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Al-Ahram Weekly 4 - 10 March 1999 Issue No. 419 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 4 - 10 March 1999 Issue No. 419
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Focus Travel Sports People Time Out Chronicles Cartoons Letters Pushing industrialisation
By Sherine NasrExperts are optimistic that the Industrial Modernisation Programme (IMP) initiated by the European Union (EU) will upgrade the industrial sector in the 21st century.
"Modernising Egyptian industry is an absolute priority at this stage," said Minister of Industry Soliman Reda at a workshop hosted by the Centre for Economic and Financial Research and Studies at Cairo University. "It has become clear that industrialisation is the first step towards achieving steady development," he added.
To this end, a whole year has been spent assessing the present state of Egyptian industry in an attempt to redefine its points of weakness. Following the assessment, the IMP will be carried out at an estimated cost of $1 billion. Over the first four years, $300 million will be provided by the EU. Later, other donors are expected to make contributions to the programme.
"The EU is convinced that countries of the southern Mediterranean, including Egypt, should have better economic growth and more prosperity," said Ambassador Christian Falkowski, EU commissioner in Egypt. Falkowski admitted that there is still a considerable income gap between European and southern Mediterranean countries. "Yet, we are looking forward to having strong partners who can open up their markets to our products through free trade agreements," he said.
Although the EU contributed expertise and loans, the main thought behind the programme is purely Egyptian. "The whole idea is to provide Egyptian solutions for Egyptian problems," said Falkowski.
The IMP focuses mainly on small and medium-size private sector projects. "It ultimately aims at improving industry's ability to become more competitive and more capable of facing the challenges of the free market economy," said Reda.
Serious studies on the programme began one year ago. A team of experts covered industrial areas from Alexandria to Aswan. "They had to produce a clear picture of Egypt's industrial structure," said Reda. To do so, the team had to answer questions on the type and volume of small and medium-size industries, the labour force, family contribution to the industrial operation and the industry's contribution to individual incomes.
According to Ambassador Gamal Bayoumi, head of the Egypt-EU Partnership Unit at the Ministry of Foreign Affairs, there is a big gap between scientific research and the application of modern technology in Egypt. "The programme is considered part of the overall economic reform that has been carried out by the government," he said.
Bayoumi believes that to modernise thinking, rather than tools and equipment, is the way to achieve better industrial activity. Production for the sake of exporting, not local consumption, was stressed in the workshop. According to Bayoumi "we have to provide at least 700,000 job opportunities every year."
The volume of production of this labour force far exceeds local market needs. "Therefore, we have to have an eye on international markets which we will not be able to invade unless we have very competitive products," Bayoumi said.
According to Bayoumi, EU -- Egypt's biggest economic partner -- has the biggest potential market for Egypt. "The EU has a 350-million-consumer potential market with an average per capita income of $15,000," he said "Therefore, modernising industry comes before liberalising the economy."
Bayoumi also noted that it is unfair to compare the Egyptian national industry with that of advanced countries. "To have this as our starting point is to witness complete failure," he said.
Countries such as Kenya, Tunisia, Yemen and Bangladesh export more textiles to Europe than Egypt. "These are the countries to compare with, but, unfortunately, the balance of payment with Kenya, for example, favours Kenya by LE60 million," Bayoumi said.
The IMP will hopefully help the industrial sector introduce better technologies than the ones already applied. "The concept of transferring technology from developed to developing countries has become a very doubtful matter," commented Reda, adding that advanced countries no longer sell their latest technological achievements at any price. "That is why one of the main components of the programme is how to introduce full automation in different processes of designing, manufacturing and finishing the product and how to minimise use of material and rationalise energy consumption," said Reda.
Asked how the programme will help Egypt increase its exports to Europe, Ambassador Falkowski noted that it is almost impossible to export to Europe unless European industrial standards are carefully met. "In addition to introducing highly advanced techniques to Egyptian industry, the programme, I believe, will also help provide industrialists with a full knowledge of the European market, its actual needs and means to access it which could be very helpful," he said.
