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Al-Ahram Weekly 1 - 7 April 1999 Issue No. 423 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 1 - 7 April 1999 Issue No. 423
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Focus Interview Profile Features Travel Living Sports People Time Out Chronicles Cartoons Letters IT industry flocks to Egypt
by Aziza SamiIn their drive to gain market share, multinational IT companies are turning to Egypt with its growing demand for information technology products -- from simple PC's to digital intelligence linking companies to the Internet.
The last five years have seen firms including Microsoft, Compaq, Motorola, AT&T and Lucent Technologies entering the market through representative offices, or through participation in projects with the public and private sectors. Their presence is being consolidated by the introduction of computerised services in the financial sector and government, as well as by the adoption of digital technology in the communications sector through the GSM mobile network installed three years ago and the upgrading of the regular telephone network.
Furthermore, Egypt is fast becoming a base for IT companies because of its position as the Arab world's main software developer with 10,000 Egyptian specialists currently working in the development of Arabic software programmes with multinational IT companies.
There is also growing demand for personal computers by individual users, as well as by small and medium-sized companies, which has led to the proliferation of small domestic hardware and software companies manufacturing on local assembly lines and creating the potential for regional export.
Egypt and South Africa are the two largest PC manufacturers in Africa, with Egypt accounting for 12 per cent of Africa's PC shipments in 1998, according to Hakan Kaynaroglu, the International Data Corporation's (IDC) resource manager for the Middle East and North Africa.
PC manufacturers are recording a high percentage of sales to the Egyptian market; Acer Computer Middle East, which has been in business for the past 12 years, says it recorded a 130 per cent increase in sales to Egypt in 1998. "We expect the figure to double this year," said Riad Nazem, a representative of Acer.
With deregulation of the Egyptian economy and ongoing reductions in trade barriers in accordance with the GATT provisions, Egyptian business associations are harbouring ambitious plans for electronic commerce (e-commerce), enabling commercial transactions to take place via the Internet. The issue has become pressing with increasing awareness in business and government circles that global finance and commerce is becoming more and more dependent on computer technology.
"The use of computer software can be a catalyst for Middle East economies, and Arab governments which commit themselves to the adoption of e-commerce, will see a significant increase in the IT sector of their national economies. But they will also have to adopt a more liberal approach to the Internet," said Ashok Sharma, director of the Business Software Alliance (BSA), who is in Cairo to attend a 5-day information technology exhibition, Gitex Egypt, which opens tomorrow at the Cairo International Conference Center.
E-commerce is acting as a catalyst for Arabic software producers. Sakhr, an Egyptian-Kuwaiti company, is currently developing a system for trading and shopping on the Internet including e-commerce tools in both Arabic and English, says Sakhr's Dalia Dawoud.
Arabic software producers are also working on portfolio, fund management and accounting systems as well as a variety of packages ranging from databases of judgments of the Egyptian Supreme Court, to bi-lingual dictionaries and Arabic encyclopedias.
According to Wahid Atallah, managing director of the Dubai World Trade Center which is organising the Gitex exhibition, IT companies are increasingly turning to the Egyptian market which is still relatively new compared to the more saturated Gulf market, the traditional trade hub for high-tech multinationals seeking access to Middle Eastern markets. "We decided to move Gitex out of Dubai for the first time, and into Egypt, because of the high potential of the market here," said Atallah. Gitex is also sponsored by the Egyptian Cabinet's Regional IT and Software Engineering Centre, a number of Egyptian software associations, and international companies including Sakhr, Microsoft, Compaq, Apple, Acer and CHS Aptec.
According to Atallah, the exhibition, the "third in scale worldwide," will bring together 150 companies displaying the full range of new IT products.
With IT becoming ever more present, governments face difficult issues such as their position in relation to the internet which in the case of Arab governments may require greater openness, the problem of how best to preserve intellectual property rights in the face of software pirating and how to deal with the year-2000 problem. There is also the question of how Arab governments and businesses will prepare for the adoption of e-commerce, which is bound to change the face of global finance, and whose transactions, according to a recent assessment by Microsoft chief Bill Gates, are predicted to rise to above $400 billion by the year 2001.
"The Arab market is still lagging behind in this respect, and it is a gap which has to be bridged as soon as e-commerce starts taking a growing share of global trade. Then, Arab nations will have to catch up with the evolution of the shopping culture worldwide," said Dalia Dawoud of Sakhr.
Existing communications infrastructures in the Middle East, which are currently unable to handle the massive increases in data traffic expected with the advent of e-commerce, will require substantial upgrading.
"One obstacle delaying the adoption of e-commerce in the Middle East is the lack of a pervasive infrastructure with a high band width and reliability. We must also create an awareness of the new business tools of e-commerce," said head of the UAE Bin Zayed group Sheikh Khaled Bin Zayed Bin Sultan Al Nahyan, who is part of a UAE delegation promoting a commercial initiative undertaken by his government which will put the city of Dubai on-line on an internet website. The project is comparable to the European 'Imagine' project adopted by the EU and a number of European cities and industries. Projects putting cities on-line will bring their services to an estimated 25 million internet users every day.
