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Swine flu causes scare; thousands of pigs culled
In response to fears surrounding the highly contagious swine flu – or H1N1 virus – the government ordered the culling of over 300,000 pigs in a locally and internationally contested measure intended to halt the spread of the virus should it eventually make its way to the country. As of press time, international press report that a German tourist passing through Hurghada airport was hospitalized after displaying swine flu-like symptoms.
The decision to cull the country’s pigs followed an April 26 announcement by the Ministry of State for Environmental Affairs, which ordered the swift transfer of all pigs in Egypt to locations far from residential areas. Minister of Finance Youssef Boutros-Ghali was quoted by local press as having announced that LE 31.5 million would be set aside to compensate pig farmers. The government has promised LE 100 for each male pig, LE 250 for each pregnant sow, and LE 50 for each piglet. A statement released by Hamed Samaha, head of the General Authority for Veterinary Services on May 11 said that, thus far, about 26,000 pigs had been killed. Disposal methods include slaughtering and freezing the meat for future consumption, or burying the carcasses deep in the ground.
Eight new cases of bird flu reported
Eight new cases of avian influenza in humans were reported in Egypt during May, bringing the total number of infected persons in the country to 25 in 2009, and 76 since February 2006. The infected individuals were all children, ranging from three to five years old. One of the infected children, a four-year-old girl from Meet Ghamr in the Nile Delta named Nada Al Ahmed Reda Younes, died due to complications from the flu on May 18. Since the deadly virus first struck Egypt in early 2006, it has led to 27 deaths.
Interest rates cut
The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) cut interest rates for the third time this year in a decision on May 14. Overnight deposit rates were reduced by 50 basis points to 9.5 percent, and overnight lending rates by 100 basis points to 11 percent. These decisions reduced the corridor between the deposit and lending rates to 1.5 percent, from 2 percent.
In a statement regarding the decision, the MPC pointed to declining inflation, but noted “that the sharp retrenchment in international commodity prices, which had begun in the second half of 2008, has not been fully reflected in domestic price levels due to the downward price rigidities in domestic markets.” However, the committee said “annual inflation will fall towards the CBE’s comfort zone by mid-2009.”
Inflation falls, food prices rise
Urban consumer inflation in Egypt fell to 11.8 percent year-on-year in April, from 12.1 percent in March, Egypt’s state-run statistics agency, the Central Agency for Public Mobilization & Statistics (CAPMAS), said last month.
Non-food inflation dropped on an annual basis to 10.3 percent in April, from 11.7 percent in March. However, non-food inflation increased month-on-month.
The decrease in overall annual inflation occurred while food prices rose 2.5 percent month-on-month, the third consecutive monthly rise. Annual food inflation also increased, moving to 13.7 percent in the first rise since August 2008.
Promised government raises reduced
The government announced on May 6 that a 30-percent annual raise it had promised to government employees on International Labor Day in 2008 had been cut to 5 percent. The cut was made in light of the global financial crisis and subsequent lack of financial resources on the government’s behalf, according to local press. Two weeks after this initial announcement, President Hosni Mubarak requested that the government grant those who had been promised 30-percent raises a 10-percent annual salary increase in order to help buffer against the hardships of the current economic environment.
Ring road accident kills 4, injures over 30
A massive pile-up on the Ring Road in Qatamiya occurred on April 27. Local press report that at least four people were killed, and as many as 40 and as few as 30 others injured and sent to nearby hospitals. The accident was caused after a truck carrying a full load of steel rods collided with a public bus, which was followed by a 20-car pile-up.
According to the most recent statistics, around 8,000 people were killed in road accidents in Egypt in 2006.
Unemployment on the rise
Minister of Trade and Industry Rachid Mohamed Rachid announced on May 16 that unemployment levels in the country had risen to over 9 percent for the first quarter of 2009, up from 8.8 percent in the last quarter of 2008. The increase has been attributed to the country’s slowing economic growth.
The announcement comes after government statements earlier in the month affirming that Egypt’s economic growth rate had declined to just over 4 percent in the third quarter of the fiscal year, in line with previous forecasts. This contraction stands in sharp contrast to the economic growth rates of the last few years, which have hovered around the 7-percent mark. The economy has been hit by decreasing revenues from the Suez Canal and tourism, as well as falls in workers’ remittances and foreign investment.
Imported wheat seized
Egypt’s state prosecutor announced May 13 that all Russian wheat imported to Egypt was to be seized across the country and at all ports after claims were made that it was unfit for human consumption and harmful to human health, local press reported. As of press time, at least 52,000 tons of the wheat had been quarantined at the Red Sea port of Safaga for further testing and quality control measures. Some reports assert that Russia believes the move was made by Egypt in order to ultimately lower wheat prices.
Egypt is one of the world’s top importers of wheat, and also one of the largest consumers of Russian wheat. Imported wheat is often used to make bread subsidized by the Egyptian government.
Index inches up
Egypt’s main index, the EGX 30, saw gains in May after investors – especially those outside of Egypt – bought into blue chips and other large-cap firms after international markets and confidence rebounded. International press report that the stock index inched up on May 26 despite many local and foreign investors staying away in anticipation of a resolution to the disagreement between Orascom Telecom and France Telecom regarding ownership of Mobinil.
Archeological items repatriated
The Myers Museum in London returned 454 rare archeological pieces to Egypt in the middle of April. Local press report that the 454 pieces had been illegally smuggled out of Egypt sometime in the 1970s, despite a United Nations Educational, Scientific & Cultural Organization (UNESCO) convention that stipulated that the smuggling of Egyptian artifacts was to end. The collection of repatriated pieces, which includes votive figurines, amulets, pottery and coins, now rests at the Egyptian Museum.
Court orders blocking of websites
In a controversial ruling mid-May, Egypt’s Administrative Court ordered that obscene or pornographic websites be officially blocked from use in the country. International press report that the ruling came after a case in April that saw the conviction of a couple for hosting a website for swingers. The court expressed that liberties and freedoms can be restricted in order to “safeguard the nation’s high level of religious upbringing [and] moral and patriotic values.” The National Telecommunication Regulatory Authority (NTRA), however, said that fulfilling the court’s ruling would be extremely difficult.
Sales of ceramics fall
Egyptian ceramic exports dropped by 35 percent in the first few months of 2009, according to local press. The decrease in sales owes to several factors, including the enforcement of import tariffs by several countries in the region to which Egypt predominantly exports its ceramics products. In particular, Libya – without a local ceramics industry – refuses to reduce its tariff on Egypt’s ceramics despite efforts by Egypt’s Ministry of Trade & Industry.
Steel prices up, imports grow
The price of Egyptian steel, as well as the volume of steel imported by Egypt, increased in early 2009 over 2008 levels. Egyptian steel companies raised steel prices to between LE 3,200 and LE 3,300 a ton in May, up LE 150-200 a ton from April.
Terminal 3 opens commercially
The first passengers to pass through Cairo International Airport’s new Terminal 3, a $340 million facility, did so on the morning of May 4, when 220 people checked in for their flight to New York. The first plane to land at the terminal also arrived on May 4.
The new terminal will increase the capacity of Cairo International Airport to around 22 million passengers each year, up from the previous 11 million.
Canal revenues up in April
Suez Canal revenues rose month-on-month to $346.9 million in April, up from $327.9 million in March. The number of vessels passing through the Suez Canal totaled 1,482 in April of this year, up from 1,439 in March.
Despite the monthly rise, revenues still fell 22.7 percent year-on-year, from $448.9 million in April 2008.
Canal authorities had announced in January 2009 that transit tolls would remain the same for this year despite an anticipated reduction in traffic due to the global financial crisis.
Foreign investment tumbles
In a statement released May 27, the Central Bank of Egypt said that foreign direct investment (FDI) had dropped by 53 percent year-on-year to $5.2 billion in the nine months ending March. The severe drop was attributed to the global financial crisis, which has discouraged investors.
Egypt’s economy has grown approximately 7 percent over the last three years thanks in part to high FDI levels. However, Minister of Investment Mahmoud Mohieldin said May 15 that foreign investment was expected to decline 43 percent to $7.5 billion in the fiscal year through June. This stands in sharp contrast to last year’s investment, which was $13.2 billion.
Revenues decline
Revenue from tourism in Egypt declined 13.2 percent year-on-year to $3.6 million in the first four months of 2009. Minister of Tourism Zoheir Garana said late May that the drop was a result of the global economic pinch as well as a significant decrease in the number of tourists from Eastern Europe. Luxury tourism, however, has avoided similar losses and is maintaining high occupancy rates.
Correction:
In the cover story of May issue, we wrote on page 40 that Sarah Broberg was assistant managing director at Trans-Arabian Creative Communications Services (TRACCS). Her job title is in fact assistant managing director.
We apologize for any Inconvenience this Inaccuracy may have caused.
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