Trade Minister Rashid Mohamed Rashid declared that Egypt's economic growth rate in 2009 would be lower than the 6.5% previously announced by the government. Speaking before the Industry Committee of the Shoura Council [Egypt's upper chamber of parliament] yesterday, he said the economic crisis is getting worse and worse, which makes it difficult to make clear estimates of its impacts. Rashid pointed out that the Chinese deputy prime minister told him that 70,000 factories have been shut down in China and seven million workers have been given the sack. "They came from the countryside and they will now go back there" he told Rashid. The minister said the Egyptian government would focus on preserving manpower rather than reducing prices, as they have already started to go down and are pressing ahead in this direction. He declared that the Egyptian industry would face tough competition in the future, especially as all countries would take several measures to back their exporters. He compared the financial crisis to a world-shaking earthquake or storm. Rashid denied any contradiction in the government's declarations concerning the effects of the global crisis. He pointed out that the government had affirmed that the financial crisis would not affect Egyptian banks given the solidity of the Egyptian banking system. However, he also said it was not possible to completely shun the effects of the crisis, although it is possible to reduce its effects. He added that industries have become the strongest sector in the Egyptian economy and are currently pushing it forward, especially after they entered new fields such as buses and electronic devices. The minister unveiled three tools used by the Egyptian government in the future to face the financial crisis. Such tools include increasing public investments to face the decrease in private ones, giving LE 2.4 billion subsidies to exports, cutting taxes, removing custom fees on capital commodities and locally-irreplaceable intermediate goods, paying attention to agricultural manufacturing, taking decisions to support some industries, and setting up outlets of Egyptian companies at a cost of more than LE 200 million. He pointed out that the government is keen to achieve balanced growth nationwide. In response to a declaration by Rashid, MP Galal Murad asked until when people would be left earning 200%, pointing out that the prices of many materials, such as wheat, are not reflected at the grass-root level. He said the prices of commodities which have no importers are going up with no justifications, while imported commodities are going down. MP Nagui el-Shehabi described Rashid's declarations as pessimistic and called on the government to orient its subsidies to public, not private, companies.
