U.S. businesses are helping to lift the Egyptian economy

Newspaper Title: The Hill

Newspaper Number:

Friday - 27 February 2015

U.S. businesses are helping to lift the Egyptian economy

The decades-long strategic partnership between the U.S. and Egypt has remained strong, partially because of vibrant business to business relationships. The central principle of our relationship remains truer than it has ever been: a strong and prosperous Egypt advances both regional and global stability. An Egypt firmly embedded within the international community serves as a powerful force for good in the world. This strengthens opportunities not just for Egyptians but for people throughout the Middle East and North Africa.

Since Egyptian President Abdel Fattah El-Sisi was elected in June 2014, the country has embarked on a comprehensive plan to stimulate growth, create jobs and invest in physical and intellectual infrastructure essential to unlocking Egypt’s talent. The president’s ambitious reform agenda seeks to reinvigorate Egypt’s economy and place the country firmly on the map as a preferred destination for global investment.

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Today, the government’s efforts have helped prompt an economic turnaround across Egypt, the most populous Arab nation with 90 million people. In the first quarter of the current fiscal year, the Egyptian economy has grown by almost 7 percent and the government expects the growth rate for this year to be north of 4 percent, above its initial target. Much of this is credited to the economic reforms taken by the government; especially energy subsidies reform, through a plan that includes price movements, redesigning Egypt’s energy mix, controlling and targeting subsidized quantities, and improving distribution systems to help control smuggling.

The country’s emphasis on improving its energy mix has drawn a lot of attention from U.S. companies that are interested in opportunities opening up in oil and gas exploration and in expansion of renewable energy sources. The infrastructure improvements that are currently underway – especially the improvements to the Suez Canal – will help ensure these new opportunities move swiftly and efficiently.

According to the U.S. Department of Commerce, foreign direct investment in Egypt from U.S. businesses stood at $20.3 billion as of June 2014, representing 31.6 percent of U.S. direct investment in Africa and positioning the U.S. as the second largest foreign direct investor in Egypt after the United Kingdom. Investments from U.S. firms in the oil and gas and financial services sectors lead other industries, but interest from consumer goods and technology firms is on the rise as well.

Last month, Michigan-headquartered The Kellogg Company, the world's leading cereal producer, acquired a majority stake in the largest packaged biscuits company in Egypt, Cairo-based Bisco Misr, for USD 123.3 million. Kellogg’s acquisition will enable the food company to expand its global snacks business in key regional markets.

Earlier this month, New York-headquartered IBM opened one of its most innovative sales centers globally in Egypt, which is part of three-year agreement with the Egyptian government to create more than 800 Egyptian jobs and develop business opportunities across 70 countries in the region.

These announcements, along with the positive IMF Article IV consultation report about Egypt, arrive as the country prepares for the Egypt Economic Development Conference (EEDC), which will be hosted by President El-Sisi on March 13-15 in Sharm el-Sheikh.

The EEDC will showcase future reforms designed to restore fiscal stability, with the overarching aim of improving the welfare of the Egyptian people. Attendees from the U.S. and around the world will also learn about specific investment opportunities and ministry officials will announce more reforms to improve the environment for foreign investors and will strengthen the Egyptian economy in a mutually beneficial cycle that improves job opportunities for Egyptians and suppresses the chance for extremism to gain a footing.

The EEDC is a key part of the government’s economic plan. It will be the turning point for stabilizing the economy after four years of high unemployment rates, and allow the country to build on progress already made toward creating a vital, strong business and industry center for the whole region. 

The conference offers a unique opportunity for U.S. businesses to invest in new projects, renewing, through their financial commitments, an enduring alliance which has been vital to regional stability for close to four decades. 

Tawfik has been the Egyptian ambassador to the U.S. since September 2012. Previously, he served at ambassadorial postings in Lebanon and Australia. He also worked at the Egyptian Permanent Mission to the United Nations and other International Organizations in Geneva (1997-2002), where he took part in numerous negotiations on nuclear disarmament, labor and human rights.