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University of Arizona Egypt Orientation Session January 28, 2004

University of Arizona Egypt Orientation Session January 28, 2004. US Team visit to Egypt:. Mr. Bruce Nasby, SENIOR VICE PRESIDENT GLOBAL SIFE Mrs. Marcia Helaine Klipsch, FACULTY Mr. Richard Klipsch STUDENTS: Ms. Amanda Wright Zaluga Ms. Amanda Elizabeth Davis

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University of Arizona Egypt Orientation Session January 28, 2004

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  1. University of Arizona Egypt Orientation SessionJanuary 28, 2004

  2. US Team visit to Egypt: • Mr. Bruce Nasby, SENIOR VICE PRESIDENT GLOBAL SIFE • Mrs. Marcia Helaine Klipsch, FACULTY • Mr. Richard Klipsch • STUDENTS: • Ms. Amanda Wright Zaluga • Ms. Amanda Elizabeth Davis • Mr. James Edward Tang-Mills • Mr. Juan Ciscomani Garcia

  3. EGYPT My homeland, my homeland, my hallowed land,Only to you, is my due hearty love at command,My homeland, my homeland, my hallowed land,Only to you is my due hearty love at command,Mother of the great ancient land,My sacred wish and holy demand,All should love, awe and cherish thee,Gracious is thy Nile to humanity,No evil hand can harm or do you wrong,So long as your free sons are strong,My homeland, my homeland, my hallowed land,Only to you, is my due hearty love at command. To listen to the National Anthem, follow the link below: Source:http://www.sis.gov.eg/anthem/html/anthem.htm

  4. Geography Location: Northeast corner of Africa on the Mediterranean Sea Source:http://www.infoplease.com/atlas/africa.html

  5. Geography Location: Northeast corner of Africa on the Mediterranean Sea Neighbors: West Libya, South the Sudan, East the Red Sea and Israel. Size: One and one-half times Texas. Egypt is divided into two unequal, extremely arid regions by the northward-flowing Nile River (100 mi). Source:http://www.infoplease.com/ipa/A0107484.html

  6. University of Arizona Egypt Orientation SessionJanuary 28, 2004 A broad and general understanding of Egypt : • Background information, • Government and politics, • Economic progress and development efforts over the last decade, • Current economic situations, • University conditions, • National development priorities of the government, • Graduate employment situation and the job market, • Ease of entrepreneurship development and small business support, • U.S.-Egypt relations and general perceptions of attitude towards Americans in-country and why.

  7. Background Information • Arab Republic of Egypt • President: Hosni Mubarak (1981) • Prime Minister: Atef Ebeid (1999) • Area: 386,660 sq mi (1,001,450 sq km) • Population (2003 est.): 74,718,797 (growth rate: 1.9%); birth rate: 24.4/1000; infant mortality rate: 35.3/1000; density per sq mi: 193 • Capital (2003 est.): Cairo, 15,892,400 (metro.area), 7,937,700 (city proper) • Other large cities: Alexandria, 3,891,000; Giza, 2,597,600 (part of Cairo metro. area); Shubra el Khema, 1,018,000 (part of Cairo metro. area); El Mahalla el Kubra, 462,300 Source:http://www.infoplease.com/ipa/A0107484.html

  8. Background Information • Monetary unit: Egyptian pound • Language: Arabic • Ethnicity/race: Eastern Hamitic stock (Egyptians, Bedouins, and Berbers) 99%, Greek, Nubian, Armenian, other European (primarily Italian and French) 1% • Religions: Islam 94%, Christian (mostly Coptic) 6% • Literacy rate: 51.4% (1995 est.) For more information, click on the links below: Land , People , Economy , Government , History . Source:http://www.infoplease.com/ipa/A0107484.html

  9. Background Information • Stay tuned: • http://weekly.ahram.org.eg/ : Government newspaper • http://www.egyptdaily.com/ : Daily information and local weather forecast • http://usembassy.egnet.net/ : American Embassy in Egypt, Arabic news summary • http://www.egypttoday.com/: The magazine of Egypt (wonders of Egypt) • Get more information: • Egypt State Information Service: http://www.sis.gov.eg • Get to know the country and its culture with audio and video files to download, • Get the TV news live, • SIS search Engine.

  10. Background Information • Get more information: • Middle East Network Information Center, University of Texas: http://menic.utexas.edu/menic/Countries_and_Regions/Egypt/ Arts and Humanities , Economy, Education, Egyptology, Government, Health and Medicine, Maps, News and Media, Science and Technology, Social Science, Society and Culture. • The Library of Congress: Egypt, a country study: http://lcweb2.loc.gov/frd/cs/egtoc.html The Historical Setting, the Society and its Environment, the Economy, Government and Politics, National Security (warning: research completed in 1990, some information need to be updated). • The CIA, the World Fact Book: http://www.cia.gov/cia/publications/factbook/geos/eg.html Introduction, Geography, People, Government, Economy, Communications, Transportation, Military,  Transnational Issues.

  11. Background Information • Get more information: • Egypt Search Engine: General information, Art, Education, etc. • Mazika: http://www.mazika.com Get to know the local music.

  12. University of Arizona Egypt Orientation SessionJanuary 28, 2004 A broad and general understanding of Egypt : • Background information, • Government and politics, • Economic progress and development efforts over the last decade, • Current economic situations, • University conditions, • National development priorities of the government, • Graduate employment situation and the job market, • Ease of entrepreneurship development and small business support, • U.S.-Egypt relations and general perceptions of attitude towards Americans in-country and why.

  13. Government and Politics • Country name: • Conventional long form: Arab Republic of Egypt • Conventional short form: Egypt • Government type: Republic • Administrative divisions: • 26 governorates • Independence: Egyptian nationalism forced Britain to declare Egypt an independent sovereign state on Feb. 28, 1922, although the British reserved rights for the protection of the Suez Canal and the defense of Egypt. • Constitution: 11 September 1971 • Legal system: Based on English common law, Islamic law, and Napoleonic codes; judicial review by Supreme Court and Council of State (oversees validity of administrative decisions); accepts compulsory ICJ jurisdiction, with reservations. • Suffrage: 18 years of age; universal and compulsory Source:http://www.cia.gov/cia/publications/factbook/geos/eg.html

  14. Government and Politics • Executive branch: • Chief of state: President Mohammed Hosni MUBARAK (since 14 October 1981) • Head of government: Prime Minister Atef Mohammed ABEID (since 5 October 1999) • Cabinet: Cabinet appointed by the president • Elections: president nominated by the People's Assembly for a six-year term, the nomination must then be validated by a national, popular referendum, • National referendum last held 26 September 1999 (next to be held NA October 2005); • Prime minister appointed by the president . • Election results: national referendum validated President MUBARAK's nomination by the People's Assembly to a fourth term. Source:http://www.cia.gov/cia/publications/factbook/geos/eg.html

  15. Government and Politics • Legislative branch: • Bicameral system: • The People's Assembly or Majlis al-Sha'b (454 seats; 444 elected by popular vote, 10 appointed by the president; members serve five-year terms), • The Advisory Council or Majlis al-Shura - which functions only in a consultative role (264 seats; 176 elected by popular vote, 88 appointed by the president; members serve NA-year terms). • Elections: People's Assembly - three-phase voting • last held 19 October, 29 October, 8 November 2000 (next to be held November 2005); • Advisory Council - last held 7 June 1995. Source:http://www.cia.gov/cia/publications/factbook/geos/eg.html

  16. Government and Politics • Legislative branch: • Election results: People's Assembly - percent of vote by party - NDP 88%, independents 8%, opposition 4%; seats by party - NDP 398, NWP 7, Tagammu 6, Nasserists 2, LSP 1, independents 38, undecided 2; • Advisory Council - percent of vote by party - NDP 99%, independents 1%; seats by party - NA • Judicial branch: Supreme Constitutional Court Source:http://www.cia.gov/cia/publications/factbook/geos/eg.html

  17. Government and Politics • Political parties and leaders: • Nasserist Arab Democratic Party or Nasserists [Dia' al-din DAWUD]; • National Democratic Party or NDP [President Mohammed Hosni MUBARAK] - governing party; • National Progressive Unionist Grouping or Tagammu [Khalid MUHI AL-DIN]; • New Wafd Party or NWP [No'man GOMA]; • Socialist Liberal Party or LSP [leader NA] Note: Formation of political parties must be approved by the government. Source:http://www.cia.gov/cia/publications/factbook/geos/eg.html

  18. Government and Politics • Political pressure groups and leaders: • Most significant political opposition: Muslim Brotherhood; • Constitutional ban against religious-based parties, • MUBARAK tolerated limited political activity by the Brotherhood for his first two terms, • MUBARAK moved more aggressively since then to block its influence, • Civic society groups are sanctioned, but constrained in practical terms; • Trade unions and professional associations are officially sanctioned. Source:http://www.cia.gov/cia/publications/factbook/geos/eg.html

  19. University of Arizona Egypt Orientation SessionJanuary 28, 2004 A broad and general understanding of Egypt: • Background information, • Government and politics, • Economic progress and development efforts over the last decade, • Current economic situations, • University conditions, • National development priorities of the government, • Graduate employment situation and the job market, • Ease of entrepreneurship development and small business support, • U.S.-Egypt relations and general perceptions of attitude towards Americans in-country and why.

  20. Economic Evolution over last decade • Macroeconomic performance improved by following IMF advice on fiscal, monetary, and structural reform policies. • Results: • Controlled inflation, lower budget deficits, and more foreign investment. • BUT, in the past four years: • Less reforms + excessive spending on national infrastructure projects = increase budget deficits. • Lower foreign exchange earnings since 1998 = pressure on the Egyptian pound + periodic dollar shortages. Source:http://www.cia.gov/cia/publications/factbook/geos/eg.html

  21. Economic Evolution over last decade • Monetary pressures have increased since 11 September 2001 (declines in tourism + Suez Canal tolls) = Egypt has devalued the pound several times in the past year. • Future: The development of a gas export market is a major bright spot for future growth prospects. • In the short term, regional tensions will continue to affect tourism and hold back prospects for economic expansion. Source:http://www.cia.gov/cia/publications/factbook/geos/eg.html

  22. University of Arizona Egypt Orientation SessionJanuary 28, 2004 A broad and general understanding of Egypt: • Background information, • Government and politics, • Economic progress and development efforts over the last decade, • Current economic situations, • University conditions, • National development priorities of the government, • Graduate employment situation and the job market, • Ease of entrepreneurship development and small business support, • U.S.-Egypt relations and general perceptions of attitude towards Americans in-country and why.

  23. Current Economic Situation • GDP • purchasing power parity - $289.8 billion (2002 est.) • real growth rate: 3.2% (2002 est.) • per capita:purchasing power parity - $4,000 (2002 est.) • composition by sector:agriculture: 17% industry: 34% services: 49% (2001) • Population below poverty line: 22.9% (FY 95/96 est.) • Inflation rate (consumer prices): 4.3% (2002 est.) • Labor force: 20.6 million (2001 est.) • Labor force - by occupation: agriculture 29%, industry 22%, services 49% (2000 est.) • Unemployment rate: 12% (2001 est.) Source:http://www.cia.gov/cia/publications/factbook/geos/eg.html

  24. Current Economic Situation • Budget:revenues: $21.5 billion expenditures: $26.2 billion, including capital expenditures of $5.9 billion (2001) • Industries:textiles, food processing, tourism, chemicals, hydrocarbons, construction, cement, metals • Industrial production growth rate:2.2% (2002 est.) Source:http://www.cia.gov/cia/publications/factbook/geos/eg.html

  25. Current Economic Situation • Agriculture - products: cotton, rice, corn, wheat, beans, fruits, vegetables; cattle, water buffalo, sheep, goats • Exports: $7 billion f.o.b. (2002 est.) • Exports - commodities: crude oil and petroleum products, cotton, textiles, metal products, chemicals • Exports - partners: US 18.3%, Italy 13.7%, UK 8.4% (2002) • Imports: $15.2 billion f.o.b. (2002 est.) • Imports - commodities: machinery and equipment, foodstuffs, chemicals, wood products, fuels • Imports - partners: US 16.9%, Germany 7.9%, Italy 6.7%, France 6.5%, China 5%, UK 4.1% (2002) Source:http://www.cia.gov/cia/publications/factbook/geos/eg.html

  26. Current Economic Situation • Debt - external: $30.5 billion (2002 est.) • Economic aid - recipient: ODA, $2.25 billion (1999) • Currency: Egyptian pound (EGP) • Exchange rates: Egyptian pounds per US dollar – 7.0 (2004 projection), 6.2 (2003), 4.5 (2002), 3.97 (2001), 3.47 (2000), 3.4 (1999), 3.39 (1998), 0.34 (1966). Source:http://www.cia.gov/cia/publications/factbook/geos/eg.html

  27. Current Economic Situation DOMESTIC ECONOMY National Accounts Egyptian fiscal year ( July-June) US$ billions unless stated otherwise FY99/00 FY00/01 FY01/02 FY02/03* GDP (current prices, LE billion) 340 359 382 405 GDP (current prices, US$ billion) 98.7 93.3 88.1 78.7 GDP real growth rate (%) 5.9 3.4 3.2 2.5 GDP/Capita US$ 1420 1530 1470 NA Government Spending/GDP (%) 30.0 30.1 29.9 31.5 Consolidated Fiscal deficit/GDP 1.20 2.23 2.50 2.90 Inflation (%) 2.8 2.4 2.4 4.0 Wholesale Price Index (%, June of each year) 1.6 1.3 3.5 18.5** Unemployment (%) 9.0 9.2 9.0 9.9 Foreign Exchange Reserves 15.130 14.24 14.147 14.809 Reserves/months of imports 10.2 10.4 11.6 12 Avg. Exch. Rate for LE/$ 3.446 3.850 4.338 5.149 End of Period Exch. Rate (June of each year) 3.446 3.860 4.510 6.154 Debt service ratio (%)+ 8.0 7.4 9.3 9.8 Total Foreign Debt/GDP 28.2 28.5 32.6 35.7++ U.S. assistance (U.S. Fiscal Year) 2.035 1.995 1.955 1.915 Military 1.3 1.3 1.3 1.3 Economic 0.735 0.695 0.655 0.615 *Preliminary figures for FY 2002/2003 unless stated otherwise. ** As of May 2003 + Debt Service is ratio of external debt service to current account receipts. ++ As of March 2003 Sources: Egyptian government, IMF, World Bank, & Embassy estimates based on those sources

  28. Current Economic Situation Key Sectoral Statistics 1999 2000 2001 2002 Tourism* Revenues (USD million) 3904 4345 3800 3764 Total Arrivals (millions) 4.797 5.506 4.648 5.192 Energy and Petroleum ** Oil (crude) (avg. thous. barrels/day) 852 710 639 631 Gas (bill. cubic feet/day) 1.4 1.7 2.4 2.6 Electricity (mill, MKH, fiscal years) 67.9 72.9 75.6 83.0 Construction*** (million tons) Cement (local sales +exports-imports) 23.1 24.1 25.7 28.1 Steel (production, rebars) 4.053 3.169 3.472 3.483 Agriculture****(million metric tons) Wheat 6.40 6.40 6.20 6.15 Rice (milled) 3.7 3.9 3.6 3.7 Sugar 1.4 1.3 1.4 1.4 Cotton (thousand metric tons) 233 200 310 315 * Ministry of Foreign Trade ** Ministry of Petroleum, Ministry of Foreign Trade (Elect. figures for fiscal years) *** EFG-Hermes, Ezz Steel **** US Dept. of Agriculture, cotton is marketing year: Aug.-Sep.

  29. Current Economic Situation TRADE AND INVESTMENT US Calendar year US$ millions 1999 2000 2001 2002 U.S. Exports to Egypt 3000.8 3333.9 3564.4 2866.2 U.S. Imports from Egypt 617.6 887.7 882 1351.9* US Trade Balance with Egypt 2383.2 2446.2 2682.4 1514.3 U.S. FDI (stock) 2210 1998 2537 2959 * Includes temporary import of Egyptian antiquities museum touring exhibition, valued at $445 million. urce: U.S. Department of Commerce.

  30. University of Arizona Egypt Orientation SessionJanuary 28, 2004 A broad and general understanding of Egypt prior to their trip touching on each of the following: • Background information, • Government and politics, • Economic progress and development efforts over the last decade, • Current economic situations, • University conditions, • National development priorities of the government, • Graduate employment situation and the job market, • Ease of entrepreneurship development and small business support, • U.S.-Egypt relations and general perceptions of attitude towards Americans in-country and why.

  31. University Conditions • Cairo University : http://www.cu.edu.eg/ • Cairo University has successfully been undertaking its mission of delivering education, research and cultural duties over the years. It is considered as the mother university among other younger universities in Egypt • Cairo University is also offering its education and research facilities to Arab and foreign students and scientists and has become well known world wide. • Cairo University has 100 scientific Research Centers and units of Private Character. There are also a hospital for the students, a printing press, a central library as well as libraries for the faculties. • Currently, Cairo University includes 23 Faculties and Institutes serving about 155,000 students with 3,158 faculty members, 2,361 assistant lecturers & demonstrators and 12,233 employees. Source:http://www.egyptsearch.com/search/search.cgi?cat=Education:Universities

  32. University Conditions • Ain Shams University: http://net.shams.edu.eg/ • Ain Shams University, as the third Egyptian university, was founded in July 1950 under the name of "Ibrahim Pasha University". • When it was first established, Ain Shams University comprised a number of distinguished faculties and academic institutes, which were later developed into university. • The university includes 14 faculties and 3 high institutes. Source:http://www.egyptsearch.com/search/search.cgi?cat=Education:Universities

  33. University Conditions Other Egyptian Universities: Ain Shams UniversityAINSHAMS UNIVERSITY -FACULTY OF ENGINEERING American University in CairoAssiut UniversityCairo University Information Page City University - Egypt City University Computer Science DepartmentEgyptian Universities Network Mansoura Universitymisr university for science and technologySheffield Hallam UniversitySunSITE EgyptThe Arab Academy for Science and Technology Source:http://www.egyptsearch.com/search/search.cgi?cat=Education:Universities

  34. University of Arizona Egypt Orientation SessionJanuary 28, 2004 A broad and general understanding of Egypt: • Background information, • Government and politics, • Economic progress and development efforts over the last decade, • Current economic situations, • University conditions, • National development priorities of the government, • Graduate employment situation and the job market, • Ease of entrepreneurship development and small business support, • U.S.-Egypt relations and general perceptions of attitude towards Americans in-country and why.

  35. National Development Priorities of the Government • KEY ECONOMIC TRENDS AND ISSUES • Macroeconomic • Fiscal Developments • Monetary Developments • Privatization • Balance of Payments • Direction and composition of trade • Impact of the War in Iraq • MAJOR LEGISLATIVE DEVELOPMENTS Source:http://usembassy.egnet.net/etr2003.pdf

  36. KEY ECONOMIC TRENDS AND ISSUES • Macroeconomic Outlook: • Egypt's economic performance and reform program in the 1990's gained plaudits from international observers for increasing growth while sharply reducing inflation and the budget deficit. • The combination of external shocks in 1997-98 (terrorist attacks, oil price collapse, Southeast Asian economic crisis) and 2001 (September 11) with a slowdown in reform efforts has reduced growth sharply since 1999.

  37. KEY ECONOMIC TRENDS AND ISSUES • Macroeconomic Outlook: • Real growth for the fiscal year ending June 30, 2002 (FY 2001/2002, or 01/02) at 3.2% and estimated growth for FY 02/03, which ended June 30, 2003 at 2.5%. • With annual population growth at around 2%, that would put real GDP per capita growth at under 1%. • Inflation estimated at 2.4 % for FY 01/02 and a slightly higher 3.9% over the 12 months from May 2002 to May 2003. • Foreign debtincreased slightly in 2001 and early 2002 as a result of the Egyptian government's floating of a $1.5 billion Eurobond offering and other borrowing, but remains comfortable at under $30 billion, or roughly one third of GDP.

  38. KEY ECONOMIC TRENDS AND ISSUES • Fiscal Developments: • The growing size of the budget deficit is one of the biggest challenges facing the government and a potential threat to economic recovery. • In 2002, the government revised its budgetary accounts to show three increasingly broad measures of the budget and deficits: • A narrow budget that includes only line government agencies and programs; • A broader definition that includes transfers to or from independent state-owned agencies, • A third definition that also includes the social insurance funds (social security), currently in surplus because of Egypt's growing working-age population.

  39. KEY ECONOMIC TRENDS AND ISSUES • Monetary Developments: • The Government has been seeking a new monetary and foreign exchangepolicy since it abandoned in mid-2000 its fixed peg of LE 3.4/$, in place since the early 1990s. • The peg had been successful in reducing inflation to low single digits, but proved untenable in the late 1990s as the pound became overvalued by at least 35% and Egypt's balance of payments position deteriorated.

  40. KEY ECONOMIC TRENDS AND ISSUES • Privatization: • The slowdown in the Egyptian privatization program, evident since mid-2000, has been a source of concern for international rating agencies, that consider the pace an indicator of the government’s willingness to move forward on economic reform. • Senior officials, including the Prime Minister and Minister of Public Enterprise, continue to emphasize Egypt’s commitment to the program. • The Ministry of Public Enterprise (MPE) announced in late 2002 an effort to gradually privatize some state-owned enterprises by participation of private investors in capital increases for the companies.

  41. KEY ECONOMIC TRENDS AND ISSUES • Balance of Payments: • Egypt's Balance of Payments (BOP) has continued to improve over the past year. • The overall BOP deficit of $447 million in FY 01/02 was smaller than FY 00/01's deficit of $871 million which we had reported as the best in several years. • Direction and composition of trade: • The European Union (EU) as a bloc remains Egypt's largest trading partner, typically accounting for around 35-40% of imports and exports. • When implemented, Egypt’s Partnership Agreement with the EU could result in a significantly larger volume of trade. • The U.S. comes next (and is Egypt's largest trading partner as a country), accounting for around 20% of imports and 10-15% of exports. • Asian countries account for around 25% of both imports and exports.

  42. KEY ECONOMIC TRENDS AND ISSUES • Direction and composition of trade: • Asian countries account for around 25% of both imports and exports. • Countries in the Middle East take 13% of exports and account for about 6% of imports, while Africa, Latin America and Australia account for less than 5% each of imports and exports. • Egypt's leading merchandise export is crude oil and petroleum products ($2.2 billion in 2002), followed by finished goods (chiefly textiles and apparel), and raw materials (cotton and other agricultural products). • Chief U.S. exports to Egypt include agricultural commodities (usually around $1 billion annually), capital goods, and equipment. • The value of U.S. exports shrank over the last two years, from nearly $3.8 billion in 2001 to under $2.9 billion in 2002, largely in line with the drop in overall Egyptian imports.

  43. KEY ECONOMIC TRENDS AND ISSUES • Impact of the War in Iraq: • The Egyptian government, private sector forecasters, and we expected the war in Iraq to have a major negative impact on Egypt's economy. • Estimates of that impact ranged from $2 billion to as high as $10 billion. • The impact was expected to fall most heavily on tourism (predictions of $1-3 billion in losses). • In fact, largely because major combat operations in Iraq ended so quickly, the impact in all these areas was much less than expected. • Suez Canal revenues actually rose significantly and tourism recovered very quickly after a sharp dip in March 2003. • War risk premiums were never imposed.

  44. MAJOR LEGISLATIVE DEVELOPMENTS • Egypt's parliament, the People's Assembly (PA), approved several key pieces of economic legislation in 2003. • New Banking Law: • It enshrines the principle of a market-determined foreign exchange rate and defines the governmental and Central Bank roles in monetary policy. • Unified Labor Law: • Provides comprehensive guidelines for the recruitment, hiring, compensation, and termination of employees in Egypt. • Telecom Law: • Expands the powers of the National Telecom Regulatory Authority to issue licenses and permits, set standards for equipment, determine tariffs, and mediate disputes between telecom service providers. Also, it protects users rights, establishes a universal services fund, and provides for the disclosure of information to promote transparency.

  45. National Development Priorities of the Government • SECTORAL TRENDS AND PRINCIPAL GROWTH SECTORS • Services • Tourism • Suez Canal • Banking • Capital Market • Insurance • Energy • Manufacturing • Agriculture • Transportation and Infrastructure • Information Technology and Telecommunications • ECONOMIC COOPERATION • Regional Initiatives • U.S.-Egypt Trade and Investment Framework Agreement (TIFA) • U.S. Economic Assistance • U.S. Support for Trade and Investment Source:http://usembassy.egnet.net/etr2003.pdf

  46. SECTORAL TRENDS AND PRINCIPAL GROWTH SECTORS • Services = 50% of Egypt's GDP (tourism and Suez Canal) • Tourism: • Tourism is Egypt's largest foreign exchange earner, as well as a key engine of growth = direct and indirect share of GDP is 11%. • The tourism sector rebounded sharply from a steep decline after the 1997 terrorist attack. • Suez Canal • Revenues had been stagnant for the past several years at around $1.8 billion annually because of increased global reliance on other means of transportation (chiefly pipelines and air) for trade. Probably only part of the increase in revenues can be sustained through the next fiscal year. • Banking: • Positive events in the Egyptian banking sector • = new management at the largest banks + efforts to improve supervision and capital adequacy + renewed talk of decreasing government ownership in the sector + a new banking law • = likely to force a major consolidation of the sector

  47. SECTORAL TRENDS AND PRINCIPAL GROWTH SECTORS • Capital Market: • The Cairo and Alexandria Stock Exchange (CASE) experienced a bull market in the first half of 2003 after a very quiet 2002, but continued growth will hinge on regional stability and the pace of economic reform. • Insurance: • Egypt insurance industry remains very small relative to other middle-income developing countries, with annual premiums accounting for only about 1.1% of GDP. • Energy: • The oil and gas sector officially accounts for around 7% of GDP. • Gas exploration, development, and production have been among the brighter spots in the economy over the past three years. • Oil production and exports still play an important role in the Egyptian economy. • Manufacturing: • Egypt's manufacturing sector accounts for approximately 20% of GDP. Main sub-sectors include metallurgy, cement, fertilizers, textile/clothing, food processing, and other consumer goods.

  48. SECTORAL TRENDS AND PRINCIPAL GROWTH SECTORS • Transportation and Infrastructure: • Egypt Air, the country's airline company, had a tumultuous year of personnel and structure changes. • Reduced tourism, higher operating costs in the wake of new post-September 11 security and insurance requirements, the war in Iraq, the pound's devaluation, and the global outbreak of the disease SARS all affected Egypt Air’s operations over the past year. • Information Technology and Telecommunications: • The government has identified development of the information technology (IT) industry as a national priority, and the Egyptian Government and private sector are eager to engage with U.S. firms in this area. Information technology (IT) in Egypt continued to grow in 2003 despite the overall sluggish economy.

  49. ECONOMIC COOPERATION • Regional Initiatives: • Association Agreement with the European Union: increased access to the European market + 615 million Euros in project assistance grants + 1.1 billion Euros in loans from the European Investment Bank to help modernize Egyptian industry. • Member of the Common Market for Eastern and Southern Africa (COMESA) since mid-1998, and is committed to eliminating tariffs with COMESA members entirely by 2004. • Aghadir Agreement: • Goal = establish a free trade area with Tunisia, Morocco, and Jordan. • U.S.-Egypt Trade and Investment Framework Agreement (TIFA): • Goal: facilitating the concrete measures to establish freer trade. • Work in Progress on: government procurement, customs reform and administration, sanitary/phytosanitary issues, and agricultural trade.

  50. ECONOMIC COOPERATION • U.S. Economic Assistance: • Over $25 billion in economic assistance since 1975. • Results: the foundations for economic growth = infrastructure (water, wastewater, power, and telecommunications) + favorable economic policy environment for private sector development. • New areas of concentration: development of the information technology sector, strengthening Egypt’s capacity for human resource development, trade policy capacity building, financial sector reform, and continuing efforts to enhance Egypt’s business and export competitiveness. • U.S. Support for Trade and Investment: • The Overseas Private Investment Corporation (OPIC), the U.S. Export-Import Bank (Ex-Im Bank) and the Trade and Development Agency (TDA) are committed to supporting the growth of U.S.-Egyptian bilateral trade and investment. These agencies provide loan and insurance products and services.

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