Many words have been written about Egypt\u2019s popular uprising since its onset on 25 January 2011 offering a diverse set of valid interpretations related to the cause of the revolution. Some of these \u2018drivers of change\u2019 include demographics, technology, human rights issues, legitimacy of the state, soaring inflation and an unequal distribution of wealth.<\/p>\n
The Egyptian people demanded \u2018bread, freedom and social justice\u2019. In my view, corruption and subsequent inequality were key reasons for public discontent prior to the revolution. However, it is important to note that Egypt\u2019s underlying economic conditions for business were good, particularly after reforms introduced by Egypt\u2019s government under Prime Minister Ahmed Nazif since 2004. Egypt also has a long standing and respected judicial and legislative power but the independence of both bodies was increasingly undermined as former President Mubarak assumed near-full control. With all three branches of government essentially ruled by one man, accountability was lost.<\/p>\n
The uprising and continuing turmoil over the past three years negatively affected Egypt’s economy; tourism and FDI were hard hit. Income from tourism dropped from US$ 13bn in 2010 to US$ 10bn in 2013. FDI dropped by a disastrous US$ 10bn to only US$ 3bn in 2013 compared to 2008. The drop in tourism directly impacts the lives of many Egyptians as the industry employs millions. Indirectly it also has negative consequences for most other industries that supply into the tourist sector such as manufacturing.<\/p>\n
Nonetheless, Egypt’s core strengths remain. Its geographical position offering easy access to three continents; free trade agreements with the EU, COMESA and the Arab Region take full advantage of this strategic position. Egypt is a real and diversified market economy with over 80 million consumers; it is also a competitive labour and energy market.<\/p>\n
Many companies recognise these strong foundations; blue chip companies with an already established base in Egypt show no signs of re-evaluating their presence in the market. Renowned brands such as Coca Cola, Vodafone, Schneider Investment, General Motors and others continue to use Egypt as their hub in the Middle East. Some even intend to expand their presence stating they have every confidence that their business will continue to thrive in the region. The key word for Egypt is confidence. In order to reinvigorate its economy after three years of political turmoil, business confidence needs a serious boost. This can only be achieved in a more stable and secure environment.<\/p>\n
During my recent visit to Egypt for a conference organised by the Egyptian British Chamber of Commerce many participants expressed optimism in the future of business in Egypt. Much depends on developments in the next few months; Egypt’s roadmap suggests that a permanent government with new president should be in place by the end of this year. It is of vital importance that this new government looks into Egypt’s current investment environment and develops strategies to bring FDI back via incentives and the removal of existing barriers; as an example, a considerable hindrance to foreign companies in Egypt is the restrictions on foreign currency transfers abroad. A clear strategy and incentives programme will be beneficial to the growth of SME’s, and increased foreign investment. The return of tourism should be a shorter term effect of increased stability in the country. Only when tourists visit Egypt again can (foreign) investment in the real estate sector begin to recover.<\/p>\n
Someone once told me that after a revolution it roughly takes three presidential terms -or 12 years – for a government to be elected that comes close to representing its people. The return to stability and economic growth can take a long time when looking at historic examples; in the UK it took hundreds of years. We should not expect an easy road to recovery in Egypt, and should be careful not to impose some of our Western or personal ideas of democracy on Egypt.<\/p>\n
Too often international media interprets events in Egypt – and the Middle East at large – from a one-sided perspective without truly attempting to understand the views of those that live there. When you speak to anyone in Egypt, commonly their first priority is their own well-being; a job, food on the table and a good family life. You will not find many people that want to go back to the days of Mubarak; Egyptians are no longer afraid to speak their minds and that freedom is invaluable, but the concept of democracy is not their main priority.<\/p>\n
In this light, I look at the announcement last week of Abdul Fattah El-Sisi to run for president in the upcoming presidential elections. The now former head of Egypt’s Armed Forces – he resigned because Egyptian law stipulates that only civilians can run for president – is supported by many Egyptians. His supporters believe he is the kind of strongman Egypt needs to bring much needed security and stability to the country, and they could be right. While some foreign papers see it as a validation of their earlier statement that the 30 June Revolution was in fact a coup d’\u00e9tat; realistically Sisi appears to be the only candidate that is able to unite and lead the country at this moment in time. I believe there are very few people that would bet against him in the elections, with many saying he will win by a landslide.<\/p>\n
Ideally the coming four years will see other strong civilian candidates rise to the foreground to ensure that Egypt truly moves towards the ‘civil state’ mentioned in the recently amended constitution. For now, it might not be such a bad thing to have someone in charge that can provide sufficient security against threats from inside and outside the country, and most importantly has the support of so many Egyptians.<\/p>\n
Meanwhile, recent reports issued by the Office of National Statistics and Confederation of British Industry (CBI) suggest that the UK economy is continuing to show signs of improvement following the 2008 economic downturn. Despite a slight slowdown in growth, particularly in the retail and services sectors, companies are increasingly confident that recovery is taking hold. The CBI said that this improving sentiment should start to feed through into increased business investment, new jobs and higher pay.<\/p>\n
According to surveys conducted by YouGov and the Centre for Economics and Business Research (Cerbr), confidence among consumers is at its highest point since 2007. The Federation of Small Businesses said confidence was building among its members, prompting more pay rises after small firms froze or cut salaries during the recession.<\/p>\n
Egypt was, is, and will be a great investment destination. Confidence will undoubtedly return once a more permanent government is in place and security increases. The new government needs to immediately work on creating a more sustainable recovery of Egypt’s economy in the form of increased trade, a higher income from tourism and a boost in foreign investment. Egypt should no longer depend on loans from donor countries in the Arab Region to sustain its economy. I have no doubt that Egypt is on the right path – combine this with increased confidence in the UK market and the future for business between the two countries is as promising as ever.<\/p>\n
Karin van Wesep
\nBusiness Development Manager
\nThe Egyptian British Chamber of Commerce<\/p>\n","protected":false},"excerpt":{"rendered":"
Many words have been written about Egypt\u2019s popular uprising since its onset on 25 January 2011 offering a diverse set of valid interpretations related to the cause of the revolution. Some of these \u2018drivers of change\u2019 include demographics, technology, human rights issues, legitimacy of the state, soaring inflation and an unequal distribution of wealth. The …<\/p>\n","protected":false},"author":3,"featured_media":3613,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[36],"tags":[],"class_list":["post-3612","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-te-public"],"yoast_head":"\n