07/10/2001
Al-Alam Alyom Newspaper 2001/OCTOBER /07
A seminar in Cairo discussed the faults and problems of Egyptian banks over the past few decades. Its participants outlined the history of this sector, and put forward some solutions to improve the overall business climate in Egypt and attract more investors. This requires reforms, no doubt about that. According to these industrialists, managers and bank officials, the private sector should be free to play a bigger role, banks should be more transparent, and the state should be less involved in Egypt’s economic life. (Available in Arabic – German in PDF )
A seminar due to discuss the private sector role’s in Egypt turned into a hot debate on the faults of the Egyptian banking sector over the past few decades. Two important banking officials briefly outlined the history of the banking sector, saying their employees were at first no more than ignorant amateurs. Many mistakes were made. Loans were granted lavishly to (dishonest) businessmen, corruption was rampant, and failing banks were rescued by the public sector although it would have been better for them to go bankrupt. Moreover, interest rates on loans were and are still too high compared to other countries. All this has created a climate of mistrust in the banks, and has very much hampered the flow of foreign investments in Egypt. Another problem were the exchange rates between the Egyptian pounds and the US dollar, the signs of stagnation in the US and Japanese economies, and the inevitable effects of the 9/11 attacks on the US. Some positive steps have already been taken, yet the speakers at this seminar called for more reforms to make the state less involved in Egypt’s economic life, make banks more transparent, increase the number of investors (not necessarily big ones), and enhancing the role of the private sector.