Egypt on Wednesday confirmed it is seeking the support of the International Monetary Fund to weather the damage from the Ukraine war on its economy.
Consultations with the Washington-based lender were focused on a “new programme designed to support the Egyptian state in its comprehensive economic reform plan," the government said in a statement. "The programme might include additional funding for Egypt."
Egypt, the most populous Arab country, is facing new economic headwinds after Russia's invasion of Ukraine, which prompted foreign investors to flee emerging markets and disrupted the global supply chain.
The IMF said it is cognisant of mounting challenges for the Egyptian economy.
IMF staff are “working closely with the authorities to prepare for programme discussions with a view to supporting our shared goals of economic stability and sustainable, job-rich, and inclusive medium-term growth for Egypt,” Celine Allard, the fund's mission chief for Egypt, said.
On Monday, Egypt’s central bank raised its key interest rates by 100 basis points in an exceptional monetary policy committee meeting. The Egyptian pound subsequently depreciated as much as 15 per cent after it had remained little changed since November 2020. On Wednesday, the currency was slightly up at 18.32 pounds to the dollar.
The first rate hike since 2017, underpins rising international commodity prices due to the Russia-Ukraine conflict and increased risk-off sentiment adding to external imbalances were key factors behind the CBE move, Abu Dhabi Commercial Bank said in a research note.
"We see this devaluation as a positive reflection of the shift in external fundamental developments, reducing the overvaluation of the EGP and supporting capital inflows," ADCB said. "We now see scope for an additional 200-300 bps of rate increases by end-2022."
Egypt this week unveiled an emergency, $7.05 billion relief programme to soften the blow on the most vulnerable Egyptians from rising food prices. About 30 per cent of Egypt’s 102 million people live under the poverty line.
Russia and Ukraine have for years combined accounted for 80 per cent of Egypt’s large wheat imports, which were about 13 million tonnes last year.
"Egypt has been one of the countries most impacted by the consequences of Russia's war with Ukraine," Hasnain Malik, strategy and head of equity research at Tellimer Research, said.
"As a major importer of wheat – from and tourism destination for – both countries, Egypt's balance of payments has taken a big hit."
With large external financing needs and non-resident holdings in Egypt's domestic government debt market, rising global risk aversion increases the risk of capital outflows and funding constraints that could weigh on Egypt's reserve buffers, Mr Malik said.
The war is also affecting Egypt’s tourism industry, one of the biggest sources of foreign currency for the country, as hundreds of thousands of visitors from Russia and Ukraine staying away from popular Red Sea resorts.
"The rapidly changing global environment and spillovers related to the war in Ukraine are posing important challenges for countries around the world, including Egypt," the IMF said.
Macroeconomic and structural policy measures can mitigate the impact of this shock on the Egyptian economy and support the country Egypt’s medium-term growth prospects.
"To this end, the authorities’ recent actions to expand targeted social protection and implement exchange rate flexibility are welcome steps," Ms Allard said.
"Continued exchange-rate flexibility will be essential to absorb external shocks and safeguard financial buffers during this uncertain time.
Egypt has turned to the IMF three times over the past six years. It borrowed $12bn under an Extended Fund Facility in November 2016, $2.8bn under a Rapid Financing Instrument in May 2020 and $5.2bn under a Stand-by Arrangement in June 2020.
The IMF funds it received in 2020 were used to cushion the impact of the Covid-19 pandemic on the economy.
“The priorities of the Egyptian state at present are to swiftly adopt measures and policies that secure the continuity of the country’s economic and financial stability and ensure the availability of basic commodities for its citizens,” according to government statement.
What is a calorie?
A food calorie, or kilocalorie, is a measure of nutritional energy generated from what is consumed.
One calorie, is the amount of heat needed to raise the temperature of 1 kilogram of water by 1°C.
A kilocalorie represents a 1,000 true calories of energy.
Energy density figures are often quoted as calories per serving, with one gram of fat in food containing nine calories, and a gram of protein or carbohydrate providing about four.
Alcohol contains about seven calories a gram.
Correspondents
By Tim Murphy
(Grove Press)
Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
Five famous companies founded by teens
There are numerous success stories of teen businesses that were created in college dorm rooms and other modest circumstances. Below are some of the most recognisable names in the industry:
- Facebook: Mark Zuckerberg and his friends started Facebook when he was a 19-year-old Harvard undergraduate.
- Dell: When Michael Dell was an undergraduate student at Texas University in 1984, he started upgrading computers for profit. He starting working full-time on his business when he was 19. Eventually, his company became the Dell Computer Corporation and then Dell Inc.
- Subway: Fred DeLuca opened the first Subway restaurant when he was 17. In 1965, Mr DeLuca needed extra money for college, so he decided to open his own business. Peter Buck, a family friend, lent him $1,000 and together, they opened Pete’s Super Submarines. A few years later, the company was rebranded and called Subway.
- Mashable: In 2005, Pete Cashmore created Mashable in Scotland when he was a teenager. The site was then a technology blog. Over the next few decades, Mr Cashmore has turned Mashable into a global media company.
- Oculus VR: Palmer Luckey founded Oculus VR in June 2012, when he was 19. In August that year, Oculus launched its Kickstarter campaign and raised more than $1 million in three days. Facebook bought Oculus for $2 billion two years later.
More from Rashmee Roshan Lall
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Cinco in numbers
Dh3.7 million
The estimated cost of Victoria Swarovski’s gem-encrusted Michael Cinco wedding gown
46
The number, in kilograms, that Swarovski’s wedding gown weighed.
1,000
The hours it took to create Cinco’s vermillion petal gown, as seen in his atelier [note, is the one he’s playing with in the corner of a room]
50
How many looks Cinco has created in a new collection to celebrate Ballet Philippines’ 50th birthday
3,000
The hours needed to create the butterfly gown worn by Aishwarya Rai to the 2018 Cannes Film Festival.
1.1 million
The number of followers that Michael Cinco’s Instagram account has garnered.
The%20Color%20Purple
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EBlitz%20Bazawule%3Cbr%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3EFantasia%20Barrino%2C%20Taraji%20P%20Henson%2C%20Danielle%20Brooks%2C%20Colman%20Domingo%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
What is the definition of an SME?
SMEs in the UAE are defined by the number of employees, annual turnover and sector. For example, a “small company” in the services industry has six to 50 employees with a turnover of more than Dh2 million up to Dh20m, while in the manufacturing industry the requirements are 10 to 100 employees with a turnover of more than Dh3m up to Dh50m, according to Dubai SME, an agency of the Department of Economic Development.
A “medium-sized company” can either have staff of 51 to 200 employees or 101 to 250 employees, and a turnover less than or equal to Dh200m or Dh250m, again depending on whether the business is in the trading, manufacturing or services sectors.
About Okadoc
Date started: Okadoc, 2018
Founder/CEO: Fodhil Benturquia
Based: Dubai, UAE
Sector: Healthcare
Size: (employees/revenue) 40 staff; undisclosed revenues recording “double-digit” monthly growth
Funding stage: Series B fundraising round to conclude in February
Investors: Undisclosed
Gender equality in the workplace still 200 years away
It will take centuries to achieve gender parity in workplaces around the globe, according to a December report from the World Economic Forum.
The WEF study said there had been some improvements in wage equality in 2018 compared to 2017, when the global gender gap widened for the first time in a decade.
But it warned that these were offset by declining representation of women in politics, coupled with greater inequality in their access to health and education.
At current rates, the global gender gap across a range of areas will not close for another 108 years, while it is expected to take 202 years to close the workplace gap, WEF found.
The Geneva-based organisation's annual report tracked disparities between the sexes in 149 countries across four areas: education, health, economic opportunity and political empowerment.
After years of advances in education, health and political representation, women registered setbacks in all three areas this year, WEF said.
Only in the area of economic opportunity did the gender gap narrow somewhat, although there is not much to celebrate, with the global wage gap narrowing to nearly 51 per cent.
And the number of women in leadership roles has risen to 34 per cent globally, WEF said.
At the same time, the report showed there are now proportionately fewer women than men participating in the workforce, suggesting that automation is having a disproportionate impact on jobs traditionally performed by women.
And women are significantly under-represented in growing areas of employment that require science, technology, engineering and mathematics skills, WEF said.
* Agence France Presse
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Schalke 1 (Caligiuri pen 51') Bayer Leverkusen 1 (Miranda og 81')
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
UAE currency: the story behind the money in your pockets
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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Australia
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ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
RESULTS
Tottenham 1
Jan Vertonghen 13'
Norwich 1
Josip Drmic 78'
2-3 on penalties
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