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Egyptian Economic Performance (12/6/2007)
A. Minister of trade and industry's visit to Russia:
1- During his visit to Russia from 9-10 July 2006, the Minister of Trade and Industry participated in Russian seminar held in Petersburg. He also conducted several interviews with Russian officials to enhance the Egyptian Russian economic cooperation.
2- The minister discussed with the Russian Minister of Industry and Energy the procedures to establish a Russian industrial zone in new Borg El-Arab city. Furthermore, both sides agreed that the Egyptian Ministry of Trade and Industry will work together with the Russian industry union to promote the investments in this new zone.
3- Both sides explored the possibilities of establishing a joint fund to assist the Russian companies willing to invest in Egypt, as well as endorsing the cooperation between the Egyptian standards and quality authority and its Russian counterpart to reach an agreement concerning the acknowledgement, which will eventually facilitate the entrance of Egyptian exports to the Russian markets.
4- The Minister of Trade and Industry stated that establishing the Russian industrial zone is considered as a major turning point in the Egyptian Russian economic relations, which will lead to the restoration of the industrial relations between the two countries as well as benefiting from the Russian technological database in this field.
5- The minister also met the representatives of the Russian companies willing to invest in Egypt, where he highlighted the facilities provided by Egyptian government to the foreign companies. He added that all the Russian products manufactured in Egypt could benefit from the custom exemption stated in COMESA agreement and Arab Trade Agreement when being exported to African and Arab markets.
6- Nevertheless, the Minister of Trade and Industry held a negotiation session with the first deputy of the Russian Prime Minister, where they discussed the means to promote the commercial exchange between both countries and prolong the Russian governmental aid consecrated to the Russian companies investing in the Russian industrial zone in Borg El-Arab. The also agreed upon starting the negotiations to establish a free trade area between the two countries after the accession of Russia to WTO.
7- He also stressed the importance of activating the agreement related to augmenting the Egyptian exports to the Russian market, where Russia pledged that it would provide the Egyptian textile, furniture, house equipments, potatoes, olive oil and flowers a 50% customs exemption when entering the Russian market. They also reached an agreement to establish a new financial tool to facilitate the bilateral trade between the two countries instead of relying on European banks.
8- Both sides also tackled the possibilities of establishing joint projects and investments in the tourism sector, as it is expected that the number of the Russian tourists to Egypt will reach more than one million Russian tourists in the current year.
B. Bilateral Relations with Italy:
1- The Minister of Trade and Industry met a delegation from the joint Egyptian Italian parliamentary cooperation group presided by the head of the foreign affairs committee in the Italian parliament, where he referred to the trade balance between the two countries that reached a surplus of 636 million euros in 2006 in favor of Egypt, when the bilateral trade reached 3.73 billion euros in the same year. Thus, Italy became Egypt's first EU trade partner and the second trade partner worldwide.
2- Moreover, it is expected that the Egyptian Italian relations will be boosted in the coming phase, as both sides are discussing several topics, which are:
· Finalizing the negotiations concerning the green path through which the restrictions on the agricultural exports and imports between the two countries will be eliminated.
· Commencing the negotiations concerning establishing an Egyptian Italian university.
· Starting the negotiations concerning establishing an Italian port in East Tafreaa area as well as establishing as Italian industrial compound.
C. UAE invests $91 Billion in several projects in Egypt:
1- Four Emirati companies in cooperation with an American company working in the energy field announced that they are going to carry out several service and industrial projects in Egypt and UAE, with $91 Billion Emirati investments. These projects will provide work opportunities for the youth in both countries and open new market.
2- There are four projects that will be constructed in Egypt. The first project is establishing the Uptown Cairo project that costs $1.9 billion, which is a luxurious housing and commercial project. The second one is establishing ports in Sedi Abdel Rahman and El-Alamein, which will cost $1.7 billion and will include 3000 hotel rooms, a port for yachts, a hospital and all the health facilities. The third project is a housing compound in new Cairo city, which will cost one billion dollars. The fourth project is another housing commercial project in Cairo Alexandria route.
D. Indian TATA targets investment in Egypt
1- On June 6th, The Minister of Investment held a meeting with a delegation of the International Indian Tata to examine their willingness to get involved in the Egyptian market by establishing a number of projects for petrochemicals, telecommunications, human development and financial services. Tata representatives said they are interested in entering the Egyptian market, which has outstanding economic potentials, a centered location among African and European markets and several investment opportunities in different sectors.
2- It is worth mentioning that Tata is considered to be one of the largest Indian companies, operating in seven major sectors; steel, services, including hotel building; insurance; international trade; energy, chemicals, engineering industries including automotive industry, spare parts, telecommunication and IT and finally consumer good including drinks and watches. Total revenues of the group amounted to USD 22 billion in FY 2005/06.
3- On the other hand, the Minister of Investment offered a number of investment opportunities to the Indian side including joining public-private partnerships or new projects. He added that such projects may be established according to the system of private investment areas, which provide administrative facilities through the one stop shop. He asked them to consider establishing special economic zones projects in south west Suez Gulf as well as establishing other projects in Upper Egypt.
E. Development in The Energy sector
1- Procedures to implement 2 new projects for petrochemicals and refining at Suez with Kuwaiti, Bahraini and Egyptian investments of about USD 3 billion, are underway. The first project aims at producing petroleum products with a capacity of 100 thousand b/d over the first phase to be increased to 150 thousand b/d in the second phase with investments of USD 1.8 billion. The second project aims at the production of petroleum and petrochemicals products at a capacity of 130 thousand b/d and investments of USD 1.2 billion.
2- The Minister of Petroleum has signed 5 new petroleum agreements for the Egyptian General Petroleum Corporation (EGPC), in the areas of the Gulf of Suez, Eastern and Western Deserts with several nationalities; American, Canadian, British, Greek and Egyptian ones, with total exploration areas of about 9950 km² and spending commitments of about USD 96 million as well as drilling commitment of 27 wells and total signature bonuses of USD 8.5 million.
F. Developments in the Communications Sector
1- The Minister of Communications and Information Technology stressed that the ICT sector has contributed around 25 billion pounds to the GDP in the last 18 months and that the recent fiscal and monetary reforms in Egypt were reflected strongly in the growth of the communication sector, since users of cell phones grew by 41% to reach 23 million people.
2- He added that there are abundant opportunities for investment in the ICT sector stressing that internet users have grown as well as ADSL users that grew to 400 thousand user and there is a tendency to lower the monthly fees for ADSL to 50 pounds.
3- The yearly investments in the mobile service have grown to 7 billion pounds and the ICT sector is working with the government to develop sectors of concern to the Egyptian people especially education and healthcare. The ministry is also working with the publishers union to publish 65 thousand books on the internet as well as news websites in Arabic.
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