GAFI chief suggests collective resolution of disputes between businesses and the government

Waleed Khalil Rasromani
5 Min Read

CAIRO: General Authority for Investment and Free Zones (GAFI) Chairman Ziad Bahaa El-Din suggests closer ties between the authority and business associations in resolving private sector disputes with the government.

It allows us to move from the state of mind of dealing with individual issues and individual problems towards dealing with collective problems, says Bahaa El-Din in a meeting with business association executives.

GAFI manages the resolution of business disputes with government bodies by preparing cases lodged by the private sector and presenting the cases to a committee of five ministers that meets approximately once a month.

Usually we are able to submit to them anywhere between 40 and 50 cases per month, but it takes a lot of effort from us to prepare the file, says Bahaa El-Din.

While the disputes are typically administrative in nature, they sometimes vary considerably in scale.

One of the items was a dispute by an investor over the customs fees for two motorcycles, says Bahaa El-Din. The next item on the agenda involved 98 factories in one specific area of Egypt that had one common problem and that was resolved in the same session.

Both cases took roughly the same amount of time to prepare and resolve.

Bahaa El-Din therefore describes business associations as the authority s natural partners in resolving disputes in an efficient and timely manner.

If every time we go to this committee we could bring 30 cases [and] each one of them involves 50 factories or 100 establishments or whole area or 100 businessmen, it would certainly be more effective than to go every time and submit the specific case of a specific business, says Bahaa El-Din.

DaimlerChrysler Egypt CEO and Managing Director George Oswald believes that a more centralized mechanism for resolving disputes would be good for business.

I think it would be a good idea to have a central authority to deal with disputes, says Oswald. You can always have the courts, but that takes an awful long time. Court disputes here can take five to 10 years.

Difficulties with customs are a particularly common complaint amongst importers.

Yee Tang had owned her own furniture store, for which she imported products from China, until she closed her business due to frustrating experiences with the customs authority.

I was a registered company; I did everything in a legal way, says Tang. The inconsistency of the customs here, especially in the type of furniture I was bringing, discouraged me from bringing more.

The arbitrary and suspicious approach of the customs authority made it difficult to do business in a straight-forward manner.

They just tell you things to make you pay more, and it has to go to this commission and then another commission to be approved, says Tang.

On one occasion, Tang paid almost twice as much in duties as a similar previous shipment. In another, customs officials claimed that the furniture were antique items.

What really discouraged me was that one of my last shipments took three months to clear the port, says Tang, and the fact that you need to hire somebody to do the dirty work in the customs. It shouldn t be that way. It should be very clear for everybody to know, not just this one guy, so as an owner of a company you know what you re getting yourself into.

The tragedy is that businesses such as Tang s have the potential for success in Egypt but are inhibited by an unpredictable bureaucracy.

I didn t want to do it anymore, not because there are not clients in Egypt; there are many clients in Egypt, says Tang.

Bahaa El-Din s suggestion of collective complaints may provide a palliative in the short-run, but systemic deficiencies require a change in government policy.

For this reason, Bahaa El-Din also proposes that business associations work with GAFI to advocate policies that affect investment. This would go some way to transform the nation from being a passive recipient of investment to a more proactive one.

It requires the investment authority not just to function as a recipient of investment but to be at the center of policymaking in Egypt, says Bahaa El-Din.

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