Comparative International Management Country Profile – Egypt

1. Comparative International Management Country Profile – Egypt

2. >> Team Agnieszka Gwizdz (Poland) Manuel Vasconcelos (Portugal) Ela Siudyla (Poland) Andreas Schmidt (Germany)

3. >> Impressions

4. >> Impressions

5. >> Impressions

6. >> Overview - Arab Republic of Egypt • Location: Northern Africa,bordering the Mediterranean Sea, between Libya and the Gaza Strip • Total area - 1,001,450 sq, • population: 77 million • Capital: Cairo • Nile – the father of rivers

7. >> History –ancient and modern Egypt • 3200 B.C: beginings of unified kingdom • From 341 B.C.: Persians, Greeks, Romans, and Byzantines • 7th century: Arabs • 13th – 16th century : Mamluks • Till 19th century - allegiance to the Ottoman Empire, governmant controlled by UK since1882 • 1922 – independence

8. >> Tourism • 750 000 tourists monthly • 13 000 hotel rooms only in Cairo • 2.2 million people employed inindustry • 11% of GDP

9. >> Economy • Economy in numbers • GDP (purchasing power parity):$316.3 billion • GDP - real growth rate:4.5% • GDP - per capita: - $4,200 • GDP - composition by sector:agriculture: 17.2% industry: 33%, services: 49.8% • 2. Oil – 50% of total exports • 3. Other industries

10. >> Today’s problems of Egypt • 1. Terrorisim • 2. Overpopulation • 3. Environment degaradation • 4. Health care

11. >> Information about the culture • People • Modern Egyptians (Arabs, living in big cities like Cairo and Alexandria) • Bedouin Arabs (nomadic tribal peoples living in isolated oases) • 3. Nubian peoples (living along the Nile)

12. >> Information about the culture • Population (2005) • 77 mio. inhabitants • Growth rate: 1.78% • population explosion • habitable land area (only 4% of the country)

13. >> Information about the culture Religion Official religion: Islam About 90% of the population are Sunni Muslims About 10% are Coptic Christians and others

14. >> Information about the culture • Language • official language: Arabic • The Egyptian dialect is distinct from all others arabic coutries because of the dominance of the media (television, cinema, radio and music) • English and French widely understood by educated classes

15. >> Information about the culture • Arts • ancient history, cosmopolitanism, strong Islamic traditions, modern pan-Arab political and intellectual history and relative freedom  cultural capital of Arab world

16. >> Information about the culture • Media • capital of Middle Eastern communications • strong journalistic traditions and a relatively free press • largest publishing industry in the Arab world • newspapers are under governmental supervision

17. >> Information about the culture • TV and Cinema • The Arab TV and cinema is dominated by the Egyptian film industry and its popular Arabic music • strong cinematic tradition since the 1930s • the only major motion picture industry

18. >> Advices for dealing with Egyptian Doing business in Egypt

19. >> Advices for dealing with Egyptian Appointment Wait for your counterpart to initiate the greeting! • punctuality is not so much a priority  but arrive on time! • Expect that your partnership will be late or an appointment will be canceled  Standard practice is to keep foreign businesspeople waiting

20. >> Advices for dealing with Egyptian Coffee and small talk • usually meetings start with coffee and small talk  even if time is limited • sometimes the Egyptian businessman has time not limited  Be careful: The “coffee” conversation and drinks can take too much time and you will fail your other tasks

21. >> Advices for dealing with Egyptian Communication with Egyptian Speaking distance  closer than in other parts of the world Do not back up !!!  in their perception you will be unfeeling person  you will present your distance to them • Use simlpe words • like “hello”, “please” or “thank you”  you can expect to be better respected

22. >> Advices for dealing with Egyptian Egyptian agent • allow him to explainthe major points of your business in Arabic • in a short meeting, a translation can be very useful  your points will be made much moreconcisely

23. >> Advices for dealing with Egyptian Meeting • Business meetings are usually quite formal • You should expect… • interruptions by: phone calls, visits from your partnership’s family, friends • Fridays are off of meetings, it’s a Muslim holy day • The working week takes a place from Saturday to Wednesday

24. >> Advices for dealing with Egyptian Meeting • You should expect… • Business schedule: In summer: 8 a.m. to 2 p.m. In winter: 9 a.m. to 1 p.m. and 5 p.m. to 7 p.m. • Different dates on paperwork - it should include the Gregorian (Western) and the Hijrah (Arabic) - make sure of it

25. >> Advices for dealing with Egyptian Appearance – what Egyptian appreciate • Conservative dress, suit with tie • Polished shoes • Hair-style, beard well cared • Visible jewellery – avoid wearing by men • Modesty dress all the time – wearing by women • Even if it is extremely hot – most of the part of body should by covered • Professional look it is important aspect

26. >> Advices for dealing with Egyptian Business Cards • printed in English on one side and in Arabic on the reverse • It is polite to make a nice comment about it or make a question: “when are you available at your office?”

27. >> Advices for dealing with Egyptian Mannerisms – what Egyptian appreciate • Call Egyptian by name • Sit down with both feet on the floor – showing the bottom of shoes could be a signal of ignorance • Keep your feet on floor till when Egyptian do not cross their legs when sitting • Hand gestures are often considered rude • Eye contact – look with honesty • Professional look it is important aspect

28. >> Advices for dealing with Egyptian Mannerisms - Difference between women and men Eye contact with men - appreciated women - too much intimate - avoid any hint of intimacy Welcome with men - hug to express warm welcome - hold a hand, means friendship women - never expect that type of behavior

29. >> Advices for dealing with Egyptian Mannerisms - Left hand • … is considered unclean • … should avoid gesturing • … is acceptable to use if you have to lift something heavy

30. >> Advices for dealing with Egyptian Mannerisms - Right hand Arabs greetings men shake each other’s hands, placing left hand on he right shoulder, exchanging kisses on each cheek Kisses are acceptable between that same sex in public Westernized Egyptian men shake hands with other men Some Egyptian men will shake a hands with Western women

31. >> Advices for dealing with Egyptian Gifts • are old customs • are expected in a business meeting • should have some meaning • Bring souvenirs with you • Don`t use Flowers • They are traditionally used at funerals and weddings • Make sure you give or receive gifts with right hand

32. >> Investing in Egypt • Economic history • 1991: Association agreement signed with the EU. Beggining of trade and economy liberalisation • Lack of deep economic reforms until 2003 limited foreignt direct investment • 2003/4: Several measures to attract investment: • - Customs reform - Privatizations • - Tax reform - Reduced energy subsidies

33. >> Investing in Egypt • Incentives • 5 to 20 years of fiscal advantages • Free trade zones and special economic areas to encourage the creation of export hubs • 39 industrial zones spread through the country • New legal framework concerning investment guarantees (excluding any nationalisation or confiscation of assets)

34. >> Investing in Egypt Incentives • 5% customs tax applied to imports of incoming products/equipment required for the investment • Freedom to establish prices and repatriate profits • National companies opened to foreign investors • General Authority for Free Zones and Investment: provides information and advice to local and foreign investors

35. >> Investing in Egypt Business Opportunities • Public works • 1. Construction • 2. Energy sector • 3. Consulting and studies • Demographic development • 1. Health system • 2. Distribution sector

36. >> Investing in Egypt Business Opportunities • Tourism • 1. Rich cultural heritage • 2. Security problems • New technologies • Downstream of agricultural production • Privatisation programs

37. >> Investing in Egypt Finance and banking system • Progressive liberalisation has been taking place since 1991 • Public sector remains in a dominant position (8 banks under state-control) • Free floating of the egyptian pound against the dollar • Foreigners are allowed to have all the kinds of financial companies

38. >> Investing in Egypt Transnational companies investing in Egypt recently

39. >> Investing in Egypt • Weak points and threats • 11th September and middle east terrorist attacks created some fear on investors • Terrorist attacks on tourists made tourism decrease • Financial system still too controled by the state • Low GDP per capita and high unemployment rate

40. >> Investing in Egypt • Weak points and threats • Language barriers • Weak private sector • Cultural differences • Different consumer habits • Communication problems

41. >> Investing in Egypt Strong points and opportunities • Low labor cost • New gas and oil reserves discovered • Strategic role in the region: 1.Cultural influence on the arab world 2.Geographical location 3.Large population

42. Main sources • “How to negotiate” Sergey Frank – Financial Times • Gesteland, Richard – Cross-Cultural Business Behavior – Copenhagen Business School Press, 1999 • Hofstede, Geert - Cultures and Organizations: Software of the Mind – McGraw-Hill, 1997 • www.cia.gov/cia/publications/factbook/geos/eg.html • www.arab.net/egypt/index.html • www.hejleh.com/countries/egypt.html • www.animaweb.org/pays_egypte_pourquoiinvestir_en.php

43. Thank you for your attention!