CAIRO: While the Egyptian economy has benefited from reforms which have made it increasingly competitive and open to foreign investment, more work is needed to ensure future prosperity, according to a top EU official.
“We are seeing an unleashing of an economic tiger on the Nile, says EU trade commissioner Peter Mandelson.
“The challenge is to keep up the pace.
One important aspect is to further reform bilateral agricultural trade agreements.
“Agriculture is a very important sector in the Egyptian economy, says Mandelson. “It will benefit from further liberalization.
Developing nations have called for richer nations to end subsidies to their farming industries, which they say amounts to agricultural protectionism.
The comments were made at a press conference yesterday. Mandelson is in Cairo to meet with President Mubarak and other top officials to discuss increased bilateral economic cooperation between the EU and Egypt, including
“Every time I come back to Egypt I’m encouraged by the economic progress, he says, noting that he visited the Smart Village on the outskirts of Cairo.
“It’s clear that the reforms are paying off.
The European Union also hopes to create a free trade zone between all the Euro-Mediterranean countries by 2010.
According to Mandelson, this also means that Egypt must strengthen its relationship with other southern Mediterranean countries in the Middle East and North Africa.
“What we’re trying to do is to increase competitiveness, says Minister of Trade and Industry Rachid Mohamed Rachid.
Over the past five years, trade between the EU and Egypt has grown by about five percent. Trade with the EU represents about 40 percent of Egypt’s total trade, with the energy, textiles and agricultural products leading the way.
When asked by The Daily Star Egypt if the EU will look to Egypt for natural gas in order to decrease Europe’s dependence on Russian energy reserves, Mandelson says: “We have a good relationship in energy, but we’re not proposing to take any immediate drastic steps.
The energy sector contribute about 39 percent of Egypt’s current exports to the EU.
While Mandelson praised the government for opening up Egypt’s economy to increased foreign investment, some warn that too much foreign investment could be detrimental.
“Privatization has been abused, says Adel Beshai, an international investment expert and economist.
“I don’t like the idea of just buying and selling, told The Daily Star Egypt, noting that domestic ownership of businesses here is also important for long term prosperity. “Egypt must have a share.
