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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 Better and better
By Mona El Fiqi
David Reader, commercial counsellor at the British Embassy, is in buoyant mood. "Trade relations," he announced, "are getting better". Not just buoyant but busy too, largely because, as he is keen to point out, "the volume of British investments in Egypt is $3 billion -- making the UK the second largest investor in Egypt. But if British oil and gas investments are included, then it is the foremost investor in Egypt. British Gas (BG) alone has invested $4 billion."
David Reader
Egypt's economic reform programme, implemented in the early nineties, opened up the Egyptian market to foreign investors and British companies were among the first to take a bite at the cherry, investing in the pharmaceuticals, cosmetics, tourism and insurance sectors.
Nor have British investors shied away from even bigger projects. According to Reader "there are some British investments in the Toshka project and industrial joint ventures in addition to other joint ventures which are currently under negotiation."
Given the volume of investments it may seem surprising that British businessmen continue to complain about obstacles impeding their entry into the local market. "Bureaucracy, labour laws, customs tariffs and the sudden issuance of governmental decrees aimed at protecting the local industry," are, Reader says, top of the complaints list.
The recent government decree to increase tariffs on imported sugar from five to 20 per cent, on the grounds that this is a necessary anti-dumping measure aimed at warding off the influx of cheap imported sugar, is just one instance of what Reader thinks is misguided policy. The problem, he says, is that although the government has raised tariffs on imported sugar it is still being brought into the country "because Egypt does not produce the high quality sugar needed in certain industries, such as pharmaceuticals and the soft drink industry".
Britain's commercial counsellor, though, anticipates that "the new cabinet will lead a more sophisticated and reasonable approach" with more gradualist policies.
Carping aside, the British have been particularly effective in encouraging investment in Egypt. In an attempt to open channels between the private sectors of both countries, the Egyptian British Business Council, comprised of leading business figures on both sides, and under the auspices of the prime ministers of both countries, was established last November during British Prime Minister Tony Blair's visit to Cairo. The council is scheduled to meet twice a year to discuss infrastructure, agriculture, industrial and capital market issues.
The British government has also launched a three year campaign called "Connect Egypt" whose aim, Reader said, "is to redress the trade balance between the two countries and to change perceptions [of the Egyptian economy] through publications, web sites and business clubs, informing British investors that the Egyptian economy has changed and encouraging them to come to see what is happening by themselves." In addition, the campaign "should help Egyptian investors get into the British market."
Egyptian agricultural products, for instance, already have a competitive advantage in the UK market, with the UK importing almost 50 per cent of the Egyptian potato crop.
The campaign bringing British businessmen to Egypt last year, organised by the British government under the name Mission 100, was the largest British trade mission ever sent to the Middle East or Africa. And, it obviously has paid dividends.
"Since the beginning of the campaign last November," says Reader, "400 British companies have come to Egypt to sell products, look for investment opportunities or participate in joint ventures."
British investors are also "definitely interested in buying Egyptian public sector companies which are currently being privatised and coming in as anchor investors and not through minority shares" said Reader, citing the case of Blue Circle, a British company which is looking into the sale of the Alexandria Cement Company.
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