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Al-Ahram Weekly 6 - 12 July 2000 Issue No. 489 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 6 - 12 July 2000 Issue No. 489
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region Focus International Economy Opinion Culture Features Travel Living Sports Profile People Time Out Chronicles Cartoons Letters Oil twilight, gas dawn
THE increasing importance of gas holds positive prospects for Egypt, an oil expert said during a recent visit to Cairo.The potential shift within the lucrative vehicle and aircraft fuel markets from petroleum to natural gas means that countries like Egypt, with potential reserves of natural gas, will soon have an important role to play in the energy market said Gregory Gause, an associate professor of political Ssience at the University of Vermont. In the meantime, nevertheless,oil will continue to be the most widely used form of energy worldwide and the big oil-producing countries will continue to dominate, he added. Until the present politics rather than strict market considerations have had a major role in determining prices. Rather than an economic lever, oil has been often wielded as a strategic weapon.
Currently, Gause contends, the politics of oil is largely a two-player game. Saudi Arabia, the world's largest oil exporter and the US, the largest importer, have divided the board between them. A move away from petroleum to natural gas would undoubtedly change the relationship between power and energy dramatically. Natural gas reserves around the world have not yet been fully explored, said Gause. Once the shift occurs, the oligarchic power of the current oil regime will be undercut by this alternative resource. In the interim, Gause says, "the oil market will continue to exist in Gulf countries, particularly Saudi Arabia, which alone possesses one quarter of the world oil reserves."
Over the short term, the old rules will apply. Between them, the United States and Saudi Arabia, will decide the price of crude. According to Gause, at the moment, neither the US nor Saudi Arabia want oil prices to be "too low" or "too high." Indeed, over the past 25 years, Saudi oil policy has generally helped to prevent price spikes and tended to hold prices down with periodic large production increases. Yet, due to Saudi domestic economic concerns, the dynamics of the old game are about to change. The Saudi regime has finally realised that oil wealth is not an eternal fountain. Production planning is now being governed less by strategic geo-political considerations and more by economic need.
Saudi oil policy is primarily driven by the immediate revenue needs of a government struggling to maintain a welfare state designed in the 1970s, when money seemed limitless and the population was small. More revenue needs to be generated and devoted to developing the domestic market. Yet, any rise in the price of crude carries with it the risk of conflict with the United States. "The key to avoiding a crisis," according to Gause, "is to encourage Riyadh to restructure its economy and its welfare state in ways that will encourage the Saudi private sector, and (thus) decrease the fiscal burden on the state."
Osman leads
ISMAIL Osman, chairman of the Arab Contractors company was recently elected president of the German-Arab Chamber of Industry and Commerce (GACIC). He is the first Arab to head the chamber since its establishment in 1951, and the organisation's eighth president. Osman's predecessor, Rudi Stoecker, held the position for eight years. Joining Osman in the leadership of the association is Salem Mashour, chairman of the Egyptian Company for Consultancy and Trade (ECTRA) who was elected as the camber's vice-president.
The election of the board of directors of GACIC takes place every two years. The board is made up of seven Egyptian members and an equivalent number of German members, in addition to an executive director.
More power
MINISTER of Electricity and Energy Ali El-Sa'idi signed two contracts to upgrade power plants in Ismailia and Alexandria. The work will be conducted in collaboration with Honeywell International, an American provider of automation solutions and power generation equipment. In total, the two contracts funded by USAID are worth $26.1 million.
The current instrumentation and control systems of the Abu Sultan and Abu Qir power plants will be replaced with state-of-the-art technology. "Egypt has great potential to fully develop its power generation industry," said Giannantoni Ferrari, CEO of Honeywell International.
The Abu Qir plant, which provides more than 75 per cent of Alexandria Electricity capacity, will receive $13.8 million to upgrade five generating units. The Abu Sultan power plant, which provides more than 50 per cent of Canal Electricity capacity, will receive $12.3 million to upgrade four generating units. Together, the two plants provide over 10 per cent of Egypt's electricity production.
24 hr banking
CITIBANK has inaugurated its first Sales and Service Centre in Egypt. Robert Lipp, chairman and CEO of Global Consumer Bank at Citigroup, was in Cairo to mark the event. He noted that this is the first sales and service centre in Africa. "We have chosen Egypt to host it because of our confidence in its economy," said Lipp.
The branch, located in Zamalek, will introduce a wide array of 24-hour services. Through the Citicard Banking Centre, clients will have 24-hour access to personal financial information. Furthermore, using a telephone, clients will be able to access their personal accounts via Citiphone Banking. At the centre, there will be a 24-hour Electronic Depository Machine. In the bank itself, a consumer finance facility will process loan applications for major personal purchases.
"For the next five years, we intend to expand our activities here by introducing new personal loan facilities, credit cards as well as phone banking facilities," said Citibank Egypt's consumer business director C P Janardhan.
To consolidate its presence in the Egyptian market, Citibank is actively building concrete links with Egyptian private sector banks.
Alexandria to Marseilles
THE CHAIRMAN of the Marseilles Chamber of Commerce and Industry, Claude Cardella, visited Egypt last week. He led a business delegation representing four French firms with interests in chemicals, plastics and water treatment. The visit was designed to enhance bilateral trade relations.
"France gives special attention to the Middle East and Mediterranean. Marseilles, which is the most important port in France, as well as the Mediterranean, has a long tradition of trade relations with this region, and with Egypt especially," said Cardella. Marseilles Port officials are "convinced that enhanced co-operation between the ports of Marseilles and Alexandria is indispensable for the advancement of bilateral trade," he added. Marseilles receives 34 per cent of Egyptian exports to France, comprised of petroleum products, textiles and edible oils.
The Marseilles Chamber of Commerce and Industry chairman invited Egypt to become a more active participant in the Industrial Forum for Mediterranean Countries. "Under this programme, industrial companies from the Mediterranean region gather at an annual forum held in Marseilles," he said, adding that he hoped to see a stronger Egyptian presence at the 11th forum, which will be held next October.
Last year, four Egyptian companies specialising in petrochemicals, pharmaceuticals, fertilisers and cement production, attended the forum. Cardella said that he had met with the Federation of Egyptian Chambers of Commerce to discuss "possible means of collaboration." He explained, "We discussed the possibility of concluding agreements for training Alexandria port-workers on the latest packaging and shipping techniques. We will also work together on establishing an Internet site where all Egyptian hotels will be listed for on-line reservations."
