|
IN BRIEF
New editors for state newspapers
Top state-owned publications received new
editors following the biggest editorial shuffle in nearly 20 years.
The Shura Council appointed new editors-in-chief to replace the
10 outgoing bosses, the majority of whom are past the retirement
age of 65. The council also split the editorial decisionmakers and
chairmanships of the board, a break from an almost 50-year tradition.
The move comes amid a growing gap between the young and old guard
in the ruling National Democratic Party (NDP) and ahead of presidential
and parliamentary elections scheduled for September 7 of this year.
Ibrahim Nafie, chairman of Al-Ahram Publishing House, publisher
of Egypt’s flagship daily Al-Ahram, was replaced by Salah Al-Ghamri,
while Osama Saraya was named editor-in-chief of the newspaper, a
position also held by Nafie for almost quarter of a century.
The Shura Council also appointed Mohammed Fadil to chair Akhbar
Al-Youm Publishing House, Mohammed Barakat as editor of Al-Akhbar,
and Momtaz al-Qut as editor of Akhbar Al-Youm.
The announcement of the changes came as Egypt’s top administrative
court was reviewing a case filed by journalists from Al-Ahram and
Akhbar Al-Youm demanding that their chiefs be forced out for exceeding
the retirement age.
Bombings rattle tourism
Egyptian authorities are carrying out a
massive search for the perpetrators who carried out a series of
explosions that rocked the Red Sea resort town of Sharm Al-Sheikh
during the early hours of July 23. Three bombs exploded only minutes
apart, killing at least 88 and injuring more than 200. One bomb
exploded in the Old Market in Sharm Al-Sheikh near cafés
frequented by Egyptians working in the tourist city; another in
a taxi stand in Naama Bay; and the third exploded after a perpetrator
drove a bomb-rigged car into the reception area of the Ghazala Hotel.
A group calling itself the Abdullah Al-Azzam Brigades of the Al-Qaeda
Organization in the Levant and Egypt has claimed responsibility
for the bombings, Egypt’s deadliest terrorist attack. Another
group, Mujahedee Misr (Egypt’s Warriors), has also claimed
responsibility. The group also claimed responsibility for the Taba
bombings, which took place in October of last year.
It remains to be seen how the attack will affect Egypt’s tourism
industry. Tourism is the second largest hard currency earner in
Egypt, generating more than $6.6 billion during FY 2003-04. Earlier
this month, the government announced a 10-year plan to increase
the number of tourists visiting Egypt to around 18 million by 2015.
Around 8.1 million tourists visited Egypt last year.
Chemist cleared of terrorist links
Magdi El-Nashar, the Egyptian whose name
surfaced as part of investigations into the July 7 bombings of the
London transportation system, which killed 56 and wounded scores
of people, has been cleared by Egyptian authorities of having any
involvement with Al-Qaeda or those suspected of carrying out the
attack. London has not yet released any statements clearing him
of the bombings, and he remains in custody in Egypt.
A link was made between one of the alleged perpetrators, 18-year-old
Hasib Hussain from Leeds, and El-Nashar, who obtained his Ph.D.
in biochemistry from Leeds University. El-Nashar has admitted to
having known Hussain, a British Pakistani, but according to a Ministry
of Interior official, the chemist insisted that he had no role whatsoever
in the attacks. He told investigators that he had returned to Egypt
on June 30 and had planned to return to Britain to resume his studies
after he completed his holidays.
The prosecutor-general’s office has issued a statement that
El-Nashar would be tried in Egypt if any valid charges were filed
against him. No extradition treaty exists between Egypt and Britain.
Touring Tut promises revenues
An exhibition of funerary artifacts from
the tomb of Tutankhamun is currently on display in the US after
several months in Switzerland and Germany. Culture minister Farouk
Hosni said that the exhibitions provide a great opportunity to show
the many faces of Egypt – past, present and future. He added
that the revenues will be used for restoration projects and to finance
the construction of the $350 million Grand Egyptian Museum.
“This money is not even a drop in the bucket of the cash needed
to build such a museum, which will cost billions of dollars,”
said Zahi Hawass, secretary-general of the Supreme Council for Antiquities
(SCA). He also pointed out that although Egypt is profiting from
these exhibitions, the hosting countries and museums are as well.
Egypt has reportedly earned $32.2 million from exhibiting its antiquities
abroad over the past three years. The earnings were generated by
18 exhibitions in several countries, including Germany, Italy, France,
Austria, the US and Switzerland.
FTA talks continue
Negotiations for the anticipated free trade
agreement (FTA) between Egypt and the US are continuing, the Ministry
of Foreign Trade & Industry announced following the recent visit
by US deputy secretary of state Robert Zoellick. The former US trade
representative (USTR) met with Minister of Foreign Trade and Industry
Rachid Mohamed Rachid to discuss issues regarding FTA negotiations.
The unofficial negotiations reportedly focused on the elements that
form the basis for an FTA, such as investments, customs and intellectual
property rights.
A recent study entitled “Anchoring reform with a US-Egypt Free
Trade Agreement” shows that both parties stand to benefit from
an FTA agreement. For Egypt, it would be an essential step to “create
sufficient jobs for new entrants into the labor market and improve
the standard of living for all Egyptians.” Additionally, the
study said that it could boost Egypt’s merchandise exports
to the US, which averaged a meager $946.6 million between 1996 and
2004.
For the US, an FTA could help US exporters overcome the disadvantage
they have in the Egyptian market competing against duty-free products
from the EU. The Egypt-EU Association Agreement allows Egyptian
goods and products that meet EU specifications to enter the European
market without customs and vice versa.
Strike hangs in the air
Air traffic controllers are threatening
to stage a partial strike in the third round of the ongoing confrontation
between the state-owned Air Navigation Company and the Air Controllers
Union. The union held a general meeting to discuss its dispute with
aviation authorities over wage increases and the dismissal of two
employees. Union Chief Magdi Abdel-Hadi vowed to “do things
in a legal manner that is recognized internationally.”
The first round of the contract negotiations took place in March,
when air traffic controllers staged a weeklong sit-in to protest
low wages, retirement bonuses and social conditions. In May, a second
round of negotiations resulted in three weeks of major delays at
airports across the country when controllers protested against the
punishment of eight colleagues. The national carrier alone lost
$40 million with several Arab and other foreign carriers also demanding
huge compensation.
The air controllers have said that if the company does not respond
to their demands – which include an immediate doubling of their
total income, followed by a 25-percent increase for two years and
a 10-percent annual increase, as well as retirement bonuses, promotions
and the reinstatement of their fired colleagues – they will
stage a three-day sit-in on August 4-6. They also threatened to
go on strike at all airports for four hours on the first day, which
would, in effect, bring all flights in or out of the country to
a halt.
Air Navigation Company chairman Ahmed Said that in the case of a
strike, the company would follow the routine international procedures,
issuing a “pilot announcement,” to inform airlines about
the air traffic delays so that they can shift flight schedules and
make necessary rearrangements.
EU earmarks d110 million in support
The Euro-Mediterranean Committee last month
approved the 2005 national financing plan for Egypt, which encompasses
three programs for a total amount of d110 million. The programs
support reforms in water management, upgrades to the overall institutional
capacity of the government and training for reformers working in
democracy, human rights and civil society.
Orascom and Wind to merge
Telecom tycoon Naguib Sawiris, who bought control of Italy’s
mobile telephone network Wind in a transaction valued at d12.1 billion,
aims to merge the business with Orascom Telecom Holding, SAE and
sell shares in the new company some time in 2006. An initial sale
of stock in the merged company will not go ahead “before 12
to 18 months,” Sawiris told reporters on the sidelines of a
conference in Milan.
Weather Investments, a consortium owned by Sawiris and two other
partners, carried out one of Europe’s largest leveraged buyouts
through the acquisition of Wind two months ago. Sawiris, chairman
of Orascom Telecom Holding, explained that combining Orascom and
Wind would put their collective earnings at about $3 billion to
$3.5 billion a year before interest, tax, depreciation and amortization.
He said he plans to use Wind as a base to expand his Internet and
mobile phone operations into Europe.
Sawiris is buying 63 percent of Wind for d3 billion in cash. He
has an option to buy the rest of Wind by the end of June next year
in return for the 26 percent of Weather Investments he will transfer
to Enel, former owner of Wind. Weather will also own 50 percent
plus one share of Orascom Telecom, which operates wireless networks
in nine countries, including Egypt and Iraq.
Egypt closes embassy in Iraq
The government announced that its remaining
staff in Baghdad – six diplomats and six administrative employees
– were ordered to leave the country in the wake of the reported
murder of Egypt’s envoy to Iraq, Ihab Al-Sherif, by militants
purportedly affiliated to Al-Qaeda. Al-Sherif’s captors had
posted video footage on the Internet of the blindfolded envoy early
last month, indicating in a statement that it killed the envoy because
he represented a “tyrannical” government allied to the
“Jews and Crusaders.”
While the Egyptian government claims it confirmed the slaying of
its envoy from multiple sources, Al-Sherif’s body has not been
recovered, leaving room for speculation that he may still be alive.
On July 23, Tanzeem Qaedat Al-Jihad Fi Balad Al-Rafidayn (The Organization
of Jihad Headquarters in the Country of the Two Rivers) posted a
new Internet video of Al-Sherif. The brief footage showed Al-Sherif
describing the peace deal between Egypt and Israel, but gave no
clear indication of when it was made.
Egypt’s foreign ministry closed its Baghdad mission, but President
Hosni Mubarak has stressed that Cairo will continue to support Iraq.
“This terrorist act will not deter Egypt from its firm position
in support of Iraq and its people,” a statement from the president’s
office said. Al-Sherif “lost his life at the hands of terrorism
that trades in Islam but knows no nation and no religion,”
it added.
On a related note, the head of the Algerian mission to Iraq, Ali
Belaroussi, and fellow envoy Azzedine Belkadi were kidnapped late
last month. As of time of press, few details were available on the
kidnapping. The incident follows attempts to kidnap the envoys of
Pakistan and Bahrain.
$33 million loan to improve water transport
Egypt has signed a $33 million loan agreement
with the Arab Fund for Social & Economic Development (AFSED)
to finance the Alexandria-Cairo waterway, which links the two cities
through a channel of the Nile. If the waterway is built it would
allow goods to be transferred between the two cities within a shorter
period of time while also reducing truck traffic on the roads. Egyptian
minister of international cooperation Fayza Aboulnaga announced
the deal last month following talks with AFSED chairman Abdul Latif
Al-Hamad.
Prime Minister Ahmed Nazif and Al-Hamad signed the loan accord to
finance the improvement of the waterway to relieve pressure on land
transport and thus improve export goods movement. The two sides
also signed memorandums of understanding concerning three other
grants, according to Aboulnaga. The first grant, totaling $230,000,
will contribute to funding a study to evaluate the effects of the
construction of the Aswan High Dam, while the second will finance
the building of three centers to support the furniture and wood
industry in the Giza and Alexandria governorates. The third grant,
totaling $1.5 million, will be earmarked to finance a center for
strategic documents on social and economic reforms.
Charter aircraft grounded
Minister of Civil Aviation Ahmed Shafik
ordered the grounding of a charter plane operated by AMC, a private
Egyptian charter company, over technical problems in the aircraft.
The Paris-bound plane with 163 French passengers failed to take
off from Hurghada following a technical problem with its air conditioning.
Although a maintenance crew repaired the fault, 97 of the passengers
refused to board the plane, which eventually reached Charles de
Gaulle Airport more than six hours late.
Subsequently, French aviation authorities prevented the plane from
taking off to Luxor with 91 passengers after they were informed
about the earlier events. Following an inspection, the French aviation
authorities allowed the plane to take off. Upon its return to Egypt,
the minister grounded the plane and ordered a detailed inspection
of the company’s fleet. AMC owner and chairman Sayed Saber
says no defects have been found thus far.
No stomach for watermelons
It’s been a bad season for watermelon
sales as Egyptians seem to be afflicted with a mysterious illness
upon eating the fruits. Many have reported cases of vomiting, diarrhea
and fever after eating just a few bites of the summertime specialty.
Some of the more serious cases ended up at the poison control center
in Demerdash Hospital.
Rumors have spread that the illness is due to the use of prohibited
pesticides by farmers. While Minister of Agriculture Ahmed El Leithy
initially denied that farmers were using banned pesticides, he later
hinted that some farmers may have purchased harmful pesticides and
that the ministry was willing to buy them back.
Ministry officials have pointed out that Egypt prohibits the import
of pesticides that are not approved by international organizations,
even if they are still used in other countries. In theory, samples
of pesticides imported into the country are tested at the Central
Pesticides Laboratory before the actual shipment is released from
customs.
And in spite of the contradictory statements by the minister, officials
within the ministry still proclaim that the problems with the watermelons
are nothing more than rumors, adding that if something was truly
poisoning the fruits and vegetables, it’s the misuse of pesticides
by farmers and not the pesticides themselves.
EIB lends d50 million for clean energy
The European Investment Bank (EIB) has announced
it is lending, under its Facility for Euro-Mediterranean Investment
& Partnership (FEMIP), d50 million to the Egyptian Natural Gas
Company (GASCO) to build two gas pipelines of a combined length
of 152 kilometers in Egypt.
The pipelines form part of the national gas transmission system
that transports natural gas from Egyptian offshore and onshore gas
production fields to destinations throughout the country. The project,
which includes the design, construction, commissioning and commercial
operation of the two gas pipelines will help reduce power generation
costs by replacing oil with gas at existing power stations.
Terminal woes
In an effort to reduce crowding while construction
progresses on Cairo International Airport’s new terminal, airport
officials decided it would be a good idea to ban vehicles from driving
up to Terminal 2 early last month. Departing and arriving passengers
are required to use shuttle buses from a temporary car park almost
two kilometers away from the terminal.
But shortly after the decision was implemented, pandemonium broke
out at the terminal and car park as passengers jockeyed for space
on shuttle buses crammed wall to wall with luggage. Airlines and
tour operators filed complaints with the minister of civil aviation,
Ahmed Shafik, arguing that their business had been adversely affected
by the traffic rerouting.
Fraport, the German airport management company under contract to
run Cairo Airport, says it should not be blamed for the delays.
The company says it purchased 14 buses for around $21 million to
shuttle flyers between Terminal 2 and the temporary car park. The
company had also requested that a number of airlines move from Terminal
2 to Terminal 1 while construction work was under way, but the government
reportedly overturned the decision.
Paychecks 20 percent fatter
July paychecks for Egyptian public sector
employees will come with a nice chunk of cash, 20 percent to be
exact. The extra cash is classified as a social allowance granted
by the Egyptian government to public sector employees in an effort
to counter inflation. Many private sector companies have announced
that they will voluntarily follow suit.
President Hosni Mubarak announced the decision in June, announcing
a 20-percent bonus instead of the 15 percent initially budgeted.
The bonus will eventually become part of regular salaries by 2010.
Public sector wages currently constitute 21 percent of government
spending and cost around £E 45.6 billion annually. While officials
in the Ministry of Finance have downplayed the cost of the new social
allowance, it is expected to further burden the national budget.
With more than 6 million people working for the government, the
bonus is expected to cost £E 3 billion.
Higab OK’d for TV
A landmark ruling has been handed to three female TV presenters
allowing them to wear higab on air. The women, all of whom were
hired to work on-air, were reassigned to behind-the-scenes work
after taking to wearing the traditional headscarf. Although officials
argued the women had adopted wearing the higab post-recruitment
and thus contravened the terms of their employment contract, the
court said that the ban violated the women’s constitutional
rights.
First Chinese factory opens near Suez
The China Textile Machinery Group (CTMC)
broke ground for its new textile factory at the southern entrance
of the Suez Canal, making it the first-ever Chinese-owned factory
to be built in Egypt. State-owned CTMC is one of China’s largest
textile machinery manufacturers, as well a major producer of fabrics.
CTMC will invest $12.5 million in the factory, to be built over
the next six months and employ 800 workers. The company said it
selected Egypt because of its geographic location, cheap electricity,
low-cost labor, high-quality cotton and free trade agreements with
regional markets.
The factory is expected to produce around 6,000 tons of PP spun-bonded,
non-woven fabric, most of which will be for export. The company
has indicated plans to build another 10 factories in Egypt over
the next three years to manufacture windows and kitchen utensils.
QIZ companies demand lower content quota
The Ministry of Foreign Trade & Industry
(MoFTI) says it will hold off on requests by Egyptian manufacturers
to renegotiate the minimum requirement of Israeli content in products
exported to the US under the Qualifying Industrial Zones (QIZ) agreement.
Under the QIZ agreement signed between Egypt, Israel and the US,
products manufactured with 11.7 percent Israeli content in agreed
on industrial zones are eligible for duty- and quota-free access
to the US market. Many of the 140 Egyptian companies registered
under the deal are requesting that the Israeli content be reduced
to 7 percent, as is the case with Jordan, pointing out that Israeli
suppliers have been unable to fulfill their orders.
Ali Awni, head of the ministry’s QIZ Unit, attributes the companies’
complaints to their poor research into the nature of Israeli industries
rather than the inability of counterparts to fulfill orders. “The
problem really goes back to the fact that many companies registered
to be part of the QIZ deal without taking the time to research the
nature of the Israeli market,” he told Business Monthly. “A
lot of the companies either followed what other companies in the
market decided to import or they simply tried to follow the precedent
set by Jordanian companies when their QIZ agreement came into effect.
What they didn’t realize is that the nature of Jordanian industry
is very different than that of Egypt.”
Awni explained that the Egyptian textile industry – the prime
beneficiary of the QIZ agreement – is much larger and more
established than that of Jordan. This makes it more difficult for
Egyptian companies to find raw materials to import from Israel that
are cheaper than those they can acquire from their regular, local
suppliers. By comparison, Jordan’s textile industry was a lot
less developed and thus needed to import a lot more; Israel was
as good as any other country to import from given that any differences
in cost would be offset by the duty- and quota-free access to the
US.
“At the same time, the Israelis are not really known for their
textile industry,” Awni points out. “That’s why when
the Jordanians asked that the quota be reduced, there was little
resistance from the US or the Israeli side.”
In addition, many of the Israeli companies that Egyptian exporters
are dealing with already have long-term commitments to the Jordanian
market, which is currently taking precedent. But instead of engaging
in negotiations to reduce the quota, Awni says Egyptian companies
should research alternative components to import from the Israeli
market rather that fixate on a handful of components and then complain
that their counterparts can’t meet their orders.
But it’s not only the inability of Israeli suppliers to meet
their demand that frustrates Egyptian QIZ-qualified companies. Many
are complaining about the expense of the components they import
from Israel, saying it would cost a lot less if they import the
same components from China or other parts of Asia.
Rather than attempt to deny it, Awni says that it makes perfect
sense for Chinese imports to be 10 times cheaper than imports from
Israel, the US or the EU for that matter. China is in the business
of mass production, which allows it to keep its prices very low.
“No matter which way you look at it, the prices of components
imported from Israel will always be higher. But in essence, the
difference in prices is less than 10 percent. And in exchange for
that extra cost, they get unlimited access to the US market, which
holds great potential. Once again, they’re just looking at
the immediate cost but not looking at it in the long term,”
he said.
The companies are complaining, but when MoFTI sent each company
a survey to voice their concerns, only four companies actually filled
out the form and returned it to the ministry. “Instead of complaining,
this would have been a very effective way to gage how they are fairing
and address the issues that many are concerned about,” says
Awni. “but they couldn’t even spare a few minutes to fill
out the questionnaire.”
Submit
your comment
Top
|
