So near, and yet so far
Sherine Nasr looks into the great potentials, yet meagre achievements, of Egyptian-Sudanese trade relations
Dictated by geographical kinship and economic interests, the age-old relations between Egypt and Sudan have always been intertwined. Strong as they are, these relations, however, have been overshadowed by the political situation at hand, with mostly friendly and cooperative relations becoming extremely tense at times.
Aware of this fact, businessmen in both countries have invariably had concerns about expanding their work in the sister country and prospects for economic integration have been kept at bay.
"The economic relations between the two countries should remain as smooth and spontaneous as they can be regardless of political ups and downs," said Ahmed Abdel-Halim, Sudanese ambassador to Egypt. At a gathering hosted last week by the Egyptian Businessmen's Association to discuss the obstacles facing economic cooperation between Egypt and Sudan, Abdel- Halim said the governments of both countries should remove all obstacles impeding the fulfilment of complete economic unity.
There are a handful of these obstacles that need time, money and sincere determination on both sides before they are eliminated. The first is perhaps the absolute lack of a land transport network to connect the southern Egyptian borders with that of northern Sudan. "Both boundaries can be connected through a 270km road that we have failed to pave for the past thousand years," said Ahmed Samir, vice- president of the International Union of Roads.
The only direct over-land connection between the two countries is perhaps the age-old camel-ridden "Arba'een Road", which extends from Kurdofan in the north of Sudan through Toshki in the south of Egypt and up to the low- income district of Imbaba in Cairo.
As a result, commodity transport between the two countries has been a time and money-consuming process and their trade volume remains meaningless in view of the poorly exploited potentials. "As a matter of fact, it is easier to export to Europe than to next-door Sudan," said Khaled Abu Ismail, head of the General Federation of Chambers of Commerce. "My oranges, for example, are transported to European markets in a week's time at a cost of $300 a container, while it costs $1,000 to transport a container to Sudan in one month's time," he said. Due to the lack of a direct connection, commodities have to travel to a neighbouring country first before they eventually land in Sudan.
Not only is there no land transport connection, but also, the facilities at Port Sudan, the main Sudanese port on the Red Sea, are so modest that it is almost impossible for trade to be exchanged smoothly between the two countries.
"The design for the long-awaited road connecting the two countries has been completed and approved and the Egyptian contracting companies are ready to work on it," Samir said. "What is lacking is the finance." He said the estimated cost of completing the road was $200 million and suggested that the financing be provided through the various Arab development funds previously used to pay for similar infrastructure projects in a number of Arab countries.
Another unintelligible obstacle is the lack of direct transactions between the banks in both countries. "This has been a major obstruction to our business in Sudan," said Amr El-Sawwaf from El- Sewedi Group, who said that transactions between the two countries have to be carried out through a mediator bank in Lebanon or Cyprus.
But despite the many obstacles, there have been numerous business success stories. The unique potentials Sudan possesses have encouraged many Egyptian businesses to permanently set up shop in the country. El-Sewedi Group, for example, has established a factory for manufacturing electric cables in Sudan.
"I believe it becomes easier for investors to do business in Sudan once they know the rules of the game," El- Sawwaf said. There are many advantages, he said, including wide investment opportunities, spacious land at reasonable prices, cheap labour and possibilities of export to countries in the west, middle and south of Africa. "That's why we decided to expand our business and build another factory," he said.
Additionally, studies have shown Sudan to be a potential bread basket, not only for Africa, but for the whole world. "Sudan is characterised by its spacious fertile lands and a wealth of animal products that has been used in a number of meat processing industries," said Ahmed Guweili, secretary-general of the Council for Arab Economic Unity.
Sudanese meat, free from mad cow disease, will soon be exported to Egypt as a safer alternative to meat imported from some of the disease-stricken markets in Europe, Guweili said.
Meanwhile, serious steps are being taken by both the Egyptian Foreign Ministry -- through the African Countries Support Fund -- and the Arab League -- through the Support Fund for the Development of the South of Sudan -- to promote stronger economic ties with Sudan.
"The south of Sudan needs a complete overhaul," Abdel-Halim said. "This includes the building of roads, airports, educational and health facilities, as well as the development of agricultural and industrial infrastructure." He said that projects for such plans have been studied in detail and will soon be approved by the Fund.
"This is a sure way to preserve the unity of Sudan," Abdel-Halim said. "It will also create better prospects to establish strong and permanent trade ties with Egypt."