Hungry for business
Reversing years of slow business and zero joint investments, Egypt and Hungary are re-inventing their economic relations
When it comes to boosting Egypt's economic relations with Eastern Europe, Hungary stands out as the best candidate, Sherine Nasr reports. It is the largest electronics producer and exporter in Central and Eastern Europe, the fifth largest medicine producer in Europe and the gateway to a market of at least 500 million consumers in the EU.
The trade balance between Egypt and Hungary stood at $275.5 million in 2008, tipping sharply in favour of Hungary, with Egyptian exports to Hungary estimated at a meagre $12.5 million versus $263 million of Hungarian exports to Egypt, mostly machinery, plastics and chemical products.
However, after two decades of low-profile business and trade, both countries seem to be standing on the threshold of a new era of economic cooperation. The past few weeks witnessed serious moves on the part of high-ranking officials in both countries. As a result, new opportunities in various sectors are rapidly forming, and the business community in both countries is taking the lead.
"Hungary is located in the centre of Europe, thus, it is a major gate to Egypt into the EU market," said Peter Kveck, Hungarian ambassador to Egypt during a press conference that was held last week to showcase investment opportunities in Hungary. "In the meantime, Egypt is regarded as the gateway to Africa. The relationship between both counties is historic and great potentials of cooperation on various fronts lie ahead."
According to Gyorgy Retfalvi, CEO of the Hungarian Investment and Trade Development Agency (ITD), it is hard to imagine big investments without having strong trade relations first.
"The business community in both countries are still lacking information about potential opportunities and there is a lot we can do in this respect," said Retfalvi who added that ITD is the right gate to provide Egyptian businessmen with a one-stop shop service, tailored information packages, business matchmaking, available tenders in Hungary in addition to a wide range of facilities to small and medium-size enterprises (SMEs).
On the Egyptian front, an Egyptian-Hungarian Business Council has been formed under the umbrella of the Egyptian Businessmen's Association (EBA), in collaboration with the Ministry of Trade and Industry.
"A strategy and a work plan is now being laid out to reinforce trade relations between the two countries," said Mohamed Youssef of EBA. "EBA can play a very active role in promoting business and investment opportunities in Egypt to Hungar," he added
On the official side, Minister of Trade and Industry Rachid Mohamed Rachid held extensive talks with Hungary's Prime Minister Gordon Bajnai during an official visit to Budapest early this month. The aim was to discuss means to boost trade, and to review Egypt's role in launching the initiative of the Union for the Mediterranean.
"Cairo is interested in consolidating its relations with the European Union members and establishing joint ventures with its European partners," Rachid told reporters after his talks with Bajnai.
During the visit, the Export Development Bank of Egypt agreed with its Hungarian counterpart to launch joint studies to fund a number of manufacturing, services and trade projects in both countries.
The two sides have also agreed to study the possibility of establishing an Egyptian trade centre in Hungary to act as a permanent warehouse and marketplace for Egyptian products. Cooperation will also include the production of a vaccine for bird flu and hygienic syringes, in addition to boosting joint projects in the field of river transport by supplying Egypt with Hungarian-made cargo boats and other equipments used in river ports.
Egypt has not so far hosted any direct investments from Hungary, but things look set for change. The activities of the past few weeks have sparked interest from Hungarian companies to study investment opportunities in Egypt.
"Hungarian companies are becoming more interested in the Egyptian market and they fully realise that Egypt is the right gate into African markets," said Retfalvi, who underlined that at least 10 Hungarian companies in the sectors of energy, logistics, pharmaceuticals and agricultural equipments are now looking for joint ventures in Egypt.