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Al-Ahram Weekly 18 - 24 November 1999 Issue No. 456 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 18 - 24 November 1999 Issue No. 456
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Special Profile Travel Living Sports People Time Out Chronicles Cartoons Letters Ill-prepared to reap results
By Amer Sultan
Egypt sent its largest trade delegation ever to the UK last week as over 70 businessmen representing 142 companies networked with their British counterparts.
The logo of the campaign
Connect UK: Mission of 100 -- a six-day visit sponsored by the Egyptian Ministry of Economy and External Trade -- came as part of a concerted drive by both the UK and Egypt to open up new markets, establish joint ventures and facilitate technology transfer, the aim being to reinforce trade and investment in the financial and industrial sectors.
Recent assessments by the British Department of Trade and Industry (DTI) have highlighted the potential of bilateral trade with last year's trade figures revealing a growth in British exports to Egypt of 3.6 per cent. In the same period, Egyptian exports to the UK fell by 2.5 per cent to 159 pounds sterling.
Egypt ranks sixth among Middle Eastern and North African countries in terms of the volume of British trade, preceded by the oil-exporting Gulf states (Saudi Arabia and the UAE) and by Turkey, Morocco and Israel -- all of which have partnership agreements with Britain and enjoy preferential access into UK markets.
Indicators suggest, however, that the Egyptian market may soon out-perform both Turkey and Israel. Certainly Egypt's banking and financial services sectors appear increasingly attractive to British investors. Last September Merrill Lynch raised its rating of the two sectors from "neutral" to "over-weight". At the same time Israel's banking and financial sectors were demoted to neutral, while Merril Lynch expressed reservations over the "stability" of the Turkish economy.
Britain's commercial presence in Egypt is already huge. By the end of 1998, investments had reached three billion pounds sterling, surpassing the United Sates and making the UK the largest non-Arab investor in the country. According to Nick Raynesford, British Minister of Planning and Construction, British investments in Egypt -- whether British owned or joint ventures -- are distributed over 193 projects and range from the petroleum and chemical industries, food, tourism, hotels and engineering sectors to banking and financial services in the free zone areas.
The DTI has identified Egypt as among the top ten markets to be targeted by British companies, a rating achieved largely because of its strong foreign currency reserves and political stability, according to Tony Emes, counsellor for trade and investment affairs for Egypt. On-going economic reforms, growing private sector activity and a rising demand for foreign products -- particularly intermediate products and those needed for infrastructure development -- also contribute to the increasing attractiveness of the Egyptian market for British businesses.
Clockwise:Boutors Ghali and Peter Hain, British foreign minister for the Middle East and North Africa, Nigel Hain, Tony Emes
photos : Farouq Bondoq
Economy Minister Youssef Boutros Ghali praised the attitude of British businessmen, who began their negotiations with Egyptian businesses from a base of solid research, having identified the technology and commodities needed by Egyptian industries to develop exports.
Though British officials insist the UK market is open to competition and to Egyptian products, few local businessmen appear to have done the necessary groundwork. "Most Egyptian exporters who want to sell in Britain do not have enough knowledge of the UK market," says Nigel Smith, head of the DTI's Egypt campaign. The British market is complicated by EU regulations determining the criteria for export entry.
"While we do not expect to conclude any deals, or reach export agreements, Egyptian businessmen here should be forming a network of relations upon which they can build later," Ghali insisted. "And if they do not come away from this mission with an in-depth knowledge of the UK economy, then the mission will have failed."
The economy minister's clear-sightedness as to the aims of the mission, however, did not appear to be shared by many of the delegates, whose performance has been compared unfavourably with their British counterparts in the 1998 Connect Egypt: Mission 100 delegation. Though 90 per cent of last year's British delegates were visiting Egypt for the first time, contracts worth five million sterling were completed during the mission, and a further 33 million sterling's worth of business was concluded as a direct result of the trip, according to figures released by the DTI.
The success of the British mission is widely attributed to delegates doing the necessary homework, aided and abetted by the commercial section of the British Embassy in Cairo, and by consular officials in Alexandria, who have built up an impressive network of contacts within the local business communities, says Douglas Barnes, deputy head of the DTI's Egypt campaign. Laying the foundations for success has been a long-term project -- among the experts sent to Egypt by the British in the past decade is Emes himself, who spent seven years following the progress of privatisation programmes.
The performance of the Egyptian delegation belied a lack of organisation and focus. Workshops and seminars were poorly attended, and often became little more than occasions for small-scale local manufacturers to display their products.
Merrill Lynch's valuation of emerging markets"Big businessmen," one delegation member told Al-Ahram Weekly, "already know the ropes and have partners in Britain. They do not need to be a part of missions such as this."
Confusion reared its head early in the proceedings. During the opening of the Products and Investment Opportunities in Egypt section on 8 November, Ghali had apparently not been told by the Egyptian organisers that a junior minister from the DTI was also planning to give a speech, and so had to delay his own by an hour.
The sheer size of the Egyptian delegation also led to organisational hiccups, though, according to one British official, "it's a good step anyway that such a gathering should be in Britain".
Egyptian business sources in London, though, remained sceptical of the Egyptian mission which they considered "a token gesture by Egyptian businessmen who want to tell the government we support you in the desire to open up markets. But actually these (businessmen) are not qualified for such an undertaking".
If the primary aim of such missions -- from an Egyptian perspective -- is to redress trade deficits and promote Egyptian exports in foreign markets, then this particular series of missions has helped the British business far more than Egypt, according to Ahmed Farahat, secretary-general of the Arab-British Chamber of Commerce. "Egyptian businessmen spent time visiting British factories and looking at British products. Actually, this mission was organised by the British government, and not by Egypt, as was reported. It was the British Embassy in Cairo that organised it, with the aim of serving British businesses."
"Not one single Egyptian body," Farahat complains, "organised a meeting to prepare for this mission."
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