They warned of a shortage of commodities and high prices…Experts: The coup initiatives to confront the dollar crisis by stopping the import of “Fashnik”

With the escalation of the dollar shortage crisis, the halt of imports, and the necessity of many factories and companies to stop production, due to the lack of production requirements, the bloody coup regime led by Abdel Fattah El-Sisi resorted to solutions closer to clowning than to solving the problem, aiming to create a media show that suggests to the Egyptians that it is working on finding solutions. for the problems they suffer from.

Among that was the announcement of a compulsory devaluation of the dollar against the pound under the Fahlawa system, not by increasing production and increasing exports. In this context, the Association of Car Dealers announced that it would stop buying dollars for a month in an attempt to reduce the demand for dollars and reduce its value in the market. The Association demanded that this proposal be circulated to other sectors of the economy. importers, at a time when thousands of factories and companies have been suffering from a halt in imports for more than two years, and some of them were forced to close their doors and stop production.

On the other hand, economists criticized these proposals, stressing that they will not produce fruitful results, but the effective solutions remain in increasing production and export.

They warned of the adverse repercussions of such initiatives, stressing that they might cause a shortage of commodity supply to a degree that would lead to a rise in prices and the control of the black market, which would increase the suffering of citizens.

The experts said: “It is possible to define a list of commodities to be stopped from being imported, including luxury and recreational goods, and to move away from basic commodities, food and production requirements.”

the cars

Regarding the initiative of the Car Dealers Association, Osama Abu Al-Majd, the president of the association, said: “The initiative aims not to contribute to creating a state of demand for the dollar, and to stop for a month importing cars and dealing in foreign exchange from 15-5-2023 until 15-6-20223.” Pointing out that this trend may contribute to the stability of the country’s situation and the preservation of the country’s currency and economy, as he put it.

Abu Al-Majd claimed in press statements that this stoppage will lead to preserving the value of the merchants’ money as well to absorb the current crisis related to the high prices of cars, in a way that makes customers reluctant to buy and thus stabilize prices.

strategic commodities

Ahmed Shiha, a member of the Importers Division of the Federation of Chambers of Commerce, downplayed this initiative, explaining that the dollar shortage crisis requires all sectors to stop importing so that stopping imports is effective and achieves its intended goal while at the same time providing production requirements and not short supply of various commodities in the market.

Shiha added, in press statements, that electrical appliances can join cars in the initiative to stop imports, in addition to many imported goods, indicating that companies and factories that have a strategic stock of their products for at least three months can participate in the initiative to stop imports for a month. .

He stressed that stopping the import of an individual commodity would not be as effective as stopping the import of many imported goods, pointing out that Egypt imports products worth about $8 billion per month.

Shiha warned against stopping the import of commodities related to contracts and production lines, because they cannot be stopped, as well as strategic commodities such as food commodities and other commodities whose import may not be stopped.

He explained that removing the dollar from the focus of increasing demand requires all importers to deal in the currency of the country from which they import products, and that the dollar is not the only approved currency, until Egypt exits the single currency circle.

Rising prices

Mohsen Al-Tajouri, Undersecretary of the Wood Division at the Cairo Chamber of Commerce, said that although the initiative to stop importing cars for a period of one month aims to reduce the demand for dollars, the cars already available in the Egyptian market may face a crisis in increasing their prices immediately after stopping imports.

Al-Tagouri added, in press statements, that this is what I fear, because raising prices has unfortunately become a behavior that reacts quickly to any absence of any commodity, regardless of the reasons for this absence.

He warned that there are commodities whose import may not be stopped, including wood, which is a necessary and basic commodity that requires import from abroad because we do not have forests to extract wood.

“Al-Tagouri” wondered if the coup government was serious about such initiatives, how would it complete the funkosh projects, including the Administrative Capital project, in addition to other facilities that require the presence of wood to complete the construction operations that are linked to delivery timelines, which makes the wood commodity outside the call to stop importing foreign products. .

He explained that what applies to wood applies to basic commodities whose import cannot be stopped, such as medicines, for example, because they affect the life and health of citizens, while provocative commodities that Egypt spends millions of dollars on importing can be stopped.

Al-Tagouri concluded by saying: The idea of ​​stopping the import of products may achieve an abundance of dollars, but not to the extent that solves the crisis of high demand for it, stressing the need to confront the high demand for dollars, and not reduce it to calling for stopping the import of some goods.

And he stressed the need to encourage local investment by granting benefits to investors, such as providing plots of land for a period of five years, for example, in return for investing them, provided that the military state begins to obtain compensation for these lands after this period, in order to encourage investment and local production, and to exploit many assets that suffer sectors. different from not being used.

Al-Tagouri warned that the crisis of high demand for the dollar is not temporary and will recur in the future or worsen if we do not start from now working on the domestic production file, which is considered a “pomegranate in the balance”, to maintain the balance of the Egyptian economy.

Disengage

Matta Bishai, head of the Internal Trade and Supply Committee of the Importers Division of the General Federation of Chambers of Commerce, called for the necessity of disengaging the pound from the dollar, stressing that this trend has increased the need for it at the present time, due to the crisis that Egypt is suffering from a severe shortage of the American currency, which affected its ability to To meet its needs, it imports basic materials from abroad.

Bishai said in press statements that a quick move is required in the issue of disengaging the pound from the dollar to address the trade balance deficit due to the high volume of imports.

He stressed that this step is important to relieve pressure on the dollar, and that it is a prevailing trend for many developed and developing countries, noting that France and other countries have joined the umbrella of countries wishing to unpeg their currency from the dollar.

Bishai stressed that de-pegging the pound from the dollar enhances the value of the pound against other major currencies, and also contributes to strengthening Egypt’s foreign trade with major industrial countries, led by China, as trade exchange with these countries will be carried out in the local currencies of each country.