Egyptian Industry Leaders Express Optimism at U.S. Meetings
Photo by David Cogswell
A delegation of Egyptian businessmen of the American Chamber of Commerce in Egypt, otherwise known as AmCham Egypt, is wrapping up its annual Doorknock mission to Washington D.C., this afternoon with optimistic reports on the improved investment climate in regard to Egypt.
The AmCham mission to Washington, which ran May 10-15, was one of an ongoing series of conferences, events and initiatives aimed at forging links between the U.S. investment community and Egyptian businesses.
The overarching purpose of the mission was to foster new business to kick start Egypt’s economy and get the money flowing again after a three-year economic doldrums that resulted from an international fear of traveling to Egypt during the tumultuous Arab Spring.
But today the theme could be “April Showers Bring May Flowers” because investment is finally getting moving again. Tourism is returning to the country. Investors are seeing a stable social climate in Egypt now, and one that needs economic investment to ward off the kind of social upheaval that inevitably flows from economic distress.
Delegates to the conference reported meeting with 150 members of Congress, representatives of the U.S. State Dept., business leaders, members of think tanks and representatives of the media. They presented Egypt’s economic growth plan, as was recently showcased at the Egypt Economic Development Conference (EEDC) in March. (see “Egypt the Future: One on One with Amr Badr, Abercrombie & Kent”)
Last March’s meeting at Sharm el-Sheikh resulted in new investments worth $36 billion, earmarked for various purposes, such as power plants.
Also encouraging economic news for Egypt was that the U.S. just restored its military aid program to Egypt after having suspended it in Oct. 2013 after a crackdown on the Muslim Brotherhood. Besides the infusion of capital from the restoration of the aid, it’s also an endorsement of sorts.
“There is a major opinion shift from the views of last year,” said Dr. Ahmed El-Sharkawy, CEO of RAMW, an Egyptian-based construction, real estate and hospitality company and owner of several Hyatt properties, “from what they heard in various media outlets that the country was basically on fire and that the people are not happy and that there is divisiveness in the country. The country is on the mend. I cannot claim there is not unrest in certain areas, but it is local and the security situation in Cairo is far better than it was three years ago. I guess the main message is there is a now a far better environment for creating jobs, and that’s the main thing we need. The two most important issues are security and job creation. And those are the issues the government is pushing companies to address. It is basically incentivizing companies to do more by creating an environment that is favorable to investment.”
After the establishment of basic security, said El-Sharkawy, “the most important issue is providing jobs, sources for employing these people, providing an alternative – because 40 percent of the Egyptian population of 90 million people are under 25. If you can put these people to work so they become earners of money instead of hopelessness or being tempted to join ISIS, you will create more scientists than terrorists, and that will be better for the whole world.”
Said Hanafi, vice president legal affairs of AmCham Egypt, is also chief of staff and general counsel of Orascom Hotels and Development, which owns 8,000 hotel rooms in Egypt. Business is way up over a year ago, he said.
“We’re seeing the occupancy rates in Hurghada tripling as compared to last year,” said Hanfi. “Last year we were in the vicinity of 25 to 50 percent occupancy. This year we’re seeing 75 to 80 percent occupancy. With the return of tourists, the travel bans of major European countries were lifted, with the exception of the north, Sinai area. And we’re seeing the room rates improving. Now we’re back to normal prices.”
As with many in the tourism business, Hanafi believes that success in tourism has a greater social value than just profits.
“Tourism is 25 percent of our GDP. So an increase in tourism will definitely help in the stabilization of the economy and the inflow of foreign currency into the country, which directly helps in the economic development and which indirectly helps in preventing the youth joining the extremist movements that use or abuse the economic conditions in which we are now. So it’s not just only about coming and visiting the country but it is as well about helping the economy and helping the country trying to be stable in a very difficult neighborhood.”
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