A.      UNCTAD report on FDI in Egypt :   1.      According to the latest report on world investment for 2006 issued by UNCTAD on October 16th , Egypt was ranked the second after South Africa in terms of attraction of  foreign direct investment (FDI) directed to Africa, thus indicating an improvement in Egypt’s position as it held the  fifth rank last year. 2.      It is worth mentioning that FDI to Egypt has witnessed a significant increase of 160% during the period 2004-2005  to reach 5.4 bn USD in 2005. This was highlighted by the report that praised the policies undertaken by the government to attract FDI and upgrade the industrial sector so as to increase its competitiveness on the international level. 3.      On the other hand, the strong performance of FDI was reflected on other investment indicators mentioned in the report namely the FDI performance indicator which measures the country’s actual share of FDI as a percentage of its share of the world GNP , according to which , Egypt managed to be ranked 66 in 2005 versus 126 and 98 in the years 2003 and 2004 respectively. 4.       On a similar note, FDI in Egypt is predicted to increase in the current fiscal year 2006/2007 to range between 7,5 and 8 bn USD versus 6.1 bn USD in the fiscal year 2005/2006. This is attributed to the improvement in the performance during the first half of the current fiscal year to reach 2.8 bn USD. Moreover, in highlight of the projects achieved in 2006 mainly, Sidi Abdel Rahman project, the third mobile telephone operator and the transaction of Bank of Alexandria, Egypt is expected to gain the first ranking in Africa. 5.      It is worth mentioning that the FDI structure has changed in favor of non-petroleum sectors to reach 55% of total FDI versus 15% for acquiring bids and 30% for petroleum investments.   B.     The Selling of Bank of Alexandria for 1.6 bn USD:   1.    October 17th witnessed the selling of the first Egyptian public bank, which is Bank of Alexandria, in an international bid won by the Italian bank of San Paolo IMI which managed to acquire 80% of the bank’s capital as a strategic investor for an amount of 1.6 bn USD. 2.    Meanwhile, the governor of the Central Bank assured that the transaction reveals the confidence of the international business circles in the seriousness of the efforts exerted by the government to improve the investment climate in Egypt. On the other hand, the minister of finance clarified that the proceeds of the transaction will be directed to the public debt service in addition to expansion of the social  security network and restructuring of a number of banks. 3.    6 financial institutions participated in the bid, namely: ·         Consortium of Arab Bank and Arabic National Bank ·         Consortium of Mashreq Bank, Dubai Investment Group and CIB ·         BNP Paribas ·         San Paolo IMI Italian Bank ·         EFG Eurobank      The offer by the Italian bank superceded the other offers.  4.  The transaction of selling Bank of Alexandria is to be considered within the efforts aiming at        reforming and developing the banking sector. C.       Developments in the Energy Sector:     1.      On October 17th, the minister of petroleum headed a delegation visiting China in order to sign a preliminary agreement on the establishment of an Egyptian-Chinese joint venture for manufacturing drilling rigs for oil and gas operations in cooperation with HH Chinese company, whereas the final agreement will be signed next November. This joint venture aims at providing the needs of the local market as well as exporting to neighboring countries especially in Africa. 2.      On the other hand, the talks will include the signing of a on the manufacturing of pipes and drilling equipment with SINBOC Chinese company as well as signing another memorandum of understanding to establish a joint venture with CNOOC which is considered to be one of the largest Chinese companies in manufacturing equipment for offshore and onshore oil and gas operations exploration.   D.     Cooperation with Italy :   1.      Within the framework of the agreement signed in February 2001 to swap part of the Egyptian debt to Italy, the minister of international cooperation agreed with the Italian side to implement the second phase of the agreement amounting to 101.6 million USD during the period from July 2006 until July 2011 and to be ratified by  the Italian parliament in January 2007. 2.      It is worth mentioning that Italy is considered to be the Egyptian major trade partner in the European union with a trade balance surplus in favor of Egypt. Meanwhile, the bilateral relations between the two countries has several dimenensions as a number of agreements were signed aiming at providing grants and facilitated loans as well as trade facilities. 3.      On the other hand, preparations are undertaken to sign a framework agreement for the development cooperation between the two countries in the near future aiming at organizing bilateral cooperation in addition to tax and customs exemptions for the Italian experts working in the Italian projects in Egypt as well as their work permits and residence visas.