A long-awaited rise in commodity exports has exporters finally satisfied with government efforts. Mona El-Fiqi reports In the wake of a new push to promote exports, recently released statistics show that Egyptian non-hydrocarbon exports are already showing impressive growth, and officials are optimistic that the trend will continue. Cutting tariffs on imports and raising funds for exports development are among the decisions taken by the government since the appointment of the new cabinet seven months ago. These decisions are largely responsible for a 20 per cent increase in export volumes in 2004 compared to the previous year according to statements by Rasheed Mohamed Rasheed, minister of foreign trade and industry. Rasheed expects that the total value of exports will continue to rise throughout 2005, particularly in the textiles sector following the implementation of the Qualified Industrial Zones (QIZ) protocol with the US. In the meantime, according to Rasheed, commodity imports excluding oil was $9.4 billion during the period of January to October 2004 compared to the same period the year before, a drop of 15 per cent. As a result, the trade deficit fell dramatically from $4.7 billion to $3.9 billion over this period according to figures released by the Central Agency for Public Mobilisation and Statistics (CAPMAS). This improvement in the balance of trade was attributed by Rasheed to increased commodity exports, particularly of agricultural products which increased by 48 per cent to reach $869 million during the first nine months of 2004. Not resting on its laurels, the Ministry of Foreign Trade and Industry is evaluating policies projected to further boost exports by 28 per cent in 2005, such as the decision taken to increase the budget of the Exports Development Fund from LE500 million to LE1.1 billion. The ministry is currently conducting a study on how to broaden the impact of the development fund across a greater number of economic sectors. Currently, the textile and food industries are the primary beneficiaries. The ministry will also soon activate a programme aimed at expanding Egyptian agricultural and textile exports to the European markets and taking advantage of the Egypt-EU Association Agreement. The ministry, according to Rasheed, also plans to translate the Egyptian bilateral trade agreements with various Arab countries into greater exports. The government decisions are being widely applauded by exporters who hailed it as a first step in the right direction. Helal Sheta, an exporter and former chairman of the Exporters Division at the Federation of Egyptian Chambers of Commerce, said that the government's decision to cut tariffs on raw materials has resulted in a reduction of the product's cost price, making Egyptian exports more competitive globally. Furthermore, the Industrial Modernisation Programme is working in cooperation with the Federation of Egyptian Industries to help some industrial sectors with export potential meet international specification standards. Amr Abdel-Latif, executive director of the Egyptian Exporters Association (Expolink), said that the government has been playing an important role in helping companies exporting agricultural products to obtain the certifications needed to gain access to the European markets. Moreover, the government has started to pay more attention to marketing, long one of the weakness hindering Egyptian exports. Abdel-Latif said that the Ministry of Foreign Trade and Industry now formulates comprehensive marketing plans for all potential export products. The Industrial Modernisation Programme participated in financing dozens of international fairs in different countries to help the Egyptian companies to present their products, an effort that has led to many successful business agreements. Also among the decisions taken by the government to facilitate exports, Minister of Health Mohamed Awad Tageddin announced that food producers are no longer obliged to provide a health certificate in order to export. Exporters welcomed the decision saying that this will save them from having to go through bureaucratic procedures which had been costly in terms of time and money. While the government is providing more concessions to exporters, it maintains its concern with protecting the reputation of Egyptian exports. Accordingly, the Ministry of Health in cooperation with Exports and Imports Control Authority decided that any exporter whose products fail to meet the international specifications standards will not be permitted to export again. Among the primary factors in rising non-hydrocarbon exports is the flotation of the Egyptian pound against the dollar in 2003. As Sheta observed, the depreciation of the Egyptian pound quickly made Egyptian products more competitive on the international market. However, exporters expect more privileges from the government relating to taxes, an issue that will be addressed in the draft tax law currently being investigated by the Shura Council. "The tax rates in Egypt are high compared to other countries in the region," complained Abdel-Latif of Expolink.
