Human development is prioritised in the government's economic plan for the coming fiscal year, reports Mona El-Fiqi While Egypt's revenues have dropped during the past few months, the government announced its intention to spend more in sectors such as education, health and housing, according to Minister of Planning and International Cooperation Fayza Abul-Naga. In a press conference held on 12 June, Abul-Naga said that while economic performance has achieved an acceptable growth rate in the past few years, the public has not benefited from its share of the profits of this economic improvement, which was a mistake. The aim of the new plan, according to Abul-Naga, is to minimise the impact on the country's poor of the economic deterioration that Egypt is currently facing, by raising the total expenditure on education, health, agriculture and land reclamation. Moreover, a new programme for low-cost housing with a total investment of LE10 billion has recently been launched. The plan for fiscal year 2011/2012 aims at achieving a total investment of around LE233 billion, of which the private sector is expected to take charge of 52 per cent. GDP growth is expected to be at least 3.2 per cent, according to Abul-Naga. These were not the only novelties, though, of this year's budget planning phase. For the first time the discussion of the government's annual social and economic plan included representatives from the private sector, civil society and revolutionary youth. Further, a series of meetings and workshops will soon be held to discuss the details of the plan. Speaking to journalists, Abul-Naga added that these meetings will be open to experts, private sector professionals, civil society representatives and any other interested persons. The importance of the social and economic plan for fiscal year 2011/2012 is that it constitutes the platform for a new five-year plan, covering the period from 2012-2017, and is as such a window for a new era of comprehensive development. On another note, a report issued this week by the Ministry of Planning and International Cooperation that evaluates economic performance during the third quarter of the current fiscal year registered a clear deterioration on Egypt's GDP growth which reached minus 4.2 per cent from January to March. Egypt's GDP growth rate had stood at 4.7 per cent in the first quarter and rose to five per cent during the second, it suffered a major drop in the third quarter. The reason behind this drop was a decline in performance by sectors such as tourism by 33 per cent, manufacturing industries by 12.1 per cent, construction by 9.1 per cent, wholesale trade by 7.9 per cent and transportation by 9.7 per cent. Growth in other sectors such as information technology was reduced from 11.3 per cent during the third quarter of 2009/2010 to reach 2.8 per cent in 2010/2011, in addition to a reduction on the total investments during the same period by 26 per cent registering LE47 billion in 2010/2011 compared to LE65 billion in 2009/2010. Private sector investments stood at LE39.1 billion in the first quarter and rose to LE44.2 billion during the second quarter but they dropped to LE27.9 billion during the third quarter. Moreover, according to Abul-Naga, foreign direct investments also dropped from $1.7 billion to $164 billion during the same period. Negative growth in all economic sectors has led to a notable increase in unemployment, up from nine to 11.9 per cent during the third quarter of the current fiscal year. Male unemployment increased from five to nine per cent, while the rate remained stable at 22 per cent for women. Abul-Naga added that economic performance during the third quarter of fiscal year had a clear impact on the country's total revenue, which declined by 19 per cent from $57 billion to $47 billion. Tax earnings were cut by 16 per cent while non-tax revenues declined by 28 per cent. The balance of payments was also reduced from $19.4 billion to $6.3 billion. The result was a drop in Egypt's foreign currency reserves from $36 billion to $28 billion in June, Abul-Naga said.
