Egypt goes for growth
A recent US conference painted a rosy picture of Egypt's potential in the ommunications and IT sectors, reports Ezzat Ibrahim from Washington
Not since the Industrial Revolution has the world witnessed a boom like that in the communications and information technology sectors. And this is not a boom that has affected economies alone, since it also stood behind many of the so-called Arab Spring revolutions in the Middle East.
Whilst millions chanted for freedom and justice in the streets of Cairo and Tunis, millions more were glued to their PCs, laptops, mobile phones and handhelds seeking to drive on the masses and topple governments. IT played a major role in this toppling process, and it seems it will now have an even greater one in the re-building phase, especially in Egypt.
The communications and information technology sectors captured the attention of the Egypt Forward business conference that took place in Washington DC recently with the participation of almost 400 US companies and 49 representatives of major Egyptian companies. Egypt as the investment destination of a new era was the main theme of the conference, where four main areas were discussed: communications and IT, energy, agriculture and transportation.
The United States is one of main countries investing in Egypt, accounting for 13 per cent of foreign direct investment inflows in 2009/2010 and a total amount of $11.6 billion as of September 2010. The main sectors covered are mining, transportation, computers and electronics and chemicals.
"Egypt has recently gone through historical developments. We all agree with US President Obama that Egypt will never be the same again, and we are here today to try to figure out the answer to the question of what will Egypt become," said Alaa Qinawi, first under-secretary at the Ministry of Trade and Industry at the conference.
"I assure you, without being overly optimistic, that Egypt's peaceful revolution has brightened the outlook for a new Egypt. We are pursuing a democratic path leading steadily towards true democracy, better governance and more transparency. Such developments will play a pivotal role in improving Egypt's economic growth potential and ability to attract foreign direct investment," he said.
According to official figures, in 2010 trade volumes between Egypt and the US reached $9 billion. The United States is currently Egypt's largest single trading partner and supplies almost 15 per cent of Egyptian imports.
Egypt's most important imports from the US in 2010 were transportation equipment, agricultural products and machinery. Egyptian exports to the United States, on the other hand, account for more than 8.5 per cent of total Egyptian exports. Major Egyptian exports to the United States in 2010 were mineral fuels, textiles and apparel, fertilisers and chemicals.
"Democracy will not come without a strong economy," was another message conveyed by Yasser El-Qadi, CEO of the Information Technology Development Agency ITIDA. "IT investment in Egypt is critical to ensuring that democracy takes root in the country, and to achieve democratic transformation the country needs to have a strong economy and good jobs."
IT multinationals currently employ some 150,000 people, and in an interview with Computerworld magazine El-Qadi sent a clear message that Egypt's transitional government had decided that the Internet would never again be switched off in the country, as had happened during the 25 January Revolution.
In a surprise announcement, Randeeb Sudan, chief of IT at the World Bank, said that "many countries all over the world come to the World Bank to copy the Egyptian success story on certain projects like EduEgypt and GrowIt."
El-Qadi was in the US almost a week before the Egypt Forward conference in order to hold talks with major IT firms, some of which are already investing in the Egyptian IT sector and others are potential investors.
The Egyptian IT message is loud and clear, he said: "come to invest in Egypt and enjoy the competitive advantages of the country." El-Qadi said the majority of the companies he had met had indicated that they were planning investments in the coming weeks and months to raise the bar of the Egyptian IT services economy.
American and Egyptian companies also reached agreements on $3.7 billion worth of investment projects. The chairman of Carbon Holdings, Bassel El-Baz, signed an agreement with the US Export and Import Bank on the second day of the conference, for example.
"Egypt will go for robust growth over the next 12 to 18 months," El-Baz said. US Transportation Secretary Ray Lahoud also said that the US stood ready to help the country in developing transportation infrastructure, including roads, airports and ports.
Lahoud said that investment in transportation infrastructure could create job opportunities for Egyptians, and Egypt needed to develop and repair roads, trains, and public buses. There were many US companies that could contribute to the modernisation process, he said.
"The US economic stimulus plan has allowed foreign companies to invest in the American transportation sector, providing Americans with more jobs. Egypt should follow a similar path to encourage growth," Lahoud said.