The Egyptian Ministry of Finance the issuing of treasury bonds cost three billion EGP (U.S. $504 million). Many economists warn issuing treasury bonds to cover budget deficit may increase national debt and therefore threaten future generations. The crisis appeared clearly when the Egyptian Ministry of Finance issued treasury bonds that cost 30 billion EGP (U.S. $5.04 billion) during the past six months. The national debt was therefore unprecedented and exceeded a trillion EGP (U.S. $168 billion), reaching 1.002 trillion EGP (U.S. $168.3) at the end of March. This national debt is divided among the government, who has 77.7 percent, the economic general foundations, who has 6.8 percent and the National Investment Bank, who has 15.5 percent. The national debt was only 962.3 billion EGP (U.S. $161.7) at the end of December 2010 before the Egyptian January 25 Revolution, according to the latest reports of Central Bank. Economic expert, Shreif Dlawer, said increasing the treasury bonds issue is a danger that threatens future generations because it increases the national debt more than makes a safe rate. It also increases the national debts' interest. "The state therefore must look for other resources to fund the deficit of general budget rather than issue treasury bonds," said Dlawer. He suggested turning to Progressive Taxation system, carried out in most countries. It increases taxes by the increase of business volume. Dlower said the Progressive Taxation system effects investment rates, particularly foreign investment. "The borrowing and loaning policy will lead to foreign countries to be able to control Egypt's economy," said executive director of Prime Holding Company, Shreen Qady. HE denied rationalizing expenditures will provide resources. "Instead of borrowing from foreign countries, Central Bank can issue Dollar bonds for Egyptian and national organizations in order to get funds," Qady said. The former director of Al-Ahly Bank, Mahmoud Abdel Aziz, said national debt exceeded safe rates. "The Egyptian government may issue national bond with long terms for Egyptian depositors," Abdel Aziz said. He added bonds must not be less than 20 years long. Their prices must be stable for five years and their interests must not be less than 12 or 13 percent. The bonds outcome must be allocated to build bridges and roads. The individual will then participate on funding important projects and insure stable resource of income as well.
