VZCZCXYZ0001
RR RUEHWEB

DE RUEHEG #2189/01 3271229
ZNR UUUUU ZZH
R 231229Z NOV 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 4311
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS CAIRO 002189 
 
SIPDIS 
 
STATE FOR NEA/ELA 
 
E.O. 12958:  N/A 
TAGS: ECON EINV EFIN ETRD ENRG EAGR PGOV EG
SUBJECT: EGYPT'S ECONOMY: November 23 PRESS ROUND-UP 
 
¶1. (U) The following are notable economic news stories that appeared 
over the past week in the Egyptian press: 
 
--------------------------------------------- ----- 
Mubarak Addresses Economy in Speech to Parliament 
--------------------------------------------- ---- 
 
¶2. (U) President Mubarak addressed a joint session of the People's 
Assembly and the Shura Council on November 20, stressing social 
justice for the poor, new stimulus and spending programs, rural 
development, and energy security. Mubarak endorsed new legislation 
to increase pensions and called for reforming the national health 
care system.  Mubarak declared that the government has met the 
challenge of the global financial crisis by passing two fiscal 
stimulus packages of LE15 billion (US$2.75 billion) and LE8 billion 
(US$1.47 billion).  Mubarak called for a third fiscal stimulus 
package amounting to LE10 billion (US$1.83 billion) to finance 
additional infrastructure projects and public services. Finally, 
Mubarak called for ensuring energy security by developing 
alternative energies and making the nuclear power program a national 
priority (Al Ahram, Al Alam Al Youm, 11/22/09). 
 
------------------------------- 
Rachid on Egypt-US Trade Talks 
------------------------------ 
 
¶3. (U) Minister of Trade and Industry Rachid Mohamed Rachid 
criticized the US focus on Egyptian politics during the economic 
dialogue taking place with Washington, saying that Egypt wants to 
keep commercial issues separate from political issues in the 
bilateral relationship.  Rachid also stated that the GOE is 
requesting the designation of at least three new Qualifying 
Industrial Zones (QIZ's), and that the GOE would like to see the 
expansion of food, leather and electronic products in the QIZ 
program (Al Masry Al Youm, 11/22/09). 
 
--------------------------------- 
Egypt and Canada to Negotiate FTA 
--------------------------------- 
 
¶4. (U) During the meeting of the Egypt-Canada Business Council, 
Minister of Trade and Industry Rachid Mohamed Rachid told the press 
that Egypt will start begin negotiating a free trade agreement (FTA) 
with Canada during the Geneva WTO conference that will be held on 
November 29. He added that Egypt is searching for new export markets 
through bilateral trade treaties. Rachid stated that Egypt would 
study the Canada-Jordan FTA as a guideline for the Egyptian-Canadian 
negotiations (Al Mal, Al Alam Al Youm, Al Ahram, 11/19/09). 
 
--------------------------------------------- ------- 
Central Bank Rejects Bank Privatization, New Licenses 
--------------------------------------------- ------- 
 
¶5. (U) Central Bank Governor Farouk El Okdah denied that the 
state-owned Banque du Caire is for sale, arguing that the market 
conditions are not right for privatization.  Banque du Caire is one 
of three public sector banks in Egypt.  El Okdah also stated that no 
licenses will be given to new banks to operate in Egypt (Al Masry Al 
Youm, Al Ahram, 11/22/09). 
 
----------------------------------- 
Unemployment Rate Up from Last Year 
----------------------------------- 
 
¶6. (U) The Central Agency for Public Mobilization and Statistics 
(CAPMAS) released unemployment data for the third quarter of 2009. 
The unemployment rate increased to 9.36% from 8.55% during same 
period last year. Urban unemployment rose by 2.4% from Q3 2008 to Q3 
2009, climbing to 13.7%, while rural unemployment increased by 0.4%, 
rising to 6.1%. The figures revealed a large gender gap in 
unemployment, as 5.3% of men are officially unemployed compared to 
22.8% of women. The overall Egyptian labor force grew by 397,000 
over the past year, and now totals 25.2 million workers (Al Alam Al 
Youm, Al Dustour 11/16/09). 
 
--------------------------------------- 
Increase in Garment Exports to the U.S. 
--------------------------------------- 
 
¶7. (U) Yehia El-Zananiry, the head of the Ready-Made Garments 
Association at the Union of Trade Chambers, said garment exports to 
the United States went up during the first half of 2009 in 
comparison to same period last year, climbing to $540 million from 
last year's mark of $520 million (Al Alam Al Youm, 11/16/09). 
 
------------------------------------------ 
GOE Denies Rumors of Energy Price Increase 
------------------------------------------ 
¶8. (U) On November 17, independent newspapers reported that Minister 
of Energy and Petroleum Sameh Fahmy is considering increasing the 
domestic sale price of petroleum products.  The reason for this 
possible price increase, the newspapers reported, is the need to 
respond to the dramatic increase in domestic energy consumption, 
including an 18% jump in gasoline consumption in FY2008/09. However, 
Hamdy Abdel Aziz, a spokesman for the Ministry of Petroleum, denied 
the reports and stated that the Ministry would not raise prices.(Al 
Masry Al Youm, Al Shorouk, Al Ahram, 11/17/09, 11/18/09). 
 
--------------------------------------------- ---- 
Newspaper Alleges U.S. Pressure on Israel Gas Deal 
--------------------------------------------- ---- 
 
¶9. (U) The Al Shorouk newspaper claimed that US Secretary of State 
Hillary Clinton pressured Egypt to increase natural gas exports to 
Israel during her recent trip to Cairo.  The newspaper said gas 
exports to Israel amount to $164 million per year, and it alleged 
that the gas is being sold for a below-market price.  Retired 
Ambassador Ibrahim Yousri, who is leading the "No Gas To Israel" 
campaign, added that Clinton not only asked the GOE for an increase 
of the amount of the gas exports but also a reduction in the price 
of the gas (Al Shorouk, 11/16/09) 
 
SCOBEY