Brothers and Sisters,
Ladies and Gentlemen

I talk to Egypt's workers on the Labor Day; I talk to our workers in Al-Mallah, in Kafr Ed-Dawwar, in Helwan, in Shubra Al-Kheima; In our industrial bastions in the 6th of Ramadhan, in the 6th of October, in As-Sadat and Borg El-Arab cities and in our industrial estates in Upper Egypt as well as to workers and the people of Egypt over the expanse of our homeland.

I assure you all of the pride we take in you and your role and patriotism as well as our appreciation of your input to its awakening and the progress of its people.

I tell you that you have been in the forefront of the ongoing march in both time of war and peace. You have been always a symbol of the cohesion and resolve of our people and you have been and will remain the basic underpinning for both our already achieved and aspired-for economic growth. I tell you that we do cherish Egypt's workers; we never forget their giving and sacrifices. Their issues are ours, their rights and interacts are our top priorities. That has been, is still and will remain my covenant to you.

I am here with you today to talk in full sincerity and frankness and review with you some of the nation's issues and our society's concerns. Where do we stand now and whereto are we going? What hopes and ambitions are we pursuing and what difficulties and challenges are we facing?

Over the passing years, we have made several economic achievements and have made daring steps towards reform that set right long-standing imbalances and generated high rates of investment, growth and job creation. We are already proceeding on and have to pursue the right path. Like others, we are addressing the challenges of the stages of transition and transformation and will overcome them in the same way as we had overstepped several others before.

At the heart of such challenges, there lie workers, well-positioned at the forefront of our move to confront and overstep them. Ahead of us there lies the challenge of maintaining high and sustainable economic growth rates. Ahead of us there lies the challenge of sustaining openness to the world and benefiting from its markets, opportunities and gains. Ahead of us there lies the challenge of new skills imposed by growth and labor market requirements. Ahead of us there also lies the challenge of expanding the base of social justice and achieving the critical and due balance between the rights and duties of our citizens, including our men and women workers.

As we are passing a stage of transition and transformation, we need to be well-aware of its landmarks and goals as well as the opportunities, gains, difficulties and challenges. We now have a new vision of an effective and advanced economy. We need a new spirit that is sensitive to the dimensions of this vision, thus providing success factors for it.

As we celebrate the Labor Day, I tell you that the prime challenge ahead is to champion the value of labor, to enhance respect by our society for manual workers in both mega factories and small workshops and various production and services sites; for those who start their careers in the workplace, who take pride in belonging to the working class, who seek, through exertion and sweat, a decent life and build their own future with productive and honorable work.

I say to our young people that the world around us is changing and we have to keep pace wit it. The labor market now has new requirements as well as increasing needs for qualified manpower. I say to those graduated some years ago that we cannot deal with today's challenges with a mentality of the past. Embark dauntlessly and unhesitatingly onto the labor market with its new specialization in demand and go ahead making your own and the nation's future, with determination, confidence and new thinking.

Brothers and Sisters,

Together with those of the current stage, we are facing a new challenge imposed by the current global economic conditions, ranging from the implications of recess in the American economy for Europe and the world at large to the unprecedented rise in world prices of oil and food commodities and its direct reflections on all countries, and developing countries in particular.

You might recall that last year, I cautioned against an incoming crisis and called for preparedness in order to avert any possible impact on the economic growth rate we have already achieved. The world economy is now undergoing a severe crisis reminiscent of the implications of the 1997 Asian crisis, exceeding it in gravity and implications. The crisis started with the collapse of the US mortgage (sub prime) market and the ensuing recess indicators for the US economy and the regression in projected growth rates for global economy.

Thus, the world has undergone and is still undergoing sweeping inflationary waves, as a result of the sustained rise in prices of oil, food commodities and raw materials all at a time and at unprecedented levels. Global stock of wheat and corn has shown its lowest in the past sixty years. Wheat prices rose at 180 percent within three years. Average increase in prices of sugar, vegetable oils and other food commodities showed 80 percent during the same period. This rise has turned into a global phenomenon that was further exacerbated by several factors, ranging from the impact of climatic conditions on world production to manipulation over food commodity prices, abstention by some countries to export their crops in order to meet the need of their population and the trend in other countries to use some of these crops in manufacturing bio-fuel as an alternative source in reaction to rising oil prices.

It is inevitable for us to face up to this new incoming challenge, for we live not in isolation from the world. We import half of our needs of wheat and corn and 90 percent of our needs of edible oil. Our imports are increasing year after year in order to cope with the needs of increasing population and rising standards of living.

We will address this challenge with effective action on the international arena, cautioning against its consequences and on the domestic arena to contain its repercussions. As the gap between the worlds's rich and poor is widening, the advanced countries have to shoulder their responsibility in the current state of global economy. It would not be sensible or acceptable to use man's food as engine fuel or to sustain generous subsidy for farm commodities used in manufacturing such fuel. Those who indulge in this trend must recognize its grave implications for the food security of humans.

I have raised all these issues during my visits to France and Germany and we will continue our move in conjunction with our partners in both the developing and developed worlds. In order to caution against the gravity and social and economic consequences of this crisis as well as its reflections on the standard of living and stability of peoples. We will pursue this move with the Food and Agriculture Organization, the World Food Program, and the upcoming meeting of the Group of Eight Industrial Powers in Japan. We will also put forth the current crisis to the World Economic Forum to be held next month in Sharm El-Sheikh and to the upcoming African Summit to be hosted by Egypt in the month after.

On the domestic front, we will address this new challenge on several axes: with further efforts to provide food security for the people, with more balance between wages and prices and with increases dependence on our wheat crops in meeting our own needs.

We have already managed to raise this percentage from 27 percent in the early 1980s to about 60 percent at present and we can afford to pursue this course by increasing the cultivated land and raising productivity per feddan. We recall that the wheat-grown areas at that time showed 1.3 million feddan. These now rose to 2.7 million feddan. Our production increased from 2 million ton to 7.8 million ton, while our consumption increased from 7.3 million ton to 15.3 million ton. In spite of the huge increase in population and consumption, our wheat imports have not as much increased, rising from 5.3 million ton in 1982 to 7.5 million ton at present. This has helped us more redouble our dependence on Egyptian wheat.

We will go on addressing this new challenge and the difficult choices imposed thereby. Of these, we will select the least burdensome, the least costing and the least affecting to economic growth rates and development efforts. These are difficult choices and we all have share awareness of their dimensions, differentiate between them and diligently prioritize them.

We will address this challenge in such ways that protect our citizens and economy against its implications; with a cohesive society and policies that protect poor and limited-income brackets against its reflections and sufferings. We will address this global crisis with our own endeavors, our solidarity and synergy and with a robust economy and new resources.

We have irreversibly overstepped a stage we all recall, where any increase in world wheat prices would trigger a foreign exchange crunch and unleash successive and uncalculated rises in the dollar exchange rate and prices of commodities and services in a troubled volatile market and an economy that can hardly put up with the faintest shocks.

Recalling that period of time, we thank Allah for what achievements we have made. We no longer grope for hard currencies to purchase our food imports. Exchange rates have now stabilized and with our Central Bank reserves rising, we are now in a position to cover any increase in the prices of our imports.

Following the economic reform achieved, we are now in a better position to face up to this crisis, with a stronger economy, with adequate resources to meet our food requirements and with sufficient resolve to push forward our progress.

Brothers and Sisters,

We could have never afforded to confront this challenge had it been for the economic reform steps we have taken. We could have never been able to increase the appropriations required to meet it, nor the provisions for food and energy subsidies by more than LE 25 billion, had it not been for the sovereign revenues generated by the economic reform, apart from additional revenues from the state-owned asset management program. We successfully managed to do this, while maintaining in the same time the state investment plan and its appropriation to enhance health, education and other services, without having to increase budget deficit or expose ourselves to unruly inflation rates. Inflation goes hand in hand with recession and regressive growth rates, coupled with falling demand for commodities and services and escalating unemployment rates. Is that how we are now?

Thank Allah, this year our economy will score a growth rate of more than 7 percent for the third year in a row. Our exports are still growing at rates of about 30 percent a year, with sustained growth in the production and services sectors. Private sector investments are growing at rates of about 40 percent a year and our economy is still creating more than 800,000 new job opportunities.

The construction and building sector shows sustained growth, with about 16 percent achieved last year, including state investments mainly focused on drinking water and sanitary drainage plants, youth and limited-income housing and increasing private sector investments in different housing segments.

The communication and information technology sector is making a growth rate of more than 14 percent a year, with investments of more than LE 50 billion over the past three years. This sector is expanding and upgrading its infrastructure and is growing increasingly competitive in the Middle East region and globally. It contributes, through the communications services and the information it provides, to raising productivity in several sectors of the national economy.

Growth continues in the tourism sector at a rate of 13 percent a year, with the number of tourists showing an unprecedented high of 11 million last year.

The agriculture sector is gaining importance to our economy, with the area of farm land rising from 6.2 million feddan in the early 1980s to 8.5 million feddan at present. We continue to reclaim new areas of land. The Egyptian farmer provides for us 100 percent of our needs of rice, apart from quantities available for export, about 60 percent of wheat and 67 percent of sugar.

Industry has become a pioneering sector for growth and a magnet for investment and modern technology as well as a main sector for job creation. This vital sector is growing at a rate of around 8 percent a year, attracting last year alone LE 42 billion in investments; sixfold its level four years ago. Its share of total investments in all sectors rose from 11 percent to 26 percent during the same period.

Modernization and upgrading of production is under way and there are firstlings of new industrial investments in Beni Swaif, Al-Minya, Assuit and Sohag governorates as well as other extending to the rest of Upper Egypt governorates.

We have channeled huge investments of more than LE 5 billion over three years to major state-owned companies such as the Iron and Steel, the Coke Coal Companies, cement, fertilizer, sugar, pharmaceutical, transport, container-handling, aluminum, metallurgical, chemical, copper, food processing and contracting companies.

We have reduced the bad debts owed by the public sector companies from LE 32 billion to less than LE 10 billion and will fully resolve this problem by the end of this year. We have provided new administrative and production systems for these companies, whereby losses of around LE 1.3 billion were turned into net profit of around LE 4 billion last year. I extend my greetings to the management and labor of these companies and give tribute to the achievement made by them, in spite of the challenges that face this sector. I re-affirm our determination to complete the state-owned asset management program in all sectors, including the spinning and weaving sector with the object of upgrading it and increasing its workforce income. We will pursue this endeavor with conviction and confidence.

The lesson learned from the current global crisis is that reform steps must be sustained, that we are more pressing need for further development and modernization, for more investments and job opportunities, for increased productivity, exports and competitiveness, for increased efforts to face up to bureaucracy and corruption and for further liberalization of our economy in order to achieve this end.

True, the fruits of the economic reforms achieved have befitted many citizens, but have not reached some other so far. However, we have to admit that had it not been for such reforms, we could have been in a much more difficult situation in the face of the global rise in price and would have suffered much more than we do now from its implications.

Brothers and Sisters,

I do follow up, on a day-to- day basis, the suffering from these implications on a day-to- day basis ; I do follow up, around the clock , the bread queues, the rising prices and the concerns of the Egyptian family in general and those of the poor and limited-income brackets in particular. This suffering does equally affect the rich or the higher-income echelons of the middle class but it heavily affects the poor and lower-income brackets of workers, peasants and employees. These are the categories that we have to line up with, supporting, assisting them and alleviating their suffering from rising prices.

I pointed out upon the inauguration of the parliamentary session that the object of the current stage was more focus on the administration of social justice and fair distribution of the fruits of growth and development to all compatriots and all governorates.

The current global financial crisis entrenches our recognition of the need for this orientation and commitment. It makes it incumbent upon us to take more steps to protect our limited-income citizens and line up closer to them in the face of its implications. To provide such protection is the state's duty and preoccupation as well as a commitment that cannot be delayed or deferred.

We have several choices and alternatives, but what matters is to alleviates burden off our citizens by rapid decisions and procedures to provide protection, to address rising prices, rather than undermining investment and growth rates.

I have asked the government to stop our rice and cement exports for six months and to abolish custom duties on food and basic commodity imports. Today, I demand it to ensure that this reflects on consumers in the markets and to stand out to profiteers in the people's livelihood and to stakeholders and manipulators of prices.

I have asked the government to promptly respond to the sufferings from bread queues. I said that I will allow such suffering to take place in spite of the availability of our needs of flour and increased provisions for bread subsidy. I gave my instructions to separate production from distribution and that governors should take responsibility for addressing bottlenecks on the local administration level. Through my day-to-day follow-up, I can observe signs of regressing bread queues and relaxation of this contingent crisis.

I also asked the government to further expand the social solidarity net and extend the coverage of ration cards to larger numbers of citizens. I asked it to the highest possible increase in wages, salaries and pensions. I did not want to announce the percentage of increase, but it will be ready on Monday and will be around 30 percent of salaries. Of course nobody expected this 30 percent. The allowance we are talking about started with 15 percent, but I asked the government to raise it to 30 percent rather than 20 percent, provided the government should seek resources.

We have to continue to respond to the current global crisis on two basic tracks: to reinforce food security for our limited-income citizens and to achieve balance between wages and prices.

On the first track, our move has seen since the beginning of the current year the registration on ration cards of about 15 million citizens, thus raising the total number of beneficiaries of ration cards to around 55 million.

I still ask the government to pursue this practice and also ask it to expand the scope of ration cards to cover larger quantities of basic commodities and to provide more food security for beneficiaries.

On the second track, the current extraordinary conditions call for an inevitable structural remedy that can bring about a tangible rectification of the wage-price relationship. True, we have been for some years raising wages and salaries, but these extraordinary conditions this year call for an exceptional raise.

In my electoral platform, three years before the current global crisis, I undertook to redouble, in six years, wages and salaries for employees and workers in the lower echelons of employment scale and raise by 75 percent for employees in senior grades. Taking into consideration the implications of this crisis for prices, I have given instructions for the government to exceed the targeted raise so as to reach, at the end of the period, higher rates than those committed. Hence the 30 percent raise came.

I also called on the government to accord special attention to the lower-income employees of local administration units in determining the rate of allowance.

I am fully confident that this obligation by the state towards employees of the administrative machinery, the public sector and the public enterprise sector will be reciprocated by a similar obligation that I look forward to and call for by the private sector investors towards their workers and employees, so as to achieve a real balance in wages and salaries.

Our move on these concomitant tracks to enhance food security and raise wages requires us to re-arrange our priorities. It poses a set of difficult choices and alternatives to respond to the current challenge so as to achieve our aspired goal with real revenues.

I call upon the government and the parliament to promptly agree on the best choices and alternatives as well as the necessary actions to procure these real revenues so that we can proceed with their implementation starting from May that starts tomorrow, without having to wait for the new fiscal year. We are in need for an instant consensus between the government and the people's representatives on these actions. Such consensus must be sensitive to limited-income brackets, geared to reprioritization of subsidy that must reach only eligible beneficiaries.

Provisions for bread and basic food commodity subsidies will reach LE 20 billion in the coming fiscal year budget. We have no problem in procuring these provisions, but we have to ensure that subsidies reach exclusively the poor and lower-income brackets.

Provisions for oil product subsidies will reach around LE 63 billion in the coming fiscal year budget. I honestly and frankly tell you that these go more to the haves than to the have nots, thus requiring reconsideration and rectification of the current state of affairs.

Brothers and Sisters,

Indeed, we have problems, challenges and difficulties, but these are not insoluble nor will they break up our will or undermine our determination. We will stand up to and overcome them with our meaningful recognition of their dimensions and causes, with a cohesive people, including workers, peasants, middle class and intellectuals, that know their way and destination. Our are a conscious people that know that increase in income is generated by exertion, sweat, hard work and struggle rather than by bygone slogans or instigative and provocative attempts that take lightly slogans of our homeland and people, profiteer in people's suffering and fail to provide choices, alternatives or solutions.

The destiny of homelands and peoples cannot be subject of recriminations or overbidding. We are more concerned over the rights of workers or other compatriots than those who profiteer in them and those who cover up under their slogans. So wide is the difference between democracy and anarchy, between expression of opinion and the targeting of the homeland'

We will respond, with the power and decisiveness of law, to those who target the homeland security and stability and the march of our compatriots. We will stand against those who propagate call for skepticism, despair and frustration and will encircle those who manipulate prices and people's livelihood.

We will forge our way towards a better future, with an economy, where potential for growth is rising year after year, with workers, whose giving continues for the sake of the homeland, with a private sector that cares for its workers and attends to its social responsibility and with a people that make their present and future.

Greetings to workers on their Day; greetings to those who toil for a decent life in every honorable work.
Greetings to every investor who opens up a means of livelihood and creates a job opportunity.

Greetings to everyone who contributes distinguished production, who puts forth an opinion, idea or proposal, who revives hope and optimism in the hearts of Egyptians, who pushes their steps forward on the road.

May Allah keep Egypt a secure and invulnerable country and may He guide the steps of its people to success.
Many happy returns of the day and Allah's Peace, Mercy and Blessings be unto you.