contract for any project to invest in the zone
No investor has signed a contract for any project to invest in the zone

The Suez Canal Economic Zone

Ahmed Darwish, chairperson of the Suez Canal Economic Zone Authority, has been visiting Singapore, Japan, Germany, and other countries. He is holding talks and arranging meetings with officials and businesspeople to talk to them about investing in Egypt.

However, up until now, no investor has signed a contract for any project to invest in the zone. The infrastructure is currently being implemented in the zone in order to make it ready for investments.

In spite of establishing the infrastructure in the Suez Canal Economic Zone, experts believe that the government could have made more efforts to accelerate the process of developing the canal.

The national project, which was announced two years ago, has not managed to attract any investments.

Hany Tawfik, executive chairperson of Union Capital, said that if the government really wants to develop the Suez Canal area, it has to accelerate the rate of establishing infrastructure.

He believes that the government has to fix the laws to reduce bureaucracy, because Egypt’s investment climate is hardly attractive now.

Tawfik believes it is necessary for the government to provide concessions to investors in order to attract their investments to the Suez Canal area.

“The government is late in developing the area”, he stated. The expert emphasised that the Suez Canal and Sinai are very sensitive areas, adding that the current counter-terrorism campaign has stalled development.

He added that there is no transparency in what is actually going on with the project.

“With every passing day, Egypt loses another important benefit and the economy suffers,” Tawfik said.

He believes that the project has the potential to attract a lot of investments, which could create jobs, increase Egypt’s exports, and ultimately increase Egypt’s GDP.

Tawfik believes that the Suez Canal’s best projects are ship services, such as welding and supplying, industrial projects, and agricultural projects.

Such projects could develop Sinai as well, he claimed.

Medhat Nafea, a board member at Misr International University, believes that the Suez Canal Economic Zone has the potential to improve the country.

He said that the parliament should inquire as to why the government is late in delivering the project.

The government mainly focuses on creating jobs out of such projects, and developing the Suez Canal area would lead to one million job opportunities according to government statements, he said.

Nafea also noted that the government must find other ways to finance its national projects instead of borrowing.

He believes that Egypt’s external debt is not high, but he emphasised that the rate of borrowing is very scary, which he says shows that the government has not thought of another way to obtain financing.

On the other hand, Nafea said that national projects alone do not develop a country.

He explained that fixing and developing the investment climate and creating new laws is what development is actually about, which the government must understand.

President Abdel Fattah Al-Sisi  while announcing The first phase of 1.5m feddans reclamation project
President Abdel Fattah Al-Sisi while announcing The first phase of 1.5m feddans reclamation project

The Golden Triangle

The Golden Triangle was one of the projects announced by the government.

The triangle is located between Qena, Safaga, and Al-Qusayr, which is an area rich in mining resources that make up 75% of Egypt’s mining minerals.

When Al-Sisi came to office, he ordered the government to consider the Golden Triangle development project a priority in order to attract investments to the area.

The project will be implemented over an area of 2.7m acres and aims to establish a new industrial capital by building industrial, commercial, and mineral sites.

According to studies, the area is rich in metallic and non-metallic minerals, including iron, copper, gold, silver, granite, and phosphate, which are involved in the manufacture of many high-tech industries.

Mining for these minerals could be used as part of the establishment of new industries.

Tawfik said that there is currently a media blackout on the project, adding that no one knows anything about it.

He believes that Egypt is one of the top five countries in mineral reserves and by taking the right steps in the Golden Triangle project, the country would greatly benefit both economically and industrially.

“The government must understand that creating a clear economic environment is the most important pillar for developing the country”, he noted.

He stated said that investors know nothing about the project, which has resulted in the project being stalled at a time when it could help Egypt attract investments and create more jobs.

It is worth noting that Ismail Gaber, the former head of the Industrial Development Authority, had previously told Daily News Egypt that the Golden Triangle development project is considered the second largest project that will aid in developing Egypt’s economy due to the high income expected from the area, once it is developed.

Gaber added that the implementation of the project began following the announcement of the proposal details, which took place in June 2016.

He stated that the project aims at attracting new Arab and foreign investments, in addition to local investments, to enhance the value of the region.

According to Nafea, the project also has a social dimension.

He believes that the Golden Triangle will also help the government develop Upper Egypt, which has suffered from a lack of development for decades, and it would lead to a reduction in the unemployment rate and poverty.

The Sukari mine, located in the Golden Triangle
The Sukari mine, located in the Golden Triangle

The 1.5m feddans reclamation project

The third national project was the reclamation of 1.5m feddans, which was announced by the president on 30 October 2015. The project aims to increase agricultural land by 20% outside of the Delta region.

The president said the feddans will be provided to the public for sale, a provision that is an investment in national food security as much as an investment in their individual futures.

Al-Sisi said that the government will provide the feddans to investors at subsidised prices in order to help entrepreneurs owning small- and medium-sized enterprises to start their own businesses.

He promised that the agricultural lands will not only provide economic stability to farmers, but will provide places of residence and services to them and their families.

It is worth noting that on 21 October 2016, Atter Hannoura, head of New Egyptian Countryside Development (NECD), announced the reclamation of 500,000 feddans as the first phase of the project, at a price of EGP 5,000 per feddan.

However, experts have doubts about the project.

Tawfik believes that the government has not enlisted enough studies on the project.

He explained that no one from the cabinet has created or released pre-feasibility or feasibility studies for the project, which does not reflect transparency.

Tawfik stated that it would not be the best idea if the government were to plant wheat in the project. He explained that it is much cheaper for Egypt to import wheat because there are bigger countries operating in this field and Egypt cannot compete with their prices.

He added that planting wheat will cost Egypt more than global prices.

Tawfik added that the countries that export wheat at low prices depend on rain to grow it, unlike Egypt, which needs water well drilling projects to plant the crop in the desert.

There is no transparency about the project, according to Gamal Seyam, a professor of agricultural economics at Cairo University, who explained that most of the information publicly available is derived from the media.

He added that the modern Egyptian state has witnessed the failure of a lot of different agricultural projects, such as Toshka.

The post Despite efforts, investors have not flocked to national mega projects appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/01/26/612538/feed/ 0
Prospects and risks of Egypt’s ambitious economic reform programme, according to the IMF  http://www.dailynewsegypt.com/2017/01/19/prospects-risks-egypts-ambitious-economic-reform-programme-according-imf/ http://www.dailynewsegypt.com/2017/01/19/prospects-risks-egypts-ambitious-economic-reform-programme-according-imf/#respond Thu, 19 Jan 2017 06:00:06 +0000 http://www.dailynewsegypt.com/?p=611103 Since 2011, political and regional developments have taken a significant toll on the Egyptian economy. Underlying structural challenges and the prolonged political transition led to the build-up of macroeconomic imbalances. A significantly overvalued exchange rate undermined competitiveness and depleted reserves. Weak revenue, combined with poorly targeted subsidies and a growing public sector wage bill, resulted …

The post Prospects and risks of Egypt’s ambitious economic reform programme, according to the IMF  appeared first on Daily News Egypt.

]]>
Since 2011, political and regional developments have taken a significant toll on the Egyptian economy. Underlying structural challenges and the prolonged political transition led to the build-up of macroeconomic imbalances. A significantly overvalued exchange rate undermined competitiveness and depleted reserves. Weak revenue, combined with poorly targeted subsidies and a growing public sector wage bill, resulted in large deficits and high levels of public debt.

Consequently, Egypt’s authorities have adopted  an ambitious home-grown reform programme which was supported by the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) agreement in order to tackle existing structural problems within the Egyptian economy, address macroeconomic vulnerabilities, and promote inclusive growth and job creation.

The IMF released on Wednesday Egypt’s country report, which includes details of the Egyptian reform programme, as well as the IMF staff’s detailed studies on the outlook, and challenges facing the programme.

The main pillars of the economic reform programme

According to the IMF staff report, the Egyptian reform programme can be summarised into several main elements.

Firstly, significant monetary and financial policy adjustments in order to eliminate foreign exchange shortages, encourage investment and exports, contain inflation, and ensure the sustainability of public debt.

On 3 November, the Central Bank of Egypt (CBE) adopted a flexible exchange rate regime, which is meant to improve Egypt’s external competitiveness, support exports and tourism, and attract foreign investment.

Consequently, the CBE would be able to rebuild its international reserves. The IMF believes that containing inflation and bringing it down to mid-single digits over the medium-term can be achieved by controlling credit to the government and banks, as well as by strengthening the CBE’s capacity to forecast and manage liquidity, improving transparency and communication.

Secondly, in regards to fiscal policies, social protection, and financial management, Egypt’s fiscal policy will be anchored to setting public debt on a clearly declining path and restoring debt sustainability. That can be achieved by increasing tax revenues through the implementation of the value-added tax (VAT), in addition to the reduction in subsidies expenditure. At the same time, social protection programmes will be strengthened in order to replace the poorly targeted energy subsidies with programmes that directly support poor households.

Finally, implementing structural reforms and promoting inclusive sustainable growth through streamlined industrial licensing for all businesses, greater access to financing for small- and medium-sized enterprises (SMEs), and new insolvency and bankruptcy procedures.

“Structural reforms are critical for the success of the programme. The aim is to address deep-seated structural impediments to growth and job creation, and create an enabling environment for private sector development,” said Christine Lagarde, managing director of the IMF. “The main areas of reforms include business licensing and insolvency frameworks; public financial management, including state-owned enterprises; energy sector and subsidy reforms; and labour market reform to create jobs and increase labour market participation, especially among women and young people.”

The reform programme’s outlook and risks

According to the report, the macroeconomic medium-term prospects are favourable, provided short-term challenges can be addressed and growth-friendly policies and reforms implemented. Due to various factors, including a dynamic and young population, a large market size, a favourable location, and access to important foreign markets, the opening of the New Suez Canal last August, large investments in the energy sector, and the discovery of a major gas field also bode well for Egypt’s medium-term development.

However, realising this potential depends on overcoming short-term challenges such as foreign currency shortages, low policy buffers, improving the business climate, and a weakened market confidence, as well as implementing wide-ranging structural reforms that support inclusive growth.

In regards to monetary policies, the report says that the authorities plan to maintain a flexible exchange rate regime and accumulate significant international reserves to act as buffers against external shocks, strengthen credibility of the CBE, and preserve competitiveness. The programme targets the accumulation of about $5bn in 2016/2017, and to reach $33bn by the end of the programme, which is equivalent to five months of prospective imports of goods and services.

Following the implementation of the programme, a real GDP growth of 4% is expected in 2016/2017. Growth is forecasted to gradually increase to around 5-6% over the medium-term as investment and exports replace debt-financed consumption as growth engines. The investment boost is based on public investment in social and economic infrastructure, large investments in the energy sector, and the discovery of the major Zohr gas field.

GDP growth will be driven by higher investment and improvement of the net external sector, in addition to the improvement of the business climate and promotion of private sector development by easing their access to finance, and by removing constraints to starting and doing business. Better macroeconomic stability will improve market confidence and attract foreign investment, in particular foreign direct investments (FDIs). Greater exchange rate flexibility will strengthen external competitiveness and support exports. The energy subsidy reform will remove the bias towards energy and capital-intensive industries.

Although inflation is estimated to temporarily increase from around 10% in 2015/2016 to around 19% in 2016/2017, it is projected to decline to around 7% over the medium-term. The budget deficit meanwhile is expected to switch to surpluses starting from 2017/2018. These projections are based on the adjustment programme that includes considerable revenue and expenditure measures.

However, these results are dependent on controlling the public sector wage bill, implementing the next phase of energy subsidy reforms, improving the targeting of social transfers, and increasing revenue measures, which can be achieved by the introduction of a VAT at a higher rate than the current rate, improvements in tax administration, and ensuring that appropriate dividends are paid to the government by profitable public agencies.

Yet, the risks to the programme are significant. Potential fiscal slippages due to revenue shortfalls, higher than programmed wage increases, or delays in implementing expenditure measures could undermine the programme’s debt sustainability objective. Attempts to manage the exchange rate could lead to a loss of reserves or the re-emergence of a large parallel market. Failure to tighten monetary policy sufficiently could lead to a strong exchange rate, inflationary pressures, and a loss of reserves.

Moreover, Egypt is also exposed to external shocks. Tighter or more volatile global financial conditions may raise borrowing costs. Lower growth in trade partners (Eurozone, Russia) or a worsening of regional security would hurt trade and tourism. Persistently, lower energy prices would reduce remittances and financing from Gulf countries. On the upside, lower energy prices would help trade and fiscal balances. Egypt’s new flexible exchange rate and prudent macroeconomic policies under the programme provide sufficient buffers against these vulnerabilities.

One of the programme’s vulnerabilities is that there are also external risks. Egypt’s own security has been vulnerable to terrorism, and it is not immune from the crises of its neighbours. As Egypt re-engages with international financial markets, global financial risks will matter more. As trade and tourism pick up, the performance of its trading partners will also be important.

Furthermore, financial support from Egypt’s international partners is a critical element of this programme.

The World Bank and the African Development Bank are strong partners in the process. Timely and generous support from China, the United Arab Emirates (UAE) and the G7 countries have made it possible to close the financing gap and bring this programme to the board. Fresh financing and rollover of debts falling due will be needed, though the need for such support will taper off by the end of the programme period.

To conclude, this reform programme can solve Egypt’s problems, improve the balance of payments, sustain reserves, and reduce vulnerability while promoting exports; thus, helping Egypt realise its full potential. However, delays in foreign exchange inflows, as well as multilateral and bilateral disbursements, could see interbank US dollar-Egyptian pound rates rise sharply. The CBE may come under pressure to limit exchange rate flexibility and it will be crucial to stay committed to programme policies and targets.

The post Prospects and risks of Egypt’s ambitious economic reform programme, according to the IMF  appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/01/19/prospects-risks-egypts-ambitious-economic-reform-programme-according-imf/feed/ 0
The global energy sector: what to expect in 2017? http://www.dailynewsegypt.com/2017/01/10/609247/ http://www.dailynewsegypt.com/2017/01/10/609247/#respond Tue, 10 Jan 2017 06:00:54 +0000 http://www.dailynewsegypt.com/?p=609247 Five main trends will be leading changes in the energy industry, requiring leaders to revisit their strategies in 2017, says Booz Allen Hamilton

The post The global energy sector: what to expect in 2017? appeared first on Daily News Egypt.

]]>
2016 was a year filled with an overproduction of energy on a global level, especially in oil and gas, resulting in an overhang of the oil inventory, which reduced the US shale production. However, this did very little to spur the demand needed to bring the global market into balance; therefore, change may be the main feature of the global energy sector throughout 2017.

Not only the oil and gas industry, but also electric power will be going through expected changes, led by many major external and internal factors. These changes will soon require leaders of the industry around the globe to reconsider current strategies, as expected by Booz Allen Hamilton in its forecast of energy trends in 2017.

Booz Allen Hamilton provides management, technology, consulting, and engineering services to corporations and governments across the globe
Booz Allen Hamilton provides management, technology, consulting, and engineering services to corporations and governments across the globe

Booz Allen Hamilton provides management, technology, consulting, and engineering services to corporations and governments across the globe. It has been present in the Middle East and North Africa (MENA) for six years, during which it partnered with public and private sector clients to solve the difficult challenges they are facing in business strategy, data analytics, cybersecurity, resilience, operations, supply chain, and more. Relating to its experience in these fields, the company expected in its forecast of energy trends in 2017 that the industry will be impacted by five main trends. However, an overall look of the region’s expected energy trends and the current circumstances is necessary in order to be able to predict correctly.

The Middle East is relying less on oil; increases investment in high-potential sectors

With the prolonged period of low oil prices, government spending is headed towards economic diversification and reducing reliance on oil, which prompts greater investment in high-potential sectors. These include real estate, construction, hospitality, tourism, and education. More attention is also being shifted towards achieving operational efficiency across sectors, and the most prominent area which will be benefitting greatly from digitally-enabled solutions is utilities. In the past, the sector of utilities has not invested as much as was preferable in information technology (IT). However, many utilities in MENA are now realising the importance of smart technology for them, and will perhaps begin to pay more attention to implementing it in their systems.

In utilities and electric power, the traditional supply chain is undergoing change driven primarily by regulation, public policy, plentiful inexpensive natural gas, and dramatic cost declines in renewable energy and storage, as Booz Allen Hamilton mentions in its forecast.

Dr Adham Sleiman, vice president of Booz Allen Hamilton MENA
Dr Adham Sleiman, vice president of Booz Allen Hamilton MENA

Data analytics will form the future of energy in 2017; greatly contribute to its changes 

Dr Adham Sleiman, vice president of Booz Allen Hamilton MENA, said that data analytics may be one of the main trends expected to shape the future of the energy sector in 2017. “Big data is rapidly changing the way the energy sector operates globally—by reducing costs, optimising investments, and reducing overall risk. In order to achieve these objectives and create additional value from untapped areas, organisations in the Middle East must establish holistic digital strategies that include upgrading their required digital capabilities,” he added.

Executive vice president in energy, chemicals, and utilities at Booz Allen Hamilton MENA, Dr Walid Fayad
Executive vice president in energy, chemicals, and utilities at Booz Allen Hamilton MENA, Dr Walid Fayad

Executive vice president in energy, chemicals, and utilities at Booz Allen Hamilton MENA, Dr Walid Fayad, said that energy and technology form the backbone of global economies and play a main role in the operational success of all other sectors. “As innovation and technological disruption become the norm across the MENA, we are increasingly seeing regulators and policy makers embracing game-changing trends in the energy sector—from support of renewable energy, advanced metering, and grid modernisation to big data and cloud. We expect that wider adoption of these technologies will increase overall operational efficiencies, especially in the wake of a period of prolonged low oil prices,” he said.

Five main trends will impact the energy industry throughout 2017

Booz Allen Hamilton expects in its forecast of the energy conditions in the world and especially MENA that the energy industry to be greatly impacted by five trends in 2017.

The first trend is a focus on capital expenditure productivity, where capital programme execution is put under major pressure by market shifts, and leaders of the oil and gas industry are pursuing everything from technology and information innovation, to greater personnel and asset tracking in oilfield development in an effort to drive greater labour and material productivity. The electric power industry is put under similar pressure as well. Inexpensive natural gas has already caused a collapse in the construction of new coal plants, and nuclear power is now in danger of a similar decline. In the entire energy spectrum, companies are taking steps to develop the ability to conduct deep continuous analysis of their capital projects during execution, and leaders are finding ways to put the insights they gain into management action.

The second trend is the creation of enterprise value from data. With the implementation of advanced instrumentation and metering, the amount of data from the energy sector’s operations has skyrocketed as is the case with many other industries. The most accessible benefits from this data have been realised so far. This data has helped identify opportunities or cost-saving through several actions, inducing labour elimination and incremental improvements of already existing processes. Of course, the usage of analytics in the energy industry is not new, but companies are now starting to realise that data can actually create new value for existing businesses. For instance, vertically integrated oil companies have very limited insight into the markets into which they sell their products, but now, data science is changing this through creating dramatically better ability to unravel and comprehend trends, draw insights, and capture new opportunities. A similar change is expected to take place in safety and reliability, where use of data is changing what engineers know about the optimal safe operating envelope for industrial processes. In terms of organisation, companies in the energy field are growing centralised data science teams, often blending legacy employees with new, more data science-oriented hires. The hard work of building business cases for data science is just beginning.

The third trend is the usage of markets in shaping the future energy grid. Regulators and policy makers in the industry are increasingly moving from a standards-and-subsidy approach to one that is more market-driven. The standards-and-subsidy approach stemmed from the public sector’s support of renewable energy, advanced metering, and grid modernisation over the past five years, in the form of mandatory deployment standards, and direct and indirect subsidies. This has been very effective at driving down the costs of these advanced energy technologies, spurring their broader deployment. Now with the new approach, regulators are trying to form a foundation for future markets, requiring a greater understanding of the value that distributed energy resources (DERs) bring to the grid, so owners of DERs can be fairly compensated. For utilities, particularly in retail markets, this requires understanding how the grid works with greater accuracy, and being able to model how it changes over time with the further expansion of DERs. This also means operating markets where customers have greater choices compared to past times.

The fourth trend is following security to the operational edge. In the energy sector, security has been mainly focused on the protection of the customers’ data on the companies system. Now, the security limit is gaining great importance and is pushed to the operational edge with the increase of instrumentation, automation, and virtualisation of operational assets in companies. The Industrial Control Systems (ICS), which control the automation of power movement through the electrical grid, oil flow through pipelines, and manufacturing systems, are facing threats as they represent an increasingly diverse and extensively connected set of technologies. However, as cyber-attackers become more emboldened, they are recognising the operational, economic, and safety impacts that attacks on the ICS infrastructure can cause. As a result, companies will increase their focus on security beyond their traditional lens.

The fifth trend is that innovation is the tipping point for cloud. In most industries, the decision to migrate IT infrastructure from fixed, on-premises servers to cloud-enabled as-a-service models has been heavily based on cost. While this has been the case in many corporate systems at the oil super-majors, innovation is now leading the current wave of cloud migration in operational business units at these companies. To create maximum business value, the rise of analytics within operation business units is now enabled by a digital strategy that is more flexible through resorting to the cloud. The use of the cloud in the utility industry was delayed because of the inability to predict how the costs of the new service models will be categorised.

The post The global energy sector: what to expect in 2017? appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/01/10/609247/feed/ 0
Was the government ready for the flotation’s consequences? http://www.dailynewsegypt.com/2017/01/09/609045/ http://www.dailynewsegypt.com/2017/01/09/609045/#respond Mon, 09 Jan 2017 06:00:08 +0000 http://www.dailynewsegypt.com/?p=609045 Squeezed by economic and political turmoil following the 25 January Revolution that toppled former president Hosni Mubarak, Egyptians are now facing a new era of hardship and austerity. The government’s adopted economic reform programme, backed by the International Monetary Fund (IMF), included the flotation of the Egyptian pound, subsidy cuts, high interest rates, and the …

The post Was the government ready for the flotation’s consequences? appeared first on Daily News Egypt.

]]>
Squeezed by economic and political turmoil following the 25 January Revolution that toppled former president Hosni Mubarak, Egyptians are now facing a new era of hardship and austerity. The government’s adopted economic reform programme, backed by the International Monetary Fund (IMF), included the flotation of the Egyptian pound, subsidy cuts, high interest rates, and the implementation of the value-added tax (VAT).

CBE Governor Tarek Amer
CBE Governor Tarek Amer

The Central Bank of Egypt (CBE) decided to free-float the Egyptian pound on 3 November, in a move aiming to improve Egypt’s competitiveness and attractiveness to foreign direct investments, as well as giving a change to the CBE  to restore Egypt’s international reserves to pre-2011 levels.

The decision was followed by a series of challenges, such as the pricing of  medication disputed between the government and pharmaceutical companies, and the investors’ problem with banks demanding that they  pay for the exchange rate gap before and after the flotation from letters of credit issued to cover imports.

Hence, the government’s readiness to tackle the consequences of flotation comes into question, as well as the absence of a centralised economic strategy that can achieve the main goals of the economic reform programme, which can be summarised into improving the investment climate, creating job opportunities, reviving tourism, and supporting exports.

Almost all pharmaceutical companies import a large portion of their production needs in US dollars, and following the liberalisation of the pound’s rate against the dollar, the latter has increased by more than 100%, which in turn increased the production costs for these companies.  (DNE Photo)
Almost all pharmaceutical companies import a large portion of their production needs in US dollars, and following the liberalisation of the pound’s rate against the dollar, the latter has increased by more than 100%, which in turn increased the production costs for these companies.
(DNE Photo)

Medicine shortage crisis

Almost all pharmaceutical companies import a large portion of their production needs in US dollars, and following the liberalisation of the pound’s rate against the dollar, the latter has increased by more than 100%, which in turn increased the production costs for these companies. These companies used to get their dollar needs directly from the CBE at the official exchange rate before the flotation.

As a response to the crisis, which indicates that it had not been taken into consideration before the flotation, the minister of health suggested imposing a 50% annual increase on 10% of the pharmaceutical companies’ products, with promises of cuts in customs, water, electricity, and gas costs, in addition to an exemption from the VAT. However, the minister’s suggestion was rejected by the companies.

Both foreign and various local companies insisted that prices be increased by 60% in order to avoid losses, especially as the official US dollar exchange rate increased by 100% in the wake of the pound’s flotation. This forced the minister to change the price increases period from one year to six months.

Later on, Minister of Health Ahmed Emad El-Din presented a proposal to the cabinet to increase the prices of 15% of domestic medicines that currently cost between EGP 1 and EGP 50 by 50%, and medicines that cost between EGP 50 and EGP 100 by 40%, while medicines that are priced at over EGP 100 by 30%.

From their side, the Pharmacists Syndicate sent an official letter to President Abdel Fattah Al-Sisi in December, calling on him to prevent any potential price increases for medication and asking for the establishment of a presidential committee which includes all the concerned parties to suggest solutions for the crisis.

Moreover, the syndicate notified Emad El-Din of their rejection of any ministerial decision that may stipulate any form of increase in the cost of medication without prior consultation with the syndicate, state-run newspaper Al-Ahram reported. This can be considered a clear warning that any price increases will be met with legal opposition from their side.

It further noted that the rapid issuance of price increases without carrying out accurate studies or consultation with specialists in the field from the syndicate’s members may be a sign that medicine companies are looking to maximise profits at the expense of citizens.

Another sign of the absence of government planning is the suggestion to increase the budget of EGP 3.5bn currently allocated to treatment at the expense of the state by EGP 5bn in preparation for the price increase.

Investment climate 

Although the government expressed its plans to facilitate investments in Egypt, their actions following the flotation came in contradiction to the announced plans. Two major incidents in less than a month could be considered a huge setback. The first was the cancellation of Le Marché exhibition and the second was the letters of credit issued to multiple investors before the flotation.

The decision to cancel Le Marché exhibition just two days before its expected inauguration has led to outrage in Egypt’s the furniture sector. The exhibition was supposed to be held on the Cairo International Fair Grounds in December. (DNE Photo)
The decision to cancel Le Marché exhibition just two days before its expected inauguration has led to outrage in Egypt’s the furniture sector. The exhibition was supposed to be held on the Cairo International Fair Grounds in December.
(DNE Photo)

Le Marché 

The decision to cancel Le Marché exhibition just two days before its expected inauguration has led to outrage in Egypt’s the furniture sector. The exhibition was supposed to be held on the Cairo International Fair Grounds in December.

Le Marché is Egypt’s largest furniture and decoration exhibition. It takes place on an area of 30,000 sqm with the participation of about 250 exhibitors, with companies placing hopes on it to conclude major contracts for one year.

Tarek Nour, chairperson of the advertising agency organising the exhibition, was informed by the Interior Ministry just two days before the planned opening that the exhibition was canceled for security reasons.

Mostafa Ismail, technical adviser to Apex, the company organising Le Marché, said that security forces told the company on Tuesday morning that the exhibition was canceled, despite being informed by official executive bodies on the previous day that the exhibition will be held as scheduled.

“We were surprised on Tuesday at 10am to find security forces of the Nasr City police department evacuating halls, closing the doors, and informing us that they had received instructions to halt the exhibition,” Ismail said.

The estimated initial losses to the company are about EGP 60m after the cancellation of Le Marché, in addition to EGP 500,000 for each participating company.

According to the executive director of Meuble for French Furniture Co. Ahmed Al-Iraqi, canceling the exhibition is an unstudied decision, especially since companies were notified the Monday before that security apparatuses agreed to the exhibition, which made companies double the number of workers to finish preparing the pavilions on time.

“The state restricted imports and floated the national currency, forcing companies to produce for the local market,” Nour said. “Then, they shut down the conference where those companies sold their production.”

From his side, the head of the Chamber of Wood Working and Furniture Industries at the Federation of Egyptian Industries, Ahmed Helmy, said that the size of furniture production in Egypt amounts to EGP 10bn per year, wondering about the message the government sent to investors by cancelling the exhibition.

Letters of credit 

Following the CBE’s decision to float the currency on 3 November, the Egyptian pound dropped in value from EGP 8.88 per US dollar to over EGP 18, which caused the value of the letters of credit issued to cover imports to spike.

Banks then demanded companies to pay the difference in the exchange rate before and after the flotation. The demand was refused by companies, attributing their refusal to their inability to pay.

Consequently a number of Egyptian investors took out a full-page advertisement in Egypt’s daily newspaper Al-Ahram, calling for Al-Sisi to take “emergency measures” to save Egyptian companies and industries after the recent floating of the local currency.

The advertisement, which was signed by nine investors associations, explained that Egyptian companies are at the risk of bankruptcy if they pay back bank loans at the new exchange rate, since they have already sold their products based on the old exchange rate. The Joint Stock Companies Law states that companies should declare bankruptcy if losses surpass 50%.

A drop in imports, accompanied by a shortage in basic goods and higher unemployment rates are excepted if the Egyptian companies go bankrupt, adding that various company owners and investors will face legal action due to their inability to repay bank loans.

The ad was published by various associations that represent Egypt’s prominent industrial zones, such as the 10th of Ramadan, 6th of October City, Obour, and Sadat cities investors associations.

Moreover, nine investor associations held a meeting in order to explain their situation. Mohamed Khamis Shaaban, head of the 6th of October City Investors Association, explained that the liberalisation of the foreign currency exchange market increased import costs, adding that the government should have studied the negative impacts associated with the decision before implementing it .

However, these issues get resolved. The government’s response to the consequences came as a reaction, which confirms the absence of a thoroughly studied plan, and the lack of homogeneity and collaboration between different governmental bodies, which in turn led to contradictory actions. In the case of Le Marché, all efforts by the ministries of industry and investment to reassure and attract investors were wasted by the actions of the Ministry of Interior.

The post Was the government ready for the flotation’s consequences? appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/01/09/609045/feed/ 0
Ashwa’yat: the underbelly of urban Cairo as understood through data http://www.dailynewsegypt.com/2017/01/03/ashwayat-underbelly-urban-cairo-understood-data/ http://www.dailynewsegypt.com/2017/01/03/ashwayat-underbelly-urban-cairo-understood-data/#respond Tue, 03 Jan 2017 06:00:32 +0000 http://www.dailynewsegypt.com/?p=607961 A recent data survey released by CAPMAS and the Population Council attempts to break down the reality of youth living in informal housing areas through numbers

The post Ashwa’yat: the underbelly of urban Cairo as understood through data appeared first on Daily News Egypt.

]]>
In a first of its kind, The Population Council and the Central Agency for Public Mobilization and Statistics (CAPMAS) highlighted the problems afflicting the youth living in ashwa’yat (informal housing areas) in a data survey released last month.

The survey noted that Sustainable Development Strategy: Egypt Vision 2030 refers to the vital need to develop Egypt’s ashwa’yat through the creation of 7.5m housing units, with a concerted effort to find solutions to problems pertaining to those areas by 2030. It continued: “This country vision is in line with the United Nations Sustainable Development Goals (SDGs) agenda, which highlighted the plight of [ashwa’yat] dwellers in its “urban goal”.

Dr. Nahla Abdel Tawab, Country Director of the Population Council said that efforts to develop Egypt’s ashwa’yat and enhance the living conditions of their dwellers have been ongoing for over a decade, sponsored by the government, civic organizations, private entities, non-profit institutions, individuals, and in some cases media officials.

However, there is very limited data that is able to provide reliable statistics on such areas, particularly on the characteristics of young people living in those informal communities, according to the survey.

Population Council in collaboration with CAPMAS conducted a comprehensive situation analysis of young people living Greater Cairo’s ashwa’yat titled “The 2016 survey of young people in informal urban areas of Greater Cairo”. The survey looked into several key indicators, including health, marriage, and employment, among others, to paint a picture of what it is like to be young and living in ashwa’yat.
Around 2947 youth were surveyed in their analysis; from the age group of 15-29.

CAPMAS said that 44.6% of youth in ashwa’yat believed their health was in a good state, with indicating that their health was excellent or very good,
Population Council said that 44.6% of youth in ashwa’yat believed their health was in a good state, with indicating that their health was excellent or very good,

Health

“The health module has shown slight differences between young people living in formal and informal areas of Greater Cairo,” read the survey.

Population Council stated that youth in ashwa’yat expressed through the survey that overall they believed their health was in a good state, with 44.6% indicating that their health was excellent or very good, compared to a 2014 survey that estimated 47.5% of their peers living in formal urban areas of Greater Cairo felt similar about their health conditions.

Rania Roushdy, the senior programme manager of the gender and youth poverty programme at the Population Council, said that researchers in Egypt are plagued by a consistent problem: a lack of information.

She believes that the results found by Population Council and CAPMAS in the ashwa’yat, which gathered data from 245 different areas, are very close to the reality on the ground. She also said that the youth face the same hard circumstances as youth living in formal urban areas.

Roushdy added that youth in ashwa’yat have their own set of problems that tend to make their living conditions worse than those of youth living in formal urban areas, such as the absence of police, which subsequently means less security.

Regarding the data collected on health, Roushdy noted that this sample focused only on how youth feel about their health. No medical tests were performed to gauge the actual health status of survey participants.

She stated that only 3% of those surveyed in ashwa’yat claimed to have chronic diseases, and 25% were not satisfied with the status of their health.

Roushdy said that the rate is fair compared to reality on the ground, while emphasising that youth are likely to accumulate greater health problems in their future due to the heavy pollution in ashwa’yat.

 

CAPMAS stated that 2.9% of young men and women in ashwa’yat said that the ideal age for a girl to get married is younger than 18
Population Council stated that 2.9% of young men and women in ashwa’yat said that the ideal age for a girl to get married is younger than 18

Labour and employment

In a stark contrast, only 15.8% of young women surveyed in ashwa’yat claimed that they were part of the labour work force, whereas 57.8% of young men said that they were employed.

According to Population Council and CAPMAS, the unemployment rate in ashwa’yat is only 9.9%, compared to 12.8% in Egypt.

However, the survey does not reflect the disparity between the informal and formal economy, and how those employed in each differ based on whether they live in ashwa’yat or formal urban areas. A survey of several academic studies refers that the informal economy could range anywhere between 30-60%, with popular assumptions estimating that informal employment surged in post-revolution Egypt. Due to the informality of large sectors of labour, gauging the actual numbers is seemingly impossible.

“They are forced to work in informal markets because they need money,” said Roushdy.

While women find it difficult to find employment in existing businesses functioning within the informal economy, they often resort to creating their own type of employment, by selling milk or cheese on their own.

 

Roushdy added that the government should legalize these types of businesses and encourage others to start their own businesses within a legal framework.

The government recently sponsored an initiative to bolster small- and medium-sized enterprises (SMEs), which are believed to make up a significant portion of the informal economy. The initiative aims to create a legal structure within which such enterprises can exist, while supporting their ability to create much needed jobs.

 

CAPMAS and the Population Council estimated that 4.6% of youth living in ashwa’yat did not attend school during 2016.
CAPMAS and the Population Council estimated that 4.6% of youth living in ashwa’yat did not attend school during 2016.

Education

Population Council and CAPMAS estimated that 4.6% of youth living in ashwa’yat did not attend school during 2016.

However, the survey also estimated that uneducated youth from ashwa’yat who have jobs was stands at 58.7%.

Roushdy said that the dropout rate from formal education in ashwa’yat is 5% (3% among men, 6% among women), compared to 3% in formal urban areas. Reasons attributed to dropping out were poverty and the long distance between their homes and the nearest schools.

She said that one major hurdle in giving women access to education is convincing families to allow their daughters to be enrolled as students. Young women who enter the formal education system statistically continue on to college more often than men.

She said the rate of women who attended college in ashwa’yat is 28%, compared to 27% average for men.

 

The prevalence of drug use (62.1%), drug dealing (60.1%), and street harassment (48.0%) were the three security challenges most widely cited by young people.
The prevalence of drug use (62.1%), drug dealing (60.1%), and street harassment (48.0%) were the three security challenges most widely cited by young people.

Other indicators

The survey revealed that more than three-quarters of young people aged 15-29 residing in ashwa’yat have never been married (75.2%), compared to about 82.5% among their peers in formal urban areas.

“Early marriage (before the legal age of 18) is slightly more prevalent in the informal urban areas (10.2%) than in the formal urban areas of Greater Cairo (8.5%),”according to the survey.

The Survey stated as well that 2.9% of young men and women in ashwa’yat said that the ideal age for a girl to get married is younger than 18. More young women than men preferred an older marriage age (above 22 years) for women, with the majority viewing the age range from 18-22 years as an ideal marriage age for women.

The prevalence of drug use (62.1%), drug dealing (60.1%), and street harassment (48.0%) were the three security challenges most widely cited by young people.

Being insulted in private (7.7%) or in front of others (8.4%) were the most commonly reported types of violence by all youth.

The reported rate of harassment among young women (49%), in the survey was slightly higher than that of formal urban areas (46%) surveyed in 2014.

Services that youth living in ashwa’yat wanted more priority given to included education (26.1%), health (18.6%), programmes to employ youth and train them for the labour market (11.2%), and improving roads and streets (10.8%).

Hala El Saied, the dean of Economic and Political Science College at Cairo University, said that the results show that youth in ashwa’yat and in formal urban areas face the same problems.

The dangers that face youth are the same everywhere, she said.

She added that developing countries also face the same problems around the world, but the problem in Egypt is that the youth make up a large portion of the population, which means the effects of the problems are higher.

“Government and civil society institutions should cooperate to promote how youth could avoid dangers such as criminal activity, carrying weapons, and drug addictions,” El-Saied said.

She emphasized the importance of fighting drug addictions, calling for a great deal of effort to be contributed to this epidemic.

The survey could prove beneficial to officials and experts, said El-Saied, as attempts are being made to improve economic conditions.

If the government were to hold to true its promises and merge the informal areas of Cairo with the formal areas, then authorities would be able to greater understand the life and economy of such areas, said El-Saied.

She noted that the government, through its previously stated ideas and projects for ashwa’yat, appears committed to working to develop these areas.

The more social housing the government provides, the more people would feel secure, she noted.

The post Ashwa’yat: the underbelly of urban Cairo as understood through data appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2017/01/03/ashwayat-underbelly-urban-cairo-understood-data/feed/ 0
Refugees in Germany: tales of Diaspora and dreams http://www.dailynewsegypt.com/2016/12/15/refugees-germany-tales-diaspora-dreams-2/ http://www.dailynewsegypt.com/2016/12/15/refugees-germany-tales-diaspora-dreams-2/#respond Thu, 15 Dec 2016 13:38:03 +0000 http://www.dailynewsegypt.com/?p=604910 Caught between the burdens of alienation and homesickness and the growing pains of integration is how Arab dreamers live in Europe

The post Refugees in Germany: tales of Diaspora and dreams appeared first on Daily News Egypt.

]]>
Like other Egyptians, during my bachelor studies I dreamed of travelling to Germany to satisfy my ambitions. I saw it as the promised paradise and its citizens as organised beehives. My dream went unfulfilled, and 15 years would go by until I would be able to travel to Germany. I only met Germans during encounters in tourist places in Cairo, until finally I received an opportunity to visit the land I had dreamed of. From the moment I touched its soil, I drew comparisons between the dream I had as a young man and the reality I saw of Arab immigrants.

In my short visit, I met many non-Germans and listened to many stories. I soon found this paradise to be a machine that turns everyone into a gear to fit its capabilities so as to maintain its stability and continuity. I found some of those gears reeling from alienation and nostalgia for the past, falling between the desire to return home and a sense of guilt that the migration dream was not what they expected. This may have been what Hany Azer, a famous Egyptian engineer who has been living in Germany for decades and a member of the Egyptian president’s Advisory Council, was trying to say when he told journalists in a meeting that Germany is a country where nobody succeeds but smart, skilled, and competitive people.

The visit was enough to knock out my young dream as I looked through different eyes at those who were forced to become part of that giant German machine, but failed at becoming irreplaceable gears, in the same way that their dreams would fail. Those who drop out of the system become negligible beings among this civilisation and order governing German life.

This is why I ask whether Syrian refugees will ever be able to integrate into the German community, overcome the fears of Islamophobia, or paint a different picture of the Arab world? Or would they segregate themselves into a parallel Arab community? Will they be able to join the labour market and engage in the German streets, or will they be controlled by the dream of returning to their homelands?

In this series, Daily News Egypt puts a human face on refugees, from across all ages and origins, and details their struggles, dreams, and grief.

 

Ideal integration not fully possible, problems bound to exist: manager of AWO Refugee House in Berlin 

http://www.dailynewsegypt.com/2016/12/12/ideal-integration-not-fully-possible-problems-bound-exist-manager-awo-refugee-house-berlin/

The right exploits the fear of refugees for their own gains: MP in Germany’s Greens party

http://www.dailynewsegypt.com/2016/12/12/right-exploits-fear-refugees-gains-mp-germanys-greens-party/

Closing borders is inhumane and contradicts German values: SPD member

http://www.dailynewsegypt.com/2016/12/12/closing-borders-inhumane-contradicts-german-values-spd-member/

European cooperation integral to solving the refugee crisis

 http://www.dailynewsegypt.com/2016/12/13/european-cooperation-integral-solving-refugee-crisis/

Bureaucracy biggest obstacle to refugees: AWO chairperson

 http://www.dailynewsegypt.com/2016/12/13/bureaucracy-biggest-obstacle-refugees-awo-chairperson/

Refugees are the migrant advisory committee’s main concern 

http://www.dailynewsegypt.com/2016/12/13/refugees-migrant-advisory-committees-main-concern/

Learning from the past: Germany’s refugee policy is dignifying, positive

http://www.dailynewsegypt.com/2016/12/08/603486/

Immigrant lives at mercy of German bureaucracy, knows very well he has no asylum rights

http://www.dailynewsegypt.com/2016/12/08/immigrant-lives-mercy-german-bureaucracy-knows-well-no-asylum-rights/

 Trials and tribulations of the Right of Asylum

http://www.dailynewsegypt.com/2016/11/23/600723/

Refugees in Germany: tales of Diaspora and dreams

http://www.dailynewsegypt.com/2016/11/21/refugees-germany-tales-diaspora-dreams/

The post Refugees in Germany: tales of Diaspora and dreams appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2016/12/15/refugees-germany-tales-diaspora-dreams-2/feed/ 0
Cathedral bombing may affect Egypt’s credit rating: professor http://www.dailynewsegypt.com/2016/12/15/cathedral-bombing-may-affect-egypts-credit-rating-professor/ http://www.dailynewsegypt.com/2016/12/15/cathedral-bombing-may-affect-egypts-credit-rating-professor/#respond Thu, 15 Dec 2016 06:00:01 +0000 http://www.dailynewsegypt.com/?p=604739 Acts of terrorism rouse foreign concerns about coming to Egypt; therefore, the dollar flow decreases, says Mashhour

The post Cathedral bombing may affect Egypt’s credit rating: professor appeared first on Daily News Egypt.

]]>
It was with heavy hearts that Egyptians Copts and Muslims followed up on the devastating attack St. Peter and St. Paul Church in Saint Mark’s Coptic Orthodox Cathedral in Abbasiya on Sunday—the same day that Muslims celebrate the Prophet Mohammad’s birth [Al-Mawlid Al-Nabi].

This past week has seen a string of attacks in the capital. On Friday, an attack on two security roadblocks in Al-Haram Street in Giza claimed the lives of six security personnel and injured three others, according to the Ministry of Health. Another bomb reportedly targeted a police vehicle in Kafr Al-Sheikh governorate; one civilian was killed and three security personnel were injured.

Economic experts expect these attacks to negatively affect the economy, especially specific sectors like investment, tourism, and the exchange rate.

Attacks may affect Egypt’s credit rating

Professor of economics at Cairo University, Aliaa El-Mahdi, said current events may affect Egypt’s credit rating. Rating institutions have categorised Egypt at “B” for more than two years, indicating that the country is stable. However, the recent strings of bombings could see these institutions downgrade Egypt’s rating to B- according to political instability and security concerns.

El-Mahdi explained that the civilian casualties from Sunday’s attack put Egypt at further risk, compared to if Friday’s attacks had been the sole incidents—especially as Christians, a minority who are already persecuted in Egypt and across the region, were the target.

Attacks may affect potential investors

El-Mahdi said recent events may affect potential investors who may choose to postpone their business plans and await the outcome of these attacks and for the greater stability.

Meanwhile, those already investing in the country may decide to suspend expansion in the market and depend more on exchange rate policies, taxes, and other economic elements.

Capital is cowardly

Pumping capital or investments requires a secure community and a stable market to guarantee a profit; therefore, investors are afraid to risk their money in an unstable country, according to economic expert Ahmed Zikrallah.

Zikrallah expects the attacks will lead foreign investments to “escape”. Investors will not accept investing in a country on the brink of failure with explosions in the heart of its capital—even inside heavily fortified places.

The Executive Board of the International Monetary Fund (IMF) had predicted that the Egyptian government would attract $9.4bn in foreign direct investment by the end of the current fiscal year, compared to $6.7bn in the last fiscal year. Analysts stressed that this could be difficult under these exceptional circumstances.

Chairperson of the Egyptian Junior Business Association Ahmed Mashhour said any investment needs stability, whether in security, legislations or business factors, and the investment climate must be a catalyst for the investor to launch new businesses in the country.

Will Russia backpedal on resuming direct flights?

Economic expert Khaled El-Shafaei said these acts of terrorism target the tourism sector, especially as the resumption of direct flights between Egypt and Russia are just around the corner, as well as a number of European countries.

Despite the long negotiations between the two sides and the improved security measures in Egypt’s airports, El-Shafaei thinks it’s likely that recent events could affect the return of flights between Egypt and Russia.

El-Shafaei pointed out that investments, which began to enter the market after the Egyptian pound was floated, reached $1bn, explaining that terrorist operations aim to prevent investment inflows to Egypt.

El-Mahdi disagrees with El-Shafaei, saying that stakeholders in the tourism sector are negligent.

El-Mahdi explained that after the terrorist attack in Luxor in 1997 when 58 tourists were killed, former minister of tourism Mamdouh El-Beltagi developed the sector and made a boom in just six months.

“We have to exert more efforts to open new tourism markets, for example in China, Africa, Asia, Eastern Europe, and Latin America,” El-Mahdi added.

Terrorism postpones dollar flow

Mashhour noted that these events arouse foreign concerns about coming to Egypt; therefore, the US dollar flow decreases, which in turn affects economic stability.

“Terrorism affects all sectors and situations inside any country, not only in Egypt, but transparency is required in such a situation to express what is going on and should be expressed through the media to the world,” Mashhour said. “Tourism has been hit and therefore the dollar price will increase due to high demand and lower supply because the main foreign currency sources [tourism] are fading.”

The head of Egypt’s Coalition to Support Tourism, Ehab Mousa, said the bombing will have a significant impact on tourism during the winter season.

Mousa expects a dramatic decline in the number of tourists coming to Egypt over the Christmas and new year holidays.

Mousa noted that Christmas is one of the important seasons for tourism in Egypt but unfortunately, the terrorists have succeeded in striking a blow to the sector due to their choice of time and place.

He expressed his concern regarding the appreciation of the dollar exchange rate in the case that the tourism industry is hit by a recession following the attacks.

Further, Heidi Hemaya, the media planning manager at J. Walter Thompson (JWT) Cairo which is responsible for the promotion of Egyptian tourism, said the company halted its advertising campaign that has been planned for launch on Sunday on CNN.

Hemaya told Al-Borsa newspaper it was decided that the campaign would be halted for 48 hours after the bombing of the cathedral.

Hemaya said the company has started to communicate with overseas offices to see how the cathedral bombing echoes abroad and find ways to handle the repercussions.

The US dollar broke through EGP 18 for buying at the Central Bank of Egypt (CBE) on Monday, for the first time since the flotation on 3 November.
The US dollar broke through EGP 18 for buying at the Central Bank of Egypt (CBE) on Monday, for the first time since the flotation on 3 November.

Dollar exchange rate remains unchanged

The US dollar broke through EGP 18 for buying at the Central Bank of Egypt (CBE) on Monday, for the first time since the flotation on 3 November.

The official price of the dollar against the pound at the CBE on Monday registered EGP 18.0323 to buy and EGP 18.3962 to sell.

At state-owned banks, Banque du Caire, Banque Misr, and the National Bank of Egypt, the greenback registered EGP 17.95 to buy and EGP 18.20 to sell, while the price stood at EGP 17.95-18.16 to buy and EGP 18.2-18.45 to sell at private banks.

The highest buying offer at banks on Monday was recorded by Abu Dhabi Islamic Bank at EGP 18.16 to buy and EGP 18.45 to sell.

Meanwhile, analysts ruled out that the exchange rate would be impacted by the recent terrorist events in Egypt.

Head of the treasury at a foreign bank operating in the Egyptian market, Tamer Youssef, said the impact of terrorism is likely to unfold on the tourism sector, and thus foreign exchange revenues. “However, tourism is already struggling and banks do not rely on the sector for hard cash,” he added. “The exchange rate has not and will not be impacted by these events.”

He noted that the available hard cash has been increasing at banks as the price hits EGP 18.

El-Mahdi said the St. Peter and St. Paul Church bombing cannot be linked to the exchange rate or the Egyptian Exchange (EGX).

On Monday, the first day of trading on the EGX after the cathedral bombing, saw a drop in the morning to 11,224 points during the first half hour of trading; however, it closed with gains despite the expected downturn on the back of the attack.
On Monday, the first day of trading on the EGX after the cathedral bombing, saw a drop in the morning to 11,224 points during the first half hour of trading; however, it closed with gains despite the expected downturn on the back of the attack.

EGX jumps over catastrophic events

On Monday, the first day of trading on the EGX after the cathedral bombing, saw a drop in the morning to 11,224 points during the first half hour of trading; however, it closed with gains despite the expected downturn on the back of the attack.

The EGX closed in the green, up by 1.29%. The EGX30 closed at 11,444 points in a sudden and unexpected market shift. Total trading recorded EGP 1.467bn over 400.3m shares.

Mohamed Deshnawy, CEO of Roots Securities Company, said the EGX absorbed the negative impact of the terrorist operations within an hour at the beginning of the session by the market switching from the red to the green zone and remaining there until the end of the session.

This marked the end of the instant negative impact.  However, the real impact of that operation on investment, whether direct or indirect investment, will be manifested in concerns about terrorism. Although, he added, the quick arrest of the offender should, to a large extent, decrease that negative impact. Moreover, that impact will decline gradually as time passes with no further terrorist attacks.

Deshnawy expected the EGX’s performance to be normal in the next period.

Adel Abdel Fattah, managing director of Themar Securities Brokerage, said the EGX’s performance came contrary to expectations that it would be negatively affected by the terrorist attack on the cathedral, as a result of the selective purchases targeting stocks that have not yet benefitted from the pound’s flotation.

He said the EGX benefited from the timing of the return of Arab investors’ purchases, as they started to purchase again in the middle of last week and continued in the Monday session this week, following a period of continuous selling since the pound was floated. These purchases have helped the EGX to overcome the repercussions of the church bombing.

Arab institutions registered net purchases of EGP 72.218m, compared to the EGP 23.136m in sales Arab individuals made. As a result, net purchases by Arabs registered EGP 49.080m. As for foreigners, they registered EGP 239.000 in net purchases, supported by foreign institutions which registered approximately EGP 5.45m net purchases.

Abdel Fattah expects the EGX’s performance in the coming days to be separate from the repercussions of the terrorist operation, as it saw many disturbances in the previous period, which gave it a higher ability to absorb such incidents without panic.

Ahmed Abu Hussein, managing director of the brokerage sector in Cairo Financial Holding, says the EGX’s performance surpassed even the most optimistic scenarios. These only expected the market to remain stable without retreat, not to make an increase, as happened in the Monday session.

Abu Hussein expects the EGX’s positive performance to continue, despite the successive terrorist operations in Cairo recently, thanks to the foreign and Arab institutions’ trust in the attractiveness of the EGX’s investment opportunities.

Abu Hussein mentioned that floating the pound and enabling foreigners to transfer their profits flexibly have contributed to the creation of foreigners’ trust in the Egyptian market, especially as this trust comes after five years during which the foreign institutions lost their interest in EGX.

The business community must support the country in these circumstances

Abu Bakr El-Deeb, a writer and expert in economic affairs, said the role of the business community in supporting Egypt’s economy is limited and very weak; despite possessing vast fortunes, they seem satisfied only with appearing in the media on talk show programmes.

El-Deeb said the business community must be charitable as business inside the country promotes the economy. The richest Egyptian businesspeople in 2014 have billions of US dollars in combined wealth.

The post Cathedral bombing may affect Egypt’s credit rating: professor appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2016/12/15/cathedral-bombing-may-affect-egypts-credit-rating-professor/feed/ 0
Refugees are the migrant advisory committee’s main concern http://www.dailynewsegypt.com/2016/12/13/refugees-migrant-advisory-committees-main-concern/ http://www.dailynewsegypt.com/2016/12/13/refugees-migrant-advisory-committees-main-concern/#respond Tue, 13 Dec 2016 08:45:36 +0000 http://www.dailynewsegypt.com/?p=604135 We solve problems gradually, says vice president for Potsdam committee Anna Nicolsova

The post Refugees are the migrant advisory committee’s main concern appeared first on Daily News Egypt.

]]>
 

The concept of a migrant advisory committee is strange to Egyptian and Arab readers, because it is not part of our political reality. The committee is a political entity whose members are elected by foreigners who do not have the right to vote in the European country in which they reside. Through the committee, foreigners have a chance to excise their political rights.

These committees are advised by the EU and they exist in many European countries.  Every city, district or county could form a migrant advisory committee if there are sufficient volunteers and political support.

The committee in Potsdam is one of the most powerful committees in Germany. It was founded in 1992 and had strong political influence. The Potsdam founders decided it should consist of nine elected volunteers who would represent foreigners living in Potsdam. Daily News Egypt spoke to Anna Nicolsova, the vice president of the committee in Potsdam, to better understand the refugee situation.

Nicolsova is a Polish lecturer who married a German man and moved to Germany to study law. She said the refugees’ needs are the main challenge to the committee, because every refugee has their own problems that need to be overcome. “Our duty is to try to defend the image and rights of refugees, and to work on integrating foreigners and refugees into society,” she said. “Refugees often find themselves in a permanent state of anxiety, fearing their application will be ejected and the uncertainty of their situation. These issues obstruct their ability to develop and their will to integrate because they do not know if they will remain in Germany or not.”

One major issue that Germans and refugees must contend with is Islamophobia. Nicolsova said this issue must be dealt with seriously, adding that she believes people would not be so afraid of Muslims if they knew more about Islam. The committee therefore enables discussion and dialogue between different segments of the community in order to bridge the gap and generate awareness.

Other obstacles refugees must contend with are the segments of society that exploit their vulnerability as well as a restrictive labout market. Nicolsova said refugees must often contend with misleading translators and brokers who exploit the shortage in affordable housing. “We must look closely at these incidents,” she said. “We cannot only look at the refugee’s side of the story; we must also hear from those they accuse because the truth usually lies somewhere in between.”

“We know very well that there are many faults in society, and we are trying to fight discrimination and persecution in order to reach a peaceful solution to the refugee issue so that we can all live side by side in peace,” Nicolsova said. “This is the role of the committee and its members. We want to involve everyone so that we may find the best solutions that we can all agree on.”

Nicolsova also said refugees often have to wait a long time for their applications to be processed, because Germany does not have enough people working in the asylum application process.

Regarding the housing crisis, Nicolsova said most refugees that are aware they are going to a city with housing shortages do not complain because they do not want to be relocated. However, complaints that the committee does receive are taken seriously. “We try to negotiate with our electors in order to be able to implement strategies that can ameliorate the situation,” she said. “Unfortunately, such situations must be gradually and patiently solved, so we work, do our best, and try to enact reforms. Even if these steps are small, they are still better than nothing.”

The post Refugees are the migrant advisory committee’s main concern appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2016/12/13/refugees-migrant-advisory-committees-main-concern/feed/ 0
European cooperation integral to solving the refugee crisis http://www.dailynewsegypt.com/2016/12/13/european-cooperation-integral-solving-refugee-crisis/ http://www.dailynewsegypt.com/2016/12/13/european-cooperation-integral-solving-refugee-crisis/#respond Tue, 13 Dec 2016 08:15:03 +0000 http://www.dailynewsegypt.com/?p=604129 It is possible to find better solutions if all European countries dealt with this issue together, says Elona Müller-Preinesberger

The post European cooperation integral to solving the refugee crisis appeared first on Daily News Egypt.

]]>
Refugees in Europe have more to worry about than the smugglers. Police are chasing them across Europe, but there are those who are trying to help refugees integrate into society, and to legalise their status. Elona Müller-Preinesberger, executive commissioner for social affairs, youth, health and order in the German city of Potsdam is one such person.

“There are refugees standing by the German borders suffering and wanting to live in a place that preserves their humanity, especially children,” Müller said. “In Potsdam we are working on refugee integration. The situation is quieter now, but we still have a lot of challenges to work on.”

“Now we are working on integrating children into education, and we encourage young people to complete their education,”  Müller added. “We have many obstacles facing the labour market and we are still learning how to deal with the situation and get better. In 1993 laws were passed that aimed to create an unappealing atmosphere for immigrants, and particularly refugees. However, now we are talking about integrating them and granting them the same rights as our citizens. We have a large number of asylum requests, and each request carries its own story and reason.”

Müller explained that refugees have the right to social and economic aid, which varies according to their legal status. Due to a lack of staff however, Müller says there are pending applications dating back 12 months.

Müller continued by saying that asylum applicants obtain €370 a month, and they are not charged for basic amenities such as gas, water, and electricity. Once their applications are processed and they are granted asylum, the government provides them with financial assistance similar to the unemployment benefits allotted to German citizens, until they find a job. The state offers training programmes to help refugees find work.

Müller added that those who complain about their living standards had high expectations prior to coming to Germany. “The situation for every refugee is different, and the state ensures that they receive enough support to live in dignity but not in luxury,” she said. “Even if the government accepted giving more, the taxpayers should not have to endure that. How could the state convince taxpayers, who work hard and do not live in luxury, to prop up a life of luxury for refugees! How could a refugee find the motivation to work and achieve success if he already lives in luxury!”

Müller explained that refugees also have access to basic healthcare, which is considered a basic human right in Germany. She said that the process of attaining basic healthcare has improved, adding that employers originally had to refer people to a doctor, but now that process is in the hands of doctors and the patients themselves. The old system, she argues, was unfair and a heavy burden on job seekers.

“Now, even the newborn refugee children have the right to be treated at a hospital,” Müller explained. “Refugees also receive free education and language courses to enable them to integrate easily and effectively in German society. There are six schools specialised in teaching the German language, and some simple study materials. Those schools prepare the children to enter regular classes in German schools located in their areas.

While Germany may be trying to integrate refugees, many other European countries have taken a more restrictive approach. Müller was critical of countries that did not do enough to help ameliorate the suffering of refugees, saying she hoped that European countries could come together and accommodate refugees as a collective. “It is possible to find better solutions if all European countries dealt with this issue together.”

In regards to the work done by volunteers and other concerned Germans, Müller said she was proud of the work they do. She admitted that there have been acts of violence directed at refugees, but noted that the government is doing its best to encourage people to tolerate refugees and stop the violence. “Germans may envy refugees because they do not pay taxes,” she said. “Some citizens have called on the state to stop using clubs and gyms as asylum shelters out of a fear that their sporting activities would be affected.” Müller also believes that the influx of refugees will not result in mass poverty, because refugees would contribute to the development of German society.

The post European cooperation integral to solving the refugee crisis appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2016/12/13/european-cooperation-integral-solving-refugee-crisis/feed/ 0
Bureaucracy biggest obstacle to refugees: AWO chairperson http://www.dailynewsegypt.com/2016/12/13/bureaucracy-biggest-obstacle-refugees-awo-chairperson/ http://www.dailynewsegypt.com/2016/12/13/bureaucracy-biggest-obstacle-refugees-awo-chairperson/#respond Tue, 13 Dec 2016 07:45:35 +0000 http://www.dailynewsegypt.com/?p=604127 There is a shortage of qualified volunteers, money, and translators to help refugees

The post Bureaucracy biggest obstacle to refugees: AWO chairperson appeared first on Daily News Egypt.

]]>
Manfred Nowak, chairperson of the workers’ welfare association (AWO), woke up early one day to find that Nazi graffiti had been sprayed on the walls of a refugees home in Berlin, drawn by rightwingers.

“This is not a real threat,” Novak said. “This act shows the fear and terror that the voters of the rightwing parties have, and so we need flexible mechanisms and strategies to deal with these problems.”

Nowak said that many Germans were struck with empathy after seeing photographs of a drowned Syrian boy’s body washed up on a Turkish beach in 2015, and offered to cooperate more closely with civil society organisations to help refugees.

Nowak used one of the rightwing parties’ expressions, saying “the image here has two sides: the real fear, and the image of intimidation to exploit the situation. We are used to putting our differences aside, and we deal with facts, so we organise conferences and seminars meant to educate the public.”

Nowak criticised German chancellor Angela Merkel for limiting the number of refugees Germany accepts, adding that he believes the government does not have a concrete plan to deal with refugees. “Our duty in the organisation is to know the nature and conditions of refugees, and give them strategies and tools to enable them to help themselves in the future.”

“Our organisation is experienced in dealing with refugees,” Nowak said. “We have been working in the field since the 1980s, and we have 12 refugee houses, and core staff covering all areas. We also have a long history in working with civil society volunteers.”

Bureaucracy is perhaps the most serious obstacle refugees are facing. According to Nowak, there are over 80,000 refugees in Berlin. “We must develop a mechanism by which to integrate these people swiftly.”

Some of the obstacles refugees face come in the form of those meant to help them, such as translators. Nowak said that some translators deliberately mistranslate because of their political differences with the refugees, adding that this is a deliberate attempt to weaken their legal position. He added that Germany does not have the budget or the number of specialised workers capable of servicing all the refugees.

“We are looking for refugees or foreigners who speak both languages. Many of those that work with us are volunteers and we can only afford to cover their transportation costs. Everyone does what they can to help, but the needs of the refugees exceed the capacity of our staff,” he explained.

One of the most important things refugees can do is learn the language of their host country, Nowak argued. “Children are able to communicate within three weeks if they learn, but it is more difficult with adults—particularly when it comes to the elderly and the uneducated. We must address this issue because whoever cannot express themselves can become more violent.”

Refugees who do not learn the language and integrate may form parallel societies. Nowak says this phenomenon is unhealthy, and that refugees must learn to speak the native language.

 

The post Bureaucracy biggest obstacle to refugees: AWO chairperson appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2016/12/13/bureaucracy-biggest-obstacle-refugees-awo-chairperson/feed/ 0
The right exploits the fear of refugees for their own gains: MP in Germany’s Greens party http://www.dailynewsegypt.com/2016/12/12/right-exploits-fear-refugees-gains-mp-germanys-greens-party/ http://www.dailynewsegypt.com/2016/12/12/right-exploits-fear-refugees-gains-mp-germanys-greens-party/#respond Mon, 12 Dec 2016 09:00:46 +0000 http://www.dailynewsegypt.com/?p=604122 Integrating refugees will benefit Germany, especially in the case that they return to their countries as relationships will be strengthened, says Marie Luise von Halem

The post The right exploits the fear of refugees for their own gains: MP in Germany’s Greens party appeared first on Daily News Egypt.

]]>
New refugees in Germany have encountered several problems: from manipulation by translators in accordance with their political leanings or psychology, and the difficulty of learning the language, to brokers taking advantage of their need for low-cost housing, and mistreatment by employers. However, these issues have not caused Marie Luise von Halem’s optimism to falter. She is a member of parliament for the Greens party in the state of Brandenburg, which up to four years ago had the highest concentration of neo-Nazis in Germany.

The Greens is the party that defends minorities in Germany the most. Halem says the obstacles faced by refugees are due to the huge influx in recent times. This led to anyone who knows the language being used as a translator without assessing their professionalism or suitability. Moreover, the housing and labour markets were not ready for the masses of refugees that arrived on German soil. Halem believes that Germany can turn things around, particularly by criticising those who exploit the fear of refugees, foreigners and the unknown for their own political gain—especially rightwingers.

The policy of the Greens, according to Halem, is based on welcoming any person who enters Germany and dealing with them as a German citizen. The member of parliament said: “Despite some people taking advantage of the issue for their own political gain, helping refugees immediately after they arrive at the German border is a necessity. Moreover, integration is a major issue for my party; we will defend and demand this as a single solution for society and for immigration as a global challenge, which is increasing of course.”

Halem acknowledges that the number of refugees was surprising and Germany was not ready for it, especially as the country’s bureaucracy is not known for being fast or flexible. However, she said “with time, the bureaucracy began to show flexibility and were concerned with finding solutions for people within the limits of the law. Moreover, there are people who had nothing to do with civil society or volunteering before, but they have become concerned with helping refugees and helping to establish shelters. This is a positive and much needed move.”

The MP continued: “It really is a cause of pride; it is a wonderful and very beautiful thing that people care for this humanitarian issue. The reason is deep in our historical roots; it is attributed to the experience we ourselves lived as refugees at the time of the second world war. We cannot forget that in the late 1960s we received Turks as labourers with contracts; but we made a mistake then because we forgot they would bring their families and integrate. So, we behaved differently that time and, early on, thought about integrating those who escaped to Germany, and their families, to find a place in society.”

Based on the size of the situation and the pressure, the present chaos is expected and, in fact, legitimate, she said; but the negative aspects can be assessed and changed for the better. “That is why I am optimistic.”

As for the crises caused by some refugees, such as sexual harassment and assault, Halem said these are individual mistakes and must be handled objectively, quietly, and with tolerance. “We have a responsibility to make German society’s ethics and concerns clear for those who escaped to our country so they can deal with the facts and expectations of the hosting society without violating its system and falling foul of the law. All people make mistakes, including the Germans of course,” she said.

On the international responsibility towards refugees, estimated at 60 million worldwide, she said: “we have to ask what we have done to have this huge numbers of refugees escaping wars, dictators, authoritarian powers, and oppression. We have to take into consideration Europe’s capabilities which enable it to absorb more than just one million people.”

On refugees’ complaints of mistreatment, including trouble with brokers, translators and other organisations taking advantage of the newcomers, Halem said: “We must not start [investigations] by doubting employees and individuals; we must assume that they have good intentions unless proven otherwise.”

As for integrating refugees in the labour market, she said for refugees who come to settle and want to enter the labour market, the doors for education and qualifications them must be opened to them, thus enabling them to compete in that market. Of course, that takes time, and the refugees need places and employers that would be willing to hire them.

Syrians, with their large numbers, are actually a great chance to increase the chances of cooperation with Syria in the future, she said. “I believe that if they are integrated into German society in the right way—imagine with me after the war comes to an end and they go back to their country—to what extent they will have an effective role in helping in reconstructing their country, when they go back with the advanced German know-how,” Halem explained.

On concerns about the creation of a “parallel society” by certain refugees who bring ethnic and religious fanaticism with them to Germany, she said that no doubt there are mistakes to be avoided while working to integrate them, and we will be able to do that more efficiently if we take all the citizens’ concerns into account.

“We, as a party, believe that strong roots and not fearing for one’s identity will help in easing integration. We also believe that any society is able to create a new, ideal identity based on pluralism and will become stronger for it. We believe that an identity based on pluralism and accepting others, results in a happier citizen than those who reject, marginalise, and exclude ‘the other’. All people must participate in the identity, laws, etc.” she explained.

It is “unimaginable” that people use the refugee issue as a political tool and the Greens will work hard to stop them from achieving their goals of racism and division. “Unfortunately, we have to admit that the right derives its political strength from Germans’ fears,” she concluded.

 

 

The post The right exploits the fear of refugees for their own gains: MP in Germany’s Greens party appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2016/12/12/right-exploits-fear-refugees-gains-mp-germanys-greens-party/feed/ 0
Closing borders is inhumane and contradicts German values: SPD member http://www.dailynewsegypt.com/2016/12/12/closing-borders-inhumane-contradicts-german-values-spd-member/ http://www.dailynewsegypt.com/2016/12/12/closing-borders-inhumane-contradicts-german-values-spd-member/#respond Mon, 12 Dec 2016 08:30:42 +0000 http://www.dailynewsegypt.com/?p=604116 The head of Germany’s social democratic party (SPD) headquarters in Berlin, Dennis Buchner, ruled out that opening the German border for refugees could be a long-term electoral manoeuvre by chancellor Angela Merkel and the ruling party. He refuted reports that alleged Germany was receiving an increasingly larger amount of refugees, but stressed Germany should not …

The post Closing borders is inhumane and contradicts German values: SPD member appeared first on Daily News Egypt.

]]>
The head of Germany’s social democratic party (SPD) headquarters in Berlin, Dennis Buchner, ruled out that opening the German border for refugees could be a long-term electoral manoeuvre by chancellor Angela Merkel and the ruling party. He refuted reports that alleged Germany was receiving an increasingly larger amount of refugees, but stressed Germany should not close its borders to those fleeing war.

Buchner said that his party’s position on the matter is very clear, and the right to asylum is stipulated in the German constitution. He added that the government welcomes everyone and reviews all asylum claims, stressing that the closure of borders is inhumane and contradicts German values. There are more than 60 million people in the world who are seeking asylum, and Germany can face this quantity challenge, he said.

Buchner noted that Berlin received only 5% of the refugees in Germany. This share is very small, but Berlin had to open some sports halls and schools, as well as stadiums and football, basketball and volleyball fields to accommodate the numbers of refugees. “We should cooperate and combine our efforts to help those refugees, and integration is our most important goal,” he said.

Buchner said he believes that the fear of Islamophobia is not real. “The German people do not ask refugees where they come from,” he said. “The Germans learned that Islam itself is not the problem, but instead it is extremists and Islamist politicians. Such people exist in all religions and beliefs. Some Germans cooperate now with mosques that help refugees. This personal experience has taught them that Muslims are normal people just like everyone else.”

Buchner believes that the largest share of Germans consider aid as a purely humanitarian activity. Even so the government has to take into consideration the fears some citizens have,  especially as some Germans continue to say racist and unacceptable things on social media.

“The government should discuss the fears of those and deal seriously with this issue, because Germans and Europeans also have right-wing extremists,” Buchner said. He noted that the lack of information increases fear and some political currents exploit that.

Some Germans, Buchner added, take advantage of refugees and their need for low-cost housing. He said that it is regrettable, but people like that exist everywhere in the world and the situation is difficult to correct because of supply and demand.

Buchner said that Germany will not be increasing the number of refugees it receives, saying the country does not promote migration but offers asylum for those fleeing their countries. “The government should analyse the number of people it can accept and plan to integrate them in the society,” he said. “Moreover, Germany should search for the reasons that push refugees to escape.”

Buchner said that he cannot predict whether Merkel’s decision to open borders for refugees was designed to take advantage of them in the elections on the long run, or not. He believes that Germany should not close the borders, and now the government faces a big challenge to enable those refugees to live in dignity. He added that the SPD party believes that Merkel was forced to do so, but the European Union failed his country.

 

The post Closing borders is inhumane and contradicts German values: SPD member appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2016/12/12/closing-borders-inhumane-contradicts-german-values-spd-member/feed/ 0
Ideal integration not fully possible, problems bound to exist: manager of AWO Refugee House in Berlin http://www.dailynewsegypt.com/2016/12/12/ideal-integration-not-fully-possible-problems-bound-exist-manager-awo-refugee-house-berlin/ http://www.dailynewsegypt.com/2016/12/12/ideal-integration-not-fully-possible-problems-bound-exist-manager-awo-refugee-house-berlin/#respond Mon, 12 Dec 2016 08:00:00 +0000 http://www.dailynewsegypt.com/?p=604099 Learning the language is key, because most of the problems refugees face stem from a lack of understanding, says a Palestinian working at the refugee house

The post Ideal integration not fully possible, problems bound to exist: manager of AWO Refugee House in Berlin appeared first on Daily News Egypt.

]]>
 

Michael Grunewald, the manager of AWO Refugee House in Gotenburger Straße, a pluralistic neighbourhood located in Berlin that is home to many Arabs, Turks, and Iranians, believes that the recent wave of refugees coming into Germany are very fortunate

Refugees face a number of obstacles and challenges in their bid to integrate into German society, said Grunewald. The ideal integration that everyone searches for is not fully possible, he explained, noting that problems with the housing crisis and searching for work are bound to create a host of difficulties.

He said that the house he manages used to operate as an old school. The house has received 180 refugees from different countries, including Syria, Iran, Afghanistan, Pakistan, Palestine, and Lebanon. They include 14 families and more than 20 children. He thinks they are lucky to be in an area with vacancies in schools and nurseries for their children, which is not easy to come by in Germany.

The house has 12 employees of Arab, Russian, Polish, and German origins, in addition to kitchen workers and cleaners from Senegal and Turkey.

Grunewald said that the scope of Islamophobia in Germany is exaggerated, given that the country plays host to more than 25 different religions and there is no distinction between them on the basis of religion.

However, he believes that notions of Islamophobia do exist and that sentiment is growing and being fuelled by some Yemeni parties that exploit people’s fear. Grunewald believes that such fears can be countered by understanding the source. He gave the example of how the Crusaders exploited the Bible to wage wars, and today Islamists exploit the Quran.

Grunewald emphasised that Germans look for information in all cases, and avoid generalisations, which is important.

He said: “I know that there are some who are expressing their general fears, but we go to Arab and Chinese restaurants and care about the knowledge and acceptance of other cultures. Foreigners are an integral part of German society, but integration will never happen in full and there will still be problems to be dealt with calmly and there will still be those who seek to exploit situations, thus it is important to uphold the law.”

He said that most refugees have chosen to come to Germany due to its refugee integration programmes. This is in addition to providing economic, social, health, and educational aid with no time limit; unlike in Spain, where aid only lasts for six months, and in France and Switzerland they barely provide aid.

He thinks that it would have been better if refugees were not divided along Macedonian borders and European countries, and the results of what has occurred during this massive influx of refugees will become clear later, but not now. He said that Germans, as usual, have learned a lot from this crisis.

Mohamed, a Palestinian refugee working in the refugee house, came to Germany to study political science, and then decided to stay.

Mohamed said that he often receives complaints from refugees about abuse occurring in a number of different offices, particularly regarding translators allegedly manipulating translations. He attributed these claims to a lack of professionalism, or perhaps due to the language of the translator not being strong enough to live up to the standards of the work.

Mohamed, who refused to speak Arabic so as not to exclude his manager from the conversation, said that refugees have official documented rights in the European Union, but he also believes that the receiving country also has rights. The most important thing for a refugee is to have his privacy respected and to take a chance to live independently. In his opinion, Germany provides this, which will help refugees learn the language and provide schools for children to continue their education.

Mohamed took us on a tour to inspect the accommodation of refugees, and the places where they prepare food and wash their clothes in the old school. He said that in emergency situations they give refugees shared accommodation in the halls or dormitories, which makes it harder for the refugees to learn the language quickly, unless they have a “willpower made of steel”.

He sees that refugees should build themselves into becoming independent individuals. “I personally, from my experience, can say for sure that learning the language will eliminate most of the problems refugees face,” said Mohamed.

The post Ideal integration not fully possible, problems bound to exist: manager of AWO Refugee House in Berlin appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2016/12/12/ideal-integration-not-fully-possible-problems-bound-exist-manager-awo-refugee-house-berlin/feed/ 0
I work to return the favour granted to me by Germany: Iranian refugee and translator http://www.dailynewsegypt.com/2016/12/08/603490/ http://www.dailynewsegypt.com/2016/12/08/603490/#respond Thu, 08 Dec 2016 10:00:48 +0000 http://www.dailynewsegypt.com/?p=603490 Refugees have high expectations of their new country, we let them do as they will even if it goes against the nature of German society, so as to not be accused of racism, says Mitra Robeer

The post I work to return the favour granted to me by Germany: Iranian refugee and translator appeared first on Daily News Egypt.

]]>
Iranian refugee Mitra Robeer came to Germany with her mother and sister in 1998 and currently works as a translator for refugees—Arabs and Persians in particular.

“My sister and I left Iran thanks to a plan my mother formulated. We were both wanted by the authorities for our political activities. So, our mother helped us escape when we were released [from detention] pending trial. Our father was dead, so we agreed out of fear and because we didn’t want to make our mother feel like she was not in control,” Robeer explained.

Initially, her family had wanted to go to America. However, her mother refused to let them go to America alone.

Her political activity began at university. There was a doctor who used to speak to the students about freedom, and told them that the voice of students and young people drives societies. “He always told us to raise our voice, as we are the party who determines the nation’s path. His words inspired us all and made us dream of a democratic Iran. So, my sister and I became involved in partisan work,” she said.

But one day the professor did not show up. It was rumoured that he was killed in a fight with his wife’s lover. “But we knew this story was a lie,” Robeer said. “His young daughter drew a picture of her father on the ground with a bullet between his eyes. Therefore, we were sure that the government searched his home and he was politically liquidated.”

At that time, the students formed groups to raise the importance of the issue, but Robeer’s group was arrested. They were taken somewhere for investigations, which she described as “overburdening”.

“The room was chilly but when we asked for reprieve from the cold, the investigators turned the air-conditioner down and strange gases and remnants of rodents came out of it. We were sure that we would fall ill and die,” she said.

The authorities put pressure on their families. “After the death of our father, who had worked in the culture ministry, our mother was determined for us to escape Iran as she feared for our lives. Through our father’s connections, she managed to secure our release pending trial,” Robeer said.

Their mother arranged for them to escape with traffickers in a pickup truck, and the sisters hid underneath the cargo. They escaped to Tehran, then to Iraq, then to Turkey, then Greece, and finally to Germany. The women were in their early twenties and were distraught. “People found our sadness strange, but we were sad that we did not have any opportunities. We loved our country, and wanted to change it for the better.”

Furthermore, Robeer was unable to complete her education in Germany since, at that time, refugees had no right to do so until their request for asylum was accepted. Her sister Mihnosh’s documents were accepted more quickly so she returned to university to complete her studies.

“As for me, I learned the language and began to work voluntarily to help people and return the favour granted to me by a country, which even if it does not respect you, it will not violate you; and, in general, is always more fair towards us than our own countries,” Robeer said.

Expanding on Germany’s treatment of refugees, her work with newcomers, and in response to the accusations refugees direct to German employees and translators, and their frequent complaints of bureaucracy, mistreatment, and manipulation of translations, Robeer said: “Based on my experience, those in need have the audacity to complain about things that are not true.”

“When we came here, we did not have the right to free meals and did not receive a monthly cash allowance. We used to take papers and go to the supermarket and stand in a separate queue so as not to delay the other customers, and we were thankful for Germany,” Robeer explained. “But now, every refugee has a roof over their heads and a cash allowance. Moreover, we used to study the language at our own expenses, but now refugees have the right to take a language course from day one—paid for by the taxpayer. However, most of them find some kind of pretext to attend, which wastes the taxpayers’ money.”

She added that the governmental offices try to help them and work to find solutions for any problem facing refugees; however, they are depressed and complain. “Personally, based on my information and experiences, I see the major problem here is that these refugees pay huge amounts of money to reach Germany, so they believe that upon arrival they will find an open paradise—their expectations are incredibly high,” Robeer elaborated. “They are shocked that everybody here receives help within the basic limits, not luxuries. Thus, they think that what is separating them from their dreams and visions is racism, but this is untrue most of the time.”

Robeer then asked: if everybody is “cursing and spitting on Germany” and criticising all the procedures, the question is, why do enormous numbers come to seek refuge in Germany? “Recently, it’s Syrians in particular, but before them it was Chechens, Afghans, Iranians, and Somalis.”

“In their journey to escape, they passed by several other countries in order to arrive in Germany. So, why did not they stay in one of those nations if they offer better or even similar forms of aid? The answer is clear for anybody who knows immigration laws: Germany is the best,” Robeer stated.

She cited the many benefits that refugees can receive in Germany: monthly aid, health and social insurance which unemployed Germans may not receive, and for the first time the German government will accept refugees’ certificates of education, such as a high school certificate. “That did not happen in our day and has not happened in other countries. I am glad for them, but sad for our generation. As a matter of fact, I believe that whatever efforts we make to satisfy them, the majority will never feel happy. They want to live like the rich Germans do—they are already equal to ordinary Germans, but this is not enough for most of them,” Robeer said.

Robeer denies that there are parallel societies among Iranians in Germany, saying: “I am completely integrated, as well as my family. Many of those who came from Iran are religious extremists, but there is no Iranian or Persian parallel society in Germany.”

The translator says that the biggest obstacle for refugees now is learning the German way of life.

Refugees believe with time that they have the right to be demanding and disgruntled, especially as the smugglers and traffickers say to them “how lucky you are” to be able to come to Germany. Moreover, lawyers and volunteers at ecclesiastical authorities [the operational and governance structure of a church] teach them how to complain and claim more benefits.

 

The post I work to return the favour granted to me by Germany: Iranian refugee and translator appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2016/12/08/603490/feed/ 0
Learning from the past: Germany’s refugee policy is dignifying, positive http://www.dailynewsegypt.com/2016/12/08/603486/ http://www.dailynewsegypt.com/2016/12/08/603486/#respond Thu, 08 Dec 2016 09:30:26 +0000 http://www.dailynewsegypt.com/?p=603486 Fadia Fouda, a former Palestinian refugee, says Germany has vastly improved the situation for new refugees

The post Learning from the past: Germany’s refugee policy is dignifying, positive appeared first on Daily News Egypt.

]]>
Fadia Fouda is a Palestinian woman who lived in Lebanon and had married a leftist during the Lebanese civil war. Given her husband’s political ideology their lives were in constant danger in Lebanon, which pushed them to leave Lebanon and go to Germany. She was the last person to obtain an entry visa to Eastern Germany, an hour before the embassy in Cyprus closed, before it was reunified in 1990.

Fadia worked with refugees in Lebanon, helping them adapt to their new lives in the refugee camps. It never occurred to her that she would face the same situation once she became a displaced person in need of help from others in Germany.

“We were a family with four children,” Fouda said. “He left for Germany before me and our children did, and we followed shortly after by taking a boat to Cyprus and from there to Germany. Once there we began the process of obtaining residency.” Her and her family were granted political asylum within a year.

Learning the German language proved to be difficult for Fouda. “We studied the language and looked for jobs. At first I worked in a museum, answering questions visitors may have had. I also worked part-time in different places, and the income was enough to make a living at first.” After 10 years, things finally began falling into place for Fouda. “I conducted a study on Palestinian women in Germany for a university,” she explained. “I had experience working with immigrants and refugees so it was something I was good at.”

Fouda said that prior to going to Germany she had many inflated expectations about life in Europe. “At first, we were shocked by the reality of the situation,” Fouda explained. “We were able to stand on our own two feet, but it is a difficult experience and not everyone is successful.” To Fouda, perseverance is one of the most important aspects of successfully navigating their new realities. “New migrants and refugees must also overcome the language barrier as quickly as possible, and come to understand their adoptive society and its culture.”

“I believe the new generation of migrants and refugees are more fortunate than we were because they are better equipped to understand their situation more quickly,” Fouda said. “When we first came to Germany language lessons were not available prior to obtaining residency, but now the government acknowledges the right of refugees to learn the language. This policy is dignifying for refugees, and it is a positive development.”

When it comes to finding employment, Fouda believes that the situation has vastly improved. “For many years, asylum seekers were not allowed to gain employment, but now a refugee may start working three months after applying for asylum if no German citizen is able or willing to take the job. This is a big development as some of the older refugees remained in Germany for up to 20 years without having a job.”

According to the Asylum Information Database, new refugees in Germany are placed in an initial reception centre for a period of up to six months; however, refugees from countries that are deemed safe may find themselves at such a centre for the entire duration of their application process. Asylum seekers that are allowed to leave these centres may not pursue self-employment, but have the right to apply for an employment permit. To be eligible for such a permit, the asylum seeker must obtain a job offer from an employer who will guarantee employment if the application is approved, providing a detailed job description is handed to authorities. Once employed, job centres are required to carry out priority reviews of the job offered for 12 months, in case a more suitable German or foreign national with a more preferable employment status exists. In essence, if there is a German or European Union citizen capable of doing the same job, priority is given to them. After a period of four years has passed, all restrictions on work and education are lifted.

“The new arrivals are lucky,” Fouda said. “Previous generations of refugees who may have started their application process 17 years ago are still waiting on the government to finalise their asylum application. After four years, if someone’s asylum request is still not finalised or if they have yet to be granted residency, they are entitled to work. This is a major achievement.”

With a growing number of refugees from the Middle East seeking asylum in Europe, Islamophobia has also become more prominent throughout the continent. “A large part of public opinion and many political forces have fears, and they do not hide them,” Fouda said. “Unfortunately, we are responsible for a large part of that, because we fail to provide a true picture of ourselves, do little to improve our own situation and isolate ourselves from the wider society.” She added, however, that refugees living in Germany “live in a real democratic atmosphere in which freedom of expression exists and restrictions are only imposed when refugees behave suspiciously. Based on my experience, Germans don’t fear ideas, and authorities don’t act unless there’s particular proof of suspicious activity.”

Speaking on Germany’s refugee policy, Fouda praised German chancellor Angela Merkel. “Germany is not a charity, but the government has a vision for the future,” she said. “German society is aging, and chancellor Merkel has innate intelligence that pushes her to work for the betterment of the coming decades. Most of refugees are young people and have the ability to work and fill the gap in the structure of the society, especially given that the country needs 300,000 workers.”

In regards to the complaints many refugees have had about the difficulty of learning the language, and their feeling of mistreatment, Fouda believes these feelings reflect real problems. “You are in a strange country and confronted by a new language and culture. Imagine how it must feel when you are not able to properly express yourself. It takes time to understand the way things are, and you must learn many new skills. All of this takes time.”

Integration is not easy, says Fadia. “You must have the spirit of a hunter; if you are prey, both society and expatriates will eat you alive, but if you are a fighter and have the will then despite the problems you will reach your goal.”

Fadia concluded by saying she hopes that every refugee coming to Germany will understand what to expect from day one. “Take the time to learn the language, it will help you find a job and allow you to stand on your own two feet within a year and a half. If you are prepared it can help you reduce the amount of time you spend suffering and wasting money making wrong decisions.”

 

The post Learning from the past: Germany’s refugee policy is dignifying, positive appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2016/12/08/603486/feed/ 0
Immigrant lives at mercy of German bureaucracy, knows very well he has no asylum rights http://www.dailynewsegypt.com/2016/12/08/immigrant-lives-mercy-german-bureaucracy-knows-well-no-asylum-rights/ http://www.dailynewsegypt.com/2016/12/08/immigrant-lives-mercy-german-bureaucracy-knows-well-no-asylum-rights/#respond Thu, 08 Dec 2016 09:00:50 +0000 http://www.dailynewsegypt.com/?p=603483 Ahmed submitted a humanitarian asylum request, does not own a passport

The post Immigrant lives at mercy of German bureaucracy, knows very well he has no asylum rights appeared first on Daily News Egypt.

]]>
Like many other young people Ahmed—who refused to publish his full name—dreamed of living in the west, and to become a businessman in countries distinguished by prosperity and job opportunities, instead of being a carpenter. This is what he thought before he started his journey to Germany a year and a half ago.

Ahmed, a 27-year-old Egyptian and the second son in a family of five children, originally comes from Mansoura. Ahmed’s father is a farmer who rents land, which has created a series of difficulties in their lives. They borrow money to be able to sell crops, and borrow again to be able to live.

Ahmed left his country after it stood in the way of his opportunities, despite him having received a high school diploma. After he graduated, he decided to continue working as a carpenter—the profession he was taught since he was a kid. He used to earn EGP 8 a day; however, that was not enough to live on or start a family with, which led him to flee the country and travel to Turkey, where he worked in garment factories. He said that his family gave him permission to travel to Turkey.

Ahmed chose Turkey as a destination because its visa is the cheapest. “The visa’s cost was roughly EGP 450, and the cost of living there is relatively inexpensive. The total cost of living and transportation is roughly EGP 3,000, if you are unemployed. The first thing you should do in Turkey is to ask about the places where Arabs gather, and then you should meet them in order to make a living. Some of them will help you find work and get paid—this is what actually happened to me—and I worked in a garment factory. I managed to save a sum of money and send it to my family in Egypt,” Ahmed said.

Ahmed spent two years in Turkey, making more money than he did in Egypt with a weekly income of 500 lira, which is equivalent to $200. He stayed in Turkey until “its currency became worthless”. That was when he and his friends decided to leave for Europe with the immigration waves of Syrian and Iraqi refugees.

Ahmed added that they were five young people who took the decision to immigrate together and shared one apartment. Preparing for the immigration journey was not difficult, since Turkey lacks supervision, and everything there can be done through paying bribes. Ahmed added that you can work without providing your passport. “If you know one of the mediators, it won’t be difficult to immigrate,” Ahmed said.

The illegal immigration itinerary was given to Ahmed as follows: “You go to Izmir to take the rubber boat to the nearest Greek island. Then you introduce yourself to the police and give them your identification papers, and the decision to leave the country within a week. After that you determine your destination and travel to the country you choose.” He added that the only risks are the rubber boat trip and the hit-and-run chase with the Greek maritime authorities before reaching the Greek shore. Everything after that becomes easier and simpler.

Ahmed said that he chose Germany as the final destination for his immigration journey because its procedures are simpler and its bureaucracy allows him to live there as long as possible, because Egypt is classified as a safe state.

Therefore, he applied for humanitarian asylum—the approval or rejection of these applications takes a long time because each request is examined separately, the waiting list is long, and it is not a priority for the German government.

“The German government rejects most of these requests. Therefore, I worked hard to find a job to earn money without paying taxes, and live in Germany. When the government issues its decision, I will find another way to stay; for example, presenting a plea will put me back on the waiting list, which means I might be able to stay for more than five years,” Ahmed explained.

Regarding the living conditions, he said that working without a passport is called “informal business”, which is prohibited and criminalised by the state. “As a refugee, I can only work under conditions, such as learning the German language to integrate, which is difficult for someone like me,” he said. Ahmed is working hard to take advantage of his time in Germany by increasing his savings, which reached EGP 80,000 from his work in Turkey and Germany so far.

Ahmed added that the government sent him to a school to learn the German language, but he left it after three months. He worked in a restaurant and did not pay taxes and violated the German law.

“At the beginning, the employers do not know you but know you need a job, so they use you and pay you a salary that is lower than what you deserve. So we agreed on €2 per hour. The normal rate is €5 to €7 in the eastern region and €6 to €8 in the western region. I worked eight hours a day, and after the employer recognised my skills, he raised my salary to €5 per hour like the rest of the staff—60% of the staff is like me and works informally,” Ahmed said.

He spends an average of €10 a day, and lives in a shared small house, paying €150 of the rent a month. Ahmed earns roughly €30 a day, and the government provides him with €140 a month. “I sometimes work overtime after and save more than €1,000—an amount I would have never been able to earn in Egypt or Turkey,” he said.

Ahmed’s dream is simple. He wants to obtain a residency permit and the right of asylum, and own a restaurant. He stressed that he is capable of achieving his dream if he stayed in Germany. He said that he will work to establish a restaurant using other sources of funding, because restaurants are profitable, since “Germans do not stop eating”.

If he is not provided with a residency permit, he will leave his house so that the authorities don’t find him. By then they will look for him again and queue him on the waiting lists. He said that during that time, he will search for a legal way to stay in Germany or repeat the experience in one of the other European Union (EU) countries. He added that he will not go back to his country before five years pass, because “Europe is the best in the world”.

Ahmed said that sometimes he feels nostalgic and thinks about returning to Egypt; however, the stories he listens to from his friends about being fired from their jobs keep these thoughts away.

In terms of his savings, he said that he transfers them through people who are legally residing in Germany.

Ahmed said that he did not follow the easy way and get married to one of the German women, because he considers it disgusting. He doesn’t want to have a son from a German woman, because in case of any dispute, she will have custody rights.

He concluded: “The unemployment problem in Egypt is because young Egyptian people like to take money from their families instead of working, and they don’t realise how their families feel when they see their children sitting next to them after all these years of education.”

 

The post Immigrant lives at mercy of German bureaucracy, knows very well he has no asylum rights appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2016/12/08/immigrant-lives-mercy-german-bureaucracy-knows-well-no-asylum-rights/feed/ 0
Egypt’s subsidy system: questionable corruption, unending problems http://www.dailynewsegypt.com/2016/12/08/603447/ http://www.dailynewsegypt.com/2016/12/08/603447/#respond Thu, 08 Dec 2016 06:00:48 +0000 http://www.dailynewsegypt.com/?p=603447 At the beginning of the 20th century, when the world was plagued by famines and world wars, governments enlisted food subsidy programmes to feed their citizenry in these desperate times. Such programmes are still used by government’s all over the world in order to combat poverty and hunger. However, many countries across the world have …

The post Egypt’s subsidy system: questionable corruption, unending problems appeared first on Daily News Egypt.

]]>
At the beginning of the 20th century, when the world was plagued by famines and world wars, governments enlisted food subsidy programmes to feed their citizenry in these desperate times. Such programmes are still used by government’s all over the world in order to combat poverty and hunger.

However, many countries across the world have stopped providing food subsidies and switched to cash support, after corruption plagued their food subsidy programmes. In Egypt’s case, corruption has been part of the subsidy system from its beginning under former president Gamal Abdel Nasser to current President Abdel Fattah Al-Sisi.

After years of dealing in a fraudulent system, how can the government combat the current level of corruption? Is Egypt’s current subsidy model what the country needs?

Daily News Egypt takes a look at ways to improve the efficiency of the subsidy programme.

 

Khaled Hanafy, former minister of supply and interior trade
Khaled Hanafy, former minister of supply and interior trade

Is Egypt’s current subsidy system a failure?

For over 60 years, Egypt has provided its impoverished citizens with food subsidies in order to help them survive. Yet, throughout its entire duration, the subsidy system has been faced with corruption despite efforts to combat such malpractices.

In February 2014, Khaled Hanafy, former minister of supply and interior trade, tried to implement a new system to end the corruption, but unfortunately he was unsuccessful.

The system he created is still in place until now. How do economists view the system and what changes would they recommend?

Hany Tawfek, an economic expert, said that the current system for subsidies is a proven failure, adding that food subsidies are no longer the default government charity system in most parts of the world.

He believes that having second prices for any product opens the door for corruption, allowing a third party to intervene between the government and the poor.

Mexico and Brazil, for example, put a halt to their food subsidies programmes in order to end the unwieldy corruption.

Tawfek said cash support is a better option for families who are below the poverty line and do not have any source of income. However, such families must meet a few conditions. Children in these families must apply for education and must receive health care from the designated government health facility.

They must also apply for government-run or private programmes that train assist them with job hunting, Tawfek said.

Tawfek believes that the current system, which relies on ration cards, in not the best method to be able to tackle subsidy distribution, as they lead to the same types of corruption by which a third party is able to intervene.

Hanafy’s programme implemented in 2014 distributed subsidies via electronic cards, which contains EGP 21 per month—which increased recently by EGP 3 up from EGP 18 following the flotation of the Egyptian pound—to purchase food products such as rice, sugar, and cooking oil.

The current system, which relies on ration cards, in not the best method to be able to tackle subsidy distribution (Photo Public domain)
The current system, which relies on ration cards, in not the best method to be able to tackle subsidy distribution
(Photo Public domain)

I don’t believe that anyone has the power to end the institutional and personal corruption that Egypt suffers from, even President Abdel Fattah Al-Sisi, claimed Tawfek.

Tawfek said that the government is unable to provide more than the current amount, which is worthless, adding that EGP 21 can hardly help feed a family.

He believes that the main problem is the small amount of taxes that the government collects, explaining that in any given country taxes represent around 25% of its income. According to Tawfek, in Egypt’s case, that would add up to EGP 750bn, but unfortunately Egypt collects only EGP 350bn, which represents just 12% of its income.

The government must reorganise Egypt’s tax system in order to increase its total income, which would assist the company with being able to support the poor with subsidies.

 

Inflation rate, economic woes provide obstacles to reforming subsidy system

On 28 November, the Egyptian Center for Opinion Research (Baseera) said that one in every three Egyptian families are willing to forgo their ration card, according to a recent survey.

Eight in every 10 Egyptian families has a subsidy card. Lower Egypt has the highest number of subsidy card holders with 89% of its residents being card holders, while Upper Egypt follows with 80% of its residents benefitting from subsidies.

every Egyptian believes in the importance of governmental subsidies
every Egyptian believes in the importance of governmental subsidies

Approximately 20 million people hold ration cards, a number that is likely higher than the amount of people who qualify to receive ration cards. With such a large segment of the population receiving some form of subsidies, some economists ponder whether the system in place is best equipped to tackle the needs of Egypt’s impoverished.

Omar El-Shenety, the managing director of Multiples Group, said that every Egyptian believes in the importance of governmental subsidies, whether that comes in the form of cash or food. However, the problems lie in the absence of a database that regulates who is receiving subsidies in order to make sure they are going to the right people.

He believes that the current number of people who receive ration cards is way higher than the amount that should be receiving them.

He said the current database is inaccurate, and that there are people from the middle class receiving ration cards who should not be.

On the other hand, El-Shenety does not think switching from food to cash is the best idea given current economic circumstances. “The government cannot implement a full cash subsidy system for the poor,” El-Shenety said, adding that it is not possible to implement such a thing given the current high inflation rate.

He believes implementing cash subsidies and getting rid of food subsidies would increase the inflation rate, which is already at its highest levels. El-Shenety explained that Iran switched from a food subsidy programme to one that distributes cash and witnessed an increase in the inflation rate, which is something Egyptians cannot afford.

It is like what happened with floating the Egyptian pound, he said, explaining that all experts believed that the price of the pound against the US dollar could not cross EGP 13 per dollar. But the flotation mechanism creates an unrealistic higher price of currencies, which would be further exacerbated if the government provided cash support.

The problem is that if the government stopped subsidising food products, they would be offered at their fair, although higher, prices, which would increase the inflation rate, he noted.

El-Shenety sees that the current subsidy system is a better system for Egypt for the time being, given the current economic problems.

The Egyptian government must create an improved, transparent database for those who truly are considered poor and need ration cards; otherwise, nothing is going to solve the problem with subsidies, he said.

By clearing up the database and removing people who are not entitled to ration cards, it would be possible for the government to increase its support for the poor, he said.

 

The current unemployment rate in Egypt stands at 12.6%, according to the Central Agency for Public Mobilization and Statistics.
The current unemployment rate in Egypt stands at 12.6%, according to the Central Agency for Public Mobilization and Statistics.

Informal economy, budget deficit make providing unemployment benefits difficult

Many countries provide unemployment benefits for their citizens who want to find jobs, but cannot.

Such benefits often provide a safety net for both the government and recipients, in order to avoid from members of the populace falling too far below the poverty line. In Egypt, the number of citizens slipping into poverty has been increasing. With the recent increase in prices over the past couple of months, the poverty rate is likely to increase at an even quicker pace.

The current unemployment rate in Egypt stands at 12.6%, according to the Central Agency for Public Mobilization and Statistics.

Aliaa El-Mahdy, former dean of the economics and political science college at Cairo University, said Egypt would be unable to provide unemployment benefits at least for the next 10 years due to the lack of knowledge and concrete information regarding the unemployed and their demographics.

She believes that a major part of this is due to the informal economic sector, which presents an obstacle to Egypt being able to provide unemployment benefits.

“It would be impossible to know whether a person applying for these benefits has any other source of income or not,” she noted.

El-Mahdy emphasised the importance of bringing the informal sector into the formal economy. She believes that the government is working on creating a database to help the government plan for the upcoming period. However, she does not believe the government has taken the steps necessary to fold the informal sector into the formal economy.

According to some unofficial studies, Egypt’s informal economy is estimated to be worth more than EGP 2tn.

Reham El-Desoky, a senior economist at Arqam Capital investment bank in Cairo, said if the government provides unemployment benefits, it would mean that Egypt’s unemployed would have less an incentive to look for jobs.

She believes that young people who are suitable for a variety of jobs have refused available job opportunities without fair reasons, emphasising that unemployment benefits must only be provided to those unable to find a job, and only for a short period of time.

El-Desoky also believes that the government also has too large a budget deficit, which would prevent them from providing such a thing.

 

 

The post Egypt’s subsidy system: questionable corruption, unending problems appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2016/12/08/603447/feed/ 0
Egyptians boycott 1 December embargo http://www.dailynewsegypt.com/2016/12/07/603240/ http://www.dailynewsegypt.com/2016/12/07/603240/#respond Wed, 07 Dec 2016 06:00:10 +0000 http://www.dailynewsegypt.com/?p=603240 The boycott campaign did not completely fail, and succeeded in many areas, says CPA head

The post Egyptians boycott 1 December embargo appeared first on Daily News Egypt.

]]>
“Don’t think of buying a new sweater, pullover, or pair of jeans”—this is the common advice given for the coming winter season. The prices of winter clothing skyrocketed to the extent that even middle-income families cannot afford them.

Even the annual custom of buying sweets handed out during the Moulid El-Nabi to commemorate Prophet Muhammad’s birthday has become an expensive endeavour, as the prices of the candy have doubled.

Prices in Egypt have been continuously increasing, especially since the flotation of the Egyptian pound on 3 November, impacting all sectors and goods—imported and local.

The past three months had been tough for many Egyptians, as the government introduced a series of new economic measures, such as the implementation of the value-added tax (VAT) on 9 September and the successive devaluation of the pound’s value before the flotation.

On 1 December, President Abdel Fattah Al-Sisi issued a decree to increase tariffs on over 300 luxurious goods and products, although officials claim that these products had been essentials with no local alternative.

Economists believe that the depreciation of the pound and VAT would lead to more inflation and decrease the purchasing power of customers.

However, Egyptians jumped at offers and discounts on products on 25 November, dubbed as Black Friday, unlike what economic experts had predicted.

Head of the Consumer Protection Agency (CPA) Atef Yacoub had called on consumers to take action on Thursday, 1 December for one day by boycotting shopping. This should have exerted pressure on retailers and pushed them to fairly price their products, instead of pumping them up under the pretext of the Egyptian pound’s flotation and the increase in fuel prices.

Yacoub called on Egyptians to not shop on that day specifically, as the first day of the month is pay-day for the majority of employees and considered primetime in the world of sales.

During a TV talk show, Yacoub said that he is not launching this initiative in his professional capacity as the head of the CPA, but rather on a personal level. He believes that stores had cheated customers on Black Friday into buying stagnant products without applying discounts.

The Egyptian Center for Public Opinion Research (Baseera) conducted a survey about the campaign which showed that 73% of Egyptians were supportive of participating in the boycott, while about 50% believed that it would help adjust prices in the Egyptian market.

inflation , market (8)Boycott derailed?  

Although 1 December turned out to be a bleak day accompanied by rain showers, neither the weather nor Yacoub’s call could persuade Egyptian to stop buying.

Movement in shops and supermarkets seemed natural, and it had become obvious that many people had not been aware of Yacoub’s boycott campaign.

During Daily News Egypt’s tour to follow up on the campaign’s impact on shops, hypermarkets, and malls, no difference in daily purchasing trends was observed.

Housewife Azza Mohamed said that she had not known about the campaign, but that she does not necessarily disagree with it. She explained that although she is keen on meeting her children’s demands, she would be willing to buy what they needed on any other day.

Gamal Mostafa, owner of a children’s shop in a mall in Haram, said that he did not notice a change in the selling and buying movement on that day, but that sales are generally stagnant due to increases in clothing prices after the local currency’s devaluation against the US dollar.

Mostafa added that the solution was not to boycott products, especially essential ones, but rather for the CPA itself to cooperate with the government in controlling prices and monitoring the market through effective means.

Private sector supermarkets in Giza and Dokki were not that affected by the boycott on Thursday.

Mohamed Hamad, manager of a supermarket in Dokki, said that customer turnout did not really differ from the previous few days, because people cannot give up on fundamental commodities, even if only for a day.

Customers at another supermarket assured that they were not aware of the boycott. One customer even insisted on buying all his family’s needs on that day because he believes that a boycott is not a tool to lower prices. The government should enforce resolute procedures to regulate the market, he stated.

He added that the CPA is the entity responsible for monitoring and adjusting the prices set by greedy retailers, and should refer them to court to protect the citizen. The agency should not play the role of civil society organisations or community-based initiatives, the customer explained.

A salesperson at a supermarket in Haram said that the turnout was lower in the morning due to the weather, but that customer traffic picked up and normalised in the afternoon.

He commented that the prices are high on customers and retailers, adding that stabilising the exchange rate should be a priority and is more important than “abortive initiatives”.

The past three months had been tough for many Egyptians, as the government introduced a series of new economic measures
The past three months had been tough for many Egyptians, as the government introduced a series of new economic measures

Not a complete failure

Yacoub stated that the campaign did not completely fail, and has succeeded in many areas.

He pointed out that the CPA formed committees in some areas to monitor the movement of buying and selling, and would publish a full report on the matter.

Yacoub added that the boycott is a symbol and will be followed by further escalation, such as determining a black list of retailers and shops who abused the economic circumstances to raise their prices.

“Our actions will escalate in order to implement the initiative and ensure its success in facing and putting an end to the greed of retailers. The escalation includes more boycotts of specific products or commodities, such as eggs or any other commodity prone to expire if it is not sold,” Yacoub noted.

However, economic expert Khaled Rahoma said that the embargo should be selective in its application in order not to harm the market. He suggested that products that are not depending on the US dollar can be boycotted for one day, as a way to threaten retailers, while retailers that sell products which are affected by the exchange rate should not be allowed to increase prices.

Rahoma added that the CPA should inform people of the products they should boycott before launching the embargo.

Fears of stubbornness between retailers and consumers

Rashad Abdu, an economist at Cairo University and head of Cairo-based Egyptian Economic Forum, said that a one-day boycott will not affect retailers, assuring that the timeframe of the boycott should to be extended in order to be successful.

Abdu added that people will buy their needs on the day before or after the boycott, which rattles its significance.

He expected that after the failure of the boycott, a cycle of stubbornness may start between the customers and retailers.

“The fundamental solution is to tighten the control on the market and develop laws that define and specify commodity prices and profit margins on products, so that retailers will not be able to randomly set their prices,” he suggested.

The boycott is “ridiculous and ineffective”

Undersecretary of the Federation of the Egyptian Chambers of Commerce (FEDCOC) Alaa Ezz said that he had been sure the campaign would fail, describing it as “ridiculous”.

Ezz added that a decrease in prices cannot be achieved through this means, explaining that the campaign achieved nothing in the domestic market and that the citizen did not respond to it.

Ezz noted that there is a societal segment with a high command purchasing power which is not interested in boycotting or high prices. Further, families of low income buy their needs on a daily basis and will not be able to survive a day without buying essential commodities.

Non-effective control on markets encouraged retailers to manipulate prices

Souad El-Deeb, board member of CPA, assured that the government believes it has completed all required procedures to adjust the prices by opening some new outlets for goods and imported meat.

El-Deeb said in a press statement that the products provided by the government do not represent a significant proportion of the size and needs of the citizens and the market. She added that the absence of effective control on the markets encouraged retailers to manipulate prices, having a direct negative impact on Egyptians.

Failure expected and no initiative will succeed unless government intervenes

Although a large segment of society hoped that the boycott would achieve any impact on prices, traders in local markets were betting on the failure of the embargo.

Mohamed Saleh, a vegetables trader, said that the boycott campaign did not succeed in lowering prices due to a lack of mechanisms to mobilise a large number of consumers, adding that high or low prices are defined by supply and demand.

Saleh added that the campaign is based on boycotting food commodities which are indispensable, although these commodities are experiencing a respective increase in prices.

Ahmed Fahmy, a retailer in a Giza market, agreed with Saleh, noting that some retailers impress the consumer with high food prices as a result of the US dollar’s appreciation. This allows a profit margin of up to EGP 4-5 per kilo, but leads to accusing all retailers of being greedy.

Fahmy called on the government to control the markets and intervene to protect both consumers and traders.

The post Egyptians boycott 1 December embargo appeared first on Daily News Egypt.

]]>
http://www.dailynewsegypt.com/2016/12/07/603240/feed/ 0