CAIRO – Egypt's new president said he would not impose new taxes or devalue the country's currency and that his government would rely instead on investment, tourism and exports to fix an economy ravaged by a year and a half of political turmoil. Asked whether the government had given any thought to devaluing the currency, an issue that has been raised by economists as it seeks a $4.8 billion International Monetary Fund (IMF) loan, President Mohammed Morsi said: "No. Definitely not. That's completely out of the question." Morsi, 61, has a window of opportunity to push through economic change while he still commands political goodwill 50 days into his tenure as Egypt's first freely elected president, economists say. Yet he must tread carefully to avoid angering a population that rose up to oust Hosni Mubarak last year partly because of high inflation and the widespread belief that the fast economic growth in the last years of the former president's rule was not reaching the poor. Among measures that have been proposed by economists are a reduction in the value of the currency, which has fallen by only 5 percent over the last 18 months despite the drop in demand from tourists and investors. Morsi spoke to Reuters hours before leaving for China, where he hopes to attract investment and improve economic ties. Next month he flies to the United States on a similar mission. "I am seeking out the interests of the Egyptian people in the East and the West. I will go wherever these may be," Morsi said, speaking from the ground floor of the presidential palace. "The interests of the Egyptian people require that we balance our relations with the whole world." A weaker pound would encourage exports and stop a drain on foreign reserves, which have fallen by more than half since the uprising, to $14.5 billion. Yet it would make tea, sugar and other imports bought by the poor even more expensive. Wheat, a big import and their main staple, is heavily subsidized. Morsi also ruled out any new taxes, at least in the short term. "There are no new taxes that will be imposed on the Egyptian people during this period," he said. "The tax system needs reviewing so that government support reaches those who need it, not those who don't," Morsi said. "There is a gradual plan so that taxpayers bear their true responsibility and pay what they truly owe," Morsi said. These, he added, would be revisions and not new taxes. "I am not talking about a sudden law that would impose a tax on the people to pay new taxes without study. We want to reduce the burden on the most impoverished. We want to support the poor and needy," he said. – SG/Reuters
