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Al-Ahram Weekly 25 Nov. - 1 Dec. 1999 Issue No. 457 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 25 Nov. - 1 Dec. 1999 Issue No. 457
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Profile Travel Living Sports People Time Out Chronicles Cartoons Letters Turning to Japan
By Niveen WahishA high-profile Japanese delegation was in Egypt this week to participate in the first meeting of the Egyptian-Japanese Business Council (EJBC). The Council, which was formed following President Mubarak's visit to Japan earlier this year, has replaced the now defunct Egyptian-Japanese Joint Committee which last met in 1982. The EJBC, it is hoped, will formulate the strategies and mechanisms necessary to further economic cooperation between the two countries by bringing representatives from both sides face to face with the aim of removing obstacles to trade and investment.
The level of Egyptian-Japanese economic cooperation has never matched up to the two countries' political ties -- having been confined, since the 1970's, to a donor-recipient relationship. After the US, Japan is Egypt's second largest development donor, providing $100 million of assistance annually. The trade balance between the two countries, though, is alarmingly asymmetric, with Japan exporting to Egypt more than ten times the volume of goods it imports. Any campaign to transform this relationship into a more equitable equation is likely, given the figures, to be an up hill task.
Although no deals have yet emerged from the Council's first meeting, it furnished both sides with the opportunity to learn more about the markets in the two countries. "Japanese investors tend to be conservative," said Yukihiro Sumi, general manager of the Cairo liaison office of Sumitomo Corporation and head of the Japanese Businessmen's Association in Cairo, "and will study a market thoroughly before they decide to enter it."
"To convince the Japanese to invest in Egypt," he continued, "they need to be convinced that a degree of economic development has already been achieved, and that the government is committed to continuing reforms."
To this end, Egyptian officials, lead by President Mubarak, Prime Minister Atef Ebeid and a large number of cabinet ministers, met with the Japanese delegation. Ebeid assured the EJBC meeting that the Egyptian government remained committed to encouraging the development of the private sector and to developing an environment conducive to the continued flow of investments. Ebeid stressed Egypt's macroeconomic stability, and stressed its membership of several free-trade groupings, including COMESA, the Arab Free Trade Area, and, hopefully, its soon to be realised partnership with the European Union.
Built with the help of the Japanese, Al-Firdan Bridge
Ebeid also invited the Japanese to cooperate with their Egyptian counterparts in modernising Egypt's industrial base and agreed with the head of the Japan External Trade Organisation to establish a new institution -- EJETRO -- to help promote Egyptian exports.
Takaya Suto, Japanese Ambassador to Egypt, pointed out that despite the fact that Egypt's investment potential had improved considerably in the past two years, Japanese businessmen remained concerned about a number of issues, chief among which were a lack of protection of intellectual property rights, inadequate feeder industries, the absence of quality control and excessive bureaucracy. Japanese companies, he continued, demand a predictable and, above all, transparent arena in which to do business.
Ebeid, and members of his cabinet, promised to do whatever they could to satisfy Japanese concerns. Should they manage to do so successfully, the dividends are likely to be large since, according to Sumi, the Japanese are becoming aware of the necessity to diversify their investments globally, and to dilute a concentration of investments in the US and South East Asia.
Increasing Japanese investment levels in Egypt was not the only focus of the Council's meeting. Currently Egyptian exports to Japan amount to only $80 million, half of which are petroleum products. To improve this position, Egyptian exporters should make a thorough study of the Japanese market, said Sado Umeda, chairman of the Japanese participants.
Egyptian exports to Japan are currently restricted to cotton, foodstuffs, tiles and petroleum products.
