(Consul Nelly Elorabi’s Speech- delivered March 3. 2005 at the Pyramid Club) Ladies and Gentlemen, First of all I would like to thank the Global Interdependence Center for its invitation, and would like to welcome, on behalf of the Consul General of Egypt in New York, the Telecom Egypt managers and engineers who participated in the Leadership Development Program, and wish they had a successful experience. In this evening of networking and discussion on business opportunities, I will tackle the Egyptian efforts to attract direct foreign investment and US-Egyptian trade relations, which gain a major boost recently, after the signature the Qualified Industrial Zone (QIZ) agreement in December 2004, and its beneficial impact on Telecommunication Industry. Since the 90s, the Egyptian Government worked hard to become an active member of the global economy, and lay the ground for trade liberation and promotion of foreign investment. Many incentives have been provided to under the law no. 8/1007, such as: 1- Projects may be wholly owned by foreigners, 2- guarantees against nationalization, 3exemption of foreign projects from corporate tax for a number of years, depending on the nature of the project ‌ etc. However, some might argue that the Egyptian reforms recently were moving too slow. But the endeavors of the government in the past few months just prove the opposite. The government, for example, took bold steps and moved towards floating the pound, passed new labor legislation to relax some the rigidities in the labor market, and further developed the legal basis for the dynamic telecommunications sector. As for bilateral cooperation, Egypt and the U.S. signed a Trade and Investment Framework Agreement (TIFA) in 1999. The TIFA provides a mechanism for facilitating the concrete measures needed to continue moving the two countries towards freer trade are. Also, Egypt has signed the QIZ agreement and was able to obtain seven zones, in Greater Cairo, Greater Alexandria and Canal Zone. The QIZ articles are entitled to dutyfree entry to the American market, with the added value of at least 35%. This 35% minimum content figure can include costs incurred in Israel, Egypt, or the United States. By agreement between Egypt and Israel, Egypt and Israel must each contribute at least one-third (11.7%). The government is very optimist about this agreement, and hope it will pave the way to a rapid development of trade and exports. However, economic interests are not our only goal for cooperation. It is our deep belief that the establishment of the QIZ will contribute to just and comprehensive peace in the region, a peace that started many years ago with the Egyptian Israeli treaty. Ladies and Gentlemen,
The government has identified development of the information technology (IT) industry as a national priority, and the Egyptian Government and private sector are keen to engage with U.S. firms in this area. Today, we have with us a delegation of representatives from Telecom Egypt, the largest public sector company in terms of financial activity and a major player in Egypt's telecommunication sector which is among the largest in the Middle East and Africa, with and estimate of $ 2.6 billion revenues annually and is expected to grow by 10% per year until 2007 to reach a level of $3.7 billion. Information technology (IT) in Egypt continued to grow in 2004, as the penetration increased from 600,000 Internet users in 2002 to over one million by early 2003. The number of mobile phone subscribers has risen steadily, from 654,000 in October 1999 to 3.8 million in July 2002 to 4.9 million in May 2003, with the latest indication pointing to a 6 million subscriber. Egypt has proved to be a promising outsourcing destination for IT and Telecommunication services. This was evidence by the business expansion of several US companies like Microsoft, Oracle and Cisco in Egypt. However, the IT industry as bright as it seems, still face some obstacles such as human resource constraints, incomplete infrastructure, legal and regulatory hurdles for Ecommerce. This is why; the Egyptian Government is aggressively working with the private sector and foreign partners, including USAID, to address these hurdles in an effort to stimulate rapid development. And the Telecomm delegation here tonight is a clear outcome of those efforts, as they visit USA for to benchmark leadership practices in USA-based telecommunications firms and regulatory bodies. And we hope that this partnership will lead to stronger trader cooperation between Egypt and USA. Once again, I would like to thank the Global Interdependence Center for its invitation, and thank you so much for participating in this event. ****************