VZCZCXYZ0010
RR RUEHWEB
DE RUEHEG #1629 2361141
ZNR UUUUU ZZH
R 241141Z AUG 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 3471
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
UNCLAS CAIRO 001629
SIPDIS
STATE FOR NEA/ELA
E.O. 12958: N/A
TAGS: ECON EINV EFIN ETRD EAGR ENRG PGOV EG
SUBJECT: EGYPT'S ECONOMY: AUGUST 24 PRESS ROUND-UP
1. (U) The following are notable economic news stories that appeared
over the past week in the Egyptian press: --------------------------------------- Moody's Raises Egypt's Sovereign
Rating ---------------------------------------
2.(U) Moody's raised Egypt's sovereign rating from "negative" to "stable" citing lower inflation, efforts to contain the
budget deficit, and relative economic and financial sector stability. Moody's had downgraded its outlook for the
Egyptian economy in mid-2008. In raising the rating, Moody's said the Egyptian economy was less affected by the global
financial crisis than some other regional economies but noted that increasing debt and deficit levels, persistent
inflation and unemployment remain continuing challenges (Al Mal, 8/20/2009). -------------------------
---------------------------------- Public Sector Bank to Sell Stakes in Joint Venture Projects -------------------------
----------------------------------
3.(U) Bank Misr, Egypt's second largest public bank, is preparing to sell stakes it owns in a number of joint venture
projects, following approval of the Ministry of Investment. The Bank has started preparing the paperwork and will
coordinate with the ministry the timing of the sales, originally scheduled to occur in the first quarter of fiscal
2009/10 (Jul.-Sep. 2009). The Ministry of Investment has said that the offering should be made at a time when the stock
market is active, especially for construction stocks (Al Mal, 8/16/2009). ------------------------------ Polluted Water
for Cultivation ------------------------------
4.(U) Independent and opposition newspapers continue to uncover new cultivated areas which are using untreated sewage
water for irrigation. Official sources at the Ministry of Agriculture indicated that President Mubarak has asked the
cabinet to prepare an immediate plan to eliminate such violations by allocating additional funds for development of
irrigations projects in the older agricultural lands. The total cost of development of new irrigation systems in Nile
Delta and the Nile Valley could amount to about LE 30 billion (US$5.5 billion)(Al Masry Al Youm, 8/20/2009).
------------------------- ------------------------------------ Egypt Signs US$2.3 Billion Oil and Gas Exploration
Agreements ------------------------- ------------------------------------
5.(U) On August 16, Minister of Petroleum, Sameh Fahmi, signed six agreements for oil and natural gas exploration that
are expected to bring in new investments amounting to US$2.3 billion (Al Ahram, 8/17/2009).
------------------------------------------- Plans for Mitigating Air Pollution in Cairo
-------------------------------------------
6.(U) Amr Assal, Chairman of the Industrial Development Authority, announced the Authority's decision to relocate seven
cement factories from Helwan (a suburb south of Cairo) to a new location in the Governorate of Beni Suef within the next
three to seven years. He added that this plan still faces objections and concerns from industry experts and officials
that will need to be considered during the implementation. The decision to relocate the polluting factories from Helwan
to other areas away from urban districts was made by the Prime Minister in December 2008 (Al Masry Al Youm, 8/20/2009).
--------------------------------------------- ------ Establishment of Investment Centers in Governorates
--------------------------------------------- ------
7.(U) Minister of Local Development, Abdel Salam El Mahgoub announced that integrated investment centers will be
established in each governorate by next year. He added that 22 new industrial zones will be established in the Delta and
in Upper Egypt governorates. The ministry plans to provide an array of support to investors including technical
assistance, licensing, and land allocation services. (Al Alam Al Yom, 8/19/2009). TUELLER