On April 24, AmCham Egypt and the American-Hellenic Chamber of Commerce co-hosted a breakfast meeting at the Grand Hyatt Hotel in Cairo as part of a three-day conference entitled “Business cooperation in the Eastern Mediterranean.”

Gamal Moharam, executive vice president of AmCham Egypt and CEO of Piraeus Bank, introduced Stephanos Costopoulos, president of the American-Hellenic Chamber of Commerce, who was leading a 20-member delegation of senior business representatives from Greece. Costopoulos underscored the potential that exists between Greek and Egyptian businesses: “Without doubt, Greece can be an important hub for Egypt,” he said. “Egyptian companies can be vital partners. This is a win-win relationship.”

Keynote speaker Ziad Bahaa El Din, chairman of the General Authority for Investment & Free Zones (GAFI), spoke on the topic of “Recent changes in Egypt’s investment environment.” He began with a snapshot of Egypt’s economic reforms undertaken since the Nazif government was formed in mid-2004. He highlighted reductions in individual and corporate tax rates, new trade agreements, privatizations of state-owned assets, particularly in the banking sector, and the creation of GAFI’s “one-stop shop” for acquiring business licenses.

He indicated that these reforms have begun to bear fruit, evidenced by the huge increase in foreign direct investment (FDI) over the last few years. In the 2003-04 fiscal year, FDI stood at $2 billion, 80 percent of which went to the oil and gas sector. This figure jumped to $4 billion the following fiscal year, and then $6 billion last year.

“Beyond the actual increase in FDI,” Bahaa El Din said, “the distribution recently has been different, and very healthy.” In FY 2005-06, only 30 percent was geared towards oil and gas, while 55 percent was for greenfield and expansion projects. He also said that the number of companies established has increased, along with the central bank’s official reserves, both indicators of a strong economy.

Bahaa El Din said GAFI has done an important job reducing the time required to receive a business license, from “several months” to “several days,” but that the agency is working to further streamline this process. As part of this effort, Bahaa El Din noted that a change in the investment law would allow for the establishment of new investment zones. He also said that GAFI was collaborating with the International Finance Corporation (IFC), the private sector arm of the World Bank Group.

In closing, Bahaa El Din noted that a common critique he hears is that the benefits of Egypt’s economic reforms have not trickled down to the poor. He stressed that it will take time before the effects are felt by the masses and emphasized that it is also up to individuals to act on their own.

In the question and answer period that followed, Bahaa El Din fielded questions about the criteria for the new investment zones, and about the one-stop shop that opened last month in Alexandria.