VZCZCXYZ0009
RR RUEHWEB

DE RUEHEG #0807 1320838
ZNR UUUUU ZZH
R 120838Z MAY 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 2388
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS CAIRO 000807 
 
SIPDIS 
 
STATE FOR NEA/ELA 
 
E.O. 12958:  N/A 
TAGS: ECON EINV EFIN ETRD EPET PGOV EG
SUBJECT:  EGYPT'S ECONOMY:  MAY 12 WEEKLY PRESS ROUND-UP 
 
¶1. (U) The following are notable economic news stories that appeared 
over the past week in the Egyptian press: 
 
------------------------------------------- 
Draft Budget and Annual Civil Service Raise 
------------------------------------------- 
 
¶2. (U) On May 6, the Shura Council, the upper house of the Egyptian 
parliament, approved the draft fiscal budget for FY2009/2010.  The 
budget reflects total revenues of LE228 billion (US$40.71 billion) 
and expenditures of LE319 billion (US$56.96 billion). The resulting 
deficit of LE91 Billion (US$16.25 billion) is approximately 8% of 
GDP. The Budget and Planning Committee of the People's Assembly, the 
lower house of the Egyptian parliament approved a 5% annual 
base-salary increase for civil servants.  The government has been 
indicating that it could not finance a higher salary increase 
without reducing capital spending. The Ministry of Finance compared 
the raise to last year's 30% increase saying there were significant 
financial challenges, including low tax revenues, falling Suez Canal 
income, and increased spending to stimulate the economy. (Ahram, 
Akhbar, Al Masry Al Yom, 5/7/2009) 
 
------------------- 
Falling Remittances 
------------------- 
 
¶3. (U) Minister of Economic Development Osman Mohamed Osman 
confirmed that, according to data from the Central Bank of Egypt, 
remittances of Egyptians working abroad are declining because of the 
global economic recession and the drop in oil prices. During 
2009/2010, remittances are expected to be US$6.8 billion, down from 
$8.6 billion in 2007/2008.  In 2005/2006 and 2006/2008, remittances 
were US$5 billion and US$6.3 billion, respectively. (Al Youm Al 
Sabee, 5/7/2009) 
 
------------------ 
Unemployment Rises 
------------------ 
 
¶4. (U) According to the official government statistics agency, the 
Central Agency for Public Mobilization and Statistics (CAPMAS), 
Egypt's unemployment rose to 9.4% in the first quarter of 2009 from 
8.8% in the last quarter of 2008. The number of unemployed reached 
2.3 million workers. Some officials stated that the segment of the 
labor market most affected is semi-skilled labor, mainly young 
university graduates. (Al Masry Al Yom, 5/6/2009) 
 
--------------- 
Gold Production 
--------------- 
 
¶5. (U) Minister of Petroleum Sameh Fahmy announced initial steps to 
establish the first integrated gold production factory from the 
Sokary mine in the Eastern Desert. The Australian-based company 
Centamin is responsible for the mining and production of the gold. 
Production reserves in the projects are estimated to be 13 million 
ounces, worth approximately US$13 billion, according to the chairman 
of the Mineral Resources Authority, Hussein Hammouda. Production is 
expected to begin in July 2009 with a capacity of 200,000 ounces in 
the first year, rising to 500,000 ounces in the future. (Ahram, 
5/5/2009) 
 
------------ 
Ration Cards 
------------ 
 
¶6. (U) The Ministry of Social Solidarity will issue an additional 
400,000 ration cards in May 2009 for new beneficiaries including 
seasonal laborers, drivers, individuals with special needs and 
chronic diseases, craftspeople, minors, and members of single-parent 
families. The additional cards, through which the beneficiaries will 
receive fully subsidized food products, will increase the total 
number of ration cards to 11.5 million cards benefiting 63.5 million 
Egyptians. (Ahram, 5/4/2009) 
 
----------------------------- 
Oil and Gas Field Discoveries 
----------------------------- 
 
¶7. (U) On April 30, the Apache Corporation, a Houston-based oil and 
gas exploration and production company, reported two new oil and gas 
field discoveries in the Faghur Basin in the extreme southwest part 
of Egypt's Western Desert and the first discovery in the North Tarek 
Concession along the Mediterranean coast.  The discoveries 
flow-tested a combined total of 6,537 barrels of oil and 30 million 
cubic feet of gas per day.  (Zawya, 5/11/2009). 
SCOBEY