22 - 28 November 2001
Issue No.561
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Al-Ahram Weekly Online 22 - 28 November 2001 Issue No.561 |
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The British are coming
Britain is continuing to show considerable interest in doing business in Egypt, in spite of the fallout of 11 September. The UK's ambassador to Cairo told Gamal Essam El-Din just why that is
On 10 October, British Prime Minister Tony Blair came to Egypt to muster support for the United States' campaign against terrorism. The visit, however, was also aimed at promoting Egyptian-British economic relations. In the aftermath of 11 September's terrorist assault on America, people throughout the Middle East expressed concern that foreign direct investment (FDI) in the region would dramatically decrease.
But since that day more than two months ago, British interest in doing business in Egypt has continued as strong as ever. Two large British trade delegations visited Egypt, while the Lord Mayor of the City of London, Sir David Howard, met with President Hosni Mubarak on 14 October. Following the meeting, Howard said, "My visit is a signal to terrorists that Britain will remain committed to investing in Egypt."
British interest in the country is clearly reflected in a report issued last week by the General Authority for Investment and Free Zones (GAFI). The report said that since mid-2000 Britain has overtaken the US as the largest non-Arab investor in Egypt. Its total investment outside of the oil-gas sector is currently $4.08 billion. Over the last five years, investment by British oil-gas majors totals approximately $3.2 billion. GAFI's report says that 217 British companies have investments in Egypt worth approximately $4 billion.
According to GAFI, the first half of 2001 witnessed the balance of trade between the two countries tip in favour of Egypt. During that period, Egypt's exports to Britain were worth more than 137.7 million sterling pounds while Britain's exports to Egypt totaled 104.9 million sterling pounds.
Discussing the remarkably vigorous economic relations between Egypt and Britain in an exclusive interview with Al-Ahram Weekly, UK Ambassador Robert John Sawers said, "Egypt is an important market and there are great opportunities here for foreign investors." He continued, "There are a number of large British companies which have been here for many years. Companies like Vodafone, Unilever, Cadbury, GlaxoSmithkline, British Gas, British Petroleum, Shell, Blue Circle, Barclays Bank and HSBC [Hong Kong Shanghai Banking Corporation]. There is a whole host of companies which have invested here and achieved success," said Sawers, who took up his post in September.
Sawers attributed British companies' interest in Egypt to the size of its market. "This market is 67 million people and this is quite attractive to do business in. Not to mention that the Egyptian economy is growing and policies are opening up. Another reason is that British companies are now highly competitive, while the British economy is one of the strongest at the moment. Certainly, it is the strongest of the G-7 economies. So, it is natural that British companies show great interest in Egypt."
Sawers said that the negative impact of 11 September's terrorist attacks in America was not confined to Egypt. "There has been a negative impact on the world economy in general. More specifically, there has been a general concern about areas outside of Europe and North America... such as the Middle East and Asia. But there is no particular concern about Egypt. It is not like [the situation following] Luxor, because that incident, which happened four years ago, was Egypt-specific. The present situation is not Egypt-specific. There is a general concern about the world economy and about investing in foreign markets. Of course, there has been an impact on Egypt, especially in the tourism sector. But once we get over the Afghanistan situation, I think this impact will vanish quite quickly," said Sawers.
However, many people in Egypt are concerned that some British newspapers have singled out Egypt for criticism in the aftermath of 11 September. Some publications have characterised Egypt as a breeding ground for Islamist terrorism, which begs the question of whether that picture will scare British investors away from Egypt.
Sawers responded that British businessmen do not depend solely on British newspapers in making their investment decisions. "We all know that Egypt is having problems with domestic terrorism. We all know that some of [Osama] Bin Laden's lieutenants are Egyptians. But we all know that the efforts of the authorities here to tackle terrorism have been successful and the support for the Egyptian government has been strong. I find myself just as safe from terrorism on the streets of Cairo as I do on the streets of London. The threat of terrorism is everywhere but there is no specific extra threat to doing business in Egypt," Sawers said.
Drawing attention to the Lord Mayor of the City of London's recent visit to Egypt, Sawers said that Howard's trip highlighted two areas in which there is considerable scope for business cooperation between the two countries. The first is in developing the mortgage finance market in Egypt. "This is a very important way to develop domestic and private capital. When you invest in homes, you invest in society. We have expertise in this area and we have a highly developed mortgage sector," Sawers said. The other area concerns public-private partnerships. "This is the area where the private sector is involved in delivering public services and developing public projects more efficiently. We also have expertise on that to offer to Egypt," Sawers said.
On 15 October, Prime Minister Atef Ebeid took observers by surprise when he announced that Sainsbury's is exploring doing business with Egypt once again. Sawers said that the supermarket chain is currently interested in buying Egyptian agricultural and horticultural products. "Unfortunately, Sainsbury's experience in Egypt was not very successful. It lost around 100 million sterling pounds. This was not due to problems with the domestic market. Sainsbury's is now just interested in buying products to send to its supermarkets abroad."
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