ARTI Egitto definitivo - ARTI Puglia

and private debt owed to non-residents repayable in foreign currency, goods, or services is
estimated at US$29,898 million at the end of FY 2007.
One major Egyptian success grew out of a provision in U.S. trade law designed to promote
Arab-Israeli reconciliation. In 2004, the U.S. approved plans for Egypt to export to the USA
products made in special export zones. So long as the goods derived at least 11.7% of their
value from Israeli inputs, they could enter the USA duty-free. Annual sales and workforce
of related companies nearly doubled.
1.8. Public Finances
On the revenues side, total revenues of the government were EGP 78.32 bn (€ 14.17 bn)in
FY2002 and are projected to reach EGP184.7bn (€ 22.9 bn)in FY2008. Much of the increase
came from a rise in tax revenues, particularly personal income and corporate taxes which
constituted the bulk of total domestic taxes, due to recent tax reforms. This trend is likely
to gradually widen the tax base in the forthcoming years. Revenues, however, have
remained more or less constant (about 21%)as a percentage of the GDP over the past few
years.
On the expenditures side, strong expenditure growth has remained a main feature of the
budget. This is mainly a result of continued strong expansion of (1) the public-sector wages
driven by government pledges. Wages and Compensations increased from EGP30.5 bn (€
7.02 bn) in FY2002 to EGP59.6 bn (€ 7.39 bn)in FY2008; (2) high interest payments on the
public debt stock. Interest payments rose from EGP21.8 bn (€ 5 bn)in FY2002 to EGP52.0
bn (€ 6.45 bn)in FY2008. Importantly, dramatic increase in domestic debt which is
projected to be roughly 62% of GDP in FY2008 up from 58.4% in FY2002; and (3) the costs
of food and energy subsidies, which rose from EGP18.0 bn (€ 4.15 bn)in FY2002 to
EGP64.5 bn (€ 8 bn)in FY2008.
The overall deficit, after adjusting for net acquisition of financial assets, remains almost
unchanged from the cash deficit. The budget’s overall deficit of EGP 43.8 bn (€ 10.07 bn)or
-10.2% of GDP for FY2002 has become 49.2 bn (€ 6.35 bn)in FY2007, so that is narrowed
to -6.7% of GDP. Deficit is financed largely by domestic borrowing and revenue from
privatization sales, which became a standard accounting practice in budget Egypt. The
government aims at more sales of assets in FY2008.
1.9. Exchange Rate policy
The exchange rate policy is linked to US Dollar. With the turn of the new millennium, Egypt
introduced a managed float regime and successfully unified the Pound exchange rate vis-àvis
foreign currencies. Currency black markets do not exist anymore.The transition to the
unified exchange rate regime was completed in December 2004. Shortly later, Egypt has
notified the International Monetary Fund (IMF) that it has accepted the obligations of Article
VIII, Section 2, 3, and 4 of the IMF Articles of Agreement, with effect from January 2, 2005.
IMF members accepting the obligations of Article VIII undertake to refrain from imposing
restrictions on the making of payments and transfers for current international transactions,
or from engaging in discriminatory currency arrangements or multiple currency practices,
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THE RESEARCH AND INNOVATION SYSTEM IN EGYPT