Egypt's energy subsidies for industrial firms to end by 2016

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Egyptian Minister of Industry and Foreign Trade Hatem Saleh said Tuesday (February 26th) that energy subsidies for industrial firms will be phased out over the next three years, the Egypt Independent reported.

"There are 100 intensive-energy consuming factories that use 70% of the subsidies, while 95% of the industrial output comes from low-energy consuming factories," he said. "We will focus on labour-intensive industries."

Speaking at an Egyptian-Swiss Businessmen Association symposium, Saleh said electricity-saving technology and initiatives will become more common, promoting the use of energy-saving light bulbs manufactured locally.

Negotiations are under way with the finance minister to increase the budget of the Export Development Fund to boost economic drivers, he said.

"And we will form another fund to support tourism beginning of the new fiscal year," he added.

The government is keen to remove obstacles to investors and manufacturers, he said, noting that 5.4 million square metres have been allocated for industrial projects.

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    على زايد

    2013-3-10

    Certainly the industrial system must be changed, because we need to be hopeful about our industries. We know that the companies and factories spend a lot of money, so the solution is that the Egyptian people should support and back the government, because any decision they make will play a role in reducing costs and consumption, especially electricity consumption. As we see around us, everything is very expensive, and there must be reasons behind that. But truly, conditions are the same; therefore I am pleased at this resolution, because there is no doubt that these are the conditions in which we live, and I don't see any need for Egyptians to reject this decision, because they object to anything. This is not right; we have minds and we must think, and the government must work for the stability of the country, because whatever happens, we can't afford to provide the required power to run this big number of factories. Therefore, reducing consumption is the best solution, and it is wrong to see such conditions in Egypt and just watch without giving a hand. I believe that everyone has to help, especially workers in the factories who exploit and dominate the conditions a lot, so this should change. It is not right to say no to anything said by the government, because we are in a situation where we should know where to go, and we must choose the right direction and the right road, because it is difficult for us alone to come up with a plan to reduce electricity consumption in companies and factories. That decision is made by the system, from its big and small members.

  • حاتم سامي

    2013-3-10

    Soon 2016 will come; certainly, and these companies and factories will pay for electricity at the normal price, without support from the state. This is the right of the state, for sure, because the current clever Minister ascertained that these factories actually take more than they produce. Therefore, it is his duty to give subsidies to the ones who deserve it, instead of giving it to a sector that do not benefit the people, and this power can be given to other factories that will benefit the Egyptians and all of Egypt.

  • امينة شلباية

    2013-3-10

    I do not think that stopping the subsidies on the energy and industrial companies will pose a problem to the Egyptian people. Whatever happens in Egypt, there is a real need to rationalize the utilization of energy. Since the competent authorities decided the rationalization of energy consumption in Egypt, the people must obey. It is pointless to object. We will not reach any final decision. Any decision must be implemented right away. This is important for the Egyptian people. We must implement this resolution as soon as possible.

  • طارق سويدان

    2013-3-4

    Due to all the misery that the Egyptian people suffer from, they can't take any more disasters. We know that poverty surrounds us everywhere, and we must realize that everything around us now has a role that will eventually end. The big problem is that everything around us has a certain amount. We're supposed to follow orders and that's it, and not try to make it clear to the world that since the day Mohamed Morsi became president, he travels every day to a different country to bring back aid from Arab and foreign countries. Why, then, do we have projects? The profit can be very big, and not just for the president, but for all Egyptians, because they would provide employment opportunities as well for those who suffer from unemployment. That is why we must make it clear to everyone that Egyptians can also determine the fate of the world. That's why we know that the solution is to restore the aid to the industrial companies, because there already isn't any production, and even if there were, it doesn't sell or even get exported, unfortunately. Everything that happens is the opposite of what we expect. When industrial companies have factories, electricity and machines that need a lot of money, besides providing employment as well, and when the government removes the aid, what happens then? The solution is to take more care of these companies and increase their production. If production is very important and there is a lot of circulation, then we need to increase the circulation, by selling the products for a lower price, and then the product will be popular, so there will be a small profit.

  • مايسه المعمرى

    2013-3-4

    The Egyptian minister of commerce and industry, Hatim Saleh, has touched on a sensitive point: that is that the Egyptian state needs to put everything in order. If you have a factory, it should produce something of value to the state and the population, and it will subsidized by the state; but if you produce nothing of value to the population, then your efforts should not be supported. This should not be a source of anger to anybody. Otherwise, they should improve and make themselves useful. These are market rules, and the whole world functions this way.

  • سمير وليد

    2013-3-3

    I don't know what the confusion is about that is taking place now, because the government resolution to stop support to manufacturing companies proves to a big extent that this is an effort to reduce consumption in Egypt. This resolution will not be activated till 2016, that is, three years from now. It is expected to come up with more solutions in addition to this one, so there is no need to worry, and everyone must do his duty to help himself.

  • حبيب نايف

    2013-3-3

    All praise to God; even in the industry now, they will ration its consumption. I believe they must have a reason, but we may find another plan, except for canceling the support. Why would they cancel the support to the factories? Instead, they should have changed the production plan itself. I mean, as long as the production is not suitable to the Egyptian market, we should know that the situation of the Egyptian people is very difficult. Actually, there are a lot of workers in Egypt who really depend on these factories to earn their living. So, when the support for these factories is canceled, the workers’ opportunity will be lower, as those who are responsible for these factories will have to stop the work. They have a right to do this, and no one can blame them, as they can't meet the needs of all the workers. Even the employees themselves will need to be fired for this; I understand the situation of Egypt's Industry Minister. Yet, despite everything, we should understand that they are really going through very difficult circumstances, and as the Ministry will cancel the support to these factories, it must consider the workers in this plan. It is a very bad thing if those workers cannot afford the price of food. This will also be a burden on the country, as they will have no work, and they will be among the unemployed, which we do not want for our country. What is happening is out of our hands, and I believe that everything could go on if they changed those industries so that they would have no consumption. That is because, if there is an industry with great production, it should receive great support, and when the support increases, the number of workers will increase too, and in this way the workers who do not have jobs will be able to join these factories and work again.

  • طارق سويدان

    2013-3-3

    We can see that Morsi does what his conscience dictates. The government is not remiss. There are factories that are being subsidized for no reason and their products are not popular. That support could be given to some other factory whose products are in fact popular among the Egyptian people. There's no shame in that. There's another thing that we should pay attention to. The minister, God help him, paved the way for the owners of the factories to manage on their own and announced that the subsidies will only stop in 2016, and that is a very respectable move that we should encourage and praise.

  • سليمان الراسى

    2013-3-2

    I realize that any decision made by the government concerning Egyptians must be implemented, because our conditions today are really tragic. Despite the industry sector that is a very important part of Egypt, the Ministry of Industry issued a decision stating that all the factories are not being subsidized. This is very strange, because many factories basically depend on this support; so it looks as if it is a plan to reduce the consumption of factories in Egypt.

  • مهند المطيرى

    2013-3-2

    President Morsi and his Government would like to stop everything in Egypt including subsidies and other things. Despite his successive declarations that he wants the advancement of the country economically and industrially, he has lately issued such a decision. In fact, no one could recognize whether he is honest or a liar. We also wonder what will determine the factories which will be spared of subsidies. We also do not know whether this will serve the interests of industry in general or not. As for me, I was expecting that the decision will guarantee power subsidies for everyone and impose subsidies for others in order to increase their productivity hence ensure the improvement of the production and industrial process in Egypt. Indeed, things have changed since in the past Morsi used to swear that the government would promote production in the country and help investors in everything. Today, however, they are cutting power subsidies on them. The major problem is that Morsi and his Government are making strange things. In fact, they are using the available power without establishing new electric power plants or extracting new petrol. Unfortunately, they are following the policy of Mubarak. Thus, I wonder how they are blaming Mubarak while they have not carried out anything all along a year in office. After his term of Presidency, the speech of Morsi is known in advance. He will claim that the period was not enough and it was about many political issues. Thus, he will also ask the people to grant the Muslim Brotherhood a complete chance given that they are the best representatives of the people. Yet, these are merely slogans which we have learnt by heart. The problem is that we are moving backward. We hope that we will develop, advance and move forward toward progress and prosperity. Unfortunately, however, the Egyptian economy is collapsing. There is also another problem concerning the decision of cutting power subsidies on factories since new investors are afraid of starting their investments and the Government will pass new laws that cause their loss especially that Egypt, represented by this Government, is not that stable even in terms of decision-making. As a result, investors will never venture in such a country as Egypt.

  • حسام متعـب

    2013-3-1

    This is exactly what we mean by the word “nonsense”! We are moving backward instead to making progress. I am sure of that. The other nations usually seek to recover the economy through the increase of industrial productivity. For this reason, they encourage the investors so that they could establish new companies and increase the production. At the same time, the competent authorities usually seek to limit the prices in order to protect the consumers. At the present time, the esteemed Brotherhood Government of “his majesty” is offering ingenious ideas to cancel the subsidy on energy. The authorities will cancel the subsidy for the factories since they are not classified as consumers. Indeed, the authorities are taking decisions hastily. They do not resort to the people for consultation. It is really surprising that the Government is cancelling the services instead of providing more and more services and subsidies. We would have to accept the rule of Mubarak. During his era, the conditions were much better. There were real opportunities to make a living. Damn the Muslim Brotherhood. Down with the Brotherhood! We are paying too much that we expect the authorities to impose taxes on the air we breathe. How the hell could they cancel the subsidy to the factories and claim that they are encouraging investment at the same time? There are only a hundred factories. Why do not they seek to make them rise to one thousand factories? The one hundred energy consuming factories would be really insignificant if the number amounts to one thousand. The deficit would be less important. Unfortunately, the Muslim Brotherhood, led by Morsi, is backward by nature. Their “ingenious” ideas are leading the country to bankruptcy. This is really weird. I felt that the long time imprisonment has affected their mental capacities. Their decisions are totally wrong. We are helpless. We need to show patience and as long as we could change the President in 2016 elections. I hope that the next President will not belong to the Muslim Brotherhood and that he will make the necessary reforms. Morsi will not last for long, God willing.