VZCZCXYZ0010
RR RUEHWEB

DE RUEHEG #1803 2591508
ZNR UUUUU ZZH
R 161508Z SEP 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 3645
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS CAIRO 001803 
 
SIPDIS 
 
STATE FOR NEA/ELA 
 
E.O. 12958:  N/A 
TAGS: ECON EINV EFIN ETRD EAGR ENRG PGOV EG
SUBJECT: EGYPT'S ECONOMY: SEPTEMBER 16 PRESS ROUND-UP 
 
¶1. (U) The following are notable economic news stories that appeared 
over the past week in the Egyptian press: 
 
--------------------------------------------- 
Egypt's Ranking in 2010 Doing Business Report 
--------------------------------------------- 
 
¶2. (U) Egypt kept its position as one of the 10 top reformers for 
the fourth consecutive year according to the World Bank's 2010 Doing 
Business Report. According to the report, Egypt reduced the cost of 
starting business, shortened the time it takes to obtain a building 
license, broadened information prepared by the Egyptian credit 
bureau, and created commercial courts. (Al Sharq Al Awsat, 
9/9/2009) 
 
--------------------------------- 
Inflation Declines in August 2009 
--------------------------------- 
 
¶4. (U) According to the data released by the Central Agency for 
Public Mobilization and Statistics (CAPMAS), annual urban headline 
inflation declined to 9.04% in August 2009, from 9.98% in July 2009. 
On a monthly basis, food prices increased, but by a lower magnitude 
than in July, registering 3.1%, compared to 4.2% in July. Prices of 
items in hotels and restaurants and miscellaneous items also rose by 
a lower magnitude, of 0.1% and 0.2%, respectively, compared to 3.5% 
and 0.6% in July (Al Akhbar, 9/9/2009). 
 
---------------------------- 
Chinese Investments in Egypt 
---------------------------- 
 
¶5. (U) Minister of Investment Mahmoud Mohiedin stated that 300 
Chinese companies will participate in the Egyptian-Chinese 
Investment Forum in Sharm El-Sheikh during November 2009. Chairman 
of the Chinese Council for Promotion and International Trade 
declared interest in increasing Chinese investments in Egypt, 
especially in infrastructure projects. Mohiedin said there are 16 
Chinese factories in economic zones with investments totaling US$3.5 
billion in various fields including fertilizers, petrochemicals, 
paper, steel, and building materials, and generating about 15,000 
jobs. The Egyptian minister expected an increase in Chinese 
investment, placing China among the top 10 investors in Egypt (Al 
Alam Al Youm, 9/9/2009). 
 
---------------------------------------- 
More Gas Exported to Europe at Low Price 
---------------------------------------- 
 
¶6. (U) Egyptian General Petroleum Corporation (EGPC) exported 103 
BCF (Billion cubic feet) of gas to the Spanish Union Fenosa during 
FY 2008/09 which was about 41% more than planned.  The price of the 
exported gas was US$ 308 million.  Reports indicate that the average 
price of the gas sold to Union Fenosa is about US$2.99 per one 
million BTU (British Thermal Unit).  This price is 1 cent less than 
the price of natural gas sold to local energy intensive factories in 
Egypt and is only 34 cent more  than the real cost of the production 
(the average cost of the production of 1 million BTU of Egyptian NG 
is $2.65). Some local experts protested the sale, claiming that 
Egypt is selling its energy resources at very low prices (Al Masry 
Al Youm, 9/8/2009). 
 
------------------------ 
Iraqi--Egyptian Cooperation in the Field of Oil Drilling 
------------------------ 
 
¶7. (U) According to a press report issued by the Ministry of 
Petroleum, members of an official delegation visiting Iraq have 
agreed to establish an operational center for drilling oil at El 
Basra. The article claims that this is the first Arabic presence in 
that region in the field of oil drilling (All Newspapers, 
9/9/2009). 
 
------------------------- 
EFSA Rejects Third France Telecom Appeal over Mobinil 
------------------------- 
 
¶8. (U) Khaled Serry Seyam, Deputy Chair of the Egyptian Financial 
Supervisory Authority (EFSA) announced that EFSA upheld the Capital 
Market Authority's decision to reject France Telecom's (FT) third 
offer to buy outstanding Mobinil shares.  EFSA rejected the appeal 
because the price offered by FT was less than the LE273.26 (US$49.7) 
price per share FT paid to acquire FT shares from Orasco Telecom. 
Seyam stated that France Telecom offered LE230per share (US$41.8) in 
its third bid (Al Masry Al Youm, Al Akhbar, 9/8/2009). 
 
Scobey