We think the International Monetary Fund has told the Ismail government that the world will not end if fuel subsidies aren’t cut on 1 July when consumers are tapped-out after spending on Ramadan and Eid El Fitr — and in the run-up to an expensive time of year marked by spending on summer vacation, school fees, Eid Al Adha, hajj, etc. Speaking with Lamees El Hadidi last night, IMF Egypt Mission Chief Chris Jarvis said the IMF backs Egypt’s plan to phase-out energy subsidies over three years and to bring inflation down into the single digits. But critically, he also said that the IMF would leave the timing of the subsidy cuts to the Ismail government. If you’re impatient, skip straight to Lamees’ interview with Jarvis in English here (runtime: 14:21)
Judge for yourself: Asked about subsidy cuts, Jarvis said, “We did talk about energy subsidies because they’re a very important part of the government’s program. I think it is important to realize that even now, after some of the increases in fuel and electricity prices, energy prices still amount to about a fifth of the government’s budget (excluding interest). That’s money that could be spent on other things like health or education or social benefits. But the president and the government are very conscious of that, and they have a plan to eliminate fuel subsidies on most products — on the main products — within about three years. We think that’s a good plan. We leave the precise timing of measures to reduce subsidies to the government to decide, but we strongly endorse that objective of spending less on fuel subsidies — which often benefit better-off people with big cars and big houses — and spending more money on health, on education and on social benefits.
Lamees: “Will we be expecting in the coming year another reduction of energy subsidies?”
Jarvis: “Well, as I said, it’s for the government to both decide on and announce the particular measures that it is planning to take.”
A slight delay in subsidy cuts would assuage the concerns of a number of economists who have warned that fuel price hikes this summer would drive inflation up again just as it is on a declining month-on-month trend. It also meshes with rumblings we’re hearing about the government acknowledging that inflation could remain in the 20% band for a good portion of the coming fiscal year, as Bloomberg noted yesterday. And if you accept that they’re right, it meshes with IMF boss Christine Lagarde’s statement a month or so back that the most important thing for Egypt to do right now is get a handle on inflation. We have more on Jarvis’ interview in Last Night’s Talk Shows, below.
Egypt will begin unloading its first shipment of Iraqi crude today before transporting it over to refineries, Petroleum Ministry officials tell Youm7.
CIB was named Euromoney’s Best Bank on the Middle East for 2017 at an awards ceremony in Dubai last night, marking the first time an Egyptian bank has taken home the regional honor. Euromoney’s statement singles out our friends for their hard work, specifically noting that it is recognizing “Egypt’s unmatched management at Commercial International Bank, the local banking sector’s biggest private-sector profit earner. As it steers through a market with great potential, but where conditions are rarely easy, CIB is worthy of the title of best bank in the region.” CIB Chairman and Managing Director Hisham Ezz Al Arab said last night in Dubai that, “We are honored to be the first Egyptian private bank selected by Euromoney for this prestigious award category. This is another momentous testimony, not only for CIB’s consistent growth and performance, but to the outstanding capabilities, strength and stability of the entire Egyptian banking sector.” You can read Euromoney’s note about the award here and check out CIB’s press release on the win here (pdf).
Cairo American College startup records EGP 40k in sales in first month of product launch. Zip & Flip, a business owned by students participating in CAC’s Injaz program, is closing in on a 200-unit sales milestone just days ahead of this weekend’s inter-school competition in Cairo. Zip & Flip’s signature product is a stylish, functional bag-towel combo: “Its waterproof lining keeps your valuables dry and when it opens up, you have a beautiful towel to share on the beach with your friends,” the company said. You can check out Zip & Flip and real-world reviews of its product on Facebook and Instagram or read their first-ever press release here (pdf).
NO COMMENT- Supporters of Turkish buffoon Recep Tayyip Erdogan beat the daylights out of Kurdish protesters on Embassy Row in Washington, DC. (Watch, runtime: 2:20)