Egypt eyes oil, wheat silos in Russia

Cairo and Moscow agrees to strengthen cooperation

CAIRO, April 15, (RTRS): Egypt’s Islamist President Mohamed Morsi will seek oil, gas and grain silos when he visits Russia this week in a bid to revive cooperation that flourished in the Soviet era, officials said.

The official newspaper of the governing Freedom and Justice Party said Morsi would travel to Moscow on Friday for talks with President Vladimir Putin on closer economic cooperation and efforts to end the civil war in Syria.

Egypt is seeking financial support, food and energy supplies on concessionary terms from a range of friends and allies to ease an economic crisis that has deepened since the uprising that toppled former President Hosni Mubarak in 2011.

Morsi’s top foreign affairs adviser, dies and raising sales taxes to meet the global lender’s conditions.

Spending on subsidies and social benefits in 2013/14 would rise to 205.5 billion pounds from a revised 182.8 billion pounds this year, it showed.

Overall government spending in 2013/14 was set at 692.4 billion pounds, up from a revised 583.8 billion pounds this year and revenue is set to rise to 497.1 billion pounds from a revised 393.5 billion. The finance ministry was not immediately available to explain the discrepancy in the figures.

The deficit figure for next year was in line with the revised economic reform programme the government put forward to the International Monetary Fund in late February. However, economists said the growth and inflation assumptions in the Essam Haddad, had three days of preparatory talks in Moscow last week and said in a statement he reached agreement on strengthening cooperation in the oil and gas industries.

They also agreed that Russian companies would participate in rail and metro projects, build wheat storage silos in Egypt and revive strategic industries in which the former Soviet Union played a key role such as steel, aluminium, turbines and electricity, the statement said.

In the heyday of Soviet-Egyptian friendship in the 1950s and 1960s, Moscow helped build the vital Aswan Dam that controls the Nile River in Upper Egypt.

The late President Anwar al-Sadat expelled Soviet military advisers in 1972 budget projection were over-optimistic.

The document said next year’s deficit would be 9.5 percent of gross domestic product, but that assumes nominal GDP growth of nearly 20 percent, or about 8.3 percent in real terms after discounting inflation, Moustafa Bassiouny of the Signet Institute think-tank said.

The largest real growth rate Egypt has achieved in the last decade was 7 percent, and the economy has slowed significantly since the 2011 uprising that ousted former President Hosni Mubarak.

The government’s own growth forecast for 2013/14 is 4 percent, and economists say 3 percent is more likely. On Sunday, the planning minister cut this year’s growth forecast to 2.5 percent from 3 percent.

Bassiouny said a more realistic assump- when he turned towards the West before embarking on a peace process with Israel.

Egypt secured $5 billion euros in stopgap financial support last week from Arab allies Qatar and Libya.

However, talks with the International Monetary Fund on a $4.8 billion loan are dragging on without agreement because Cairo is balking at cutting costly fuel subsidies and raising sales taxes, diplomats said.

On Syria, Egypt is trying to broker a negotiated transition to a democratic government without President Bashar alAssad, but Russia remains Syria’s biggest arms supplier and diplomatic protector at the United Nations, vetoing Security Council resolutions that would sanction on Damascus. tion for 2013/14 would be nominal growth of around 13 percent - 10 percent inflation and 3 percent real growth. That would mean the projected deficit figure would be around 10.2 percent of GDP after a revised 10.7 percent this year.

“This still is a somewhat optimistic projection, but the numbers provided in the report seem to be misleading,” he said.

Egypt, which has suffered two years of political instability since Mubarak’s ouster, agreed with the IMF to cut its deficit to secure the loan critical to support its economy.

Prime Minister Hisham Kandil has repeatedly said the government will implement its economic reform plan whether or not it reached an agreement the IMF.