New Decree Reducing Government Proc

At the end of last year, the Prime Minister issued Decree No. 1025 of 2011 with respect to reducing Government spending in order – as declared then – to reduce the budget deficit and encourage local production. In reality, the Decree was a media effort and had little impact on the deficit or on encouraging local production. Now, and in order to attract more media attention, the Prime Minister issued a new Decree No. 736 of 2012 (Official Journal, Issue No. 26, published on June 28th, 2012) amending some of the provisions of the previous Decree as follows: • Amending the procurement requirement for purchasing cars, office equipment, furniture, and other items so that it is centralized at the level of the Ministry or the Governorate. • Requiring Government entities to purchase local products as long as they are available with respect to motorcycles, cars, furniture, computers, air conditioners, office equipment, fire-fighting equipment, hospital requirements, “and any other items”. The Decree further states that the Ministry of Industry and International Trade shall– through the Industrial Development Agency – establish a data base of local producers with whom the various Governmental agencies shall deal and procure local products. But in spite of the fact that the Decree may have a positive outcome in terms of encouraging the purchase of local products during a time of economic crisis, it seems to indicate a return to complex and over-centralized procurement policies which could result in lengthy contracting cycles.