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