A steady stream of employees flowed into Cairo’s financial district and customers queued to access their accounts on Sunday, the first day for the country’s banks to open after a week-long closure due to political protests. More than 200 bank branches opened today between 10:00 a.m. and 1:30 p.m.. Customers are allowed to withdraw up to 50,000 Egyptian pounds and $10,000 a day.

The pound EGP= fell as low as 5.9260 against the dollar compared with 5.8550 when banks last traded the currency on Jan. 25. The drop was much less steep than some traders had feared.

Trade was heavy as foreign investors and Egyptians sent money out of the country because of the political instability. Around 400 million Egyptian pounds changed hands in the first 45 minutes, compared with a typical 300 to 400 million pounds for a full day before the crisis.

The Central Bank of Egypt moved 5 billion Egyptian pounds ($854 million) of cash into the financial system as depositors gained access to their savings. The regulator has $36 billion in reserves and guarantees deposits.

The stock market remained closed for a sixth day after the benchmark EGX 30 Index tumbled 16 percent in the week to Jan. 27.

The government plans to sell 15 billion pounds in treasury bills tomorrow after canceling last week’s auction.

Sources: Bloomberg, Reuters, BBC

Click here for up-to-date info on Egypt Currency and Exchange Rate

Alongside haggling, tipping is a pervasive feature of the Egyptian economy. Millions of Egyptians depend on these gratuities for their survival and exist in a kind of parallel “baksheesh economy”, abandoned by government and employers alike. In fact, with the grinding poverty, neglect, marginalisation and disempowerment that poor Egyptians endure, tips could be the only change, loose as it might be, that some are willing to believe in.

In a country with high unemployment and overflowing with surplus labour, well-off Egyptians tip everyone from deliverymen, unofficial parking supervisors and petrol pump attendants to the even less necessary toilet attendants who hand them a napkin to dry their hands and the bagger who packs their shopping at the checkout.

Expat Egyptians are often expected to go that extra mile, and dig deeper into their pockets and tip at a greater angle than locals.

In a society where the LE 35 minimum wage (less than £4) is irrelevant, where labour protection is a joke and where social safety nets are tattered and threadbare, baksheesh helps somewhat to redistribute wealth and, at its best, is an informal expression of social solidarity and cohesion.

But baksheesh is neither the most efficient nor the fairest way of seeking greater socio-economic justice. Part of the problem is that baksheesh reward subservience, punish dignity and encourage a master-servant sort of mentality between the well-off and the poor.

Though tips may take the edge off poverty and maintain social peace, they also serve to keep the poor in their place by constantly reminding them of how their economic survival is not down to their hard work but due to the patronage of their “betters”.

Baksheesh also provide employers in the service sector with the opportunity to dump the responsibility for their workers on to the customers’ laps.

Excerpted from an article by Khaled Diab for guardian.co.uk

As part of an independent research project to study the role of women in modern Egyptian society, Jenkins-Sleczkowski discovered that the Americanized view of countries like Egypt is very different from the actual experience inside the country.

Although rural Egypt still show signs of a developing nation and there is poverty and inadequate public services anywhere, Egypt’s densely populated urban centers have become much more modern than most Americans believe.

Expecting to find a country of huts and dirt paths, Jenkins-Sleczkowski found instead a society of modern individuals living in the 21st century, sharing the same lifestyle of packed freeways, fast foods, apartment living, mall shopping and other concepts of modern living associated with American and other world power societies.

“My trip to Egypt showed me that our Western perspectives can be biased and shaped by our own myths about the East. I found that women exist largely as men do in the public sphere, contrary to stereotypes our media would have us believe about the conditions in the country. Our country needs to reconsider its generalizations about former colonized countries. Our biases ignore the degree of modernization that foreign countries, such as Egypt, have achieved.”

Global public relations firm Hill and Knowlton is to spearhead an international campaign for Egypt to help generate investment into the country from across the globe.

The country wants to highlight its evolution from a developing economy into a secure international marketplace. The focus will be to communicate the competitive advantage Egypt offers companies locating to the country, including low corporate tax rates, major market trade agreements and a highly educated and youthful workforce.

Egypt has seen a significant growth in its tourism economy over the past two decades, and is now focused on mirroring that growth in sectors such as IT, energy, manufacturing and retail.

Egypt’s economy grew 4.5 per cent in 2009, despite the global economic crisis. The Egyptian government plans to get back to the seven per cent growth it had seen before the global crisis unfolded.

PRWeek

Revenues and the number of visitors from last year are expected to be the same this year, as the effect of the global economic crisis appears to be less severe than expected.

Currently, the Egyptian tourism industry is 4-5 percent below last year’s revenues.

The Ministry of Tourism is investing even more (between $40 and $60 million) this year in marketing and promotion activities.

The ministry is registering higher and higher numbers of tourists from the US and China.

Ahmed El-Nahas, chairman of the Egyptian Tourism Federation, pointed out that the tourism sector is employing 12 percent of the total labor force in Egypt and accounts for 11.6 percent of the national economy.

Over the past three years, the tourism sector has gathered more than LE 400 million to support community development projects; LE 122 million were allocated specifically to social service projects.

Excerpted from an article by Mariya Petkova for Daily News Egypt

The Affordable Mortgage Finance Program will gradually replace the supply-side subsidies that had been commonly used and move towards a more inclusive, transparent and efficient demand-side subsidy program for low and middle-income households.

The Program is one of the key outcomes of the strong partnership established between the Ministry of Investment, and the Ministry of Housing, Utilities and Urban Development, and the World Bank. Implementation of this operation will be led by the Guarantee and Subsidy Fund (GSF) under the Ministry of Investment.

The Gov Monitor

Wind Energy is scheduled to be the largest contributor to the generation of renewable energy in Egypt. 12% of the 20% of total renewable energy generation is to come from this source. By 2020 it is expected that wind energy will contribute 7200 MW to renewable energy generation.

Egypt is located in the Sunbelt area which means that the country is endowed with high intensity of direct solar radiation ranging between 2000-2600 kwh/m2/year and sunshine duration that ranges from 9-11 hours with mostly clear days. Egypt’s primary locations are able to offer 500 more hours of solar operation each year compared to Spain and Greece, the most favourable European locations. Especially the Upper Egypt region shows great potential for solar energy development.

Hydro-electric power generation has the potential to account for 14% of total generation by 2013. In theory, the Aswan High Dam Project can generate 2.1GW, currently low water levels prevent this from being realised. A Russian company has been awarded the refurbishment of the power station to increase the capacity to 2.4GW.

The Egyptian government has worked on a comprehensive energy needs assessment and has determined that there is a requirement for four nuclear power stations. The first power station is set to be completed by 2020.

Global Arab Network

The Egyptian government and several private companies are preparing to invest hundreds of millions of pounds in an ambitious effort to revive shipping along the Nile. Their plans call for at least a half dozen new ports, a series of barrages and extensive dredging. Advocates say the work will help relieve pressure on Egypt’s congested highways and lower transport costs for industry.

The British, during their occupation of Egypt, understood the importance of the Nile as a cheap and relatively hassle-free thoroughfare. To oversee the river, they established the Inland Water Transportation Agency, later to become the River Transportation Authority (RTA). Following independence, budget-conscious state-owned enterprises built river ports to transfer goods from Upper Egypt to Lower Egypt and vice-versa.

The climate changed during the 1970s as custom tariffs dropped and the country opened its doors to imported goods. Merchants demanded faster transportation to cope with intensifying competition. Trucks became an attractive option and the Nile began to decline as a trade route.

Much of the river traffic ended up on the country’s highways. In 2008, there were nearly 515 million tons of goods transferred by land in Egypt. Trucks carried 93% of this amount — nearly 500 million tons — while rail transport’s share was only 6%. Less than 1% was transported by other means, including river ships. The number of trucks has skyrocketed: There are over 1 million on Egypt’s roads, including 600,000 that are considered heavyweight vehicles (those over 30 tons).

A barge will travel from Cairo to Alexandria in three days, while a truck can make the trip in few hours. While slow, barges create their value in economies of scale. They can carry large quantities of heavy goods for much less than a truck. In a single journey a standard barge will haul as much as 30 heavy trucks.

Another economic advantage of barges is infrastructure. Building a 1,500-kilometer road would cost around LE 3 billion, the same stretch of rail would be nearly double that, while preparing 1,500 kilometers of river for sailing costs only LE 800 million.

Egypt has four main river routes connecting the country from north to south. Three of these connect Cairo with Damietta, Alexandria, and Aswan. The fourth route connects Aswan to Halfa on the Egypt-Sudan border through Lake Nasser.

Three years ago, the RTA started dredging the first three routes. A 450-ton barge needs water at least 2.5 meters deep. But in many areas the water drops to less than 2 meters in the winter. The dredging efforts ended in May this year at a total cost of LE 800 million.

The Nile has the potential to be part of a future integrated transportation system in Egypt, but only if the government plays it right. Dredging the channel, building barrages and installing navigation systems are all efforts that will attract investors to the Nile.

Excerpted from an article by Ali El-Bahnasawy for Business Today Egypt

Despite the impact of the global downturn on Egypt’s important tourism industry, international investors continue to recognise that there are numerous lucrative opportunities worth exploiting in the market.

Some notable examples of new investments announced at the end of 2008 and the beginning of 2009 include the renovation of the Nile Hilton costing $64 million (LE350mn), the Fairmont Hotels launch of its Fairmont Residences in Zamalek Island, in Cairo and the US timeshare company, Interval International affiliation with the Monte Cairo resort. These new projects are joining the multibillion dollar luxury tourism projects in the coastal areas that have already started and all proved very positive signals about the medium-term prospects for the tourism industry in Egypt.

Activity in the sector is still continuing and investment is still being attracted. Recently Kuwait’s Abyaar Real Estate Development Co announced that it had bought a one million square metre plot of land in Marsa Alam on the Red Sea coast to develop as a real estate project.

Overall construction activity is expected to continue to benefit from the hospitality sector’s expansion in the long term.

Over the last year, the Ministry of Tourism said that it was growing at a rate of 25 percent until the global crisis hit the world in September. Since then, tourism numbers began declining.

In terms of revenues, tourism still generates an important flow of hard currencies for Egypt with $10.9 billion in international receipts in 2008, up by 15.9 percent from 2007. When considering only government expenditure on travel and tourism, inclusive of tourism promotion, aviation administration and security services, the figures amounted to $0.7bn in 2008, which was unchanged from the previous year, whereas capital investment totalled $4.5bn, up from $4.1bn in 2007, according to the World Travel and Tourism Council (WTTC).

Excerpted from an article by David Morgan for Global Arab Network

The economy of the most populous Arab country is expected to expand by up to 4.7 percent in the fiscal year that ended in June, compared to 7.2 percent in the previous year, Boutros- Ghali told reporters in Cairo, as the global recession hurt revenue from the Suez Canal and tourism.

Egypt’s economy expanded by just above 7 percent annually for the past three years before the last fiscal year, helped by rising revenue from tourism, the Suez Canal and foreign direct investment.

The government is targeting a budget deficit of 8.5 percent in the current fiscal year, Boutros-Ghali said.

Bloomberg