VZCZCXYZ0003
RR RUEHWEB

DE RUEHEG #1502/01 2161028
ZNR UUUUU ZZH
R 041028Z AUG 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 3332
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS CAIRO 001502 
 
SIPDIS 
 
STATE FOR NEA/ELA 
 
E.O. 12958:  N/A 
TAGS: ECON EINV EFIN ETRD ENRG PGOV EG
SUBJECT: EGYPT'S ECONOMY: AUGUST 2 PRESS ROUND-UP 
 
¶1. (U) The following are notable economic news stories that appeared 
over the past week in the Egyptian press: 
 
------------------------ 
Suez Canal revenue is 7.2% lower 
------------------------ 
 
¶2. (U) Suez Canal receipts reached $4.7 billion during FY08/09, a 
reduction of 7.2% from the previous year. Colonel Ahmad Fadel, 
Chairman of the Suez Canal Agency, attributed the decline to the 
economic slowdown resulting from the global financial crisis. Fadel 
added that the Canal Agency decided not to lower the passage fees 
after a careful study of global maritime market. (All newspapers, 
7/27/2009) 
 
------------------------- 
IMF staff visit to Egypt 
------------------------- 
 
¶3. (U) The IMF praised Egypt's ability to contain the repercussions 
of the global financial crisis. It also praised the Egyptian 
economic reform that started in 2004. A recent IMF staff visit 
report said the government is continuing to pump funds for 
investment, especially in infrastructure. In general, the IMF said 
the Egyptian economic performance for FY 08/09 was good and GDP 
growth is expected at 4.4%. The report also said inflation declined 
to below 10% down from its peak at 24% during August 2008 while 
foreign reserves are still capable of covering imports for more than 
6 months. (Al Ahram and Al Akhbar, 7/29/2009) 
 
-------------------- 
Gas Export to Israel 
-------------------- 
 
¶4. (U) Egyptian press referenced reports from the Israeli Newspaper 
Ha'aretz and Globes magazine (on line) indicating that the Eastern 
Mediterranean Gas company (EMG) has signed a new deal to import 12 
billion square meters of Egyptian natural gas to the Israeli company 
Dorad Energy Ltd.  The duration of the contract is 17 years with the 
option of a five-year extension. The total cost of the deal amounts 
to about $2.1 to $2.7 billion. (El Masri El Yom and Yom 7, 
7/29/2009) On the other hand, on July 26 the freedom committee of 
the Journalist Syndicate organized an objection stand against the 
gas exports at its headquarters. (El Masri El Yom, 7/27/2009)  In a 
meeting with students in a summer camp in Alex, former Mofti Nasr 
Wassel said that the export of the natural gas to Israel is not 
correct according to the Islamic Shareaa. (El Masri El Yom, 
7/30/2009) 
 
------------------------------- 
Port Said topped world sea gateways in terms of growth in 2007 
------------------------------- 
 
¶5. (U) Egypt's East Port Said Port topped world sea gateways in 
terms of growth in 2007, Mohamed Mansour, Egypt's Minister of 
Transport, told members of the Arab Chamber of Commerce while 
showcasing investment opportunities in the country's transport 
sector. "The port's area will be increased to 56 square kilometers 
to make future expansion possible, which will create thousands of 
jobs for residents of Port Said and neighboring governorates," the 
official said according to a statement released by the Ministry of 
Transport. Development plans will be carried out in three phases 
totaling LE500 ($89.2 million). The first phase will be finished by 
2015, according to Ibrahim Seddiq, the Chairman of Port Said Ports 
Authority. (Egyptian Gazette, 7/27/2009) 
 
------------------------------- 
Banks may consider restricting credit in foreign currencies 
------------------------------- 
 
¶6. (U) With the decline in both interest rates on foreign currencies 
and forex revenues from abroad, banks are considering restricting 
credit in foreign currencies, following a period of promoting this 
type of credit.  Banking sources said the previous expansion in 
forex lending had exerted pressure on the foreign exchange interbank 
market after the drop in some banks' forex positions, prompting the 
CBE to inject more liquidity into the market, thus negatively 
affecting foreign reserves. The CBE had become more stringent about 
the banks' forex positions and liquidity ratios, which led banks to 
start reducing forex lending. (Al-Mal, 7/27/2009) 
 
----------------------------- 
State-owned petroleum companies report their operations 
----------------------------- 
 
¶7. (U) In financial reports submitted to the Chairman of the 
Egyptian General Petroleum Corporation (EGPC), state-owned petroleum 
engineering and construction companies Petrojet and Engineering for 
the Petroleum & Process Industries (ENPPI) posted total revenue for 
the last three years.  Petrojet's total revenue for the period was 
LE 2.4 billion.  ENPPI, currently conducting several projects in 
Egypt, seven other Middle East nations and Venezuela, stated total 
revenue of LE 1.2 billion during the same period. (Al Ahram, 
7/30/2009) 
 
Scobey