Egyptian economic experts said traditional measures to fund the budget are not enough, and new ways to rationalize expenditures and maximize revenues are needed. Currently, the budget deficit stands at 134 billion EGP (U.S. $22 billion). Egyptian Minister of Finance Hazem al-Beblawi said that the ministry is studying other ways to fund the deficit and reduce dependence on loans. The ministry is looking into treasury bills and assets purchases in order reduce pressure on the banking system. The goal is to allow it to fund private sector projects and invest in securities. It also seeks to curb rising interest rates on government securities, which recently reached 13.7 percent. However, Beblawy did not exclude foreign funds as a means to cover the deficit. Professor of Economics Dr. Alia al-Mahdy, former dean of the College of Political Science and Economics, suggested a number of ways to fund the deficit other than foreign loans. One of her suggestions is to reduce power used by industrial areas, saying it could cut 20 billion EGP (U.S. $3.4 billion) from the budget. Mahdy also suggested issuing new licenses for iron, cement, fertilizers and petrochemical factories, creating new revenue sources for the budget and cover the deficit. She also suggested selling government land. Mohamed Al-Ebrashi, a former head of General Budget Sector, suggested increasing revenues of government agencies to transfer their surpluses to the general budget. Ebrashi said that making these agencies more efficient and self-sufficient would help balance the budget. Dr. Abdul Moneim Lotfi, an economic expert at Cairo University, said the tax system should be reformed. He also suggested applying guidelines for international companies to increase tax income and stop tax evasion. Lotfi also said the government can fund the deficit by using Islamic finance, which requires exceptional collateral to cover loans and interest.
