Suez Canal revenues up SUEZ Canal revenues were up in October by 4.8 per cent compared to the same month last year. The Canal brought in some $447.8 million in October 2011, up 2.2 per cent from a month earlier. The canal's revenues in October 2010 were $427.3 million. Revenues in September 2011 were $438.3 million. The Suez Canal is one of Egypt's most important sources for hard currency, along with tourism, oil and gas exports and remittances from Egyptians living abroad. Earlier this month, Chairman of the Suez Canal Authority Admiral Ahmed Fadel had said the Suez Canal revenues increased by 11 per cent from January till September 2011 reaching around $ 3.9 Billion compared to the same period in 2010. The Canal's revenues amounted to $4.7 in 2010. A bloated budget INITIAL indicators for the closing account of the 2010/11 budget show a deficit of 9.8 per cent of GDP which comes to LE134.5 billion. In comparison, the budget deficit stood at 8.1 per cent the year before. Public spending reached LE402 billion, of which LE96 billion went to wages alone. A further LE123 billion were spent on subsidies and social benefits, with an increase of LE20 billion compared to the year before. While taxes on income, capital gains and goods and services increased, non-tax revenues fell by 25 per cent due to a drop in foreign donor assistance. In addition, revenues from publicly owned entities fell by 24.5 per cent due to the drop in the activity of economic authorities and public sector companies in the aftermath of the revolution and their need to increase their spending on wages and benefits. Cooler inflation? THE HEADLINE Consumer Price Index (CPI), which measures the inflation rate, rose slightly in October 2011 according to the Central Agency for Public Mobilisation and Statistics (CAPMAS). According to CAPMAS, CPI inched up by 0.33 per cent in October compared to 1.43 per cent in September. However, the annual inflation rate declined to 7.10 per cent in October from 8.21 per cent in September. The CAPMAS report stated that some products witnessed a clear reduction in price. These include grains and bread which fell by 3.9 per cent, fish by 2.9 per cent, fruits by two per cent and vegetables by 2.3 per cent. On the other hand, the prices of some products such as meat and poultry increased by 1.9 per cent, milk and eggs by 1.8 per cent, oil by 0.7 per cent, sugar by 0.8 per cent, as compared to September 2011. However, an annual comparison of prices of some food products showed a notable increase. These include rice which increased by 51 per cent, potato went up by 47 per cent, and tomatoes by 21.8 per cent compared to prices in October 2010. Higher unemployment THE UNEMPLOYMENT rate increased to 11.9 per cent during the third quarter of 2011 according to a report on Egypt's labour force that was recently published by the Central Agency for Public Mobilisation and Statistics (CAPMAS). The unemployment rate increased from 8.9 per cent during the third quarter of 2010 to 11.9 per cent during the same period in 2011. The CAPMAS report said that the unemployment rate was estimated according to criteria set by the International Labour Organisation (ILO). The number of unemployed persons reached 3.1 million, an increase of 35.3 per cent when compared to the same period in 2010. The total labour force is estimated at 26.6 million, a figure which increased by two per cent compared to the same period in 2010. The labour force in Egypt represented 33.1 per cent of its total population during the third quarter of 2011. The participation of male individuals in the total labour force is estimated at 74.6 per cent compared to 75.3 during the same quarter in 2010 while the share of females was 22.4 per cent compared to 22.8 during the same quarter in 2010. The total figure of employed individuals during the third quarter of 2011 was 23.5 million, a reduction of 1.3 per cent compared to the same quarter in 2010. Natural gas bids EGYPT's state-owned gas company (EGAS) plans to hold a bidding round for natural gas exploration early next year, petroleum minister Abdallah Ghorab said on Monday. In October, the Egyptian General Petroleum Corporation (EGPC) said it would hold its first bidding round to explore for oil and gas since the uprising that toppled president Hosni Mubarak and had invited international companies to enter. Egypt's current oil and condensate production is currently in the range of 700,000 barrels per day, while gas output is around six billion cubic metres, said Ghorab. Egypt's proven reserves of oil and gas rose to 18.3 billion barrels of oil equivalent in the year to the end of June 2010 and the country expects to boost them to 20 billion over the next two years. Hassanein speaks out A LECTURE by former finance minister Medhat Hassanein, who believes vision is needed to pull Egypt out of its current crisis, was attended by Niveen Wahish. Lecturer Hassanein stressed that the elections should be the take-off point and any delay of elections will have negative repercussions on the economy. "Whoever comes is not the issue," Hassanein said, adding that the debate about excluding NDP members from running for the elections is a waste of time. "What we should concentrate on is securing free elections." One of the top tasks for the new government, according to Hassanein, is to improve the business climate which he said has been destroyed by the recent court cases annulling deals that the previous governments had made with businessmen. Hassanein acknowledged that some members of the private sector may have done things that were not right, "but we have to look to the future". He pointed out that foreign investors are questioning how they can come back to invest in Egypt when the private sector is seriously attacked. "We cannot ignore its [the private sector] role in the economic development of our country. The government does not have the resources for economic activity. It should act as a regulator and build the institutions conducive to growth." Hassanein is cautiously optimistic about Egypt's economy. "Egypt has the fundamentals of an economy that can grow and prosper." However, recent figures about the performance of the economy, the sharp drop in foreign reserves, foreign direct investments and the budget deficit, are a cause of concern to him. Yet, he believes the economy can grow if it makes a better use of its resources. Among those resources, he said, are human capital and tourism. "Egyptians have not been yet looked at as a source of social and economic development but as a burden." Tourism has also not been considered seriously as a source of income. "We have been concentrating on goods' exports, while we should be concentrating on tourism," he said, pointing out that this industry is labour intensive and therefore a source of labour generation. Hassanein believes that finding the path for Egypt's future lies in the hands of youth but he advised them to consult the senior professionals and experienced generation so as not to repeat their mistakes of creating unsustainable growth. He also said that the young revolutionaries must come down to earth to do grassroots work. "Visit slums to understand poverty," he said.
