Investment Minister Ashraf Salman said in an interview that the government assigned a new consulting house (WPP) to prepare for an economic summit in Egypt together with the American consultant (Lazar), adding that the date of the summit has not been set yet.
He said the government was planning to hold the summit on 21 and 22 February, but agreed to postpone it when WPP recommended that the participating states should be consulted first and that international financial institutions should be consulted as well so that the summit does not coincide with other international conferences. Also, Lazar said the planned date coincides with the New Year's holiday in China and East Asia.
Q: How do we reform the investment climate?
A: We need to regain the confidence of international institutions and global investors in the economy, especially that our economy was affected by the political changes in the last four years. We also need to achieve a reform that meets the people's aspirations.
Confidence can only be restored if the whole government, from the president to the smallest official, is committed to a strong economic reform policy that encourages the investment climate.
Q: What are the latest developments in the economic reform policies?
A: A structural reform of the state budget through tax policies that address the deficit versus GDP. Also, policies to increases revenues by utilizing untapped state assets and merging the informal economy with the formal to gain new taxpayers.
As for government spending, part of it would go to subsidies, another part to the interest on domestic public debt and a third part to the salaries of the public sector.
Q: What else?
A: We have to make sure that subsidies go to the needy and not the rich. The first step of the rationalization of subsidies in the coming four years aims at reducing the budget deficit to 8 percent of GDP.
Q: Are there plans to stimulate investors?
A: The government has plans to invest 58 billion pounds in infrastructure and national projects, but this is not enough. For us to achieve a growth rate of 3.5 percent or 4 percent in order to stimulate foreign investors, we need 340 billion pounds. This is where the private sector comes in. We consider it the backbone of growth.
Q: What incentives are we offering investors to achieve the targeted growth rate?
A: Legislative reforms that remove obstacles faced by investors. We will not review 64,000 laws. We will just pinpoint certain factors that create a better investment climate and turn it into an attractive economy, not repellent, so as to attract 280 billion pounds in investments during 2014/2015 and achieve a growth rate of 3.5 percent to 4 percent.
Q: Are there imminent solutions to the disputes between the government and investors?
A: We are working on that, but we prefer that the investors themselves announce the results of those solutions. This is better for the confidence in our economy.
Q: Which of those disputes is difficult to resolve?
A: That of the UAE Al-Futtaim company. It is a series of administrative problems that has to do with licenses and that impeded some 17 billion pounds of investments in the Egyptian market for three years.
We are tackling these problems one by one because we cannot devise general mechanisms to resolve disputes. But we do stand by the investors.
Disputes that are still considered before courts are easier to resolve than disputes that already received court rulings.
Also, we address disputes through a reconciliation committee, but this is taking too long because there are too many problems.
Q: What about the unified investment law?
A: It aims to amend other relevant laws to improve the investment climate, and it is based on the experiences of other countries that changed their laws and increased investments.
We have a case of an investor who obtained a license from the Ministry of Agriculture to reclaim land in two years. But he had to wait for two years and four months to obtain a permit from the Ministry of Irrigation to start working, which forced the Ministry of Agriculture to withdraw the license from him for not meeting the deadline.
And we have another case where an investor obtained a license to build a mall on a land lot, but it took five years for the government to provide the infrastructure. And so the land lot was withdrawn from him.
Q: Does the unified investment law solve these things?
A: Yes. For all these matters will be under one supervisory body, namely the Ministry of Investment.
Edited translation from Al-Masry Al-Youm
