“We have a great responsibility towards Egypt. It is a great thing to have a visionary leader and strong-willed people. The nation, the leader and the people must join hands to build our country.” These were the words of Prime Minister Ibrahim Mahlab at the closing ceremony of the Egypt Economic Development Conference (EEDC) which was held on 13-15 March in the Red Sea resort of Sharm al-Sheikh to draw direly needed investment and aid to Egypt. The country’s economy took a nosedive in the wake of the Arab Spring uprising in January 2011 and the subsequent Islamist rise to power. On 30 June 2013 a 33-million-strong peaceful revolution by the Egyptian public was supported by the army, led by the then Supreme Commander General Abdel-Fattah al-Sisi and, on 3 July 2013 the Islamist Muslim Brotherhood regime was overthrown. Egypt embarked on political and economic reform through a Roadmap jointly charted on 3 July 2013 by representatives of all the sectors of the Egyptian community and the military. Now the country has a new Constitution, the moderate secular Sisi was elected President by a landslide, and parliamentary elections are upcoming. And, as clearly revealed by the EEDC, Egypt is bent on getting its economy up and running.
The conference achieved its objectives with flying colours but, as Mr Mahlab said: “It is after the conference that the real challenge begins. All Egyptians must work hard to wipe out corruption and carelessness. Egypt’s future belongs to her young; they are the ones who can make the dream come true.”
The young figured highly in the closing ceremony of the conference when President Sisi said he would not begin his speech till the young men and women who had participated in organising the conference come up next to him on the podium. It was a gesture of acknowledgement and gratitude for the young people who, absolutely elated, hastened and stood by the President; they lost no time to take selfies with him. They joined him in what has become his landmark greeting: “Long live Egypt!” When some in the packed auditorium chanted “Long live Sisi” the President countered with a swift “Long live Egypt and no one else”.
The President was ecstatic about the conference’s success which surpassed all expectations. In his 35-minute address, he told the seated in the massive conference hall that the billions of dollars in aid and project-funding “gave so much joy to the people of Egypt.” He especially praised Germany’s Siemens and the United States’ General Electric.
President Sisi drew laughs as he joked about the hard bargains he drove with top multinational executives to reduce prices, deliver ahead of schedule and allow longer grace periods for loan repayments. He said he went so far as to use the [equivalent of the] Egyptian colloquial phrase that best expresses wheeling and dealing: “Ashaan khatir Rubbenna (For Heaven’s sake), we have to have better deals!”
The President acknowledged Egypt’s recovery would be tough and long. “We are behind, and must run ahead,” he said. “Egypt needs as much as USD300 billion in investment to give her 90 million-populace a good life.”
“Some people thought our country had died,” President Sisi said, “but Egypt was there 7,000 years ago and taught the entire world. Now this nation is awakening. Egypt is a land that God created so it can forever live.”
The three-day conference was meant to show the world Egypt is again open for business, and to draw investors scared off by four years of instability and turmoil that followed the Arab Spring.
New investment-friendly legislation was enacted to assure investors Egypt was a serious business contender; among the new laws and regulations has been the investment law, amendments to the tax law, and regulations concerning currency transfer.
Ahead of the EEDC, the government teamed up with legislators, businessmen and economists to issue the new unified investment law. The law should practically put an end to longtime investor disgruntlement with the notorious red tape in Egypt by instituting the ‘one-stop shop’ through which all investment requirements may be resolved at a single window. It regulates the relationship between investors and the Egyptian State, ensuring the rights of each in a given partnership and in case of its termination. The law has been met with much praise from businessmen and investors but, according to Egyptian business tycoon Naguib Sawiris who together with all the Sawirises pledged to invest ‘heavily’ in Egypt through their giant Orascom group, it is hoped that the bylaws of the investment law would secure its being put into action successfully. But almost everyone concerned agrees that the State’s attitude towards investment and investors is so far extremely positive.
A new law is also expected soon to allow private investment in the fields of infrastructure and renewable energy.
The Prime Minister said the conference secured investment deals worth USD36 billion, a sum that included funding for projects worth USD18.6 billion, agreements with international enterprises worth USD5.5 billion, as well as aid and grants from four Arab countries worth USD12.5 billion. Arab nations have generously supported Egypt since the overthrow of the Islamists in July 2013.
On the right track
Hani Helmi Azer, the Egyptian engineer who was decorated by Germany for his outstanding work on the construction of the Berlin Hauptbanhof and Tiergarten tunnel, and who participated in the EEDC, said that the conference got off on the right foot and proved Egypt is capable. “The world now sees that Egypt is on the right track,” he said.
German Chancellor Angela Merkel had delegated the Minister for Economic Affairs and Energy Sigmar Gabriel to attend the conference and inform the Egyptian President that Germany will support Egypt not only economically but also on the political and social levels.
Egypt and the Emirati Capital City Partners signed a USD45 billion deal to build the new administrative capital (Cairo Capital) in the presence of President Sisi and Sheikh Mohammed ben Rashid al-Maktoum, Vice President and Prime Minister of UAE. Minister of Housing Mustafa Madbouli said that the project should have taken 10 years to build, but these were reduced to 5-7 years to comply with President Sisi’s demand.
Emirati investments in the field of construction include another investment agreement worth USD40 billion between the Ministry of Housing and Arabtec Construction to build one million housing units; the signing of the deal will take place during the coming days.
The Ministry of Petroleum also signed a USD12 billion energy deal with British Petroleum (BP) for the extraction of gas from East and West Nile Delta projects. Minister of Petroleum Sherif Ismail said that the new deal aims to reduce Egypt’s energy gap and exports by 2020.
Prime Minister Mahlab and UAE Minister of State Sultan al-Jaber attended the signing ceremony of a final agreement between the Red Sea Ports Authority and the Emirati Marine terminal operator DP World to build a liquid bulk terminal at the Sukhna port on the Red Sea. The project aims to expand the existing liquid bulk terminal and build new tanks and warehouses for the storage and handling of petrochemicals.
Four investment agreements worth USD6 billion were signed with Ahmed AlSudain, CEO of Emirati AlSudain Group and Lin Yichong, President and CEO of China Harbor Engineering Company. Minister of Supply Khaled Hanafi who signed the deal on the Egyptian side said the agreements involve investments in the International Logistics Center which will be established in the Mediterranean port of Damietta [Watani International, 15 February 2015, P1; http://en.wataninet.com/features/economy/an-international-hub/13161/] and in the trade and shopping city which will be built in the Suez Canal area.
Ken Allen, CEO of DHL Express which already has a thriving operation in Egypt, announced at the EEDC that his firm intends to increase its investment in the country through a nationwide expansion plan that aims to double its service points in Egypt. Allen said DHL intends to transfer its experience in international trade to small and medium enterprises because of the important role these companies shoulder in boosting the economy.
The EU announced its commitment to an aid package to Egypt worth more than one billion Euros; the package would cover various sectors and would focus mainly on human and social development. Half the aid package will be directed to education, healthcare and local development programmes; one third will target infrastructure and protection of the environment; and the remaining portion will be used to promote economic development, commerce, innovation and human rights.
Vote of confidence
German industrial giant Siemens will invest USD10.5 billion in Egypt to build power plants that should boost the country’s electricity generation capacity by up to a third.
Siemens CEO Joe Kaeser told The Associated Press that the deals were signed Saturday after negotiations with President Abdel-Fattah el-Sisi, “who drove a hard bargain.”
“It will create 1,000 jobs and we’re ready to start as soon as possible,” he said. “We’ve been doing business here for over 110 years so we’ve seen crises come and go… It’s not about (us) coming and going.”
He said the package included binding agreements worth about USD4.6 billion. They include a new 4.4 gigawatt power plant in southern Egypt, a project to generate 2 gigawatts of wind power and a new wind rotor blade factory. The other agreements were memorandums of understanding to build other plants and substations over the coming five years.
Another power plant, this time a 50 megawatt solar station, will be built by Sawiris’s Orascom at an investment value of USD100 million and a delivery period of 12 instead of the originally planned 18 months.
General Electric and Italian petroleum company ENI were among several companies to announce agreements. Egypt’s oil ministry said in a statement that the ENI deal was worth an estimated USD5 billion and would develop oil and gas resources.
Egypt key to the region
Prime Minister Mahlab has decided to form a unit attached to the cabinet and headed by Investment Minister Ashraf Salman to follow up on the progress of the EEDC’s projects. The move was applauded by Egyptian investors.
Egypt’s Minister of Industry and Trade Mounir Fakhry Abdel-Nour said the ministry was urging Egypt’s young people to work with the private sector which, he said, is the locomotive that will pull the economy out of the doldrums.
Former Finance Minister Samir Radwan said he was pleasantly surprised at the resounding success of the EEDC. “Some 2500 participants took part, and 30 heads of State. The billions that will be poured into the Egyptian economy constitute a vote of confidence in the Egyptian people and government,” he said.
For its part, Bloomberg American network said that investors from the Gulf played a major role for the success of the EEDC, and that the investment deals and agreements signed cover a wide range of economic sectors, especially energy and construction.
According to Bloomberg, companies from the UAE ranked first on the investor list especially in the construction sector. These huge investments confirm the role of the Gulf Cooperation Council nations as Egypt’s main supporters after the overthrow of the Muslim Brotherhood regime in 2013. Moreover, many investments came from companies such as BP and Siemens which have been operating in Egypt for many years. Bloomberg’s assessment can be interpreted to reflect the confidence these long-time investors in Egypt have in the country’s investment potential.
Bloomberg highlighted the statement made by al-Jaber at the EEDC: “We must all stand by Egypt today because the security and stability of Egypt is the key to security and stability of the entire region.”
18 March 2015