Egypt Calls on Nations to Provide Economic Assistance

Tuesday, 15 Feb 2011 04:00 PM

 

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Egyptian Foreign Minister Ahmed Aboul Gheit called on the international community to offer support for the economy, saying it “has been greatly affected by the political crisis that has rocked the country.”

The protests that culminated in the Feb. 11 ouster of the former president, Hosni Mubarak, have led businesses to shut down, scared off tourists and pushed up Egypt’s borrowing costs. The Mubarak-appointed government, now running the country under military oversight pending elections, is forecasting slower growth. It has promised a stimulus plan to address the economic complaints of the demonstrators, such as high unemployment.

Egypt’s finance minister, Samir Radwan, said yesterday the country’s budget deficit will widen to about 8.4 percent -- less than some analysts forecast -- as spending increases and economic growth slows after Mubarak’s fall. The Institute of International Finance in Washington predicts the budget gap will be 9.5 percent of gross domestic product, rather than the 7.9 percent previously forecast by the government.

The turmoil has cost the nation about $1.5 billion of tourism revenue, according to Central Bank Governor Farouk El- Okdah. It has also forced companies to close and sent the currency skidding to a six-year low. Before Mubarak’s resignation, the benchmark EGX30 Index tumbled 16 percent in one week. The bourse has been closed since Jan. 27.

Economic Growth

Aboul Gheit said U.S. Secretary of State Hillary Clinton, as well as British Foreign Secretary William Hague and Saudi Foreign Minister Faisal bin Abdulaziz bin Faisal al-Saud were among the officials who have called him to discuss support and developments in the country, according to a statement posted on the ministry’s website late yesterday.

Clinton also spoke today by telephone with Prime Minister Ahmed Shafik, the State Department said.

The Institute of International Finance cut its forecast for Egyptian economic growth in this fiscal year to 1.5 percent from 6.1 percent, it said Feb. 4. The North African country’s economy lost $310 million a day during the unrest, according to Radwan.

Aid “should be priority No. 1 now,” Sherif El-Halwagy, Cairo-based director of public investments at Ace & Co. investment group, said today in a telephone interview. “This democracy, in its infancy, needs to be stabilized and one way to do that is through economic support.” Ace, based in Geneva, is a closely held investment group specializing in structuring public and private investments and in participating in them.

Constitution Committee

The Supreme Council of the Armed Forces formed a committee to amend the constitution and gave it 10 days to submit its proposed amendments, according to state television. The committee is headed by former Judge Tarek el-Bishry.

“We are optimistic about this committee,” Mohamed Morsey, spokesman for the Muslim Brotherhood, said in a telephone interview today.

The Muslim Brotherhood will seek to form a party “at the nearest possible opportunity,” Morsey said. Sobhi Saleh, a member of the Brotherhood and a former parliamentarian, is a member of the committee, Morsey said.

Several members of the military Supreme Council met today with the heads of Egyptian newspapers and magazines and “stressed the legitimacy of the demands of the protesters,” the state-run Middle East News Agency said. Members emphasized the need for police to return to the streets, MENA said.

© Copyright 2014 Bloomberg News. All rights reserved.

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