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Economy hit hard

China Daily | Updated: 2013-08-13 07:28

Egypt's smaller companies have struggled since the uprising that pushed aside Hosni Mubarak in 2011, becoming victims of the general economic crisis of a country rocked by ongoing political instability.

But in a few corners of the economy, businesses are doing just fine. Local food producers, for example, have seen demand continue largely uninterrupted, while small-scale building suppliers have benefited from the inability of authorities to clamp down on unplanned construction projects.

Against a background of unrest, the overall economic picture looks bleak, with access to credit and foreign currency drying up. Government officials have stopped making decisions and security has all but disappeared from the streets.

Factories and workshops have been hit by interruptions in subsidized diesel and gasoline and by regular power outages as the government runs low on the dollars it needs to import petroleum products from abroad.

Angry workers routinely shut down plants and block ports.

Gross domestic product grew at an annualized rate of just 2.3 percent in the nine months to the end of March, well below the 6 percent a year thought necessary to absorb new entrants to the labor force.

However, the lack of effective government control in many areas has led to a rise in small-scale construction projects that would previously have been blocked - and suppliers of building materials are cashing in.

"Last year, in sales volume terms and in value terms, we had our best-ever year in the Egyptian market, and this year will be even better," said Taher Gargour, managing director of sanitary ware and tile maker Lecico Egypt.

"We're selling more at higher prices than we've done in any year, even the best years of the Mubarak economy, when overall GDP growth was at its peak."

While mainstream contractors have often suffered for lack of business, Lecico has been supplying toilets and tiles to small and individual builders who were taking advantage of a breakdown in government zoning rules.

Across the country, skylines have turned brick-red as people add illegal floors to buildings, or else construct concrete and brick buildings on agricultural and other restricted land.

The building boom has also been driven by a boom in the number of young adults in Egypt at marriageable age seeking a place to live.

Reuters

(China Daily 08/13/2013 page11)

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