Egypt remains a free market economy, at least under the current leadership.(Photo: Reuters)
Egypt's business elite community voiced their concerns and queries on the future of the country's economy in a meeting arranged by the Supreme Council of the Armed Forces and attended by the governor of the Central Bank. Also at the meeting were several economic group ministers along with 40 of Egypt's major business and industry leaders.
Hazem El-Beblawi, the finance minister, reassured investors that the government will not revoke its previous contractual commitments as long as it adheres to the law.
He added that the government is currently reviewing some of its commitments to ensure that they are in-line with all related regulation and legislation.
“Egypt will not back down on a free market economy, but the state has to be strong and able to enforce the law, and protect competition” said El-Beblawy,
“The world must know the 25 January Revolution happened in Egypt to re-establish reverence for the rule of law.”
Responding to a question on the issue of minimum wages, the finance minister added that the government wants to impose a minimum income rate, not merely a minimum basic salary.
Business leaders, however, questioned El-Beblawi’s logic.
“Why a minimum wage now?” asked Gala El-Zorba, head of the Federation of Egyptian Industries, indicating that priorities should be set according to the limitations of the state budget.
In addition to contesting the government’s direction to impose a minimum wage, businessmen attending the meeting took the opportunity to communicate some of their policy requests to the attending officials.
Ahmed El-Wakil, head of the Federation of Chambers of Commerce, said that the government should not contemplate imposing any new taxes until the local economy recovers from the current crisis.
The former head of the Garments Export Council, Magdy Tolba, called for rebalancing the labour law for the benefit of employers, as the current one “only gives all the rights to workers.”
He also called for diminishing lending interest rates in Egypt, which reach 16 per cent, to match that of peer countries.
The newly-appointed minister added that the government is currently studying methods to rationalise energy subsidies; namely removing subsidies from Steel, Cement, Fertilizers and Tiles industries.
El-Beblawi also said that since Egypt is not a rich country, it has to work hard to attract foreign investments to compensate for the shortage in domestic saving. “The scarcity of natural resources should drive us to maximise utilisation of what we currently have.”
For his part, General Mahmoud Nasr, economy advisor to the defence minister, indicated that Egypt is currently suffering from years of bad economic and public policies; adding that a distinction should be carried out between honest businessmen and those who profiteered from the previous regime,
He also expected 2012 to be a year of recovery for the Egyptian economy before 2013 witnesses a real start for the country.