More taxes THE 2010/2011 budget is set to increase by LE7.5 billion. Part of the increase will be financed by raising taxes on cement, steel and imported cigarettes. Cement will be subjected to a five per cent sales tax instead of the current flat rate of LE1.4 per tonne of imported cement and LE2.5 per tonne of local cement. The sales tax is set to increase from three to eight per cent. The Budget and Planning Committee of the People's Assembly approved the increase in taxes to compensate for refusing to approve an increase in the price of gasoline, solar and sales tax. The committee also approved that LE3 billion will be raised through borrowing and LE2 billion through development assistance. Growing stronger MINISTER of Economic Development Osman Mohamed Osman announced that the Egyptian economic growth rate continued to increase during the third quarter of the current fiscal year to 5.8 per cent compared to 4.3 per cent during the same period last year. In a press conference held Wednesday, Osman said he expects that growth would continue to expand to reach six per cent next year. Osman said public investments are estimated at LE34 billion in 2010/2011, representing 2.5 per cent of total GDP, and that this figure should rise to reach four per cent. According to Osman, total foreign direct investment in Egypt in 2009/2010 was $7.5 billion. The government is aiming to raise this to $10 billion. The minister said that for the growth rate to reach eight per cent, total public and private investment should represent 25 per cent of Egypt's total GDP, and exports should rise to $200 billion in 2013. By that time, Osman asserted, each individual would feel the results of the improved economic performance in rising living standards. Total GDP was LE861 billion during the period from July 2009 to March 2010, rising 15 per cent compared to the GDP during the same period last year. According to Osman, the improvement in performance and investment led to 158,000 additional job opportunities during the third quarter of the current fiscal year. Egypt and Jordan tie the knot EGYPT and Jordan agreed last week to establish a free trade area between them. Iraq is set to join at a later stage. The three-way free trade area will facilitate the entry of Egyptian goods into Iraq through Jordan. A logistics storage area for Egyptian goods is expected to be established on the Jordanian-Iraqi border to help in the transfer of Egyptian goods to Iraq and other Gulf export markets. The agreement came following a visit by Egyptian Minister of Trade and Industry Rachid Mohamed Rachid to Amman last week. Rachid met with the Jordanian prime minister, minister of trade and industry and minister of transport. These meetings were followed by another of the Egypt-Jordan Business Council. Egypt and Jordan will set to work on a customs union and the liberalisation of trade in services between them. To this end, a working group has been formed including representatives from the ministries of trade and industry, transportation and finance of both countries, in addition to businessmen from both sides. Egypt and Jordan also hope to set up joint projects that would take advantage of cumulative rules of origin to export to the EU, keeping in mind that both are signatories to the Agadir Agreement and both have an association agreement with the EU. Improving mediation services IFC, a member of the World Bank Group, recently launched a project in Egypt to further reduce the costs of doing business by helping to settle commercial disputes more promptly. IFC is expected to work with different stakeholders from the public and private sectors to build mediation skills and raise awareness about commercial mediation. IFC will also offer assistance on implementing more efficient and less expensive conflict resolution mechanisms for businesses. "Building on the success of our work in developing the market for alternative dispute resolution in Morocco and Pakistan, bringing mediation services to Egypt will greatly enhance the competitiveness of Egyptian firms, particularly smaller businesses," said Jesper Kjaer, IFC senior manager for the Middle East and North Africa, in a press release. "Working with the IFC to improve mediation services in Egypt will help address some of the obstacles businesses face and encourage more to join the formal sector," said Nabil El-Arabi, director of the Cairo Regional Centre for International Commercial Arbitration (CRCICA). CRCICA had partnered with the IFC in organising a conference last week to raise awareness about the benefits of mediation as a way to solve disputes. Entitled "Egypt as a Regional Platform for Alternative Dispute Resolution in the Arab World", the conference brought together government officials, private sector representatives and lawyers.
