VZCZCXYZ0003
RR RUEHWEB

DE RUEHEG #2078 3061451
ZNR UUUUU ZZH
R 021451Z NOV 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 4055
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS CAIRO 002078 
 
SIPDIS 
 
STATE FOR NEA/ELA 
 
E.O. 12958:  N/A 
TAGS: ECON EINV EFIN ETRD EAGR ENRG PGOV EG
SUBJECT: EGYPT'S ECONOMY: November 2 PRESS ROUND-UP 
 
¶1. (U) The following are notable economic news stories that appeared 
over the past week in the Egyptian press: 
 
-------------------------------- 
Mubarak Speech to NDP Conference 
-------------------------------- 
 
¶2. (U) In a speech to the National Democratic Party (NDP) 
conference, President Hosni Mubarak laid out his economic agenda for 
the coming year.  Most notably, he called for the construction of 
nuclear power plants for producing energy.  Mubarak also touted the 
recently announced additional LE10 billion (US$1.83 billion) 
stimulus package, aimed at improving roads and sanitation, and 
claimed that Egypt is handling the global economic crisis with its 
own money, not foreign aid or debt. Finally, Mubarak stressed that 
Egypt considered water resources to be a matter of national security 
(Al Ahram, 11.1.2009). 
 
-------------------------- 
Egypt's Poverty Rate Rises 
-------------------------- 
 
¶3. (U) Minister of Economic Development Osman Mohamed Osman 
announced that the Egyptian poverty rate recently increased from 19% 
to 21%. Osman blamed the global financial crisis and the decline in 
foreign direct investment for the rise in poverty.  Egypt's poverty 
line is calculated based on the costs of basic needs, and those 
falling below it generally earn US$1 per day or less (Al Masry Al 
Youm, 10.29.2009). 
 
---------------------------------------- 
Central Bank Creates New Inflation Index 
---------------------------------------- 
 
¶4. (U) The Central Bank of Egypt introduced a new inflation index, 
derived from the government's current Central Agency for Public 
Mobilization and Statistics (CAPMAS) index. The new index charts 
core inflation and strips out the volatile prices of goods such as 
fruits, vegetables and transportation. Using the new metric, 
inflation was just 6.3% in September and 5.8% in August 2009, 
compared to the headline inflation indicator which put inflation at 
10.8% in September and 9% in August (Al Mal, Al Alam Al Youm, Al 
Ahram, 10.26.2009). 
 
------------------------------------ 
Combating Sea Erosion along the Nile 
------------------------------------ 
 
¶5. (U) Minister of Irrigation and Water Resources Nasr Allam 
announced that the Egyptian General Agency for Coastal Protection 
has completed its project to mitigate the impact of sea erosion 
along a five-kilometer stretch of the Nile delta by the city of 
Rosetta at a cost of LE95 million (US$17.43 million).  The work is 
part of a larger plan to protect a 120-kilometer stretch along the 
Mediterranean and the Red Sea coasts by 2017 with a total investment 
of LE1.4 billion (US$260 million) (Al Ahram, Al Shorouk, 
10.26.2009). 
 
------------------------- 
Reduction in Food Exports 
------------------------- 
 
¶6. (U)A report by the Export Council for Food Commodities showed 
that Egyptian food exports fell by LE1 billion (US$183 million) over 
the first three quarters of 2009, a 16% decrease from the same 
period last year. Exports of milk products fell by 25% over the 
period, although sugar exports bucked the trend, increasing by 12% 
(Al Bursa, 11.1.2009). 
 
------------------------------- 
WTO Africa Group Meets in Cairo 
------------------------------- 
 
¶7. (U) At a gathering of African trade ministers to discuss the Doha 
Round of the World Trade Organization (WTO) talks, Egyptian Minister 
of Trade and Industry Rachid Mohamed Rachid gave a speech warning 
against ignoring developing countries in world trade negotiations, 
and arguing that African nations should present a united front on 
WTO issues.  Representatives of various African nations at the 
conference criticized subsidies on American agricultural products, 
particularly cotton (Al Alam Al Youm 10.29.2009). 
 
Scobey