Sayed Mohamed El-Kosayer Cairo – Mohamed Salah Sayed Mohamed El-Kosayer inherited big responsibilities when he was appointed as Chairman and Managing Director of the Industrial Development & Workers Bank of Egypt (IDWBE). In the short time in this position, he managed to develop the bank and improve its financial troubles. El-Kosayer spoke to Arabstoday for an in depth interview about Egypt’s trials with its financial crisis: Mohamed Salah: How would you evaluate the current situation in Egypt’s banking sector? Sayed Mohamed El-Kosayer: Let’s start with the loan from the International Monetary Fund (IMF). The state’s general budget has a deficit of 140 billion EGP which is financed by either the IMF, foreign investments, or other financial institutions. The government had to borrow from the IMF for several reasons; the most important is that the loan in itself is considered a certificate of trust and efficiency to the Egyptian economy, which encourages the international, Arab and European financial institutions to inject more funds. The certificate also attracts foreign investors to the country. Without this certificate, some countries refuse to make new investments in the local market. Also, the loan raises the credit rating of Egypt and supports the monetary reserves to fulfil the market’s needs for foreign currency. That’s because the return of foreign investments with the economic recovery and the completion of the state’s institutions need more time.\\ Mohamed Salah: Are there other alternatives to external loans? If so what are they? El-Sayed Mohamed El-Kosayer: Yes, there are several alternatives. But the problem is when it’s time to pay back the IMF loan, we find ourselves in a situation where we have no money to pay it back and we are forced to borrow again to pay the debt. There are five alternatives to the external loans; through the reform of the tax system, reviewing the cumulative taxes, reviewing the value added taxes and imposing on the flow of funds in the stock market, which doesn’t add value to the market. Also the financial system should be overviewed as it withholds a lot of money, which reached about 75 billion EGP.  The import of consumer goods worth 10 billion EGP needs to be stopped. By doing this, returning to the production and operation system, focusing in the next period on stopping the sectarian demands and returning to production the budget deficit can be handled. Mohamed Salah: What are your views on the Qatari deposit? Does it represent an invasion to the Egyptian banking market by offering to take over the shares of foreign banks in Egypt? El-Sayed Mohamed El-Kosayer: The deposit aims to support foreign currency reserves in the Central Bank. We hope other countries will do what Qatar did, which is not an invasion to the Egyptian market. Regarding the Qatari offer to buy the shares of the National Societe Generale Bank, the selling value will not come to Egypt, but will be given to the French owner. If Qatar comes to Egypt to take over a bank, that is considered a message of trust in the Egyptian economy, and the deal is only about taking over, but will not affect the form of the Egyptian banks. Mohamed Salah: What about some foreign banks leaving the Egyptian banking market and its impact on the banking sector? El-Sayed Mohamed El-Kosayer:  Depends on the banks’ policy in the home country, because its main branches study its expansion policies according to its conditions. It has nothing to do with the banking sector in Egypt, and has no further implications or impacts on the sector. Mohamed Salah:  Do the current economic and political events represent a reason for the European banks to leave and being sold? El-Sayed Mohamed El-Kosayer:  I don’t think so, and even if those banks leave and sell their shares in Egypt, the numbers are not huge and they do not have a great influence because of their small market shares.  If they leave their reasons do not include whether the economic situations in Egypt are promising or not. Mohamed Salah:  Does this loan cover the allocations gap? El-Sayed Mohamed El-Kosayer:  We don’t need other loans from the Central Bank, and since I joined the bank the irregular loans were 1.8 billion EGP. We dealt with about 470 million EGP which is about 28 percent of the irregular debts portfolio, collecting in cash between 80 – 90 million EGP. Mohamed Salah:  In terms of the legislative part, what would you demand from the government and the President? El-Sayed Mohamed El-Kosayer:  The government is required to issue a system of legislation and laws to create an investment atmosphere in Egypt, not only the banks. For example licences, investments, environmental conditions, duration of the licence and others. Some laws and licences are required to form a good environment for investments. Mohamed Salah:  How did you improve the bank retail sector? El-Sayed Mohamed El-Kosayer:  The bank reached a growth rate of 44 percent because of the development and the variation of retail products and programmes and byspreading the sales culture in all branches.