Investors and government officials in Egypt on Monday warned that the country's exports to the US and the European Union will be affected as the debt crisis in the Western world hits global demand.
Mohamed Bahi Ragy, executive director of the Trade and Industry Ministry’s Export Development Fund, said Egypt's sitation will become precarious if the US fails to find radical solutions to its financial crisis in the next three months.
Ragy told Al-Masry Al-Youm that after the EU, the US is the second largest market for Egyptian exports.
He went on to say that garments and textiles are Egypt’s main exports and any problems the industry will face will have huge repercussions as it has high employment rates.
Ragy added that the predicament facing Egyptian exports is not limited to the US market but Europe too. He explained that seven European countries are on the verge of bankruptcy and that some have announced austerity plans which will be followed by a decline in spending on household and electrical appliances, apparel and textiles.
Egypt's exports to the US during the 2009/2010 fiscal year amounted to US$4.5 billion, while total exports during the first nine months of the 2010/2011 fiscal year amounted to only US$2.7 billion.
Galal al-Zorba, the president of the Federation of Egyptian Industries and a board member of the American Chamber of Commerce in Egypt, said Egyptian companies exporting to the US have huge fears concerning the US crisis and its impact on demand.
Zorba added that US clients are requesting fewer exports in new contracts, fearing being unable to dispose of imported goods due to diminished consumer purchasing power.
Asked about government support for Egyptian companies, Zorba said the government’s current situation does not allow it to confront situations of this magnitude or to endorse any industries.
He went on to say that there are no alternative markets as apparel and textile exports to the US almost bring in US$1.5 billion annually.
But Industry and Foreign Trade Minister Mahmoud Eissa told Al-Masry Al-Youm that the ministry will immediately deal with any problems that may arise in the Egyptian export market either through endorsements or by replacing the US market with nontraditional markets.
Translated from the Arabic Edition