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EU-Egypt pact signed

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Investors still remain timid of the high risk they would be assuming by pouring large investment into Egypt

Hatim Salah, Minister of Industry and Foreign Trade, right, signs one of the EU-Egypt task force agreements. (PHOTO BY MOHAMED OMAR)

Hatem Salah, Minister of Industry and Foreign Trade, right, signs one of the EU-Egypt task force agreements. (Photo by Mohamed Omar)

The EU Egypt Task Force Business and Tourism Summit kicked off Tuesday amid a strong presence from diplomats, European businesspeople, Egyptian ministers and the high-level executives of financial institutions from both sides. The objective of the summit is to provide a platform for future European investment in Egypt with focus on lending and the development of small and medium sized enterprises.

Ministers giving their opening remarks focused on comforting investors as to the safety of the investment climate in Egypt. “We assure you that Egypt respects all extant stable contracts, as long as they’re corruption-free,” Minister of Industry and Foreign Trade Hatem Saleh firmly declared in his speech. “Egypt is undergoing democratic transformation and, as opposed to the pre-revolution circumstances, we guarantee you that we operate in full transparency and we will make sure that all our obligations and contractual agreements are respected so long as they’re lawful, and preserve rights and justice” Saleh added. Osama Saleh, minister of investment, praised the long ties between the EU and Egypt, extolling the merits the “strategic partnership” between the EU, Egypt, and Middle East.

Demonstrating its commitment to finance and in order to further nurture Egyptian-European cooperation, the Director General for External Operations of the European Investment Bank Tamsyn Barton, announced the bank’s plan to double its investment in Egypt to an annual €1 billion. “We plan to step up our investment here, and we have a pipeline of projects in both the public and the private sectors as we believe both are equally important,” said Barton. She announced the signing of a €600 million infrastructure project, which will be funnelled to complete the construction of the new metro line. Other projects that the bank is interested in, pertain to community development project (infrastructure on the community level, water and traffic), renewable energy, microfinance and working with banks to support SMEs.

In a panel discussion, director of the Joint Managing Authority of ENPI CBC Med, Anna Catte, highlighted the importance of addressing common challenges and realising the potential of Mediterranean territories. She announced the approval of 65 projects in Egypt worth €114 million. Without going into the details of the projects, she expressed that they would go towards the promotion of good governance for territorial planning and development, mitigation and adaptation of strategies to climate change, and fostering cultural dialogue and sustainable tourism. “Thirty Egyptian organisations are part of 22 of 65 projects, with investments totalling €70 million.”

“I am strongly confident in the future of fruitful opportunities in Egypt. I strongly support the European commission in this effort, in particular in the field of financing SMEs, as big companies don’t need the promotion of chambers of commerce. With this new government and the new spirit, I am sure we can work collaboratively towards creating a good atmosphere for investment, which would benefit both Egypt and the EU,” the president of Association of European Chambers of Commerce and Industry, Alessandro Barberis, told Daily News Egypt commenting on the potential gains of the Egyptian European mutual cooperation.

In spite of the assurances given by keynote speakers, investors remain timid of the high risk they would be assuming by pouring large investment into Egypt in its current state. Given the lack of clarity and the thick bureaucracy they’re forced to endure, investors are waiting for the government to take more decisive actions in securing the interest of investors.

“The bureaucracy is the main problem facing Egypt. I operate a business that employs 300 people in Upper Egypt and I would like to expand that number to 600, but due to the air of uncertainty, I can’t take that step yet,” the managing director of the Egyptian Greek for Clay Bricks and Roofing Tiles, Petros Avgoustidis, told Daily News Egypt.

“Egypt has a golden opportunity but the government needs to start facilitating procedures for investors. If I can expand, my competitors in Greece would see the benefit of investing in Egypt and hence they too would invest here,” added Avgoustidis.

The majority of investors shared more or less the same concerns of high risk and the guarantees for respecting contracts. “The most important challenges we’re facing are for the government to maintain respect for contractual agreements, respect legal obligations and make us feel safe so we can relay that to our partners so we can further expand in Egypt,” said the managing director of the Spanish Union Fenosa Gas.

“The message that Egypt needs to send to the outside world is that it is capable of protecting foreign investment. I want to invest in this country because its obvious there are a lot of opportunities, but if I see that investors here are getting properties confiscated, why would I come? Egypt, just like Greece, is socially flexible; it has a long history and has been through many changes, but Egyptians still adapt. This is why I am very optimistic that Egypt will survive the current stumbling blocks,” the Greek Counsellor for Economic and Commercial Affairs in Egypt, Evangelos Dairetzis, told Daily New Egypt expressing his enthusiasm and optimism at the future potential of investment and development in Egypt.

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