VZCZCXYZ0013
RR RUEHWEB

DE RUEHEG #0420/01 0701535
ZNR UUUUU ZZH
R 111535Z MAR 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 1842
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS CAIRO 000420 
 
SIPDIS 
 
STATE FOR USTR 
 
E.O. 12958: N/A 
TAGS: ECON EPET EFIN EAGR ETRD ENRG MNUC PGOV EG
SUBJECT:  EGYPT'S ECONOMY:  WEEKLY PRESS ROUND-UP 
 
¶1.  The following is a summary of notable economic news stories as 
they appeared over the past week in the Egyptian press. 
 
GAS RESERVES 70 TRILLION CUBIC FEET 
----------------------------------- 
¶2.  Wood Mackenzie, an energy consulting firm, estimated that 
EgyptQs natural gas reserves stand at 70 trillion cubic feet (TCF), 
of which more than 80 percent is in the Nile Delta. (NOTE: This is 
the first independent confirmation of the GOE's natural gas reserve 
figure. END NOTE.)  Egyptian Gas Holding Company (EGAS) Chairman 
Mahmoud Abdel Latif said EGAS plans 23 exploration wells in the FY 
2009-2010 fiscal year, representing a $1.1 billion investment.  This 
year EGAS also plans to start up seven new gas development projects, 
worth $3.3 billion, which are expected to produce about 800 million 
cubic feet of gas per day.  EGAS is reportedly expanding its effort 
to provide natural gas to Egyptian homes.  As of February 2009, EGAS 
reported that 3.1 million Egyptian homes have been supplied with 
natural gas, and the company plans to hook up another 1.4 million by 
¶2010. 
 
SEPTEMBER ROCKSLIDE VICTIMS RECEIVE NEW HOUSES 
--------------------------------------------- - 
¶3.  The GOE has announced that they have delivered a second batch of 
housing units for forty seven families ordered to leave their homes 
after the September 2008 rock slide in the El Mokattam area. 
Reports indicate twenty families are still sleeping in the street in 
front of the Housing Commission. 
 
US-BUILT LOCOMOTIVES ENTER SERVICE; DRAW COMPLAINTS 
--------------------------------------------- ------ 
¶4.  At the end of February, the Egyptian General National Railways 
(ENR) took delivery of 120 new locomotives manufactured by General 
Electric. .  Media reports indicate several ENR locomotive drivers 
were concerned about safety issues associated with the technology 
and roll-out of the new locomotives and complained to the general 
prosecutor.  ENR Chairman Mahmoud Sami rejected the drivers' claims, 
and told reporters he is sure the investigation will show ENR is 
taking and following appropriate safety measures. 
 
NUCLEAR LAW TO PARLIAMENT THIS SPRING 
------------------------------------- 
¶5.  Following a meeting with the British Ambassador, Minister of 
Electricity and Energy Hassan Younes described the GOE's plan to 
diversify energy sources, including increasing renewable energy to 
20% of the total available by 2020, along with efforts to encourage 
conservation amongst commercial and residential customers.  He noted 
that Egypt's draft nuclear law had been reviewed by the IAEA, and 
was expected to be approved by the Parliament this session. 
 
CAO REPORTS ON EGYPTIAN ECONOMY'S STRENGTHS AND WEAKNESSES 
--------------------------------------------- ------- 
¶6.  The government's weaknesses outnumbered its achievements, 
according to the Central Auditing Organization (CAO) report 
presented March 5 by CAO Chairman Goudat el-Malt, in his statement 
to the People's Assembly. According to the press reports, Finance 
Minister Ghali and Economic Development Minister Osman refused to 
respond to the details of the report. Among the GOE's failings, 
El-Malt said, is that the poor and the middle class have not 
benefitted from the economic reforms.  El-Malt said Egypt's internal 
debt is one of the highest worldwide, while inflation rose from 4.2% 
in 2006 to 11.7% in 2008.  On the positive side, El-Malt cited 
growth rates of up to 7.2%, $11.9 billion in foreign investments and 
$34.6 billion in monetary reserves. 
 
REVENUES UP, OPERATING DEFICIT STABLE 
------------------------------------- 
¶7.  The Ministry of Finance reports that the government's primary 
deficit was 1.1% of GDP in the second half of 2008.  Public revenues 
reached LE 147.1 billion ($27.2b), a 59.1% increase over the same 
period the previous year, equivalent to 14.6% of GDP. 
 
EGYPT'S STRATEGY FOR THE GLOBAL FINANCIAL CRISIS 
--------------------------------------------- --- 
¶8.  Cabinet spokesman Magdy Radi told the press that the government 
has a fourfold strategy to address the financial crisis, and its 
continuing impact on tourism, exports, foreign investment, Suez 
Canal revenues and remittances.  The strategy will focus on 
"developing the national economy, allowing it to get over the 
negative effects of the crisis; re-launching the economy based on 
the local market; making more public investments in utilities, 
infrastructure and services; and using national savings to finance 
medium and big enterprises." 
 
EGYPTIAN WORKERS STAYING IN THE GULF 
------------------------------------ 
¶9.  CEO of the Egyptian Chamber of Commerce Saleh Nasr, who also 
heads the Association of Labor Abroad, denied reports that companies 
in the Gulf had laid off Egyptian labor as a result of the economic 
crisis.  He disputed recent reports that 40,000 Egyptians would 
return home.   The Gulf is still the most important destination for 
Egyptian workers; there are currently 2.5 million Egyptians working 
in Saudi Arabia, according to the press. 
SCOBEY 
 
SCOBEY