Despite the challenging business environment and deteriorating economic conditions ever since the 25 January Revolution broke out, Egyptian exports have increased by 17 per cent in 2011, said Minister of Finance Momtaz El-Said. Exports amounted to LE130.7 billion in 2011, compared to LE110.2 billion in 2010. Exports to the European Union, Egypt's largest trading partner, increased by 20 per cent from January to November 2011 hitting $8.9 billion compared to $7.4 billion in 2010. Egyptian exports to Greece alone grew by 99.8 per cent in 2011 compared to 2010, according to the Hellenic Statistical Authority. Meanwhile, exports to Turkey and South Africa climbed by 50 per cent and 35 per cent respectively. Ali Eissa, head of the Agricultural Export Council (AEC), attributed part of the surge to commitments exporters made prior to the revolution. Eissa added that before 2011, many programmes were created to enhance and spur Egyptian exports, in order to boost the economy. "As a result, there were a lot of contracts signed in the year that preceded the revolution," Eissa told Al-Ahram Weekly. Another reason for exports the boost, said Eissa, was weak demand for local products on the Egyptian market. In 2011, Egyptians tightened their spending on the back of political unrest. "This pushed producers to sell their produce to make only marginal profit, while some even took losses," he said. Some believe the four per cent depreciation in the pound's value helped boost exports. For his part, Eissa does not see any relation between the exchange rate depreciation and export growth. But El-Basha Idris, head of exporters division at the Cairo Chamber of Commerce, told the Weekly that the pound's depreciation did indeed help increase exports. He added that the export boom was driven by an increase in prices of counterpart commodities exported by other countries. Though the boom is good news, some analysts believe it is misleading. Associate professor of economics at Cairo University Mohamed Hassan said the increase in exports was driven by an increase in Egypt's petroleum exports. According to the Central Bank of Egypt (CBE), petroleum exports increased from $5.4 billion in the last six months of 2010, to $6.7 billion in the same period of 2011. Meanwhile Egypt's non-oil exports decreased from $7.2 billion in 2010 to LE6.8 billion in 2011. Hassan explained that it is logical that non-oil exports should slump in the wake of political unrest, though "this is a temporarily shock." On the other hand, demand for petroleum exports is normally not affected by turmoil. As for export activity this year, Eissa said demand varies from sector to sector. "Some sectors are booming, while others suffer from weak demand," he added. The end result is that exports are unlikely to yield similar results to 2011. This year has seen many Egyptian port worker strikes, as well as shipping interruptions. This in turn has sent bad signals to international markets over Egypt's ability to fulfill its export commitments. Moreover, numerous factories have stopped operating altogether. Idris agreed, saying that although export activity has not been interrupted, things should be much better when stability and security are restored. Earlier this month, Prime Minister Kamal El-Ganzouri pledged LE600 million in subsidies to exports through the end of the current fiscal year. El-Ganzouri said these subsidies aimed to enhance Egyptian exporters' potential and increase local products' competitiveness on the international market. Eissa believes that LE600 million is not enough. "This amount is insufficient," he told the Weekly, adding that the subsidies should be at least double that. But Fayza Abul-Naga, minister of planning and international cooperation, said that in light of budget austerity, it is hard for the government to allocate any more money to exporters. However, she added, the government will discuss increasing export subsidies in the next budget.
