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1. Commodities: a. The balance of trade in commodities witnesses a deficit that is increasing dramatically since 2005 as it has mounted from 11.9 billion US$ in 2005 to be 31.8 billion US$ by the end of 2013. b. This huge deficit is due the increase in exports from 18 billion US$ in 2005 to be 25.9 billion US$ in 2013. c. In 2005, the Egyptian petroleum exports were representing 56% from the overall exports, whereas in 2013 it has decreased to be 46%. d. The decrease in the petroleum exports is a positive sign that we have started to depend on non-oil exports having more added value. 2. Services: Egypt’s balance of services in 2005 has achieved a surplus of 7.8 billion US$, and a surplus of 6.6 US$ by the end of 2013. By reviewing Egypt's balance of payment figures throughout the past 10 years, one can easily note that Suez Canal is one of the main pillars in service sector. The Suez Canal’s income has decreased from (7.8 %) in 2005 & (6%) in 2013. From 2005 to 2013, the income of Suez Canal has increased by an average of 17%. It is well noted, that this income has witnessed a stagnation in growth since 2008. Therefore, adopting new concepts in developing its positive and rapid impact on the national economy by increasing the hard currency revenues, is what is being announced nowadays. (The new Suez canal - The SCADP) 1 Business Support Organizations’ Role A) Advocacy to remove "excess" government controls and promoting market competition based economy B) Focus on receiving delegations mainly interested either to invest or import from Egypt C) Work through its specialized committees to improve and establish value - based industries D) Encouraging the growth of new service sector industries E) Optimum use of each organization network of stake holders around the globe and try to encourage, know how transfer / FDI , as well as establishing modernized training centers in sectors of concern, as well as encouraging mutual R & D . F) Enhancing BSO's performance to better serve business community by regularly upgrading services adopting new techniques, automation and HR development. G) Studying the trade structure of our partners to find out the most convenient way for markets penetration especially in new markets H) Capitalize and strengthening relations with countries where we enjoy a surplus in the trade balance I) Study problems using our sectorial committees to propose solutions. 2 Egypt in figures Country Flag Official Languages Foreign languages Arabic English and French widely understood by educated classes Cairo Cairo, Alexandria, Giza, Port Said, Suez, Hurgada, Luxor, Sharm El Sheikh Capital City Main Cities Form of Government Head of State Road Network: Railway Network: Coastline President: ABD EL FATTAH AL SISI Prime Minister Eng. Ibrahim Mehlb 87,363,195 (Oct 2014) 2.5% (2008-2013) 0-14 years: 40.5% 15-44 years: 44.4% 45-59 years: 10.7% 60 years and over: 4.4% 27.6 Million (Q2 2014) , 27.623 Million (2013). 27 Million (2012) , 26.8 Million (2011) 41 Universities (23 Public, and 18 Private) Alexandria, Damietta, El Dekheila, Port Said, Suez, ElSukhnah 108,784 Kilometers 9,570 Kilometers 2,450 km Internet Users 44.51 Million (May 2014) Mobile Users 101.93 Million (May 2014) Head of government Population: Population average Growth Rate Age Structure: Labor Force Universities Main Sea Ports and Terminals 3 Egypt has adopted: a new constitution, a democratic system that applies the rule of law, The separation of powers and stresses on the independence of court system. We have a new elected president with a vision and large popularity that allows him to take difficult decisions to reform economy. And a new economic policy that aims at: Restructuring the budget Boosting exports to reduce current account deficit. Increase the inflow of investment to decrease the growth deficit. Replacing fuel subsidies by spending on health , education, housing and transportation Increasing public revenues by introducing new and fair taxations Decreasing the subsidies on oil products Promoting exports of both goods and services using our trade agreements with the Arab world, Africa, Europe and Turkey. TOURISM The Egyptian government has an ambitious plan to increase the number of tourists to twenty millions in three to five years. MEGA PROJECTS As well as, creating new job opportunities specially that Egypt is currently undergoing new mega projects namely: 1. SUEZ CANAL PROJECT a. Deepening of Suez canal, digging of a parallel canal in both directions with the purpose of increasing the capacity of the canal and decreasing the passage time as well as its positive impact on revenues Suez Canal b. Development of Suez Canal area SCADP, as it is considered as a cross road between three continents. 4 Information on Suez canal: The Suez Canal is considered as a world hub for trade linking the Mediterranean Sea to the red sea directly. The borne trade in 2012 has reached 7.8% of the world trade. Therefore, adopting new concepts in developing its impact on the national economy is what is being announced nowadays. Project one description: This giant project will be the creation of a new Suez Canal parallel to the current channel with a total length of 72 kilometers. The project would include 35 kilometers of expansion and deepening. Aims: Is to speed up traffic along the existing waterway and boost the country’s economy. Increase national income of hard currency. Increase rate of transits and minimize transit time Increase canal’s capacity Increase canal’s competitiveness against other international alternative water routes. Boost Egyptian morale Increase the Suez Canal revenues by 259% by 2023 to become 13.226 billion US$ compared to current revenues of 5.1 billion US$. Increase the canal’s capacity to be 97 vessels in 2023 against 49 vessels in 2014. Less transit time Suez Canal Area Development Project (SCADP) Objectives: Developing and boosting Egypt’s national economy by making use of the unique location of Suez canal Creating new industrial and logistic centers that depend on added value and complimentary industries. Economic boom and job creation Increase the ship traffic 5 2. Golden Triangle: development of south east Egypt between the Nile valley and the red sea which is an area rich in minerals . Upper Egypt’s natural resources will be tapped into to develop the region through the Golden Triangle Project, the second largest developmental project run by the Egyptian government. The project seeks to establish a new industrial capital city through constructing a global, touristic, mining, economic, commercial, and industrial center. It will also create a logistic and economic center northwest of Safaga, which will operate mining activities to make use of the Eastern Desert’s Golden Triangle. This area extends from Edfu, south of Qena, in the Nile Valley to Marsa Alam on the Red Sea coast and Safaga in the north. The project will sit on an area of 6,000 square km and will develop Upper Egypt through constructing an industrial, agricultural, touristic, and commercial zone. The proposed time frame for project construction is two years. A separate entity will implement the project under the umbrella of the cabinet, to build the project as quickly as possible, and at the highest level of efficiency. The proposed projects for the Golden Triangle developmental project include mining projects, such as using phosphate ore and constructing fertilizer factories. Other projects will utilize raw materials to manufacture cement from clay and limestone and produce gasoline from oil-based clay. The project also entails tapping into agricultural lands in Qena governorate and constructing a number of touristic resorts in Dendara, Laqeta, and Qena Valley. It will also develop resorts and tourist villages between the Safaga and Al-Quseir areas. New urban communities like New Qena will be built, alongside a number of new cities on the Qaft-Al Quseir Road floodplain, with Safaga and Al-Quseir further developed. Industrial projects set for implementation will develop the 6 industrial zones in the governorates of Qena, Sohag, and Red Sea as well. The Safaga-Qena railway extends 223 km in length, with 150km to be reconstructed. The plan is to run six trains per day on the railway line. One train has 35 train carriages, each containing 65 tonnes of cargo, while the transport capacity for one line is 7,000 tonnes per day. It can be used to transport materials from production areas in the valley to manufacturing areas, or to transport coal from ports to manufacturing zones. For marine ports, several platforms will be built in Safaga Port for containers, public goods, or dry molding, 5km alongside the coast, with a total capacity of 30m tones. Studies are also being conducted to develop Abu-Tartor Mining Port to raise its capacity from 2.5m tones of dry molding to 6.5m, 2m tones of phosphoric acid. The developments will also see the port’s capacity rise to 1m tones of sulphuric acid, and 3m tones of public goods. It will cost an estimated $135m over three years, allocated to complete bidding procedures and implementation. A total of 300,000 direct job opportunities will be provided during the 20 years of construction the project in the industrial sectors, in addition to 180,000 indirect opportunities, with a total of 480,000 job opportunities as a result of Golden Triangle Project. 3. Egypt’s million square kilometers Consist mainly of desert, split into two halves by the River Nile, compelling Egyptians to cluster around their only stable source of drinking and irrigation water. Around 95 percent of the 62 million Egyptians occupy no more than 5 percent of the country’s total area along the Nile Valley. Accordingly, economic activities, whether industrial, agricultural or service-related, are targeted towards the major metropolitan cities along the Delta with negligible value added generated by the desert governorates. The dynamics of the situation are even more unbalanced with arable-land7 per-capita figures showing a marked decline and the mismatching of annual growth in the labor force with job-generation capacity leading to a crisis in the form of declining marginal productivity. The Egyptian policy to mitigate the crisis has evolved through three overlapping phases. The first phase started in the early 1950s with largescale land-reclamation projects in areas adjacent to the Delta, successfully achieving its target by increasing the land area from 5 million feddans in 1952 to 8 million feddans in 1998. By the second half of the 1970s, a new strategy based on establishing new industrial cities in remote desert regions began to relocate heavy industries, supported by infrastructure designed specially for that purpose. By 1998, the Egyptian government had established 19 new cities and it is expected to increase the number to 41 cities by 2017. Finally, since the early 1990s, based on the relatively disproportionate population-relocation effects of the above-mentioned policies, the governemt has been creating integrated community centers in the desert equipped with an elaborate infrastructure and utilities network to enable it to sustain massive relocation. To attain this objective, four mega projects are scheduled to be operational by 2002, adding no less than an additional 20 percent to the habitable land in Egypt. These four mega projects are planned to capitalize on Egypt’s most precious resources, arable land and strategic location. To utilize the cultivable land plots in the Western Desert and Sinai Peninsula, massive land-reclamation schemes will lay the corner stone for resettlement, agricultural production and exports. To exploit the unique location of the Suez Canal navigation route, an international hub port capable of attracting international container traffic will be established in the East Port Said region to complement the currently existing Port Said, Damietta and Alexandria ports. Finally, situated only 100 kilometers from Cairo in the northern region of the Gulf of Suez, a giant industrial zone is planned to host high-tech industrial complexes with low-cost access to both inputs and consumption markets. A major divergence from prior policies is the private sector’s dominant role in the new mega projects. Although the government contribution in the early stages of these projects is significant, the long-term value added activities will be 75-80 percent dominated by the private sector. In this respect, the government has set up an investor-friendly regulatory 8 environment for projects located in remote regions as per Investment Law No.8/97. In addition, the door has been opened wide for foreign investors to invest in Egypt who positively responded either by establishing a business presence or participating in Build, Own, Operate and Transfer (BOOT) projects. Integrated and sustainable development is the panacea for Egypt’s economic woes. Partial solutions are not capable of alleviating the economic and social pressures resulting from a growing population and labor force in the face of declining arable land, capital and employment opportunities. It has been Egypt’s most ambitious development plan to invest in the 1990s structural reform successes and high macroeconomic performance to expand its productive base to sustain past achievements and future growth 4. Toshka project The Toshka or New Valley Project, which aims to make Egypt selfsufficient in food, is now in the news. The project is designed to channel water from Lake Nasser, the lake formed by the Aswan High Dam into the Western Desert in the southwest of the country to irrigate 1 million hectares and build new cities in the desert. The project now aims to reclaim 108,000 feddans in the first phase, which will eventually increase to 4 million feddans with the purpose of achieving food self-efficiency. As of 2014, only 55,000 feddans were cultivated. The first phase is to be finished within a year. Egypt’s population of 87 million lives on only 5.3% of the nation’s land, in the Nile Delta and Valley. It is hoped that 20% of the Egyptian population will live in the new lands. Minister of Irrigation Hossam Moghazy said, “This project is not about irrigation and agriculture; it is a developmental project to get out of the narrow valley to the vast desert, which covers about 60% of Egypt.” 5. Developing northwest coast This region represents the future of development in Egypt as the northwestern coast extends to 500 kilometers and has a desert hinterland extending to the depth of 280 kilometers. This area could absorb a huge part of overpopulation in Egypt in the coming 40 years. 9 Preparations for new projects in the north coast are ongoing, including the establishment of a new green city of al-Alamein. The project aims to develop the housing infrastructure and boost tourism in the area, which has undiscovered resources. 10