Bittersweet sugar THE SOARING price of sugar on the local market caused a lot of tension between the ministers of investment and social security Mahmoud Mohieldin and Ali Meselhi, respectively, on the one hand and deputies of the People's Assembly on the other. Zakaria Azmi, chief of presidential staff and a heavyweight in the ruling National Democratic Party (NDP), said the government allowed Safola, the private-sector Egyptian-Arab investment, to impose its hold on the market and push the price per kilo up from LE2.5 to LE4.5. "At first Safola bought most of the sugar on the market and then was allowed to monopolise importing more than 750,000 tonnes," Azmi lamented, charging that "this huge quantity allowed it to push the price up and control the market at the expense of poor people." Abdel-Reheim El-Ghoul, chairman of the assembly's Agriculture Committee, also criticised Mohieldin, complaining that the latter has refused to raise the delivery price of sugar from farmers in Upper Egypt from LE235 per tonne to LE300 per tonne. "It is very strange that while farmers in Europe and America receive generous subsidies from their governments, sugar farmers in Egypt are left to suffer at the hands of private sector monopolies," said El-Ghoul. In response, Mohieldin emphasised that "it is quite difficult for the government to approve increasing the delivery price of sugar even by one piastre because this will cause a lot of losses to the government-owned sugar companies." Mohieldin indicated that the government is currently in the process of upgrading its sugar-producing companies to bridge the gap in local production from 60 per cent at present to more than 80 per cent in the next few years. For his part, Meselhi indicated that the government helped more than 63 million poor and average income citizens to buy subsidised sugar at the price of LE0.6 per kilo. Walter's world SPEAKING at a business lunch organised by the German-Arab Chamber of Industry and Commerce and the American Chamber of Commerce in Egypt last week, Norbert Walter, chief economist at Deutsche Bank Group, stated that China is steadily on the advance to becoming the "state-of-the-art economy". His comments came about during a discussion of which country will rule the world economy and take the lead after the world economic crisis. "The rise of Chine portrays a change in the economic balances of power, and this change certainly affected Egypt," he said. According to Egyptian Minister of Investment Mahmoud Mohieldin, just 12 years ago foreign trade with the United States and Europe accounted for 90 per cent of Egypt's total activity. Today there is much greater diversity. He added that 40 per cent of foreign direct investments are from the east. "China has become Egypt's number one investor," Mohieldin said. "The progress of Asian investment in Egypt is huge, getting trade and investment stronger; besides that, tourism also benefited from Asia, so things are getting better," he added. "From the east comes the sun," said Walter. He believes that this is fast becoming a reality that all should simply face. "Eastern, in particular Asian economies prove to be the new accelerators of growth," he said. Besides China, Walter believes that India benefits from a stable government and a new generation of internationally minded managers. "India is another source of dynamism in 2010 and 2011," Walter said, while Japan is in bad trouble as the government deficit doubles its gross domestic product. Walter expects that growth in China will be 10 per cent next year. He added: "China's poor democratic structures foster fast crisis management and effective decision making, while European countries accumulate public debt through its stimulation programmes creating immense burdens for future generations." Walter highlighted the issue of demography stating that Germany's population shrank continuously, making immigration an issue to consider. He believes that this opens a good case for cooperation between countries with different demographic fate. He pointed out that "countries which are rich in children aren't rich in the quality of education systems, therefore cooperation is a necessity." Discussing the current issue of the Dubai debt crisis, both Walter and Mohieldin stressed its overblown real estate sector and its lack of natural resources. Thus, Dubai is expected to debt further on external help, which in the first place will come from Abu Dhabi.
