VZCZCXYZ0000
RR RUEHWEB

DE RUEHEG #1601/01 2300357
ZNR UUUUU ZZH
R 180357Z AUG 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 3445
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS CAIRO 001601 
 
SIPDIS 
 
STATE FOR NEA/ELA 
 
E.O. 12958:  N/A 
TAGS: ECON EAGR EFIN ETRD ENRG PGOV EG
SUBJECT: EGYPT'S ECONOMY: AUGUST 17 PRESS ROUND-UP 
 
¶1. (U) The following are notable economic news stories that appeared 
over the past week in the Egyptian press: 
 
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Agriculture Products Irrigated by Sewage 
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¶2. (U) Food safety continues to be a major concern in Egypt 
following the discovery that thousands of acres of farmland in the 
Helwan governorate south of Cairo are being irrigated with municipal 
sewage water.  These farms supply the Cairo market with fresh 
vegetables.  The GOE is trying to mitigate the impact of these 
concerns by resolving the issue quickly.  Egypt's fresh fruit and 
vegetable exports to Europe are produced in well-managed farms, 
mainly in the Delta region and should not be impacted by this latest 
problem. (Al Masry Al Youm, Al Akhbar, 8/9/2009 - 8/13/2009). 
 
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New Real Estate Tax Law Approved by Minister of Finance 
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¶3. (U) On August 7, Minister of Finance, Youssef Boutrous Ghali 
approved the new real estate tax law. The new law provides 
regulations for assessing the rental value of real estate units. The 
law exempts housing units whose annual rental value is less than LE 
6,000 (US$1085). Amounts which exceed this limit will be subject to 
tax. Buildings used for education, government, unions, political 
parties, and youths centers will be exempt from the tax. The 
Minister said the law specifies the rules for determining the value 
of real estate taking into account such factors as geographical 
location, desirability, proximity to public parks, and the nature of 
the district and the street in which the building is located (Al 
Ahram, 8/8/2009). 
 
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Suspension of Sugar Duties 
-------------------------- 
 
¶4. (U) Minister of Finance Youssef Boutrous Ghali announced that 
Egypt will exempt imports of raw and refined sugar from customs 
duties from August 15 until the end of December 2009. The decree 
will be submitted to the Prime Minister for ratification and 
issuance. The decision aims to decrease the price of sugar in the 
local market during the month of Ramadan and beyond in the face of 
high world sugar prices. Egypt consumes around 2.2 million tons of 
sugar per year, including about 1.4 million tons produced 
domestically. About 60% of Egypt's sugar imports come from Brazil 
(Al Ahram, Al Akhbar 8/11/2009). 
 
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Foreign Companies to Market their Gas Locally 
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¶5. (U) A government official indicated that Egypt would allow 
foreign partners to sell their share of natural gas in the Egyptian 
market through direct contracts with buyers rather than through the 
government.  A new Oil and Natural Gas Regulatory Authority will 
determine the guidelines for such contracts.  This new authority is 
expected to be approved by the People's Assembly during the next 
parliamentary session (Al Masry Al Youm, 8/9/2009). 
 
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Inflation registering 9.9% in July 2009 
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¶6. (U) According to figures released by the Central Agency for 
Public Mobilization and Statistics (CAPMAS), year-on-year inflation 
was essentially flat from June to July (9.98% in July, vs. 9.96% in 
June). The monthly change in the Consumer Price Index (CPI), 
however, jumped to 2.2%, from the previous month's 0.4%. Annual 
changes reflect that prices of housing and utilities, furniture, 
transport, communication, recreation and miscellaneous items were 
rising by a lower pace, while prices in hotels and restaurants rose 
at a faster pace in July. Inflation has been declining steadily for 
the few past months, but spending ahead of Ramadan, could put a 
break on further decline (Al Masry Al Youm, 8/12/2009). 
 
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Site Location Studies for the First Nuclear Power Plant 
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¶7. (U) Minister of Electricity and Power Hassan Younis said that the 
Australian consulting firm Worley Parsons will complete the updated 
site selection study for the location of Egypt's first nuclear power 
plant by December 2009.  He added that the site of El Dabba, located 
on the Mediterranean Sea, is still allocated to the Egyptian Nuclear 
Power Plants Authority (NPPA) and that the GOE has begun 
reactivating its nuclear cooperation agreements with the United 
States, EU, and Russia (Al Ahram, Al Masry Al Youm, 8/10/2009). 
 
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Announcing New Pricing Policy for the Tourism Season 
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¶8. (U) The Hotels and Tourism Entities Chamber of Commerce announced 
a new pricing policy for the tourism season, extending from October 
2009 to October 2010. The new policy allows tourism companies to 
freely set their rates, provided they are not more than 25% lower 
than previous rates. This policy would enable the hotels to better 
deal with the repercussions of the global economic slowdown (Al Mal, 
8/11/2009). 
 
TUELLER