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Henry FordCo-founder of Ford motors

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There can be economy only where there is efficiency

Failure is simply the opportunity to begin again, this time more intelligently.

Benjamin DisraeliFormer British PM

1804-1881L.E 2.85

Egyptian - Ethiopian agree on beginning serious negotiations

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Page 7

MINISTRY OF ELECTRICITY & RENEWABLE ENERGY

EGYPTIAN ELECTRICITY HOLDING COMPANY (EEHC)

EGYPTIAN ELECTRICITY TRANSMISSION COMPANY (EETC)

ABBASSIA, NASR CITY, CAIRO, EGYPT TEL.&FAX. : (02 22616537)

PROJECT OF: SUPPLY AND SUPERVISION OF ERECTIONOF (2) POWER TRANSFORMERS 220/66/11 KV, 125MVA EACH FOR 15 MAY (2) SUBSTATION

220/66/11 KV, (2X125 +3X40)MVA, GIS TYPE

ONE ENVELOPE (TECHNICAL + FINANCIAL)

ADJUDICATION NO. 53/2015-2016- EETC invites international eligible tenderers to offer their bids to participate

in the adjudication no. (53/2015-2016) for supply and supervision of erec-tion of (2) power transformers 220/66/11 KV, 125MVA each for 15 MAY (2) substation 220/66/11 KV , (2X125 +3X40)MVA, GIS type one envelope (technical + financial).

-The conditions of EETC purchasing and contracting regulations will be con-sidered as an integral part of the tender documents.

-The scope of work is described in the tender document, the tender docu-ment is available at EETC cashier against presentation of payment receipt of non refundable US$ 3000 from National Bank of Egypt - Nasr City branch EETC’s account no. 11001007177 together with an application (Original + two copies) showing the name, address, E-mail, fax. And telephone numbers of both foreign supplier and local agent and addressed to head of purchasing and stores sector during official working hours.

- Interested Tenders should submit one envelope (technical + financial) on or before the day of Sunday 31/1/2016 at 12 (noon) to EETC central purchasing department (see address below) on condition that the bids will be valid for 180 days started from the opening date of the envelope.

- Bids (Technical + Financial) to be submitted according to tender conditions in sealed envelope.

* The envelope (Technical + Financial) contains the general and special con-ditions and the tenderers offer including all information as specified in the ten-der document, quantities and price schedules, and bid bond with an amount of USD 65 000 valid for 210 days started from the opening date of the envelope.

The envelope will be opened on the same date and time, Interested Tender-ers may obtain further information regarding tender document from

EGYPTIAN ELECTRICITY TRANSMISSION COMPANY (EETC) ABBASSIA, NASR CITY, CAIRO, EGYPT TEL.&FAX. : (02 22616537)

By Eman Rashed

Dr. “Alaa Yassin”, Con-sultant to Minister of Irri-gation and Spokesman of Renaissance Dam file, has announced that the techni-cal delegate will discuss in today’s meeting with Ethiopia some of Egypt’s suggestions; including low-level sluice gates…pointing out that there will be a scientific discussion on the number of gates that the dam should consist to chan-nel water, through identify-ing the number of gates and reviewing the studies con-ducted by Ethiopia.

He added that the design of GERD includes 2 emer-gency spillways; one in the middle of the dam’s body and the other on the left, in addition to 2 emergency gates. He highlighted that these 4 gates will be dis-charged after the comple-tion of dam’s filling due to the difficulty of operating the 145-meter-tall Dam. “Yassin” assured that these 4 gates would contribute to countering any risks might

happen to the operating basis of the dam; like a breakdown of electricity turbines at different levels or when the water level in the dam reservoir is de-creased. They also help raise safety levels. Ministry of Water Re-sources and Irrigation, Hossam Moghazi, an-nounced early on Sunday that the Egyptian govern-ment had arranged a meet-ing with Ethiopian and Sudanese technical experts today Jan. 6th, in the Ethi-opian capital Addis Ababa. The meeting comes after long negotiations between the three parties around the destiny of each regard-ing their share in the Nile river’s water resources, the Ethiopian Renaissance Dam project has raised the Egyptian government’s deep concerns about the project’s direct impact on Egypt’s vital historical source of living.

The relations between the two competing countries have seen heightening disputes, starting with different affiliations on Yemen’s war, and going through oil share competition, then ending with cutting ties between them, on Sunday, over the storming of the Saudi Embassy in Tehran, af-ter the execution of Saudi Shiite cleric Nimr Al-Nimr.

The worsening tensions be-tween the two oil giant producers caused oil prices to bounce high, especially whilst investors’ con-cern about likely supply disrup-tions.

Brent crude prices witnessed a surprising hike at 3 per cent earli-er on Monday, before plummeting

slightly into 2 per cent ($38.10 per barrel).

Alongside, the previously slumping US crude oil price rose more than 2 per cent, peaking at $37.81 per barrel.

“With increased geopolitical tensions between Saudi Arabia and Iran, the market has put a pre-mium on prices just when mar-kets opened (in 2016),” brokerage Phillip Futures said in a note, ac-cording to BBC.

Saudi Arabia and Iran’s econ-omies mark the largest in the MENA region, with Saudi Ara-bia coming first, followed by the forthcoming Iran.

Although, this oil price hike shapes bad news for Egypt, be-

ing a great importer of the com-modity, The Egyptian government is deemed to back Saudi strong stance against its embattled ally “Iran”, provoked by the kingdom’s generosity towards the Egyptian people, through pumping huge investments into Egypt’s market and economy, after the ouster of the Muslim-brotherhood president Muhammed Morsi in 2013.

Bahrain, UAE and Sudan also followed Saudi's footsteps in cut-ting and downgarding diplomatic and economic ties with the Per-sian state to express their deep concerns regarding Iran's interests in destabilizing the region and changimg the balance of power existed for nearly a century.

Saudi cuts diplomatic ties with Iran

Egypt and Ethiopia proceed rounds of talkswww.meobserver.org63 Year No. 1 Wednesday, 6 January 2016rd

6 8A Story of Success

Former minister of social solidarity: Dr Gouda Abdul Khaliq

A new round of talks this month to settle disputes

2

Saudi Arabia to support Egypt with $3bn of loans

Also see page 3 & 6

Puerto Rico to miss new year bond payments

CPR - Saudi Arabia agreed to pro-vide Egypt with more than $3bn in loans and grants to help its dollar-starved economy.

The kingdom will loan $1.5bn to develop the Sinai peninsula and $1.2bn to finance Egypt’s oil pur-chases, Egyptian Minister of Inter-national Cooperation Sahar Nasr told Bloomberg News from the Saudi capital, Riyadh. Egypt will also re-ceive a $500m grant for buying Saudi exports and products, she said, with-out providing further details. The

loans are on favorable terms and will be formally signed on Tuesday, she said.

The fresh aid suggests that Saudi Arabia is still committed to support-ing Egypt even as the oil-rich king-dom cuts subsidies to shore up its finances, though it is significantly smaller than the tens of billions which Saudi Arabia along with Kuwait and the U.A.E poured into Egypt after the 2013 military-led ouster of Islamist President Mohamed Mursi. Egypt has offered tourism and housing projects

to Saudi funds, an Egyptian govern-ment official said last week.

Last month, Saudi Arabia prom-ised to invest 30bn riyals ($8bn) in Egypt through its public and sover-eign funds. It also said it will help Egypt meet its oil needs for five years on favorable terms.

Egypt’s currency crisis caused business activity to contract the most in more than two years in November. The new aid package should free up dollars needed to import capital goods and raw materials, and help

authorities avoid an uncontrolled cur-rency devaluation.

The relation between the two gi-ant regional poles are historic and longlasting, Saudi Arabia under-stands the significance of Egypt's economic stability and vows to al-ways provide Egypt with all possible aid to maintain its own security.

The security of both nations are deeply interconnected, as they both try to allign their foreign policies to save the region from the ongoing tur-bulance.

MEO greets Coptics for christmas

Brief on local stocksCapital gains tax (CGT) on stock exchange dealings, which caused a stir and a mar-ket crash in 2015, won’t be imposed on any stock dealings carried out last year; said “Sherif Samy”, Chairman of BOD of Egyptian Financial Supervisory Authority (EFSA). Page 2

Ministries on SpotMinistry of Petroleum has decided to in-crease the amount of gasolineto be pumped by 21 per cent to counter the increase in consumption during the celebrations of feasts and mid-year holidays. Page 3

3 Remarkable scenes on the Ethiopian dam dispute seriesWater Tensions shape this century’s real war between countries, which aim for a larger ratio of existence. These disputes have overshadowed the main stream events in the Nile basin countries over hundreds of years. Page 3

China manufacturing shrinks for fifth month: Economy could be rebalancing properlyWe’ve just had the news about the perfor-mance of the Chinese manufacturing econo-my (forbes): not good it has to be said. The sector is still, just, shrinking, although that rate of fall has slowed. Page 5

1st edition 6165 issues 2nd edition 1/2016

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6 January 20162 www.meobserver.orgomeHEOM

From the trading floor

Capital gains tax (CGT) on stock exchange dealings, which caused a stir and a market crash in 2015, won’t be imposed on any stock dealings carried out last year; said “Sherif Samy”, Chairman of BOD of Egyptian Financial Supervisory Authority (EFSA), pointing out that Tax Au-thority has assured him that during last week’s meetings.

He highlighted that according to tax law, law amend-ments proposed in the middle of tax year do not apply to the whole period; thus, stock investors won’t pay taxes on their dealings during the whole 2015, including the 5 months period prior to the issuance of the CGT2-year freeze decision on 15 May 2015.

He confirmed that tax refunds already collected dur-ing the past period is not relevant to Misr for Central Clearing, Depository and Registry (MCDR); especially that it is an organization concerned with clearing and set-tlement only. Thus, investors who want to be refunded, have to address the Tax Authority which is the organiza-tion responsible for refunding taxes collected.

Samy pointed out that the Legislative structure of the financial market has undergone a significant develop-ment last year, with regard to investor protection. This resulted intoa progress in the ranking of EGX in the Global Competitiveness Report released recently. He mentioned that there has beencoordination with the au-thors of the report to clear some key points that could contribute to a further progress in the ranking during the upcoming period.

“Samy” added that The World Bank has also praised the investor protection system in EGX; and gave the dis-closure system provided by EGX a rating higher than its peers in the region and in OECD countries, as included in the latest report by The Bank.

He assured that 2015 witnessed introducing amend-ments to the regulations of capital market law that facili-tated a number of things relevant to the market and the increase of capitals. There were also other amendments to develop new types of bonds and charity funds that were reviewed few days ago by State Council and shall come to light soon.

While EGX 30 faces support level at 6700 points by the end of the week, and keeping shares is advised. Karim Saeed, Financial Analyst in Osol Company for Brokerage, said that EGX 30, the main Egyptian stock market index, faces main support levels during this week’s performances at 6700 points; and if the index bounces higher for a long period, it will qualify it to target its higher levels at 7200 points.

He pointed out that EGX 30 has managed to continue mounting during last week’s performances toward its first target near 6900 points, and exceeding it toward 7030 points which is the highest price level in 7 weeks before closing at 7006 points by the end of last Thurs-day’s session.

He added that the vision and expectations over the in-dex’s performance are positive; especially that financial market investors and workers in EGX are looking for-ward to a new year that would regain trust and bring the market back to its role.

Egypt signed a memorandum of understanding with the China Rail-way Construction Corporation to construct Cairo’s sixth metro line, according to a transportation min-istry statement issued on Thursday.

Cairo’s metro, planned to have a total of six metro lines, aims to reduce traffic congestion in one of the most populous cities in the world.

The project to construct the sixth metro line will cost $3.5 billion,

the financing of which remains under negotiation between the two parties, according to the statement.

The line stretches over 24 kilo-metres parallel to the first line from Al-Khosos north of Cairo un-til the southern suburb of Maadi in the satellite zone.

Egypt is still constructing the third metro line, which is planned to be completed by 2020. Con-struction on the fourth and fifth lines has not begun yet.

MEO - On the occasion of the beginning of sugarcane harvest season, Khalid Hanafy, Minis-ter of Supply and Internal Trade, announced securing all finan-cial provisions for the Sugar and Integrated Industries Company (SIIC) to receive the sugarcane crop from farmers. He confirmed that revenues of SIIC for this year reached around EGP 5.8bn. The announcement came during a meeting held by Hanafy with Mu-hammed Abdul Rahim, Chairman of SIIC, and attended by Gen-eral Ibrahim Hassanein, Chair-man of Food Industries Holding Company (FIHC), Amin Selim, Manager of Minister of Supply’s office, Mamdouh Abdul Fattah, Deputy Chairman of the Gen-eral Authority for Supply Com-modities (GASC), Hamdy A’lam, Head of Distribution and Control Sector; and Rasha Hamdy, Dina Hammed, and Karim Gomaa, As-sistants to the Minister of Supply.

Hanafy stated that the marketing policies of SIIC has managed to se-cure the company a contract to ex-

port 42,000 tonnes of brown sugar to Kenya, and 20,000 tonnes of Eth-anol to Europe. It is also currently seeking to export products to other African and European countries. In addition, SIIC managed to seal a deal to sell 50,000 tonnes of Etha-nol worth EGP 250m to an Indian Company in Egypt. It is currently holding talks with a major interna-tional Chinese firm over construct-ing 3 plants for paper manufacture from sugarcane bagasse in Egypt; each with a production capacity of 100 tonnes of paper per day, with nearly EGP 1bn investments to be paid in full by the Chinese firm. There are 3 state-of-the-art plants for canning and packaging being currently established with a pro-duction capacity of 2000 tonnes of sugar a day saving EGP500m a year that was wasted before due to poor packaging.

He added that some private sec-tor and multinational companies in Egypt signed an EGP 175m agreement under which SIIC will provide them with experience and carry out some work for them in

the field of sugar. He pointed out that the Ministry provides all sugar needed for ration cards, commis-saries, and the Ministry outlets from the inventory of SIIC which is currently 27000 tonnes. He also confirmed that they draw from the SIIC inventory on a monthly basis; since no sugar is imported from abroad nor bought from private companies inside Egypt, even sug-ar needs for outlets of “My Asso-ciation” project for the youth, will be fulfilled from SIIC inventory.

Abdul Rahim, Chairman of SIIC, confirmed that all dues to sugarcane farmers were paid dur-ing the last season; adding that the company has signed a contract with a marketing company to con-duct market research on the prod-ucts of the company, and to design a brand for further promotion of the company products nationally and internationally. He also said that the company has environmentally regularized the factories through the Consulting, Development Re-search and Technological Planning Center at Cairo University.

A wait and see mood is expected to covering the market during the coming short period. Locally, listed shares are anticipating the removal of administra-tive controls imposed on foreign curren-cy transactions. On Wednesday, Head of the Federation of Egyptian Industries said that local manufacturers agreed with the Central Bank of Egypt (CBE) to raise caps imposed on daily and monthly dollar cash deposits at banks to five-fold their current levels which is to $50 thousand daily up to a maximum of $250 thousand monthly. The decision is yet to be officially announced.

According to a research note by Hany Genena, Head of Reseach at Pharos Securities, while the restrictions were meant to crush black market traders, it ended up in crushing private sector ac-tivity and in the departure of the former governor. He expected a rally in the market when the restrictions are moved.

Foreign and regional investors have been net sellers since mid-2015 and

equity valuations are attractive. So, there is potential short-term tailwind in large caps, namely: Commercial Inter-national Bank, Talaat Moustafa, Palm Hills, Orascom Construction and EFG-Hermes Holding, obviously accompa-nied by a rally in some small caps such as Gemma.

Meanwhile, Pharos excluded Ezz Steel from its 2016 top pick list due to slow demand on steel.

On another front, the escalation in ten-sion between Saudi Arabia and Iran with the former severing ties with the latter on Sunday, might hold many threats to the stability of the region and drag it to a religious war, the effects of which would be devastating on the economy –mainly depended on Gulf aid- and the market.

Raya Holding for Technology and Communications:The holding company said it plans to continue expanding its call center busi-

ness in Europe in 2016. Also, it aims to realize 40 per cent of its profits for 2016 and 2017 from its businesses abroad. Meanwhile, Raya Restaurants, the restaurant group affiliated to Raya, will also expand during the year with new branches planned to be opened in Maadi. The company’s consolidated net profits during the first nine months of 2015 came at EGP 86.2m marking a 398 per cent increase from the previous year’s figure.

Egyptian Transport and Commercial Services Company-Egytrans :The transportation company said it was awarded an EGP 1m contract from Gamesa, the Spanish manufacturer of wind turbines. Under the agreement, Egytrans will carry out all the transpor-tation works related to Gemesa’s activ-ity in Gebel El Zeit project 2.

The company added in a release sent to EGX, that it will finalize the project within 2016. Egytrans is planning on

expanding on transmitting wind farms since, the Ministry of Electricity is plan-ning to produce 20 per cent of its energy from renewable sources by 2022.

Ezz Steel (ES):Posted a net loss of EGP 172.4m in the third quarter of 2015 compared to EGP 285.4m in the same quarter of the previ-ous year. However, this pushed the nine month loss till September to reach EGP 509.4m, over and above a net loss of EGP 696.6m in 2014. Pharos noted that the company’s operating performance has been mirroring the deterioration in global industry dynamics, largely due to the buildup of excess supply in China and the ensuing plunge in steel prices.

Steel prices have been experiencing a downturn since early 2015. Specifically, the average net price consistently fell from EGP 4,438 per tonne in the first quarter, to EGP 4,327 per tonne in the third quarter of 2015 due to competition from cheaper imported steel.

Orascom Telecom Media And Technology Holding (OTMT):Will hire Deloitte Independent Financial Advisor in due diligence review of CI Capital, the investment bank arm of the Commercial International Bank (CIB).

Sources revealed that the due dili-gence review will start next week for 45 days. OTMT is seeking to buy CI Capi-tal, just one month after it bought the majority of Beltone Financial, another leading investment bank.

Telecom Egypt (TE):The country’s fixed line sole operator, denied media reports on its workers’ protesting for bonus disbursement de-scribing it as totally untrue.

The company’s board of directors met at the end of 2015 to plan for 2016 budget. It projects an increase in its total revenues between 7 and 9 per cent and a hike in its bottom line before taxes by 20-30 per cent.

Economists said that the latest statements by Hisham Genena, the Head of the Central Auditing Organization, on corruption will cause confusion among investors, especially in light of the conflict that has occurred in this respect. Genena announced that the extent of corruption reached in 2015 about 600bn pounds and then later announced that the fig-ure is in three years. The authority then released a statement explaining that the size of corruption that had been announced was collectively over 4 years, beginning from 2012 and until 2015.

The Presidency released a statement stressing

that in light of following up statements published by some media on corruption within state institu-tions exceeding EGP 600bn pounds during 2015, President Abdel-Fattah Al-Sisi directed the for-mation of a face-finding committee to investigate these statements.

According to the presidential statement, the com-mittee is preparing an urgent report to be submitted to the president and inform the public on the results of its work within the framework of full transparency.

The committee comprises the head of the Admin-istrative Control Authority as chairman and repre-sentatives of the ministries of Planning, Finance, Interior and Justice as members and Hisham Bad-awi, the Deputy Chairman of the Central Auditing Organization.

Ambassador Gamal Bayoumi, the Secretary of the Union of Arab Investors and Secretary Gen-eral of the Egyptian-European partnership at the Ministry of International Cooperation, said that the statements by the head of the CAO was not suc-cessful and that he did not express himself correct-ly because corruption is not necessarily bribery or embezzlement but also delaying people›s interests,

which is the global standard for measuring the ex-tent of corruption.

He stressed that the statements will not affect the investors and businessmen, as investors know the circumstances of each country before they enter it even if it is witnessing wars.

President Abdel-Fattah Al-Sisi’s orders to form a fact-finding committee to investigate the state-ments reflect a rational presidency and that the State does not have any sensitivity in dealing with corruption cases.

He explained that Egypt signed the international Convention against Corruption, and is currently preparing to review the agreement with Egypt›s partners in the European Union and the United States.

Hossam Heiba, the board member of the Egyp-tian Society of direct investment, said the statement by the head of the Central Auditing Organization was astonishing especially because of inconsist-ency and inaccuracy by an official in charge of fig-ures. Once he said the figure was in one year and then he said in three years and later the statement by the organizations confirmed that the corruption

during 2015 amounted to 600 billion pounds and was the result of corruption throughout 4 years from 2012 to 2015.

The Presidency is the only institution that is moving quickly to resolve the problems of inves-tors in Egypt and therefore formed a face-finding committee to investigate these statements, which reassures investors.

The figure announced by Genena will create a state of confusion among investors and as long as the figures are not clear and they should not be mentioned, he said.

He wondered what the organization has done re-garding the corruption has announced, saying it is a question we do not know its answer.

Ossama el Maraghi, the Spokesman for the or-ganization, said the corruption during the four years came as a result of a study prepared by the CAO at the request of the Ministry of Planning, pointing out that the study included some sectors to highlight the shortcomings without specifying the total for a given year. He pointed out that this study tackled the evaluation of many systems to highlight the glitches in some sectors.

Brief on local stocksAll stock investors’ dealings in 2015 are exempted from tax

“The government will present amendments of financial market law before Parliament”

By Mahmoud Hammad

Experts: Statements by Central Auditing Organization on corruption confuse investorsA fact-finding comittee to investigate CAO's statements»

EGP 5.8bn revenues of SIIC

Egypt's sixth metro lineUndergound stations

»

Founded 1958

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For completion of our previous topic on trust and how much it influences economies; we will discuss today an international form of trust; namely, the mutual trust between countries.

Psychological trust (whether the personal or the social) and its relation to economies is not distinct from political trust; as it is an integral part of civilized, and democratic co-existence among all countries.

Let me get straight to the point. We all know well that Ethiopia, as an African country, has poor economic abilities, more precisely absolutely poor. It cannot afford to establish the so-called Grand Ethiopian Renaissance Dam (GERD); in fact there are massive amounts of money channeled to it with the purpose of suffocating Egypt in terms of water supply, and in turn economi-cally and socially. This is proved through the geographic nature of Ethiopia’s soils; since they are calcareous soils, they are not fit to hold water for long times; further enhancing the potential collapse of dams in this area.

Let’s take a closer look on this issue raised decades ago with the aim of imposing exis-tential pressures on Egypt; as the establish-ment of dams in upstream countries affects the water quotas of the downstream ones, resulting into a shortage of water and major

economic problems. The relations among Nile basin Countries

and the share of each in Nile water is regulated by a set of international agreements (1902, 1929, and 1959); which stipulate, for instance, that no country shall make a unilateral deci-sion, executing the agreements bona fide, and not prejudicing the interests of other parties. Thus, Ethiopia, through such attitudes, is flouting these agreements without any consid-eration for the rule of law or the world.

Let’s consider the economic consequences of the establishment of GERD, for we all know that the Egyptian civilization is origi-nally based on agriculture. The Nile River Basin Cooperative Framework Agreement (CFA) signed in the 2000s allocated 55 bil-lion cubic meters annually to Egypt; then the planning and implementation of the ag-ricultural projects was carried out (equal 8m acres). But, since the population has been growing since concluding this agreement; the size of cultivable lands is no longer in due proportion comparing to the population which has reached now 90m people, and up to an increase of 109 per cent per annum.

Under such harsh circumstances, Egypt will eventually have to export no less than 60 per cent of its needs.

Read

By Eman Taher

CPR - President Abdel Fat-tah Al-Sisi has stressed the importance of promoting small and medium size in-dustries as they provide promising working opportu-nities for youth and contrib-ute to pushing forward na-tional economy thus offering promising development op-portunities at the economic and social levels.

This came during Presi-dent Sisi’s meeting Monday with head of the specialized Council of the Economic

Development Abla Abdel Latif and the council’s mem-ber Mohsen Helmy.

The meeting took up meas-ures to develop Egypt’s gov-ernorates, said Presidential Spokesman Alaa Youssef.

The meeting also tack-led projects, which will be implemented in Qalyubia governorate including the establishment of several factories for ready-made clothes along with complex-es for complementary food and petrochemicals.

The two members of the council underlined the need of activating the branch of the industrial training coun-cil in Qalyubia governorate in order to provide the nec-essary technical training for employees in the various in-dustrial sectors.

The meeting also dis-cussed several proposals for establishing an entity to develop, organize work at small and medium-sized en-terprises and establish a fund for faltering factories.

Al-Sisi underlines segnificance of medium and small industries

6 January 2016 3www.meobserver.orgomeHEOM

Money Market analysts expect a posi-tive performance by the Egyptian money market in 2016, especially during the first half of the year with an expected rise in the financial, real estate sector, construc-tion and building materials sectors.

Raafat Abdel Moez, a money mar-ket expert, said the Egyptian Exchange will see a positive performance during 2016, especially during the first half of the year, explaining that the first quar-ter of the year may witness a tangible improvement in the performance of all indicators, especially after the market has ended its fifth decline wave at the 6302 point levels.

He pointed out that the market value of the benchmark index EGX3 is ex-pected to reach 7250 levels, then 7500 points. The small and medium-sized stock index EGX70 is also expected to continue its gains targeting the level of 400-405 points, he said.

He added that it should be noted that these projected rise will not be the re-sult of any economic events or positive news, but will only be just a corrective move upwards in the medium term to make up for the record losses witnessed

in 2015. However, some of the positive news at the political or economic levels or the bourse would lead to the accelera-tion of such corrective move upwards.

As for the key sectors expected to rise during 2016, he referred to the fi-nancial services sector after the recent acquisitions by businessman Naguib

Sawiris through Orascom Telecom and Technology of Beltone Financial and the announcement of the acquisition of C. I. Capital, which will re-evaluate the shares of this sector.

He pointed out that shares of the real estate sector, whose value on the Egyp-tian Exchange do not express the size of

their real estate assets, are also expected to rise. Reducing the value of the pound by the Central Bank during the coming period is expected to have a significant impact on moving the real estate sector as well as the construction and building materials sector.

Mohamed Said, a money market ex-pert, said the Egyptian Exchange is ex-pected to witness a positive and upward performance at the beginning of 2016 and the first half of the year to have an upward performance with an improve-ment in values and volumes of trading, with the support of national mega pro-jects the state has begun to implement and their positive impact on the bourse, mainly the one-and-a-half-million fed-dans project and the Suez Canal axis development.

He asserted that the most prominent sectors expected to rise include finance, real estate, food and fertilizers. Howev-er, the financial sector will have a head start in achieving record rates of rising.The Egyptian Exchange revealed devel-opments in the market during 2015 after the challenges faced as a result of crises experienced by global markets that had

a deep impact on the performance of the Egyptian Exchange, prompting the worst performance recorded since the global crisis.

Dr. Mohammed Omran, the Chair-man of the Egyptian Exchange, said 2015 was full of challenges at the global and regional levels. The world economy status was not favorable to a great extent and growth rates declined which greatly affected the performance of economies of emerging bourses and therefore on emerging markets, he said.

Omran explained that the rate of de-cline reached in some money markets more than 60per cent, such as the case in Greece and Brazil 46per cent and Tur-key 31per cent, which had an impact on the Egyptian market, where the EGX 30 Index fell by almost 24per cent.

He added that despite the decline in the index, but given the strong increase witnessed by the bourse from 2012 to 2014, in which the market went up by about 94per cent and was exchang-ing first and second places at the level of emerging markets. The bourse still maintains a growth rate of 40per cent since 2012which is one of the highest

levels at the level of emerging markets, according to Morgan Stanley.

He added that the market has seen an upswing in operations enrollment and attracting companies with 15 new com-panies listed with a capital exceeding 6 billion pounds, the highest rate reached since 2008. It is equivalent to three times the capital earned during 2014 and more than 30 times of the achieved in 2013, and equal to the total achieved throughout the last five years from 2010 to 2014, he said.

The year 2015 comes as the third worst year for the stock market which lost approximately 37.5per cent of the value of the benchmark index EGX30, specifically by dropping from the lev-el of 10066 points, the highest level reached during the year, to 6300 points, the lowest level during the year. The small and medium stocks index EGX70 lost nearly 43 per cent of its value drop-ping from the level of 604 points, the highest in the year, to the level of 344 points, its lowest level during the year, which is also considered the lowest level since its launch in early 2008, he added.

Dr Gouda Abdul Khaliq, Former Minister of Solidarity, said in an interview to “MEO” that Egypt recently encounters various eco-nomic challenges; it is necessary to bring back the ministry of economy and not to count on foreign invest-ments to solve the economic crisis.

What are the substantial economic challenges faced by Egypt in 2015? The most important challenges lie in the economic management which will be the biggest challenge in 2016, if the situ-ation is to remain as it is. In other words, under the current circumstances, con-secutive choices are made without any realization of their basis, the role of the citizen in them who is a main partner in this system, nor their impacts on society. For, there is not one authority in Egypt responsible for managing the economic affairs;thus Egypt is like a boat rocked by enormous waves, whether regional or international.

All current ministries of government; starting from Investment, Planning and International Cooperation, to Finance; and even the Central Bank (CBE) have not among them a single ministry re-sponsible for managing the economy. If CBE supposedly manages the economy, then it should have realized that it is of utmost necessity for economy to main-tain the EGP’s value taking whatever actions necessary for that purpose. Yet,

this is not what has happened last year after the depreciation of EGP against ap-preciation of foreign currencies reached a dangerous level.

What are the economic solutions to end this confusion?We need to change the public perspec-tive based on the belief that the solution for all economic problems of Egypt is found abroad. Official statements al-ways call on attracting foreign invest-ments, without any mention of local investments at the same rate and level. This should be handled soon, if the economy is to progress.Another thing is that if we analyze the public speech in

Egypt, we will find that one of the most key words in economic models is miss-ing; namely saving.Yet, ironically all the talking now is about foreign grants; e.g., China has announced that it will give Egypt a huge grant during its president’s visit to Egypt next month. This is a proof that all the talking now focuses on grants which in fact hurts the economy.

Therefore, consumption has to be rationalized, production has to be in-creased, and saving must be carefully considered since it is a key to boost economy. This requires a promotion of this culture in the society and an ad-vanced study on the economic political tools.

Moreover, to further assert the ab-sence of an economic management; we have a state that is economically and re-gionally important, since it is a founding member of IMF, and WTO. Thus, it is startling that the economic situation is that degraded.If I was in control of the economy, I would declare the state of war economy; for our economic situa-tion entails considering things from that perspective. As, if we to compare our current economic position with that at the 1973 and 1967 wars, we would find them nearly similar.

That’s why we refer to Egypt’s mem-bership at WTO according to which it has rights; if it counters an economic crisis, it is entitled to take all measures necessary to control imports. Yet, this was not mentioned at all; it is because the one responsible for managing econ-omy now thinks that Egypt’s member-ship in these international organizations is curbing it.

What do you think of the major projects implemented last year; especially the Suez Canal Project? Some of these projects are significant, useful, and well-implemented; whereas others are useless and poorly imple-mented. Among the first was the new Suez waterway, because The Canal was under an existential threat represented in an Israeli scheme to establish a land transport system to be a replacement for

the Suez Canal. Israel has already ap-proached the World Bank to take part in the studies and funding of the project. It has also agreed with Chinese companies on constructing a railway between Eilat toAshdod; which is considered a land path tying the Red Sea to The Mediter-ranean. Israel’s scheme was based on the fact that rail transport is cheaper and faster; causing as a result an irreparable damage to Suez Canal. Egypt, therefore, had to proactively foil this scheme by implementing this project. The New Suez Canal reduces wait time for ships leaving the Eilat-Ashdod project with-out any strategic significance.

That’s why; this project is consid-ered an act of defending the strategic geographical position of Egypt. Yet, not everything is subject to political and strategic examination only; there is also an economic aspect to be taken into con-sideration.From a political and strategic perspective, it is a great project; except that, from my view-point, this project has a very high economic value that could have been easily avoided. In other words, when the time of the project was limited to one year instead of 3, 34 km2 were dug using 75per cent of world’s cranes; meaning that the cost is three times higher than average…could this have been avoided?...I believe it could have been without any harm to the stra-tegic aspect of the project.

Ministry of Petroleum has de-cided to increase the amount of gasoline due to be pumped by 21 per cent to counter the increase in consumption during the cel-ebrations of feasts and mid-year holidays. Engineer Tarek El-Mola, Minister of Petroleum, has said in a statement to “Al-Wafd” that these additional amounts is for preventing long queues at stations;amounts of diesel will be increased as well to 39,5000 tons.He confirmed that the ministry is currently managing unloading 130,000- ton cargos of gasoline directly from tanker ships at Al-exandria, Suez and Ain Sokhna ports. He pointed out that all gov-ernorates’ needs were covered through a pipeline network of the types of fuel needed to serve the agricultural, industrial and com-mercial activities; as well as the daily supply of the fueling and services stations were provided through a fleet of tanker vehicles and trains.

Ministry of Petroleum has finished installing gas meters at The Olympic Center for Training National Teams, Maadi; after the Minister of Petroleum Tarek El-Mola has ordered to install them at speed and for free to prepare for the final inauguration of The Center in the framework of the cooperation between Ministry of Youth and Sports, and Ministry of Petroleum.

The Olympic Center is prepar-ing for its final inauguration after Tulip Company was assigned to manage the hotel of the Center for hosting all national teams of different sports to begin prepara-tions forRio de Janeiro Olympic Games 2016.

On the other hand, Dr Khalid Hanafy, Minister of Supply and Internal Trade, announced the completion of land inventory in all governorates to start estab-lishing commercial chains and logistic zones. This comes under the implementation of President Al-Sisi›s initiative to estab-lish several major commercial chains for the purpose of provid-ing food commodities at afford-able prices.

221 lands have been chosen so far for the establishment of this project according to their expansion and investing plans. The lands located, whose number is 709, are affiliated to Internal Trade Development Author-ity (ITDA), Subsidiaries of Food Industries Holding Company (FIHC), General Committee for Foreign Aids; and several min-istries.

Earlier last week, Dozens of refrigerator cars loaded with dif-ferent commodities for prices lower 20-25 per cent than others in the market have gone down the streets of several governorates on Friday. theyprovide as well "build your own meal" service at affordable prices ranging from 20-30 pounds per meal according to its type.

Analysts expect positive performance of money market during first half of 2016

A challenging year for the Egyptian economy Ministries on Spot

The Egyptian situation requires declaring a "war economy"»

Dr Gouda Abdul Khaliq

By Mahmoud Ali

Water Tensions shape this century’s real war between countries, which aim for a larger ratio of existence. These disputes have overshadowed the main stream events in the Nile basin countries over hundreds of years. It is no wonder that conflicts are outraged on the world’s longest river, lengthening 6,853 km.

Nile river passes through ten countries in northeastern Africa —Egypt, Rwan-da, Burundi, Democratic Republic of the Congo (DRC), Tanzania, Ken-ya, Uganda, Ethiopia, South Sudan, Su-dan and with varying climates.

Five years ago, Ethiopia announced its intent of building a dam called “The Grand Ethiopian Renaissance”. At 6,000 MW, the dam will be the largest hydro-electric power plant in Africa when com-pleted, threatening-clearly- the down-stream countries’ (Egypt and Sudan) shares of the Nile.

Since then, tripartite negotiations have been held between the three countries, looking forward to reach a consensus upon this conflict.

In This article you will be taken through a panorama show of 3 remark-able scenes underlining this tension.

1st scene: The Dam is built on a Sudanese landA recent report of Aswat Masriya “A website launched by Reuters” unveiled that the Ethiopian dam is set up on a land, originally Sudanese, which was granted to Ethiopia because of an old agreement on Nile river shares.

The accord dates back to 1902, when there was a severe competition between France and England on building their empires through occupying African ter-

ritories. At that time, Egypt was under the British conquest, which exploited an error done by a French company responsible for building railway roads in Ethiopia that encountered a financial crisis, and was unable to complete the project. England pumped investments into that project, in order to force its control over the region.

On the other hand, The French gov-ernment slipped into another mistake, through aiding the French company by Frank 50m annually, without con-sulting the Ethiopian king “2nd Men-lek”. This golden opportunity allowed the English envoy to Ethiopia “John Harrington” to meddle with the situ-ation through informing the king that France is trying to put its hands on his empire.

As a result, a deal was inked, on May 15 1902, between English and Ethiopian kings, which granted the later a 3,600 km land from Sudan, stipulated by com-plying to not build any projects or dams over the blue Nile, which guarantees the Egyptian and Sudanese shares of the great river.

According to experts, this piece of land is the same of the great renaissance dam project on the Blue Nile, which pro-vides Egypt with about 85 per cent of its water shares. The site is now called “Benishangul-Gumuz”, located near the Ethiopian-Sudanese borders.

It is noteworthy that Ethiopia is currently renouncing the 1902 accord, claiming that it was not approved by the so-called the “Ethiopian throne council”, however, the Ethiopian government referred to it when it was drawing its borders with Eretria, which means that it legitimizes this treaty.

2nd scene: Wide range negotiationsOnce Ethiopia has started building its dam, the successive Egyptian govern-ments have involved in worldwide talks, especially with the countries that sup-port the barrier such as China, Italy, and Norway, in order to back its rights on the Nile flow to its land

No sooner Had Egypt been invited to trilateral talks with Ethiopia and Sudan on the new project, than Egypt announced the intransigence of the Ethiopian officials, re-sorting later to diplomatic offensive on the issue with other upper riparian states, in-cluding Tanzania and the Democratic Re-public of the Congo, which were pointless.

While Egypt is asking for raising its share to 90 per cent of Nile waters, about 50 per cent of the renaissance dam is now completed, amid the 10 amicable talks between Egypt, Sudan, and Ethio-pia, according to Experts.

3rd scene: Lessons from world’s water disputes “The wars of the twenty-first century will be fought over water”, said Ismaiel Serag El- Deen, the director of Alexan-dria Bibliotheca.

This quote proves true, especially whilst High tensions over water in Asia, the world’s driest continent, which is deemed as their hub.

China boasts nearly half of the world dams on Mekong and Brahmaputra riv-ers, which fueled conflicts between neighborhood countries including India, Bangladesh, and Vietnam.

Meanwhile, Analysts predict that “wa-ter wars” could break out between India

and China. “Upstream dams, barrages, canals, and irrigation systems can help fashion water into a political weapon that can be wielded overtly in a war, or subtly in peacetime to signal dissatisfac-tion with a co-riparian state. Even denial of hydrological data in a critically im-portant season can amount to the use of water as a political tool,” says strategic affairs expert Brahma Chellaney, accord-ing to The Diplomat Japanese magazine.

Alongside, Laos, a small country in Southeast Asia, has planned also to be the battery of the continent, building dams on Transactional Rivers with Vi-etnam and Cambodia, however, High regional concerns led to deferring the Laotian hydro-electric power plans

On another hand, Europe witnessed a conflict between Hungary and Czecho-slovakia, in which Hungary addressed the international justice jury, claiming

the cancellation of an old treaty with the previously mentioned country on Dan-ube River, since it has been divided into Czech, and Slovakia.

The jury assured the two countries’ shares of the river, according to The 1997 UN agreement over water usage.

Regarding all the previous expe-riences, Egypt can boost escalation either through heightening regional concerns over the issue, or by re-sorting to the International Justice Jury, relying on multiple agreements, firstly the previously mentioned 1902 accord, secondly the 1997 UN agree-ment, thirdly the 1993 association between Egypt and Ethiopia, which stressed on the Egyptian rights on Nile River, and assured no dangers will be imposed on the downstream country’s water share.

3 Remarkable scenes on the Ethiopian dam dispute series

Financial, Real Estate, Construction, Building Materials are key sectors expected to rise»

By Doaa Hussein

6 January 20164 www.meobserver.orgMENA Region

After the success of the Dragon City in Dubai, the Chinese and Bahraini sides decided to repeat the experience, but in Bahrain. The city serves Bahrain, Qatar, Saudi Arabia and Kuwait as it will be one of the biggest tourist and entertainment attractions that in-cludes an area for restaurants and is expected to receive three million visitors each year.

The Dragon City, which stretch-es along an area of around 100,000 square meters, has markets over an area of 50,000 square meters, 787 shops, 300 housing units, a parking lot over an area of 40,000 meters and a storage area for

5,000 warehouses.The Chinese dragon city is

expected to cost about $ 100 million. China-Mex Company

has chosen Bahrain to establish this city due to the characteris-tic of the Kingdom in terms of open-minded industrial work and to ensure the property rights of foreigners by 100per cent along with the decrease in the tax slot on large projects. The kingdom also enjoys a distinguished location, as being in the heart of the Gulf and near Saudi Arabia, the largest Gulf economy.

Chinese companies seek to take advantage of the position of Bahrain as a tourist hub for Chinese goods to attract visitors from the Gulf states.

Some 500 Chinese companies are expected to move to Bahrain which will create new investment opportunities and encourage coun-tries to build several industrial cit-ies.

Saudi Arabia’s Tadawul rose by 0.59per centon Sunday – the first session in 2016 – to close at 6,952 points.

113 stocks were in green, 48 others were in red, while 22 remained un-changed.

Many listed companies revealed the raise of its operation cost after Saudi Arabia hiked the fuel prices like Maaden company which said in a statement on Sunday that it is SAR 120 million.

Many analysts expect that the most negative effects will be on Petrochemi-cal industry. Fahad Al-kasem, the man-ger of Amwal company for financial consults in Rayed said to CNBC Arabia TV, “inflation will reach to 10per cent from 5per cent in the Kingdom”.

Kuwaiti indexKuwaiti INDEX (MARKET-IXP)

rose0.05per cent to 5615.12 points on Thursday. Kuwait said on Tuesday that it putSubsidy rationalization policy to secure Kuwaitis’ needs.

“The Kuwaiti citizens will not be af-fected by the procedures which the fi-nance ministry will undertake to cover budget deficit” the ministry announced on Tuesday.

Kuwait is estimating KWD 8bn budget deficit in 2015, based on a pre-vious expected oil price at $45 per bar-rel; oil prices reached $28 a barrel on Tuesday.

The country intends to raise fuel pric-es as of 2016.

According to Kuna, Undersecretary of Kuwait’s Finance Ministry Khalifa Hamada said on Wednesday, the gov-ernment plan to rationalize subsidiza-tion will contribute to saving KD 2.6 bn in three years, which shows the importance of the plan in a time when the budget is witnessing a large deficit because of falling oil prices. He pointed out that the rationalization process will ensure the sustainability of development in Kuwait and give the State the ability to continue to provide essential services

to its citizens, such as education, health, security, justice and other services that are indispensable.

Kuwait’s new law for direct invest-ment is expected has main role to sup-port the economy. It eased the invest-ment processors which caused direct investment fleeing. Many international companies like American General Elec-tric and Chinese Hawaii announced starting of investment in Kuwait.

UAE indexesEmaar Properties PJSC led the de-

cline in Dubai stocks three days after a fire ripped through one of its hotels

on New Year’s Eve. The DFMGI fell 0.5per cent to reach 3,134.98 points. Also, Abu Dhabi Securities Exchange (ADX) closed in the red , weighed by the collective decline of leading stocks. The general index lost 0.83per cent to reach 4,271.5 points.

Emaar, which is about 30 percent owned by the Dubai government, dropped as much as 4.4 percent, before paring its slide to 1.6per cent. The fire is covered by insurance and Emaar sees “no material impact" because of the blaze, the company said on Sunday. The developer appointed Dutco Group to re-store the hotel.

“Emaar’s statement helped halt some of the panic selling we saw at the be-ginning of the session, but investors still have questions,” said Dubai-based Samer Al-Jaouni, the head of institu-tional business at Menacorp, one of the biggest brokerages in the United Arab Emirates to Bloomberg. “The company needs to clarify the amount and percent-age of cash flow that this hotel was con-tributing to Emaar’s hotel portfolio.”

The Address Downtown Dubai hotel, which Emaar developed, owned and op-erated, caught fire Thursday as the city prepared for its annual year-end fire-works display.

KHALEEJ TIMES - Middle East fund managers have become more positive on regional equities with a strong bias towards the UAE, and more bearish on bonds, a monthly Reuters survey shows.

The survey of 14 leading fund man-agers, conducted over the past 10 days, found 50 per cent expecting to raise their regional equity allocations in the next three months, and 14 per cent expecting to cut them - the largest bullish balance since February 2014.

In last month's survey, 29 per cent an-ticipated increasing equity exposure and 21 per cent expected to reduce it.

Global markets' positive reaction to the first US interest rate hike in almost a decade, and better regional valuations after a broad Gulf market sell-off in ear-ly December, are the main reasons for the change.

"Some stocks have been pressured by aggressive, redemption-driven selling flows after oil prices fell, and this cor-rection offers medium- to long-term in-vestors the opportunity to increase their exposure to fundamentally robust com-panies," said Sachin Mohindra, portfolio manager at Abu Dhabi-based Invest AD.

Meanwhile, 36 per cent of fund man-agers expect to reduce their allocations to regional fixed income, with none planning to raise them - the biggest bear-ish balance for bonds since the survey was launched in September 2013. Last month, the ratios were 36 per cent and seven per cent.

"In the coming US Federal Open Market Committee meetings, we will continue to witness rising rates, which will negatively impact fixed-income securities," said Tamer Kamal, head of

asset management at Abu Dhabi-based Union National Bank.

For a third straight month, managers are equally split over the region's larg-est stock market, Saudi Arabia, with 36 per cent expecting to increase their exposure there and the same number to reduce it. Slightly under half of manag-ers submitted their responses after the government announced on Monday this week its 2016 budget, which included spending cuts, energy subsidy reforms and tax rises designed to bring a huge deficit under control.

While many managers see the budget as positive for the long term, they believe the market could be hurt in the short term by the austerity steps. "The budget is a posi-tive sign for the long run, but we think that the first three months of 2016 will be an adjustment period for companies as their gross margins are impacted by the higher costs," said Mohammad Shabbir, head of equity funds at Dubai-based Rasmala In-vestment Bank.

He cited companies in the petrochem-ical, cement and transportation sectors.

The effects of contractionary mon-etary policy and less accommodative fiscal policy will be visible next year, said Vijay Harpalani, fund manager at Dubai-based Al Mal Capital.

The UAE remains by far the fa-voured equity market among region-al bourses with 71 per cent of fund managers expecting to increase their exposure there and none to reduce it - the most bullish allocation since the survey was launched. That compares with 36 per cent and seven per cent in November.

“A lavish welfare state that breeds in-

dolence and apathy must one day come

to an end,“ the Financial Times wrote

Friday, adding, “The past week’s an-

nouncements are the beginning of a new

normal for a country that fears any kind

of change.“Saudi Arabia, which in 2015 got about

three-fourths of its total revenue from oil,

is known for its robust state welfare pro-

grams. The nation's roughly 30 million

people don't pay income or sales taxes,

and items like fuel and food are tradition-

ally heavily subsidized. The youth unem-

ployment rate is about 30 percent.

But oil prices recently hit an 11-year

low, and Saudi Arabia refused to limit pro-

duction in response. This, in turn, led to a

deficit of about $98bn this year, the Wall

Street Journal reported. With no signs of

the trend changing, the government de-

cided to cut public spending in 2016.

“Our economy has the potential to meet

challenges,” King Salman said in a speech

Monday.Volunteers attend an event for Om Ab-

dullah, a passionate cooker who used to

cook and make tea to sell in the street to

make money for living is honored by Sau-

di young women volunteers who gathered

money for her to boost her work and to

afford her more progressive conditions in

her work, Dec. 10, 2015, in Jeddah, Saudi

Arabia.PHOTO: JORDAN PIX/GETTY

IMAGES One way it's doing that is by limiting

benefits for citizens. Saudi Arabia raised

domestic gas prices by as much as 80 per-

cent Tuesday, increasing the cost of 95-oc-

tane gas to 24 cents per liter — still cheap

by international standards but worrisome

for citizens accustomed to relying on the

government. Other adjustments to water

and electricity were expected by 2020.

The backlash has already begun. Gas

stations saw huge lines Monday night as

people scrambled to fill up their tanks be-

fore the price increases took effect. “They

are entering too many wars and need more

money," Jihad al-Najjar, 22, told Reuters.

Meanwhile, other experts argue adapta-

tion to the “new normal“ needs to extend

to other areas of the economy. The Finan-

cial Times said to cope with the changing

global oil business, Saudi Arabia needs to

revamp its education system to produce

more skilled workers in more sectors —

including women.The Brookings Institution echoed that

stance in a Wednesday essay, asserting that

switching up subsidies — though a good

first step — wasn't enough to combat the

overarching issue.“Saudi Arabia must act fast and smart

by starting to gradually cut down on their

subsidies, reduce superfluous spending on

defense and start privatizing selected state-

owned entities to generate cash and cru-

cially create employment opportunities for

its youth, which represents either the great-

est threat or beneficiary of such budget

plans and related policies,“ the essay said.

Reuters- Saudi Arabian Finance Minis-

ter Ibrahim Alassaf said the kingdom ex-

pects to introduce value-added tax in two

years, aiming for a tax rate of around 5 per

cent, the Saudi-owned Al-Hayat newspa-

per reported on Wednesday."VAT will be introduced gradually and

be completed within two years, which is

the time set for application in GCC (Gulf

Cooperation Council) countries in 2018.

It will be around 5 percent, which is the

lowest worldwide," Alassaf was quoted as

saying.In its 2016 state budget announce-

ment earlier this week, the ministry said it

planned to introduce VAT in coordination

with other countries in the region.Younis Haji Al-Khouri, undersecretary

at the United Arab Emirates ministry of

finance, told reporters earlier this month

that the target for introducing the tax in

the region was three years. The Interna-

tional Monetary Fund has suggested the

UAE consider imposing VAT at a 5 per-

cent rate.

Saudi Arabia's budget creates 'new normal'

Emaar Properties led the decline in Dubai stocks after a fire ripped 'Address' hotel

IBT- Saudi citizens are in for a rude

economic awakening in the coming

years, analysts predicted this week after

the government released its 2016 budget

and plans aimed at narrowing a predict-

ed $87bn deficit linked to low oil prices.

Austerity has finally arrived in Saudi

Arabia, and although it's already prov-

ing unpopular, it might not be sufficient.

2016

Chinese Dragon City to open in Bahrain at a cost of $100m

The Chinese Dragon City has opened in the Bahraini capi-tal of Manama as a huge joint venture between Diyar Al Muharraq Bahraini Company and China-Mex Chinese company.

Stocks to trump bonds in Middle EastRegional funds more bullish on equities, with UAE in the forefront.

The US rate hike in December was imitated by most Gulf cen-tral banks and is expected to be the first in a series.Also, shrunken government revenues in the Gulf due to low oil prices are hurting liquidity at Gulf banks, pushing up short-term interest rates and reducing local buying support for Gulf bonds.

Arab stocks absorbed the chock of Saudi budget and its performance was positive in general last days.The number of sessions was few as most

Arab bourses closed on celebrating New Year like the global.The Kingdom announced on 28 of Decem-ber its 2016 budget with deficit 15per cent

and it started energy subsidy cuts. The Saudi index declined on the first session af-ter the announcement but it recovered on the second day.

Few sessions and positive performance in Arab markets

ME steel fabricators gear up for Sharjah eventThe upcoming SteelFab 2016 in Sharjah, UAE, will offer the steel fabrication and metal working industry in the Middle East region an unprecedented opportu-nity to source machinery from Europe at an economical rate, organisers said.

The depreciating euro against the US dollar and the impressive presence of European manufacturers and brands at the show, which will be held at Expo Centre Sharjah from January 17 to 20,

offer key advantages for regional companies, they said.

“This is an exception-al opportunity. There is no better time than now

to take advantage of a falling euro and such a large presence of European exhib-itors at one place. SteelFab 2016 offers a unique opportunity for regional fabrica-tors to invest in the latest machinery and equipment,” said Saif Mohammed Al Midfa, CEO, Expo Centre Sharjah.

The UAE dirham is pegged to the US dollar, which has gained nearly 15 per cent against the euro over the last year and the Europe’s common currency is expected to drop further due to the Euro-pean Central Bank’s government bond-buying programme, a statement from the Expo Centre said.

The euro to dollar

exchange rate has been hovering around $1.1 for quite some time, which is a significant fall from over $1.35 just 18 months ago.

Countries with a dollar-linked cur-rency can expect to see lower prices on European goods as the sliding euro allows cheaper imports, and an interest rate increase in the US means the dollar will rise further and a euro-dollar parity is likely in the near future, it said.

Increasing foreign presence has al-ways been a strong point of SteelFab and exhibitors from Europe form a major chunk of overseas participants.

More than 25 exhibitors have already confirmed their presence in the German Pavilion. Over 100 Italian exhibitors and brands too

will be taking part this time, while visi-tors can also expect to see participants from the Netherlands, Portugal, France, Lithuania, Ireland, Belgium, Finland and Spain.

“SteelFab 2016 also offers trade visi-tors an opportunity to directly purchase machinery from European exhibitors, which will help them further reduce their purchase bill and take the fullest advan-tage of the market conditions,” added Midfa.

The 12th SteelFab 2016 will feature more than 370 exhibitors represent-ing nearly 1,000 brands from across the world, besides new special focus areas, special pavilions, live displays, techni-cal seminars and product presentations. - TradeArabia News Service

By Hayat Hussein

6 January 2016 5www.meobserver.orgInt. Asia

Top News Headlines from Asia

Since Asia is home to the largest number of consumers in the world, businesses and traders are always eager to expand their activities in the continent. At the same time, economists and analysts con-stantly monitor the Asian markets and developments as they can easily affect and shape world markets. From China’s manufacturing slowdown to India’s fight against free internet and the shift of world shipbuilding market; Asia offers a plethora of interesting stories. Here are some of the latest ones:Chinese manufacturing contracts for fifth straight monthFurther shrinking of the Chinese manu-facturing sector has mounted global con-cerns over the Chinese economy. Despite

various measures taken by policymakers including interest rates cuts (six times in two years), the Chinese economy grows at the slowest pace in 25 years. The official manufacturing Purchasing Managers' Index (PMI) closed at 49.7 in December, up from 49.6 in November. The reading is below 50, so it indicates a contraction, yet a higher one would have suggested an expansion.

The slight increase means that “growth momentum is stabilising somewhat ... however, the sector is still facing strong headwinds," said Zhou Hao, China econ-omist at Commerzbank in Singapore. One reason of the slowdown in China’s manufacturing is the weak demand as it put pressure on the factories and made

them cut prices of their products. The service sector has been a bright

spot in the Chinese economy. The of-ficial non-manufacturing Purchasing Managers' Index (PMI) hiked to 54.4, from 53.6 in November. However, econ-omists still focus on the manufacturing sector and worry about a sharper con-traction in the Chinese economy.India resists Facebook’s Free Basics planIndia fights against a plan of Facebook Inc. founder Mark Zuckerberg which of-fers free Internet to the Indians. The In-dian government has made Zuckerberg suspend his Facebook’s Free Basics plan until it reaches a decision. The applica-tion, introduced to a number of develop-ing countries, offers free restricted web

services on mobile phones and access to Facebook’s social network and messag-ing services.

Opponents of the free service claim that it violates principles of net neutrality and impacts start-ups who are not part of it. Executives of the heads of nine start-ups wrote to the TRAI, “There is no rea-son to create a digital divide by offering a walled garden of limited services in the name of providing access to the poor.”

On the other hand, Zuckerberg wrote in The Times of India newspaper “We know that for every 10 people connected to the Internet, roughly one is lifted out of poverty.” He added, “What reason is there for denying people free access to vital services for communication, educa-

tion, healthcare, employment, farming and women’s rights?”

Undoubtedly, Facebook has an eye on expanding in such a huge market as India is a promising growth market for Facebook and other giants (only 252m of India’s 1.3 billion people have Internet access).Shift in world shipbuilding marketThe world shipbuilding market, once dominated by five South Korean ship-building companies, has witnessed some shifts recently. China has broken into the world’s top five shipbuilding companies for the first time with Shanghai Waigao-qiao Shipbuilding (SWS) ranking fifth position leaving only four places for South Korea. Daewoo Shipbuilding & Marine Engineering ranked first, Sam-

sung Heavy Industries and Hyundai Heavy Industries ranked second and third respectively, while Hyundai Samho Heavy Industries held fourth position.

“It’s the first time in over ten years that another country has made it into the top five,” said a Samsung Heavy Industries source. The rapid growth of the Chinese and Japanese rivals has made Korea lose a place for a foreign company.

In this regard, South Korea approved funding of shipping industry worth $1.2 bn, in order to enhance the country’s maritime sector, boost shipbuilding in-dustries and sustain troubled shipbuild-ing companies. The fund will be stimu-lated by local commercial banks and state-controlled finance companies.

Latest News Stories on Asia

Forbes -We’ve just had the news about the perfor-mance of the Chinese man-ufacturing economy: not good it has to be said. The sector is still, just, shrink-ing, although that rate of fall has slowed. However, it’s possible to take this as good news if we should so wish. Because we do rather think that China should be doing a little less manu-facturing than it does: the economy should rebalance over into producing rather more in the way of services. Partly just because that’s the way that economies continue to grow once past a certain level of income (we as consumers simply desiring more services than manufactures past a certain level of income) and partly because we’re pretty sure that China is grossly over-invested in basic manufac-turing and production.

However, as ever, we’ve also got the problem of try-ing to decide whether this is simply a cyclical move, in which case it’s not good news, or a structural one in which case it could indeed be good news.

China’s economy started the year with more bad news as official data showed that the manufacturing sector shrank for a fifth straight month in December.

That will increase the pressure on the govern-ment to stimulate growth in the world’s second-biggest economy, which has been slowing as it struggles with overcapacity and a heavy debt burden after years of

breakneck expansion, as well as weak global de-mand for its factory’s prod-ucts.

That’s the FT, which sees it as broadly bad news. Yet the WSJ is rather chirpier:

An official gauge of Chi-

na’s manufacturing sector edged up in December, helped by robust infrastruc-ture spending, signaling a slight gain in momentum for the world’s second-largest economy. The mod-est uptick in China’s offi-cial purchasing managers index reported Friday was below economists’ expec-tation, however, suggesting that there won’t be a sig-nificant rebound in China’s economy anytime soon, economists said.

Yes, manufacturing shrank, but by less than it had been previously. Thus we can get both the claim that it is shrinking, and that it is better.

So, looking at it purely as a cyclical indicator, things aren’t good. How-ever, think about the FT’s point about overcapac-ity. And then think about what we think an economy needs to do at middle in-come status, move a little away from manufacturing and a little more into ser-vices: But there are some signs of improvement as well. China’s official non-manufacturing purchasing managers index, a gauge of activity beyond the fac-tory floor, rose to 54.4 in December from 53.6 in November, the statistics agency said Friday.

China manufacturing shrinks for fifth month: Economy could

be rebalancing properlyThe World Bank, NEW DELHI – The Government of India and the World Bank today signed a US$ 50m credit for the Nai Manzil: Education and Skills Training for Minorities Project to help young people from minority communities complete their education and gain from mar-ket-driven training programs with the aim of improving their employment outcomes.

The project will support the Government of India’s national Nai Manzil (New Horizon) Scheme, a compre-hensive education and skills development program for youth from minority com-munities, launched in August this year. The project will reach out to disadvantaged youth from minority com-munities and support their enrolment in open schooling, as well as provide hands-on vocational training. It will also provide post-placement support to assist them in find-ing sustainable employment.

“The Nai Manzil Scheme is designed as an integrated ed-ucation and training program that provides youth from mi-nority communities skills that are needed for different tasks in a rapidly changing world. Interventions under this project will support the Nai Manzil Scheme in improving the employability and per-formance of minority youth in the labor market,” said Raj Kumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance, Government of India.

The credit agreement for the project was signed by Raj Kumar, Joint Secretary, Department of Economic

Affairs, Ministry of Finance, on behalf of the Government of India and Michael Haney, World Bank’s Operations Ad-viser in India, on behalf of the World Bank.

“India’s demographic divi-dend can be harnessed only if all young people from all sec-tions of society are equipped with the education and skills needed to make them produc-tive members of the econ-omy,” said Michael Haney, Operations Adviser, World Bank, India. “This project reflects the government’s in-tent to provide opportunities for youth from minority com-munities to acquire the edu-cation and training that they might have missed out on. We hope it will improve the employability and earning capacity of youth, particu-

larly that of women, in these communities.”

Twenty per cent of young people (i.e. those between 17 and 35 years of age) from minority groups (notified mi-norities consist of Muslims, Parsees, Jains, Buddhists, Christians, and Sikhs) are out of the labor force, which is higher than their share of the youth population. While overall the trend has been for youth in India to receive more years of formal education, youth from certain minority communities are more likely to experience lower levels of education and are more likely to be unemployed. Accord-ing to the National Sample Survey 2011-2012, Muslim youth have the lowest labor market outcomes. They earn 25-30 per cent lower wages,

are 50 per cent less likely to be engaged in the formal sec-tor and have higher rates of unemployment.

A recent World Bank study of select skills training pro-grams in five states of India found that well designed skills training programs make a positive difference; beneficiaries were found to experience a seven percent-age point increase in employ-ment (with a stronger result for women than for men) and a 21 per cent increase in their wages. In addition, formal education continues to shape employment outcomes and long-term productivity of the youth. Youth with primary education (or less) receive 12 per cent lower wages than those with secondary educa-tion, the study found. “The objective is to help these youth to extend their formal education and enter the labor market with better employ-ment prospects. The project will also incentivize the education and training pro-viders to provide placement support to these students, and track them for a certain period after they have com-pleted the study or training program,” said Muna Salih Meky, Senior Education Spe-cialist, World Bank and John D. Blomquist, India Program Leader, Inclusion and the World Bank’s Task Team Leaders for the project.

The credit is from the International Development Association (IDA) – the World Bank’s concession-ary lending arm – the credit is on IDA terms with a ma-turity of 25 years, including a 5 year grace period.

Indian education to revive

Asia’s new year economic resolutionsA tour of the prospects for the Asia-Pacific’s biggest economies in 2016.

New Year has arrived and with it that special time when resolutions are often made for the year ahead. With this in mind, Pacific Money takes a look at what the Asia-Pacific region’s biggest

economies might be hoping for in 2016, and whether they might beat the typically low success rate for New Year pledges.

China: Exceed Growth TargetThe Diplomat - China has already lowered expectations for its growth prospects, with Chinese President Xi Jin-ping declaring a 6.5 per cent target for annual GDP ex-pansion from 2016 to 2020, down from the previous 7 per cent target set from 2011 to 2015. But with even the communist party’s Global Times newspaper pointing to the problems of inflated growth data, Beijing may be hard pressed to achieve even its reduced target without further fiscal and monetary stimulus.

The world’s second-biggest economy may also have contracted the deflation disease, according to ANZ Re-search, giving policymakers another headache as they attempt to restructure the economy from investment to consumption-led growth amid its slowest expansion in 25 years.

Only 8 per cent of New Year resolutions are achieved, according to research by the University of Scranton. A refocus by Beijing on the economy, including consoli-dating its ‘One Belt, One Road’ program and promoting regional free trade, might go a long way toward beating the average.

Japan: Growth, By Any Means NecessaryJapanese Prime Minister Shinzo Abe’s reflationary program enters 2016 having yet to convince skeptics, including the bulk of the Japanese public. After three years of Abenomics, the latest opinion poll conducted by Kyodo News found more than 70 per cent of voters did not feel any economic benefits, with only a quarter seeing improvement following massive monetary eas-ing, fiscal expansion and pro-growth structural reforms including the Trans-Pacific Partnership (TPP).

Abe’s success in persuading private companies of the merits of investing at home could be crucial in ensuring

the economy achieves so-called “escape velocity” prior to being pulled back with another consumption tax hike in 2017. Nevertheless, stock investors are still smiling, with the benchmark Nikkei Stock Average ending 2015 at its highest annual close in 19 years and with more gains expected by analysts in 2016.

India: Make The Incredible CredibleThe Modi revolution has already seen India surpass China as the world’s fastest growing major economy, with a 7.4 per cent GDP growth rate in the latest quar-ter outscoring China’s 6.9 per cent reported gain. Even more is expected in 2016 however, with the Interna-tional Monetary Fund predicting a 7.5 per cent gain for “Incredible India” and the OECD eyeing 7.25 per cent.

However, despite the hype, India’s economy still remains a fifth the size of China’s, showing that there is plenty of work ahead for the South Asian emerging giant to maximize the benefits of its demographic divi-dend. A hostile upper house, delay in implementing the goods and services tax, and restrictive labor laws are all seen as barriers to continued outperformance, while there have also been questions raised over the quality of India’s GDP data amid weak corporate earnings and sluggish loan growth.

The only BRIC left worthy of the acronym has much more to do in 2016 to achieve its promised destiny, with Indian Finance Minister Arun Jaitley calling for the growth rate to be raised from 7.5 per cent by an-other 1 to 1.5 percentage point to sustain wage hikes and pension increases. Exports have also slumped for 12 straight months on the back of a stronger currency, making trade deals with TPP members such as Australia and Canada vital to achieve Modi’s goal of doubling ex-ports by 2020.

ASEAN: Make Integration WorkThe official establishment of the ASEAN Economic Community (AEC) and its regional free trade zone should point to further growth ahead for Southeast Asia, with its 600m consumers potentially becoming the world’s fourth-largest economic bloc by 2050.

The International Monetary Fund expects the “ASE-AN 5” of Indonesia, Malaysia, the Philippines, Thailand and Vietnam to post 4.9 per cent GDP growth in 2016, although stronger growth is expected for ASEAN as a whole, with the OECD estimating an average of 6.2 per

cent annually through to 2020.HSBC economists expect the AEC to add at least 5

per cent to the region’s economic size by 2030, while BMI Research suggests ASEAN’s share of global GDP could grow from 3.2 per cent to reach 4.7 per cent by 2023.

With the challenges facing the region in 2016, policy-makers might consider the advice of experts to keep the New Year resolution list short, tangible and obvious, at least if they wish to beat that lowly 8 per cent achieve-ment average.

Chinese factories shrink production

Indian overcrowded classes

6 January 2016

The Egyptian-Ethiopian negotia-tions over the Renaissance Dam have undergone a significant

development recently; amid the ten-sions that overshadowed most of the previous meetings, Egypt, Sudan and Ethiopia have signed The Declaration of Principles to settle their disputes over the Grand Ethiopian Renaissance Dam (GERD). Egypt has decided as well to submit the matter to a technical study that was assigned to 2 French Engineer-ing consulting firms.

The foreign ministers of Egypt, Su-dan and Ethiopia have signed last week in Khartoum an agreement to end their long-running disputes over the GERD, which Ethiopia builds on The Blue Nile; the major tributary of the Nile. The agreement provided for respecting The Declaration of Principles signed by the presidents of the three countries in Khartoum last March; and for boost-ing the technical studies by appointing a new French company, Arterlia, to conduct the technical studies on GERD alongside the other French company, BRL Group. Moreover, the agreement stresses Ethiopia's commitment to arti-cle 5 of The Declaration of Principles; mainly to apply the results of the tech-nical studies during dam's storage res-ervoir first filling, and to the operation

policies.The agreement also stipulates form-

ing a committee of technical experts to examine the possibility of increasing the number of GERD gates as suggested by Egypt. If the committee concludes that this suggestion is essential, then it will be carried out to maintain Egypt's water security. The agreement has included an invitation by Ethiopia to media special-ists, members of parliament, people's diplomacy and technicians from Sudan and Egypt to make an inspection visit to GERD, in the framework of follow-up and transparency.

The latest rounds of the meetings over GERD were accompanied by some rumors spread by the media to sabotage the negotiations; as some of the Egyp-tian media have circulated a statement by the Ethiopian Foreign Minister in which he, allegedly, said that Egypt can-not go on a war against Ethiopia. Such statement was denied by Counselor Ahmed Abu Zeid, Egypt MFA Spokes-man, who confirmed that it is com-pletely and utterly untrue; that it was wrongly translated; and that media are infiltrated by elements that work toward undermining the Egyptian government's efforts relevant to such profile.

On his part, Dr. Ayman Shabana, Professor of political science at the

Institute of African Studies, said that the "Khartoum Document" signed by Egypt, Sudan, and Ethiopia last week over GERD is but a confirmation of The Declaration of Principles; as it ensures stressing Ethiopia's commitment to not fill the Dam except after the two French consulting companies submit their stud-ies on the impact of the Dam on Sudan and Egypt.

To answer the question about the pur-pose of the negotiations, Dr. Shabana stated in a special statement that he has no trust in the Ethiopian negotiator be-cause he keeps stalling; and thus float-ing negotiations and impeding reaching a settlement, while work on GERD is carried out at a fast pace. He assured that in case the next round of talks fails, Egypt will inevitably resort to the inter-nationalization of the issue by bringing it before Security Council and commu-nicating to the international community the graveness of the genocide Ethiopia is carrying out against the Egyptians by depriving them of their right in water.

He stressed the need to form an Egyp-tian lobby consisting of law professors and experts on water, dams, and African affairs to tour the world and explain the political, economic, social, and envi-ronmental risks of this issue on Egypt; assuring that all diplomatic and public

relations with all countries must be used to project the just case of Egypt.

Regarding the diversion of the flow of the Nile River to run through GERD, Shabana assured that the flow of the river was already diverted in May 2013; so that the GERD would be constructed without any hindrances, and the diver-sion announced recently was in fact re-directing the river to its natural course. He stated that such step is not part of the dam's storage reservoir filling; because the river will be flowing through its nat-ural course as before, and the portions of the downstream states are not cut.

Shabana confirmed that negotiations over GERD focus currently on storage capacity of the dam and setting the pe-riod required to fill it; adding that Egypt demands reducing the storage capac-ity and increasing the filling period to 10 years, while Ethiopia plans a 5-year filling period which represents an actual harm on Egypt's quota of water.

And as for Ethiopia's political exploi-tation of GERD, Shabana confirmed that nothing is suspicious about this; for this dam is primarily intended to be a political pressure. He confirmed, however, that Egypt has a lot of pres-sure cards that would block any political purpose of the U.S or Ethiopia behind constructing the Dam. He pointed out that Egypt has political alliances with powers; like Russia and China, which refuse to undermine Egypt's security, especially after the state of insecurity and instability that the region has un-dergone.

On the other hand, Dr. Amany Al-tawil, African Program Director at Al Ahram Center for Political and Stra-tegic Studies (ACPSS), said that the Khartoum Document on GERD signed by Egypt, Sudan, and Ethiopia is not an

answer to the points of concern and fear raised so far by experts on water and dams. She also assured that the safety factor of the Dam and its impacts on the downstream countries are still unclear.

She added, in a special statement, that the Dutch consultancy firm decided not to take part in the studies because it concluded after conducting technical studies that GERD is built on a hill that does not fit this use assuring its poten-tial collapse. She added that Ethiopia has obstinately refused the studies and temporized till the firm withdrew from the negotiations on GERD.

She added: “the safety factor of the Dam is unknown, and it threatens Hu-man security in both Egypt and Sudan”; pointing out that GERD is built on a geological fault which we do not how much the construction of the Dam can affect or what are the repercussions of this on the Horn of Africa. She con-firmed that it is estimated that East Af-rica could be separated from the rest of the continent as a result of constructing the Dam on a geological fault.

And as for the ongoing negotiations and the ministers of foreign affairs and irrigation confirming Ethiopia’s com-mitment to not filling the dam till the consulting firms finish the studies, Dr. Al-tawil assured that the firms will be conducting their studies on the environ-mental and technical impacts but not the safety factor of the Dam. She called on internationalizing the issue soon by bringing it before international courts; and she highlighted the factor of time that Ethiopia is using to impose a fait accompli, assuring that Egypt has so many pressure cards to use against Ethi-opia that are currently invisible, yet on the proper time can be used to resolve this issue.

6 www.meobserver.orgAfrica

Latest Stories on Africa

A new round of talks this month to settle disputesDr Ayman Shabana: the diversion of the river's flow won't affect Egypt's quota of Nile water

The economic aspect of Senegal

MGA Africa - The politics aside, South Africa’s economy is still very much in charge. President Jacob Zuma’s baf-fling and ill-judged juggling of finance ministers was only righted when Big Business painted a stark picture of the looming apocalypse. “You are on your own”, was the clear message by key party backers who faced their own in-terests being wiped out. Even for Zuma, who has mastered patronage politics, it was all too much. It was one of the most dramatic cases in Africa where big busi-ness, made a president blink. Zuma’s dented image is seen to have taken one of its biggest beatings in the fumbling.

Even famously boisterous Nigeria can toe the line. The clean-up effort by president Muhammadu Buhari after the opposition defeated the ruling party for the first time led to the phrase “The fear of Buhari”, which on first impressions suggests it is all very real, as things from oil refineries to agencies start to work again, as South Africa’s MTN found it operation in Nigeria was slapped with a $5.2bn fine - the largest ever in Africa - for failing to disconnect 5 million un-registered users. The question is if it is sustainable.

China has military ambitions in Af-rica, despite vigorous protestations and

friendly summits with the continent. Beijing, which this year for the first time sent in its first peacekeepers to Africa, is now finalizing a naval base deal with strategic Djibouti, with Nambia seem-ingly next.

The African Union is looking to add some bite, as it has threatened Burundi with the forcible deployment of troops, citing extreme circumstances of the conflict in the country. If it manages to deploy it will have silenced critics, they are endless, who see it as toothless and nothing more than a strongmen’s talking club.

In addition to having more money transfer firms than banks, some 95 per cent of Somali banknotes (only the 1,000 shilling denomination exists) are counterfeit. Most them, though, are ac-cepted for trade in the country.

Djibouti could become Africa’s first green super-power. Dependent on fossils but with a population of just 850,000, its target to be completely reliant on re-newable energy by 2020 is tantalisingly within reach, on the back of investment cash.

As the world grapples with carbon-fuelled climate change, there are oil, gas, and especially coal, reserves that must remain unexploited if the earth is to es-cape an environmental catastrophe, oth-erwise termed “unburnable carbon”. For Africa, 23 billion barrels of Africa’s oil, or 21 per cent of the continent’s proven oil reserves must remain unexploited if global temperatures are to hold at two degrees Celsius. That’s equivalent to the entire proven oil reserves of Angola,

Chad, Congo-Brazzaville, Egypt, Equa-torial Guinea and Gabon – combined.

Africa’s Internet revolution is real, but we’ve barely scratched the surface: submarine cables now provide 20-times more international bandwidth than was the case in 2010. In sub-Saharan Af-rica, bandwidth increased 39 per cent in 2014-2015. Still, submarine cables have been designed with vast capacity, and by mid-2015 barely 8 per cent of capacity in Africa was being utilised.

The mobile phone comes first in Af-rica, before electricity, water, roads or toilets. Mobile service is usually the first form of infrastructure to be rolled out in Africa, in most African countries, cell service is universal, or near-universal.

By contrast, just 30per cent of Africans live in areas with sewerage services.

Almost half of Africa’s urban popula-tion lives in slums and informal settle-ments.

In the next 35 years, Africa will need to accommodate almost 900 million new urban dwellers, which is equivalent to what Europe, USA and Japan combined have managed over the last 265 years.

85 per cent of Africa’s urban popula-tion is not eligible or able to secure for-mal housing loans, because of poverty and high borrowing costs. The low ratio of outstanding mortgages to GDP in Af-rica (10 per cent) highlights that urban Africans lack financial tools to access property. In Europe and the USA, this ratio is 50 per cent and 70 per cent of

GDP respectively. Excluding the North African countries reduces the ratio to only 1 per cent for sub-Saharan Africa.

China grabs all the headlines, but Japan invests three times more project money in Africa than China does, only with a much quieter and below-the-radar approach.

2015 has been the year of the migrant crisis, but traversing the Mediterranean on a rickety boat isn’t actually as peril-ous as media reports have made it ap-pear – statistically, at least. Last year, for example, at least 3,500 asylum seekers and migrants died while crossing the Mediterranean Sea to southern Europe. But 219,000 people successfully made the crossing. That translates to a “jour-ney success rate” of 98.4 per cent.

Goodbye 2015, hello 2016; things we learnt about Africa in the passing year

Some 95% of Somali banknotes are counterfeit - but they are still 'good'

In an environment of falling oil and com-modity prices, export challenges and low growth rates; African countries struggle to compete with world economies. Their significant efforts to enhance their com-petitiveness and place themselves on the proper track of development are appar-ent. Nobody can deny the great potential of Africa which can be easily revealed by our top stories on Africa this week.

South Africa is optimistic towards ending the US trade dispute

South Africa seems confident to meet the deadline to settle its trade dispute

with the US. “We are totally committed to finding a resolution,” Lionel October, the director-general of South Africa’s Department of Trade and Industry, said according to Bloomberg.

Two months ago, President Obama said that South Africa continued impos-ing a number of longstanding barriers on the United States as far as trade is con-cerned and that they have 60 days to take remedial actions or they would have to face suspension of certain trade prefer-ences they received under AGOA (Afri-can Growth & Opportunity Act).

Since that time, veterinarians from the two countries have worked on resolving the dispute to reach a final protocol. “We have made the concessions on pork and beef imports,” October said.

U.S. lawmakers renewed AGOA last June. The act eliminates import levies on more than 7,000 products and involves benefits for 39 African countries. Compli-ance with AGOA requires relevant nations to eliminate barriers to U.S. trade and in-vestment, lead a market-based economy, protect workers’ rights and adopt econom-ic policies that combat poverty.

This has stimulated trade in South Af-rica as it has mounted its exports to the US since 2000. Exports under the act accounted for more than a fifth of the nation’s exports to the U.S. last year, ac-cording to data compiled by the Trade Law Centre. Meanwhile, total trade be-tween South Africa and the U.S. amount-ed to about $14 billion last year.

China’s POLY-GCL drilled appraisal wells in Southeast Ethiopia

China's POLY-GCL Petroleum Group Holdings Ltd has successfully drilled two appraisal wells in southeast Ethiopia and will

soon find out their volume of gas deposits. "They have finished drilling and are now

conducting tests on the reservoir. Tests will conclude soon," State Minister of Mines, Petroleum and Natural Gas, Wakgari Furi, said. "We may start gas production in 2016. They are working fast," he added.

With a cost of $4 billion, the project will develop the fields and establish a pipeline from Ethiopia to the coast of Djibouti, where an LNG plant and ex-port terminal will be built. This project among others can make Ethiopia a major LNG producer.

Mali produced 50 T of Gold in 2015, seeks more output in 2016

Mali, Africa's third-largest producer of the precious metal, produced 50 tonnes of Gold in 2015 and will increase output this year, President Ibrahim Boubacar Keita said. Production is to start at the Kofi Nord facility operated by Canada's Endeavour Mining with a production average of around 1.8 tonnes per year. Meanwhile, production at the Fekola mine of B2Gold shall start this year. Gold sector, mainly, yields about 25 per cent of the country’s revenues.

Senegal is one of the most stable coun-tries within Africa. It has actually sig-nificantly strengthened its democratic institutions since its independence from French troops in 1960. It had three peaceful presidential political transi-tions with four presidents. The first is Leopold Sedar, he ruled from1960 until 1980, Abdou Diouf , he ruled from 1981 until 2000 and Abdoulaye Wade, who ruled from 2000 until 2012, and since March 2012 Mack Sall is ruling until today.

Current economic system and future expectations

The Senegalese economy is expected to fasten its growth in 2015 and 2016, as the economic activity will be strength-ened by lower oil prices, electricity sub-sidies and the reduction in production costs. The GDP is also excepted to raise at 5 per cent in 2015 and some estimates indicate that it might raise at around 5,3 per cent in 2016 and 2017.

Meanwhile, the economic activities in Senegal are driven mainly by tele-communications and financial services. Furthermore, agriculture is expected to grow by 5,5per cent, and the weather conditions are expected to have a posi-tive impact over agriculture.

However, there are actually various challenges which face economic growth within Senegal, staring by a weak gov-ernance system which to a great extent hinders the private sector to conduct more investments. The high cost of en-ergy and natural disasters which Sen-egal experiences also affects negatively the economic growth. There is also a high poverty rate remains in Senegal, according to the 2011 Poverty house-hold survey, 46.7 per cent of the popula-tion and the number of poor has risen during the 2006-2011 period. Given an estimated annual population growth of 2.5%, gross domestic product (GDP) growth remains well below the rate necessary for significant poverty reduc-tion. Moreover, there is weak manage-ment of exports for certain goods such as seafood and peanuts. Furthermore a lot of effort needs to be exerted within the tourism sector and a diversity of economic resources needs to be planned for such as working on more on the telecommunication sector, mining and manufacturing.

Currently the government is working on a plan in named “Plan Senegal Emer-gent” (PSE) which aims to increase the productivity of Senegal’s economy in the public and private sectors. The main aim for Senegalese authorities is to set make Senegal an emerging country by 2035. In fact, current plans to accelerate public investment will test the authori-ties’ ability to expand the quality of pro-jects.

Concerning the high rate of poverty within the Senegalese population, Presi-dent Sall is setting a plan to accelerate the roll out of the National Family Se-curity Transfer Program, in order to in-clude 150,000households before the end of 2015.

The Renaissance Dam could

collapse and the internationalization

of this issue is the solution

Top News from Africa

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Breaking News from Europe and the USEU’s Trillion Euro Bank Bail-outs are overJob Vacancies Break Records in the UKAirbus Signs Selling Agreement with All NipponAmerican Airlines Officially Merges with US Airways

From the end of bank bail-outs in the EU to data reporting rising vacancies in the UK, and deal agreements of Airbus and American Airelines; it has been a quite eventful week. Though, business news is not abundant during holidays since businesses are usually flat as light volume marks holiday weeks. Here is a look at some of the latest business news in Europe and the US.

EU’s trillion euro bank bail-outs are overThe EU effectuates new rules and measures to break the cycle between lenders and govern-ments in a move that ends the age of huge bank bail-outs. These measures are supposed to re-cover the single currency. Brussels’ new Bank Recovery and Resolution Directive (BRRD) will not allow creditors to receive official sector aid unless they endure losses of at least 8pc of their total liabilities. Needless to mention, Brit-

ain will not be liable to the rules.In this regard, the EU’s commissioner for fi-

nancial stability, Jonathan Hill, said on Twitter: “No longer will the mistakes of banks have to be borne on shoulders of the many”. Member states have provided banks at stake with more than €1.6 trillion (£1.18 trillion) bail-outs, between 2008 and 2012. “We now have a system for re-solving banks and of paying for resolution so that taxpayers will be protected from having to bail-out banks if they go bust”, said Lord Hill.

Besides, Brussels has sued six member states in the European Court of Justice for failure to incorporate the regulations into national law.

Job vacancies break records in the UKBritish data reveals that advertised job vacan-cies hiked to 1,244,772 breaking post-recession records. The figure suggests that there were al-most two jobs for every jobseeker. Though the news seems positive for jobseekers across the UK, it implies an alarming message. It entails that the British employment market lacks bal-ance and skilled labour. In other words, there are still unfilled positions and shortage in quali-

fied workers.The data also shows that average advertised

salaries increased for the first time in eight months. Currently, the average advertised sal-ary in the UK is estimated at £33,112, up 0.2 per cent from £33,043 in October.

One reason may be the falling unemployment rate which stands currently at 5.2 per cent. An-other can be the increase in self-employment, with about 641,989 claimants recorded this month.

Airbus signs selling agreement with All NipponAirbus has agreed to sell ANA Holdings Inc., Japan’s largest airline, three A380 superjumbos. This agreement has returned confidence for the aircraft which failed to win a new airline cus-tomer since 2013. The aircrafts will be used in 2018 on Tokyo to Hawaii route, a renowned destination for Japanese tourists. Though many might not consider selling three planes a great deal, success on this route might drive other agreements. “I’d expect to see more,” said Ad-dison Schonland, an analyst with AirInsight Inc. in Baltimore. “Nobody ever bought three A380s;

that’s enough to try the plane on one route.”Notably, the biggest plane of Airbus has

struggled to compete with smaller aircrafts such as Airbus’s A350 and Boeing’s 777 as they cost less than the huge aircraft which ac-commodates about 525 passengers. Boeing has long dominated the market, so a Japanese or-der is absolutely a big deal for Airbus. Though, Mark D. Martin, founder of Dubai-based Martin Consulting LLC, said according to Bloomberg, “This deal is a short-term phenomenon, some more A380s may sell, but you can’t say sales will be buoyant from now on,” he said. “This is more an isolated case.”

The UAE is the aircraft’s biggest customer, with orders amounting to 140, more than a third of the orders which are about 317.

American Airlines officially merges with US AirwaysAfter a merger in 2013, American Airlines Group Inc announced it finally completed its merger with US Airways Group and both com-panies will operate as one entity, American Air-lines. So, US Airways officially faded away on

Dec. 30, 2015. Both companies have already combined their booking system since October, 2015. They also successfully merged their flier programmes since March, 2015. Customers could not be able to use the US Airways mo-bile app or US Airway’s website to book tick-ets. Naturally, customers were redirected to the website of American Airlines whenever they use the website of US Airways. Thus, the merg-er operations were handled smoothly.

According to American Airlines, the step is merely administrative since the company’s em-ployees and customers will not be affected by the move. The merger will enable American Airlines to compete with other rivals, add to its revenues and expand its aircraft fleet which currently contains 948 aircrafts, including Boe-ing and Airbus jets. The company, in addition, has orders of 338 jets, from Boeing and Airbus, which will join the fleet of American Airlines starting from 2016. Yet, American Airlines will have to comply with all obligations of US Air-ways including debts and liabilities.

1. Migrant crisis Europe is facing the worst ref-ugee crisis since World War II. The U.N. estimates 1 million people crossed the Mediter-ranean to escape war, poverty and persecution in their home countries in 2015.

With the security situation in the Middle East worsening, the influx is not likely to ease in 2016. Europe is bitterly di-vided over the situation, with some countries refusing to take in their share of asylum seekers.

2. Brexit In Britain, the year will be dominated by debates about the country’s future in the Eu-ropean Union.

The country is deeply di-vided over the issue. Prime Minister David Cameron has said he is ready to campaign in favor of continued mem-bership, provided the EU is willing to change, and he will

spend much of the year trying to negotiate reforms.

A national vote will be held by 2017, the first time in 40 years the issue has been put to the test.

3. Terror threat The new year started with a series of terror threats in Eu-rope. New Year’s festivities were canceled in Brussels, Europe’s political capital, after authorities uncovered plans for suicide attacks. In Paris, fire-works were canceled follow-ing multiple terrorist attacks in November that left 130 dead. And in Germany, several train stations were shut because of terror alert.

Fears of terrorism and stepped-up security are likely to remain commonplace in Eu-rope in 2016, as most countries increase their defense spending.

4. Tensions with Russia Russia is becoming increas-

ingly isolated in the world, and its relationships with Europe are worst since the end of the Cold War. Russia has lost its last ally in Europe, after Tur-key shot down its warplane near the border with Syria. Russian economy is struggling and the situation in Ukraine has stalled.

5. Economic revival? Despite all the tensions, Eu-

rope could finally see an eco-nomic revival in 2016. The continent has suffered from low growth and deflation, and its leaders are hoping 2016 could mark a change.

The value of the euro has fallen dramatically against the dollar, making Europe more at-tractive for investors and tour-ists. The ECB has stepped up its stimulus program, and the threat of Greece dropping out of the eurozone has passed, at least for now.

FT - Puerto Rico will default on a number of its obligations at the start of the new year, as the impoverished US territory — beset by nearly a decade of recession — runs out of cash.

The island, struggling under a debt burden of $72bn, will be un-able to pay the entirety of roughly $1bn in claims due on January 1, Governor Alejandro García Padilla conceded on Wednesday.

The US territory scrambled to pay $328.7m owed on the island’s general obligation debt, municipal bonds that are backed by the commonwealth’s constitution and among its highest priority debt.

Puerto Rico was forced to claw back more than half of that amount from other government organisations, the governor said.

Two bond insurers — Ambac Assurance and Financial Guaranty Insurance Company — have already lambasted the moves, which affect funds set aside for the Puerto Rico Infrastructure Financing Authority, the Highways and Transportation Authority and the Con-vention Center District Authority.

The island paid $15.4m due on debt issued by the Puerto Rico Sales Tax Financing Corporation, known as Cofina debt by its Spanish acronym, and $9.9m owed by the Government Develop-ment Bank, the commonwealth’s de facto finance authority.

The governor said the island would instead miss payments on $35.9m on debt issued by the Infrastructure Financing Authority as well as $1.4m on Public Finance Corporation bonds, which first defaulted in August.

Melba Acosta Febo, president of the GDB, said that the island had chosen to default on obligations where bond documents stated revenues assigned to the organisations were able to be clawed back.

Governor García Padilla issued an order in December that al-lowed Puerto Rico to shift revenues and funds set aside for some is-suers — organisations that do not enjoy certain legal guarantees — to pay bond holders of higher priority debt, including those backed by the constitution.

Investors in Cofina and general obligation debt have contended that they are both at the top of the complicated capital structure, and should be paid over the other when the island completely exhausts its reserves.

A December study from the Center for a New Economy, a non-partisan research group on the island, put the general obligation bonds at the top of the complex pyramid, followed by issuers who have backing from the good faith and credit of the government. The group ranked the Cofina debt third.

Lawyers and analysts have disputed the exact ranking and have warned that lawsuits are likely to begin once a payment on the bonds is missed.

Credit analysts with both Moody’s and Standard & Poor’s have said that the dearth of liquidity implies it is only a matter of time before the commonwealth begins defaulting on its higher priority debts.

US Treasury secretary Jack Lew said last week that it was “in-evitable” for the commonwealth to default in the coming months, and that they were “effectively in default” after they began shifting money from some issuers to pay bills from others.

A Treasury spokesperson added that the new default underscored “the gravity of the commonwealth’s fiscal crisis and the need for Congress to act now. Puerto Rico is at a dead end, shifting funds from one creditor to pay another”.

Puerto Rico has attempted to stave off default on those obliga-tions in a bid to avoid costly litigation that could undermine its re-structuring work. Roughly 70 per cent of bondholders have already agreed a restructure of debt issued by the island’s electric utility, taking a 15 per cent haircut.

Prepa, as the utility is known, will make its $303m payment due at the beginning of 2016.

Questions have swirled over the hierarchy of the bonds — Puerto Rico has more than a dozen issuing authorities and investors have already clashed over who has first right to cash the island has claim over.

“It’s interesting that they moved the Cofinas down, considering the liens are so strong,” Peter Hayes, head of BlackRock’s munici-pal bonds group, said of the order the government ranked the pay-ments. “It shows the complexity of this debt and how it is all inter-related. The unwinding of this situation will be difficult to achieve.”

Mr García Padilla has emphasised that he will prioritise essential public services over bondholder payments.

Puerto Rico has paid roughly $200m to the trustee that handles Cofina debt, Ms Acosta Febo said, indicating that a February pay-ment will be made on time.

Investors now turn their attention to a May 1 payment owed by the GDB, which the government has yet to set aside or claw back funds for. The island faces a maturity wall of at least $1.9bn in July, according to the Centre for a New Economy. It is a payment ana-lysts, investors and policymakers in Puerto Rico have agreed the country will be unable to make.

IBTimes - 2015 was a tumultu-ous and consequential year in the world’s markets. Years of steady expansion since the financial crisis gave way to economic shocks from the developing world and an end to the Federal Reserve’s zero-interest-rate policy.

Projections for 2016 are cloudy, with some prominent economists warning of an imminent U.S. re-cession and others predicting smooth sailing ahead. Regardless of when the next downturn comes, however, longer-term trends rang-ing from the evolution of the jobs market to corporate capital alloca-tion patterns will reflect the econo-my’s health in the new year.

Here are three economic indica-tors worth watching in 2016.

Employment and the Labor ForceAmerican workers are hopeful that 2016 will be the year that wage gains finally pick up noticeably from their anemic pace since the financial crisis. Mainstream eco-nomic models suggest that would require a turnaround in longer-term employment trends.

In the past year, the headline un-employment rate finally fell to an even 5 percent, providing at least a symbolic indicator that recession-era labor market woes have largely

dissipated. But economists — in-cluding Federal Reserve Chair Janet Yellen — remain concerned over ev-idence that weak patches in the fab-ric of the U.S. jobs market remain.

Some of those worries aren’t new. The proportion of American adults who are working has been falling for more than a decade. Just over 62 percent of civilians are in the labor force, down from nearly 67 percent in the late 1990s.

The pattern has worried econo-mists: “The labor force participa-tion rate remains below most es-timates of its underlying trend,” Federal Reserve Vice Chairman Stanley Fischer said in a speech in October, noting also that “an unu-sually large number of people are working part-time, but would pre-fer to work full-time.”

Stocks in, Stocks out: Buybacks vs IPOsContinuing a year ‘s long trend, 2015 was a banner year for stock buybacks. In the most recent re-porting year, companies repur-chased more than half a trillion dollars of their own shares. With corporations once again the biggest buyers of stock on the open market, the S&P 500 will end the year with fewer outstanding shares than it be-gan with.

It’s worth asking whether 2016

will see buybacks continue their upward march, a trend that would spell good news for equity markets but less certain news for workers, who may lose out when compa-nies aggressively buy back stock at the expense of making new in-vestments. But a different ques-tion is also pertinent for the mar-kets: Where did all this money go?

Financial observers typically as-sume that money sent out the door to shareholders ends up being rein-vested in young and growing com-panies. But that assumption has been challenged in recent years as shareholder distributions, including dividends, have surged to record levels without a corresponding rise in investments in young and grow-ing companies.

As economics professor and Roosevelt Institute fellow J.W. Mason pointed out in a November report: “Instead of increasing, the share of investment coming from new and small companies is actu-ally declining.” Shareholders may be bringing in historic sums, but they are not necessarily spreading the wealth to younger firms.

That phenomenon was evident in the initial public offering mar-ket in 2015. Companies entering public markets, like Square, raised just $30 billion in the past year, the lowest total since 2009. As shares

are eaten up in corporate buybacks, historically few new firms issued new stock in 2015.

The surge of stock buybacks and relative paucity of IPOs came as the pipeline of promising startups grew ever greater. CB Insights lists 144 companies as “unicorns” — private firms valued at more than $1 billion — and has identified 531 companies as IPO candidates.

Central Bank DivergenceBetween the ongoing oil slump, cratering commodities prices and the economic slowdowns in China and Brazil, U.S. companies faced significant headwinds in 2015. The challenging global environ-ment, combined with a strength-ening U.S. dollar that weighed on exports, helped usher in a profits recession in corporate America.

Yet the economic turmoil wasn’t enough to prevent the Fed from em-barking on the first cycle of interest rate hikes since 2006. The Decem-ber decision indicated the Fed’s confidence that American consum-ers and companies wouldn’t suffer from higher borrowing rates, which essentially put the brakes on eco-nomic growth.

Yet even as the Fed has charted a new path for American mon-etary policy, central banks around the world have redoubled their

commitments to monetary easing. Earlier in December the European Central Bank announced it would cut benchmark rates further into negative territory and extend a stimulative bond-buying program. After the Fed’s decision, the Bank of Japan also announced a continu-ation of its accommodative mon-etary policies.

“Expect further divergence be-tween the Fed and the ECB,” Uni-Credit chief economist Erik Niels-en told Bloomberg in November. In 2016 investors could expect to see the Fed “hiking rates a couple of times next year and the latter ex-panding its balance sheet more than it has presently announced.”

The growing divide between the Fed’s policy and that of other cen-tral banks is mixed news for U.S. companies. While the gap shows just how strong the American econ-omy is compared to foreign com-petitors, rate hikes at home paired with easing abroad make the dollar more expensive on global markets, depressing appetites for U.S. ex-ports.

That could extend the pain on corporate balance sheets of cor-porate mainstays — including retailers, fast-food chains and au-tomotive manufacturers — risk-ing muted returns on the stock mar-ket and drags on jobs growth.

Puerto Rico to miss new year bond payments

Here’s what to watch in Europe this year

US economy in 2016: Here are 3 important trends to watch

CNN - The European Union is bitterly divided and likely to remain so. Geopoliti-cal tensions and terror threats aren’t expected to abate. And the migrant surge will continue to cause political and social challenges. But it could also be the year Europe’s sluggish economy turns around.

5 worst currency losses in 2015

By Amal Mohy

6 January 2016 7www.meobserver.orgInt. Europe & Americas

1.The Argentinian peso lost 34.6 per cent against the dollar, making it the world›s worst performing ma-

jor currency.

The country's new government re-moved the peso’s peg to the U.S. dollar in December, letting it float freely. Although the currency tanked, the government hopes that lifting the controls will encour-age more foreign investment.

Argentina’s economy is suffering from years of economic mismanagement, and it desperately needs foreign cash.

2. Brazil's real plunged 32.9 per cent against the dollar this year. Brazil is depend-

ent on exporting agriculture and raw materials like oil, sugar, coffee and metals. Commodity prices have col-lapsed, hitting Brazil's finances.

Then there is corruption. A scandal in-volving Brazil's oil giant Petrobras has spread to the highest levels of business and politics, shaking the nation to its roots.

3. The South African rand dropped 25 per cent in 2015. The slump in commodity prices has hit many of South Africa›s

biggest companies. Mining accounts for about 50 per cent of the country›s foreign exchange earnings, and the current ac-count deficit, are growing. Unemploy-

ment is at 25 per cent and inflation is expected to hit 5.6 per cent in 2016.

Africa›s second biggest economy plunged even more after political turmoil in December, when the country had three finance ministers is less than a week.

4. The Turkish lira lost 20 per cent against the dollar. Its econo-my suffered from the combination

of political uncertainty and the worsening security situation in neighboring Syria.

Turkey is also among the countries hit by the Federal Reserve’s decision to raise rates, because it could push up the cost of servicing its huge external debt.

The IMF expects Turkey to grow 3.6 per cent in 2016, way below the 9 per cent growth it experienced in 2010 and 2011.

5. 2015 was a very bad year for Russian ruble. Vital oil revenues collapsed and the economy plunged into a deep

recession. The ruble has lost 17 per cent against the dollar.

President Vladimir Putin has told Rus-sians the worst of the economic crisis is now over, but economic indicators point to a different reality: Russian GDP, indus-trial production and retail sales keep drop-ping. Still, the ruble is doing better than last year, when it lost 41 per cent against the dollar.

6 January 20168 www.meobserver.orgTourism

WEATHER

Cairo23 °C

Tehran10 °C

Muscat25 °C

Abu Dhabi23 °C

Doha23 °C

Kuwait19 °C

Damascus18 °CBeirut

18 °C

Gaza21 °C

Amman16 °C

Manama21°C

Khartoum31 °C

Nouakchott31 °C

Tripoli22 °C

Ankara7 °C

Riyadh23 °C

Baghdad17 °C

Sanaa23 °C

Tunis15 °C

Rabat20 °C

Algiers14 °C

Djibouti29 °C

A joint tourism campaign between the Min-istry of Tourism and the global advertising agency J. Walter Thompson (JWT), has been recently launched under the supervision of Hisham Zaazou, the Egyptian Minister of Tourism. The contract entails a three-year campaign worth $22m annually.

The launching of the campaign focuses on two important aspects. The first aspect is changing the perspective of tourism in Egypt through the use of social media tools. Recently, what has been circulating in main-stream media is mainly related to terrorist at-tacks and the low level of security in Egypt, from this negativity came the idea of using the social media tools in order to encoun-ter what is circulating in mainstream media outlets. Major tourism companies in Egypt

and so called “influencers of social media” attended the launch, which was held at the Ritz Carlton Hotel in Cairo, in order to set a plan for incorporating social media tools within #This is Egypt# and discuss other im-portant issues.

Concerning the first aspect, Tarek Gam-rawy, one of the social media influencers in the campaign, explained that changing the perspective of tourism in Egypt would mainly concentrate on promoting different touristic places in Egypt through the use of social media tools. “The Pyramids and the Sphinx in Cairo, temples in Luxor and As-wan, are the main touristic elements which we have been depending on for many years in promoting tourism; however Egypt is full of many touristic spots aside from ancient Egyptian monuments. Different beaches and unexplored spots in Egypt need more light to be shed upon and this can be done through the use of social media influencers who travel along unexplored spots in Egypt,” he stated.

Gamrawy added that the tourism sector will be working on a calendar, which in-cludes establishing new activities within the tourism sector. “As the tourist wants to check new places, he needs to experience different activities as well during his trip. Marketing for sky diving, different water sports, air bal-

loons and many other activities is a must if we want to change the perceptive of tourism in Egypt; the idea is customization of ser-vices for different tastes,” he added.

The second aspect of the campaign is work-ing on one of the main challenges that face the tourism sector, which is the labour. Concern-ing this point, Gamrawy stated that the labour force working in the tourism sector need in-tensive training related to learning how to deal with tourists. “The idea is not about getting tourists to visit Egypt one time, the idea is to make tourists come again after experiencing a positive experience during the trip; however, on many levels the attitude of people working in the tourism sector, especially at the sightsee-ing spots, negatively affect tourism, as many tourists are harassed either to buy souvenirs or use certain facilities as it is the case by Giza Pyramids for example; so this aspect needs a lot of effort to be exerted.”

It is to be noted that JWT launched since the start of #This is Egypt# campaign two important promotional campaigns and post-ed them on YouTube. The first promotional is directed to locals, concerning exploring Egypt. The second promotional is directed to tourists within the Arab world. As for the coming promotional material, it will be tar-geting international tourists.

The Pharaohs who built one of the world’s wonders, the Pyramids, had their society organized as a pyramid as well. The segmentation within the ancient Egyptian society and the meticulous organization of each activ-ity were actually the main reasons behind a strong economic system.

The society was divided into 8 im-portant segments starting from the base of the pyramid, which starts with slaves and servants, followed by farmers, arti-sans, merchants, scribes, soldiers, gov-ernment officials (nobles, priests), and the Pharaoh at the top of the pyramid. The high degree of organization and communication between those eight segments is the key of the strength which characterized the economic system within the Egyptian society. Du-ties were assigned based on specializa-tion, which made every man/woman master what he or she is accomplishing.

Labour was divided according to gender:

Ancient Egyptians were able to success-fully divide labour according to gender; while men grew flax, their women spun it into thread and wove the linen. Fish-ing was also an important aspect; fish was caught by men and had to be cleaned and dried by women, to be of much use in the hot climate of Egypt, unless they were consumed immedi-ately. The Egyptian society did actually recognize women as equal to men, but as having an essential complementary, expressed especially in the action of producing children. This respect is ex-pressed clearly in the Ancient Egyptian theology and morality, but it is difficult to determine the extent of its applica-tion in the daily life of Egyptians. Most women belonging to the peasantry, worked alongside their husbands doing agricultural work. Women were known to manage farms or businesses in the ab-sence of their husbands or sons. Within the high social classes women were able to achieve important social positions. There were several examples indicating how women reached high official posi-tion. The royal blood was a key for a woman to become a ruling pharaoh; it

is worthy to note that one of the pros-perous ruling period which witnessed a strong economic system was the ruling period of Queen Hatshepsut, who or-ganized trade trips to the land of Punt in Somalia.

Manufacturing:

Ancient Egyptians were able to make the best use out of the raw materials. Gold and silver had a significant eco-nomic value within the Egyptian mar-ket. A large part of the manufactured goods came from the families which produced the raw materials. The metals used for tools were copper, bronze and, iron. Artisans were the segment which made the best use of metals. Their work was not vastly displayed at the Egyptian markets; some of them targeted clientele from the royal household and nobility and bourgeoisie. As for cabinet makers, they crafted furniture for the rich class. Poorer people continued to use stone and wooden tools. Gems remained in the possession of a wealthy minority and the stone quarried for temples and tombs served the same class of people and profited only the craftsmen involved in the building. In the towns, there were small factories, often financed by rich noblemen: bakeries, breweries, car-pentry workshops and the like with a few dozen employees. Weaving, for instance, became a largely male occu-pation with the introduction of upright looms during the New Kingdom.

The strength of the economic aspect

On the economical aspect, Egyptologist Ahmed Seddik, stated that there is so much to learn from the ancient Egyptian economic system. A timeless sense of

justice marked their economy since it was the temple that controlled the eco-nomic activities in ancient Egypt, hence, economic injustice is tantamount to deprivation from the mercy of the gods. While economic prosperity translated into more reserve in the temples. It is a two-way street. Justice in the form of economic equilibrium was the grammar behind the glamour of ancient Egypt.

“The high degree of organization, tasks’ distribution, harnessing of natural resources, sustainability, and renewable energy were the key success elements of the economic system during the phar-aohs’ ruling,” confirmed Seddik.

For the sake of economic prosper-ity the ancient Egyptians almost liter-ally left no stone unturned. They knew exactly how to exploit their resources, they harnessed the wind power to move

their barges from lower Egypt to upper Egypt then they followed the flow of the Nile that moved them from upper Egypt to lower Egypt. They actually invented recycling before the word recycling was invented. From a single plant they in-vented paper to communicate and boats to navigate. Aside from the economic benefits that plant was part of the plan to keep the land united. Therefore having a kind of a united market for the whole country. It is easy to see that the ancient Egyptian economy was a model of self-sufficiency since their currency was sustainably green and made of grain. The ancient Egyptian banks consisted of multiple granaries located along the river banks, with a great deal of acces-sibility to give and take. That is to say they were producing their own food in the form of their currency, explained Seddik.

Energy resources:

The ancient Egyptian had many en-ergy resources. The main resource was the human power. They were clever in knowing how to make the best use of human labour. Temples, pyramids, and ornaments are the best examples that indicate how human labour within the ancient Egyptian society was the strongest aspect.

They were able to make the best use of natural energy resources which Egypt enjoyed such as, wind energy, fire and solar energy. Wind energy was exploited to navigate ships. The Egyptians were fortunate in that the Nile flowed from south to north. The winds were northerly and sufficed to blow the ships upriv-er. They were let to drift downriver with furled sails; but often a destina-tion could only be reached through rowing which required large crews. As for fire they used it for, smelting and casting metal, glassmaking, and burning pottery. For the working of metals high temperatures had to

be achieved and this was done quite possibly with charcoal. Ancient Egyptians succeeded in using solar energy; they used the heat of the sun in the production of mud bricks, which were the perfect building ma-terial in Egypt.

It is worthy to note that the strong

economic system within such a high degree of organization is what made the pharaohs succeed to keep a civi-lization which left its significant traces until the 21st century.

This is how Pharaohs made it !

#This is Egypt: Changing

perspectives on tourism in Egypt

By Amira Elhamy

Until January7th, visitors inside the Egyptian Museum will be al-lowed to take pictures, with cam-eras and mobile phones of Egyp-tians antiques. Previously visitors were not allowed to take pictures inside the Egyptian museum un-less they pay fees.

Khaled El-Anani, the museum general supervisor, declared that the

antiques minister took this decision in order to encourage more visitors to visit the Egyptian museum.

It is important to note that around 3 significant artifacts had been recently will be displayed at the museum for the first time.

It is still unclear whether, this decision will last after January 7th 2016.

Taking pictures free of charge at the Egyptian museum is finally allowed

Engineer Ali Ibrahim Al-Naimi was born in 1935 in Ar-Rakah in the Eastern Province. He joined Saudi Aramco in 1947. Al-Naimi studied at the American University of Bei-rut and resumed his education in the United States at Lehigh University. He obtained a bachelor of science degree "Geology" in 1962. He later earned his masters of sci-ence degree in hydrology and economic geology at Stanford University in 1963, Al-Naimi rejoined Aramco as a Geologist till 1967 and a supervisor for the Abqaiq production department in 1969. He was then promoted to assistant director and then director of production in the Northern Province (1972-1975). He became vice-president of production affairs in 1975. He was appointed vice president of petroleum affairs in 1978. Al Naimi was elected as a member of the board of directors in 1980 and was promoted to the position of execu-tive vice-president of oil and gas affairs in 1980. He was named president of Saudi Aramco in 1984, being the first Saudi to hold that position. In 1988, combining the

presidency and chief executive position, he was named president and chief executive officer. Al-Naimi became the Minister of Petroleum and Mineral Resources on 2 Au-gust 1995. Along with his responsibilities & Ministry commitments, Al-Naimi Su-pervised the foundation of (KAUST) King Abdullah University for Science & Tech-nology. Al-Naimi was awarded on multiple occasions for his excellence and success.

Al-Naimi

A Story of SuccessHis Excellency Ali Al-Naimi, Minister of Petroleum and Mineral Resources, Kingdom of Saudi Arabia

Egyptian museum allows photo shooting