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Egypt's premier upbeat despite painful food crisis

SHARM EL-SHEIKH, Egypt - Egypt was hosting Sunday the World Economic Forum on the Middle East 2008, with Prime Minister Ahmed Nazif vowing to continue with economic reforms despite major challenges caused mainly by a global food crisis.

More than 1,500 participants, including key heads of state and leading business figures, were set to attend the WEF meeting at which Egyptian President Hosny Mubarak later Sunday was to hold a speech about improving the investment climate and seeking robust growth.

US President George Bush, Jordanian King Abdullah and the Duke of York are among the most prominent guests of the WEF meeting at the Red Sea resort of Sharm el-Sheikh.

The Egyptian government is trying to attract more foreign investments as it grapples with the painful effects of rising food prices in the global markets and with inflationary pressures which have sparked food riots and nationwide strikes over the last months.

A gathering of leading business leaders and media representatives invited by Nazif on Saturday was overshadowed by the global food crisis.

Nazif's upbeat speech highlighting positive results of years of strident economic reforms and a robust seven-per cent growth in 2007 could not subdue concerns over the country's ability to deal with the food crisis and its social side-effects.

For centuries Egypt had been the bread basket for the region, Nazif said, infusing a note of optimism about the potential of the country, now a net food importer, reducing its dependence on imports.

‘Egyptians spend a big percentage of their budget on food, which makes dealing with the food crisis a real challenge,’ Nazif said.

‘Our response is clear. We have a 2.8 billion-dollar package directed towards taking away the pain of rising food prices as well as salary hikes for state employees and an increase in food rations,’ Nazif said.

Businesses have also been urged to increase wages.

The Egyptian government will deal with the food crisis in a painful way, the premier said.

‘What happened last year will not happen in the same way in the next years,’ Nazif promised.

A more efficient use of water resources and use of technology in the farming industry, agriculture storage and transportation are now being discussed by the Egyptian government.

‘We are redefining agricultural policy, which opens new opportunities in the agriculture industry,’ Nazif said.

But since the food crisis is largely a global problem, it has to be globally solved, Nazif said.

‘Normal market factors failed and the world has to reconsider this fact,’ the premier said.