THIS MORNING: Tenth of Ramadan dry port tender launches today; Facebook defeats antitrust lawsuits; Ethiopia announces Tigray ceasefire.
Good morning, friends, and welcome to the next-to-last workday of the week. We hope you’re looking forward to the long weekend as much as we are.
We’re not typically fans of things that increase costs for businesses. Just about the only thing we dislike more is needless regulatory complexity.
And yet we’re cheering the Madbouly government’s imposition yesterday of a private-sector minimum wage. We’ve long maintained that businesses need to pay a liveable minimum wage, and EGP 2,400 is a step in the right direction. Planning Minister Hala El Said deserves a tip of the hat from all of us this morning for having kept the idea on the agenda and seen it through.
Forget about economic arguments in favour of the minimum wage — a business that cannot pay an adult a wage sufficient to ensure they can eat, find a place to live and clothe themselves is not a business that deserves to be. (With apologies to Norm Ornstein. Elements of his 2013 argument in the Atlantic really stand out in our mind this morning.)
The NCW is allowing businesses to file for exemptions. It should grant them very, very sparingly. Small businesses that have gone legit (who are filing taxes, paying social insurance and wage taxes for their employees, etc) deserve more flexibility than medium and large enterprises, regardless of industry. And any exemptions granted should have a sunset clause beyond which it should be very onerous indeed for a business to ask for an extension — particularly for businesses with larger labor forces.
But please don’t get us started on this “mandatory bonus” thing. Bonuses should be earned for outstanding performance — full stop — not because you have a pulse and happen to be sitting in a seat on a specific calendar date. Using them as a back door to force the private sector to pay more to workers outside the minimum wage (or to substitute for benefits the state is unable or unwilling to provide) is simply a perversion of why bonuses exist. They are by definition a form of variable compensation that reward outstanding performance, not entitlements that should be booked as fixed costs.
We have a rundown in this morning’s Speed Round on how the minimum wage will work and expect to have more news and analysis in the days to come.
WHAT’S HAPPENING TODAY-
A tender will be launched today for the establishment of the Tenth of Ramadan City dry port and logistics hub under a public-private partnership model, the Finance Ministry said in a statement. Cabinet had given preliminary approval to the 250-feddan dry dock and logistics hub in early June, shortly before greenlighting to move forward with a tender to establish the project. Five consortia are reportedly interested in the tender, including one led by Elsewedy Electric and DB Schenker, one led by Dubai’s DP World, and another by China International Marine Containers Group.
It’s the final day of the Big 5 Construct Egypt at the Cairo International Convention Center.
THE BIG STORY IN THE REGION- The Ethiopian government has announced an immediate, unilateral ceasefire in the conflict in the restive Tigray region, which almost eight months ago saw conflict erupt between the government and separatist forces. Government troops have left the regional capital after Tigrayan rebels reportedly ejected the interim administration. The story is front news everywhere from Reuters and the AP to the BBC and the FT.
THE BIG STORY INTERNATIONALLY- Facebook 1. Antitrust 0. Efforts to curb the market power of US tech giants suffered a blow yesterday after a federal judge tossed out two antitrust lawsuits seeking to break up Facebook. The Federal Trade Commission and a coalition of 46 states filed the cases claiming that the social media giant was using its market power to “systematically” eliminate its competitors and were seeking the forced divestiture of Instagram and WhatsApp. However, the judge ruled that the lawsuits were “legally insufficient” and were not able to prove that Facebook wields monopoly power. The FTC is able to appeal and refile its case in the next 30 days.
Facebook’s shares surged 4.2% on the news, pushing its market cap above USD 1 tn for the first time.
** CATCH UP QUICK with the top stories from yesterday’s edition of EnterprisePM:
- The Supreme Constitutional Court (SCC) now has the power to block local implementation of international arbitration rulings after its authority was augmented in legislation passed by the House.
- The long-awaited Sovereign Sukuk Act was greenlit by MPs yesterday, paving the way for the government’s inaugural sukuk sale.
- Ukraine’s Vazhmash is serious about saving Egyptian Iron and Steel and has fielded an offer to get the defunct state-owned company back up and running.
CIRCLE YOUR CALENDAR-
The Cairo International Book Fair will open its doors at the Egypt International Exhibition Center tomorrow. The two-week event will run through to 15 July.
The British Egyptian Business Association (BEBA) is organizing a virtual education week from 5-6 July with three seminars planned. The first, taking place at 10am on 5 July, will discuss skills-based learning while the future of investment in education will be the topic on the table at 12:30pm the same day. On 6 July, a talk on the digitalization of education in Egypt will be held at 12pm.
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.
*** It’s Going Green day — your weekly briefing of all things green in Egypt: Enterprise’s green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.
In today’s issue: Will Egypt’s new Waste Management Act transform an industry that’s long been plagued by decentralization and declining profits? The act’s executive regulations are currently being reviewed by cabinet, and expected to be approved within the coming 6-8 weeks. Today, we break down how the act is setting up a national structure to manage waste collection and disposal, setting stricter licensing requirements and non-compliance penalties, and leveraging financing to address profitability challenges. But some say more clarification is needed, particularly when it comes to the act’s enforceability and the role of the informal economy.