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Egypt faces more difficult decisions to overcome economic crisis, PM Ismail tells Parliament

Amid calls from MPs for withdrawing confidence from his government, Egypt Prime Minister Sherif Ismail insisted this measure will not help the country rise above its predicament

Gamal Essam El-Din , Monday 31 Oct 2016
Egypt PM
File Photo: Egypt's Prime Minister Sherif Ismail speaks in front of Parliament
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In a statement before parliament Monday, Prime Minister Sherif Ismail said "Egypt is still passing through a harsh economic crisis; to get out of it the government needs the support of parliament and the MPs."

Ismail, in response to greater calls from MPs that parliament should withdraw confidence from his government for failing to contain the dollar shortage crisis or improve public services, said "yes we face a severe economic crisis, but this is not so much due to this government's performance as to the failure of many former governments to embrace radical reform or make difficult decisions."

Ismail also argued that "differences between the government and parliament at this critical stage will not help Egypt at all. We rather want cooperation and agreement because the government alone will not be able to overcome the crisis without parliament's support."

Ismail said "the government is ready to take on another package of difficult economic reform decisions, but with the stipulation that these gain the support of parliament before they are finalised."

Ismail insisted that "However harsh economic conditions are, Egypt remains in much better shape than many other countries around us like Syria, Libya and Iraq."

"So what we all need at the moment is to keep Egypt stable and view Egypt's current stability as a great blessing we shouldn't waste," he added.

On the dollar shortage crisis, Ismail unveiled that the Central Bank of Egypt will issue new measures on the exchange rate.

"We are also about to make important decisions on boosting investment, such as amending the investment law and supporting the industrial sector," said Ismail, noting that "the government has granted the industrial sector EGP 6 billion in financial assistance to help it compensate imports."

According to Ismail, the dollar crisis is not all bad.

"In some ways, it was good for the industry sector because the crisis discouraged imports," said Ismail, adding that "the government is currently in the process of solving problems facing one thousand closed factories to help boost local production at the expense of foreign imports."

On the sugar shortage crisis, Ismail said the government and governor of the Central Bank have agreed that 1.8 billion in US dollars will be made available to help the country import basic commodities like sugar and to build up supplies to cover at least six months.

"We aim to create a stock of these basic commodities that should meet the country's needs for eight months," said Ismail.

He also stated that "an amount between eight and ten thousand tonnes of sugar are being injected into the market every day, but the problem is that some merchants still insist on storing huge quantities."

"we will continue supplying the market with sugar every day regardless of any monopolistic practices until we make sure that the stock meets needs for at least two months," Ismail added.

Ismail deplored that Egypt's vital tourism sector has suffered three setbacks in one year: the crash of a Russian passenger plane above Sinai last October, the hijacking of an Egypt Air plane in March, and the loss of another Egypt Air plane in the Mediterranean Sea in May.

"However, we are working in all directions to restore hope for the tourist sector which is vital to our revenue of foreign currency," said Ismail.

Parliament speaker Ali Abdel-Aal did his best to contain anger among MPs who said citizens in their districts are blaming them for not withdrawing confidence from the government of Sherif Ismail.

According to Abdel-Aal, "Egypt has passed through several economic crises and challenges and what we need today is to join shoulders to overcome the current crisis."

Directing his speech at Ismail, Abdel-Aal said "parliament is ready to extend a helping hand to the government so that we as a nation can overcome the current crisis."

Abdel-Aal said "parliament will welcome any decisions that can help the government implement a serious and promising economic reform programme."

Joining Abdel-Aal, Mohamed El-Sewedi, a businessman and head of parliament's majority coalition Support Egypt, said MPs are ready to support any difficult decisions that lead to serious economic reform.

El-Sewedi said the government's failure to make swift decisions necessary to address the dollar crisis led to the creation of a thriving black market.

Ismail, who was interrupted several times, vowed that greater efforts will be made in the coming period to help MPs solve the problems of their constituents.

He also promised that no radical economic reform decisions will be made without consulting parliament first.

"You are the ones who are in daily contact with citizens, and we are keen to explore their views on every decision we take," said Ismail.

 

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