Annual Report 2004
	President's Letter Committee Highlights AmCham Profile Events Highlights Board of Governors DoorKnock Report Committee Chairs 03-04 Committee Chairs 04-05 Operations & Services Constitution AmCham Annual Reports History

LUNCHEON MEETINGS

Minister of communications and information technology: ‘IT as a business catalyst’

Information and communications technology (ICT) was the focus of discussion at a monthly luncheon held on January 5, 2004, featuring guest speaker Minister of Communications & Information Technology, Ahmed Nazif.

Since the creation of the ministry in 2000, the numbers of Internet users jumped from 400,000 users in October 1999 to 2.7 million in 2004. Over the same period, the number of telephone lines increased from 4.9 million to 8.7 million, while mobile phone users jumped from 600,000 to 5.7 million.

In his speech, Nazif focused mainly on the outcome of the World Summit on the Information Society (WSIS), held in Geneva in December 2003. Bridging the digital divide – both between and within countries – was the main issue raised at the summit, which Nazif and President Hosni Mubarak attended on behalf of Egypt. Nazif noted that, in Egypt, many barriers still exist to bridging the gap, especially between rural and urban populations.

However, Egypt has made “exponential” progress in ICT, he stressed, pointing to improved quality of telephone networks, a boom in mobile phone users, with an estimated 100,000 new subscribers each month, and the introduction of key public-private ICT partnerships, including the “Free Internet” and “PC for Every Home” initiatives.

Another critical issue raised at the summit revolved around Internet governance as well as the defining of the roles played by the government and private sector vis-à-vis Internet access.

He went on to list some of the accomplishments achieved by his ministry: a portal for government services already exists, he explained, and MCIT is currently looking for private sector support to provide 400,000 additional PCs to 7,000 schools by 2007. A “telemedicine” network, too, has been launched with the aim of promoting e-health, while an electronic cultural preservation center has been set up at the Smart Village. E-business has also been in the spotlight, with the forthcoming e-signature law and initiatives to tackle cyber crime.

Speaking from an international perspective, Nazif argued that currently, there are many barriers preventing developed countries from outsourcing to cost-effective alternatives in developing countries such as Egypt. Egypt’s large pool of ICT talent will boost the industry, the minister said, if such barriers are broken down. “We have the potential to become more competitive in many ways,” the minister commented.

In this regard, the ministry has stated its goal of boosting national software exports from an annual $150 million to $500 million within three years.

etroleum minister discusses the future of local oil and gas

On January 14, Minister of Petroleum Sameh Fahmy was the guest of honor at a monthly luncheon held at the Cairo Marriott’s Aida Ballroom.

The minister began his speech with a brief historical overview of the local petroleum industry going back to 1964, when the massive El Morgan crude oil field was discovered. Over the course of the last 30 years, he explained, 293 concession agreements were signed, 44 percent of which were with U.S. companies. This was reflected in export receipts: in the 1998-99 fiscal year, the minister said, petroleum exports to the U.S. were worth $44 million, while in 2002-03, they stood at $157 million, mainly from high-quality petrol products.

Fahmy went on to explain that – despite the popular misconception that revenue is split 50-50 between foreign companies and the state – Egypt’s share of that revenue was some 76 percent.

The minister also said that Egypt’s production of oil and gas had increased noticeably in recent years, rising from 55.4 million tons in 2001-02 to 57.3 million tons in 2002-03.

In terms of Egypt’s ace-in-the-hole, natural gas, Fahmy was no less optimistic. He explained that, recently, there had been a dramatic rise in the country’s total proven gas reserves, adding that natural gas export contracts were signed with Spanish, Italian, French and U.S. companies (although the minister reiterated Egypt’s policy of never contracting out more than one-third of the country’s total reserves).

He pointed out the importance of the landmark inauguration of the much-celebrated Egypt-Jordan gas pipeline last year, and added that the Damietta and Rashid LNG complexes, currently under construction, would be among the largest in the world.

The minister went on to highlight Egypt’s current “six-years-from-discovery-to-export” strategy, predicting that by 2006, the country would be ranked the sixth largest LNG exporter in the world. “Our goal is to have exported 30 million tons of natural gas by 2010,” he said.

The minister expressed his hope that, as natural gas gradually takes the place of oil as the primary energy source globally, Egypt would enjoy its share of growing – mainly U.S. – demand, and encouraged American companies to continue their longstanding cooperation with Cairo. “We invite U.S. investors – along with other investors – to participate in gas and oil projects in Egypt,” he said, suggesting that, “ Egypt can become a hub for energy resources to the United States.”

Fahmy wrapped up his talk by rattling off Egypt’s many advantages vis-à-vis petroleum production and export, including long-term political and economic stability; a perpetually developing investment climate; Cairo’s clear-cut policies; and formidable national infrastructure.

“Ingredients for a successful reform program” was the topic of a talk given by Alan P. Larson, undersecretary for economic, business and agricultural affairs the U.S. Department of State, at a special luncheon for AmCham Egypt members on February 26.

Larson began by saying that U.S. initiatives in the region aim at creating greater economic and educational opportunities, while simultaneously expanding the role of citizens in shaping their countries’ futures. He contested the perception that U.S. and EU positions on reform in the region diverged sharply, saying that “there is a large degree of convergence” between the two visions. In view of what he called “signs that people and leaders in the region are interested in accelerating the reform process,” he explained that the goal of the U.S. was merely “to be a good partner” in the support of such endeavors.

The undersecretary hailed Cairo’s efforts to reform the private sector, the customs regime and monetary policy as “signs that Egypt is moving ahead on reform.” He also mentioned the de-listing of a number of companies on the Cairo & Alexandria Stock Exchanges, following their failure to comply with disclosure procedures, as an illustration of the government’s commitment to transparency in economic dealings.

Nonetheless, he asserted that there is more work to be done in enhancing the free flow of information, corporate accountability and good governance, saying that a lack of transparency creates “a form of uncertainty that can be very damaging” to the business environment.

As for the direction of the U.S.-Egypt relationship, he said that an “economic relationship whose fundamental core is economic development assistance isn’t going to be a vibrant relationship.” Instead, he explained, the relationship needs to develop toward emphasizing private sector interaction, because “private capital can make Egypt the powerhouse of the 21st century.”

On the issue of Egyptian aspirations to open FTA negotiations, Larson said, “I believe the important strategic relationship will not be complete until there is an FTA.” Such an arrangement, he added, would be “a rock in the relationship and provide an organizing principle for further reform.” Embarking on FTA negotiations, said Larson, “is now a matter of timing and how to ensure there will be success.”

However, he cautioned that the process is far from simple. “For FTAs with the U.S., negotiations are extraordinarily complex, dealing with services, manufacturing, agriculture, investment, intellectual property rights, transparency procedures and other activities,” he said.

In closing, Larson reaffirmed the necessity of reform in light of the demands of an increasingly globalized economy. “The most successful countries are those that decide to reform faster – to take those steps now,” he said.

‘Economic, political and cultural reform: The Alexandria Declaration... What next?’

AmCham Egypt held its Pre-Annual General Meeting luncheon on May 23 to discuss the steps needed to realize the goals of the Alexandria Declaration, a wide-reaching plan for economic, political and cultural reform.

Guests at the luncheon included Kamal Aboulmagd, vice president of the National Council for Human Rights, Ismail Serag El Din, director of Bibliotheca Alexandrina, and Mahmoud Mohieldin, chairman of the economic committee of the ruling National Democratic Party (NDP).

The overall consensus was that Egypt needs to take action on necessary reforms sooner rather than later. Serag El Din stressed the importance of grassroots participation to ensure transparency and accountability. Mohieldin outlined the key areas in need of reform, namely, decentralization of decision-making – a goal supported by the NDP – trade liberalization and the protection of intellectual property rights.

Aboulmagd discussed reform of Egypt’s political environment, explaining that “it is impossible to achieve economic or social reform without political reform.” In closing, he offered a sober warning. “We are facing one of the most serous crises in our history. Danger is knocking at our door, and to delay additional economic reform is to invite in the unknown.”

avid Welch, ambassador of the United States to Egypt: ‘Just do it’

On May 31, AmCham Egypt held its Annual General Meeting (AGM), at the Grand Hyatt Cairo hotel. AmCham executive director Hisham Fahmy kicked off the meeting with a brief presentation on recent improvements made to the AmCham Egypt website (www.amcham.org.eg), noting that that the Chamber had become the first organization in Egypt to offer online registration and payment. He also announced the launch of the new “CyberLink” network, which will allow member companies to communicate with each other via the website.

Tarek Mansour, country senior partner of PricewaterhouseCoopers, presented the auditor’s report included in the 2003 annual report. “The financial position of the Chamber is in good health,” Mansour said, noting that AmCham boasted a $10,500 accumulated surplus for the year ending December 31, 2003.

AmCham president Taher Helmy then shared highlights from the AmCham Board of Governors’ report for 2003. He pointed out that the Chamber currently boasted 20 different sector committees with more than 160 meetings all featuring prominent committee speakers including National Democratic Party (NDP) policy head Gamal Mubarak; petroleum minister Sameh Fahmy; communications and information technology minister Ahmed Nazif; U.S. undersecretary of state for economic affairs Alan Larson; and Microsoft founder and CEO Bill Gates. Helmy then introduced the main speaker, David Welch, the U.S. ambassador to Egypt.

Welch focused mainly on the economy giving an overview of the year, starting with the currency devaluation, pointing out that after the floating of the pound, exports and local production became more competitive, while imports became more expensive. “Egypt ran up a balance-of-payments surplus for the first time since 1997, meaning that more foreign currency came in – from exports and tourism – than left the country,” he said. He also pointed out that Egyptian exports to the U.S. were up by 26 percent – to $1.1 billion – over the previous year.

As for tourism, he recalled that the industry had braced for a $2 billion loss in revenue as war loomed over Iraq. Happily, though, he added, more than 6 billion tourists – a record – ended up visiting Egypt. Welch also noted that “four times as many American tourists, in particular, visited Egypt in the first quarter of 2004 than did in the same period in 2003.”

The ambassador also noted the launch of Egypt’s first natural gas exports to Jordan, begun in the summer of 2003, while LNG exports to Europe were slated to begin later in the year. “In another five years,” he said, “ Egypt could become one of the biggest LNG exporters in the world.”

The ambassador went on to mention Egypt’s nascent IT sector, which he noted was largely “impervious to economic fluctuations,” saying that the launch of the “Free Internet” initiative and “smart villages,” along with Egypt’s accession to the WTO’s IT convention, were positive developments.

Welch concluded his talk by announcing that $300 million in special funds – granted Egypt by U.S. Congress last year – would be disbursed imminently.

“You know what you have to do,” he concluded. “Just do it, and you’ll truly see a tiger on the Nile.”

AmCham hosts senior representatives from U.S. think tanks

AmCham Egypt hosted a special lunch on June 23 for senior representatives from prominent think tanks in Washington, DC, visiting the country as part of a special delegation.

Issues discussed included U.S.-Egypt relations, Egypt’s special role in the Middle East, as well as economic, political and cultural reform in the region.

Members of the delegation were: Congressman Howard Berman (D-CA), member of the House International Relations Committee; Dennis Ross, director and Ziegler distinguished fellow at the Washington Institute; Robert Satloff, director of policy and strategic planning at the Washington Institute; Geoffrey Kemp, director of the Regional Security Program at the Nixon Center and former National Security Council Middle East expert in the Reagan administration; Wendy Sherman, principal at the Albright Group and former State Department counselor in the Clinton administration; Walter Slocombe, partner at Caplin & Drydale, former undersecretary of defense in the Clinton administration and former special adviser on defence in the Coalition Provisional Authority in Iraq.

Arab League secretary-general Amr Moussa: ‘The future of Arab-American relations: Time for a new outlook’

On June 29, AmCham Egypt hosted a luncheon at the Cairo Marriott hotel on the subject of “The future of Arab-American relations: time for a new outlook,” featuring Arab League secretary-general and former foreign minister Amr Moussa.

The Arab League chief started by thanking sponsors and AmCham for making the event possible. Moussa declared that a big question mark hung over the U.S. relationship with the Arab world. “I’m a man who believes it’s in our best interest to have the best possible relations with the U.S. This entails various efforts on the part of both Washington and the Arabs,” he said.

Moussa stated that upon the end of the Cold War, most hoped to see a new international system founded on democracy and human rights. In the Middle East, the apogee of this sea change to the global order was represented by the Madrid conference, convened by the U.S. with the aim of finally solving the Israel-Palestine dispute equitably.

But these negotiations broke down after Oslo, said Moussa, as the Israelis were “encouraged to do anything they wanted, while the Arabs were, on the ground, offered very little.” By the late 1990s, he continued, “ U.S. support for Israel made us abandon the hope of a just settlement. We didn’t know then that we’d soon see something even worse.”

With the coming of the George W. Bush administration to the White House, Washington’s support for Tel Aviv’s heavy-handed policies in the Occupied Territories became total. “ Israel has now acquired impunity in international affairs,” he said.

Moussa went on to warn of “a certain religious dogma” that has gained influence in the U.S., and is largely the reason for Washington’s adoption of the Israeli line vis-à-vis Middle East policy.

While Moussa said he was “gratified” by Bush’s earlier vision of a two-state solution to the conflict, “this has yet to materialize,” he said. “Let us hope (against hope) that U.S. Middle East policy will be re-visited, or all the tension will continue.”

On Iraq, and the recent “handover” of sovereignty to a U.S.-appointed Iraqi government, Moussa said, “I wish the new government well. I hope it will rise to the occasion. Nevertheless, the current chaos doesn’t bode well. A strategy is required.” He went on to note that, “the restoration of sovereignty is one issue. Full withdrawal of the U.S. military is another issue. As long as there are foreign forces in the country, there are going to be resistance attacks.”

With regard to reform of the Arab League in particular, he explained that reform was “here to stay, and now at the core of the Arab League. He went on to point out two important reformist resolutions that came out of the Tunis meeting. The first was aimed at furthering economic and social reform, while the second involves the modification of the Arab League charter, and the eventual creation of an Arab parliament; a court of justice; a joint security mechanism; an Arab investment bank; an Arab cultural council; and a sanctions regime for cases of non-implementation.

In conclusion, he said that many questions would be answered in 2005, a year in which Iraqis have been promised free elections (scheduled for January) and Palestinians have been promised a state (according to Bush’s “roadmap”).

Minister Rachid Mohamed Rachid spells out plans for boosting competitiveness and exports

On September 12, AmCham hosted a luncheon at the Cairo Conrad hotel featuring guest speaker Rachid Mohamed Rachid, minister of foreign trade and industry, who outlined his ministry’s short-term intentions vis-à-vis the industrial sector, exports and trade agreements.

Rachid emphasized that the new government was eager to partner up with the private sector to “share a vision and a work plan” in order to confront several vital issues, including “restructuring, competitiveness and exportability.”

In terms of national exports, Rachid was optimistic. “We export 4 percent of our industrial product,” with total exports racking up some £E 6 million to £E 8 million a year, he noted, comparing these figures unfavorably to other developing countries such as Turkey and Tunisia.

The bulk of Egypt’s exports, meanwhile, which constitute mainly raw materials with no value added, he said, were “not very profitable.”

Rachid explained that, in order to improve local industry and exports, the ministry would – in partnership with the private sector – “focus its resources” on a few of the most pressing problems. He went on to spell out the ministry’s “vision” for the twin sectors, in which local industry and exports are made more competitive by maximizing existing strategic advantages, resulting in both higher value added and the penetration of fresh export markets.

The minister set down three specific short-term goals, namely: to boost the annual growth rates of total export values by 17 percent; for manufacturing value-added by 6 percent; and for strictly industrial exports by 20 percent.

Rachid then listed 10 “strategic thrusts” aimed at achieving these goals:

1) Revolutionize the environment for business by eliminating obstacles to business; decentralization; and pushing legislative reform; 2) Develop industrial-sector strategies to promote transparency and the disclosure of the criteria for government intervention in order to maximize the industrial sector’s competitive advantages; 3) Support and promote export; 4) Re-engineer the Export Development Fund; 5) Modernize the industrial sector through improvement of quality, standards and accreditation; innovation and technology transfer; access to knowledge; the upgrade of institutions; and the convergence of the Industrial Modernization Program (IMP)’s activities with the ministry’s own; 6) Maximize the benefits of trade agreements by maximizing the benefits accrued by existing free trade agreements; 7) Enhance the contribution of local human resources; 8) Maximize and mobilize financial resources; 9) Build Egypt’s image; and 10) Communicate and inform.

The minister concluded by saying that, “we need to change the existing mindset regarding global integration,” as well as to “align our efforts in one direction.”

On September 28, AmCham Egypt had the honor of hosting newly appointed Prime Minister Ahmed Nazif at a monthly luncheon held in the Grand Hyatt Cairo’s Farhaty Ballroom. The event, which was transmitted live via AmCham’s videoconference facilities to personnel at the Smart Village, drew a capacity crowd of 830 members and guests.

Nazif began by citing Egypt’s four key strengths. Firstly, he noted, Egypt is a vibrant emerging market. Secondly, he pointed out that Egypt has invested heavily in infrastructure that can support growth. Thirdly, said Nazif, Egypt’s population offers “a young workforce that is cost effective yet adaptable.” And finally, he noted, “God has given us this strategic meeting point between three continents... and a strategic and secure environment with excellent global relations.”

The prime minister then outlined a plan to draw cautious investors to Egypt. “Skeptics do not want to see just a mood change, they want to see action,” he said. His plans included: removing obstacles to business and investment; boosting the competitiveness of the workforce and business institutions; restructuring the social safety net; and redefining the role of the government by launching administrative reforms.

“We’re restructuring the government’s interface with investors,” he said, noting that the General Authority for Investment & Free Zones (GAFI) had just elected a new board and would take on more of a promotional role. He added that fast dispute resolution mechanisms should be developed, existing legislation should be reviewed to eliminate impediments and that investor services need to be centralized into “one-stop-shop” facilities.

In terms of improvements to the business environment, Nazif pointed to the need for reforming customs, the tax system, banking and enhancing investment development.

Egypt, Nazif continued, needs to divest its portfolio of public-owned companies; deregulate public services such as transport, health and education; seize market-driven opportunities to promote sectors such as tourism, energy, housing, agriculture, industry and IT; and capitalize on export-oriented opportunities through existing trade agreements.

Egypt has plenty of exports, commented Nazif, but “the challenge is to move from exporting talent to exporting services.” He outlined several ways of doing this, including: developing export infrastructure; providing export guarantees to Arab and African countries, focusing on the service-side (such as outsourcing); and concluding framework agreements with technology providers, which Nazif described as a “formula that cannot fail.”

The prime minister said job creation was essential, listing four key ingredients to improving the labor force. He said Egypt must create a wider, far-reaching role for its social fund, support employment incentives, export skilled workers to foreign markets and improve employment services and information.

Nazif said education was a top priority, stressing the importance of quality education above all else. “People don’t want free education, they want good education,” he said. The education system should be adjusted, he insisted, to “emphasize leadership development and foster entrepreneurship.”

Nazif encouraged greater cooperation between Egypt and its number one single trading partner, the United States. He pointed out that in the first three quarters of 2003-04, the U.S. accounted for $3.3 billion (26 percent) of all imports and $2.7 billion (36 percent) of all exports, as well as $800 million (36 percent) of all expatriate remittances. He pointed out that Egypt was the second largest recipient of U.S. aid and had received $3.5 billion in total investment to date, mostly in the petroleum sector.

The prime minister concluded by saying he was positive about Egypt’s future. “We know our strengths, we stand on firm ground and I believe we can meet all of the challenges ahead of us,” he said.

AmCham Egypt hosted Foreign Minister Ahmed Aboul Gheit on December 15 at its monthly luncheon, which was held in the Grand Hyatt hotel in Cairo. A number of influential political and business figures from both Egypt and the U.S. attended the event, including U.S. Congressman Robert Nye (R-Ohio) and members of his staff.

Aboul Gheit spoke to the audience about the direction of Egypt’s foreign policy, highlighting what he described as the “five primary pillars” of Egypt’s approach to international diplomacy: focusing on the Middle East, sub-Saharan Africa, Europe and the United States, Asia and Latin America, and international organizations such as the UN. He then gave an overview of the initiatives the ministry is undertaking with each.

He emphasized the ministry’s dedication to the Middle East in promoting “peace and stability for Egypt and the region, particularly in Iraq and Palestine.” He went on to explain the twin elements of all Egyptian diplomacy – security and foreign policy. “Egypt must engage with whoever is interested in building a structure of peace in those tormented countries, he said.

On January 19, the secretary-general of the Supreme Council of Antiquities, Zahi Hawass, was the guest of honor at a breakfast meeting hosted by AmCham Egypt, held at the Semiramis InterContinental Hotel.

Hawass regaled the audience with tales of his archaeological discoveries in locations across Egypt, ranging from Bahariya oasis in the Western Desert to Edfu in the south and the pyramids plateau on the outskirts of Cairo.

But the lessons of the Bahariya excavations go beyond the secrets of the golden mummies.

Following coverage of the captivating discoveries by media around the world, the oasis was transformed from an off-the-beaten-track destination attracting a handful of intrepid backpackers to one that now hosts some 10,000 foreign visitors annually.

Hawass said that there were currently 13 different museums on the drawing board. While they will be spread across the country, many will be located in the vicinity of archaeological sites, with the aim of drawing tourists to these areas. Others, such as that slated for Sharm Al Sheikh, will bring the wonders of the ancient world to those visitors enjoying seaside holidays.

On the issue of the return of stolen artefacts to Egypt, Hawass emphasized that he is not seeking the return of the many Egyptian antiquities scattered across the globe. Nonetheless, he asserted that all items which left Egypt after 1972 must be recovered, as they are considered stolen under UNESCO conventions. There are, however, five specific items he does believe should be returned, including the Rosetta Stone and the bust of Nefertiti.

On January 26, Naguib Sawiris, chairman of Orascom Telecom (OT), explained to attendees at a special AmCham breakfast how his company had gone from operating exclusively in Egypt to working throughout Africa and the Middle East.

For Sawiris, OT’s strategy of using its domestic success as a springboard into foreign markets carries an important message about the region’s business potential. “If we concentrate, we, with our own minds – Arab minds – can do something better,” he said.

OT moved into GSM services in 1998 with MobiNil, Egypt’s first private mobile services provider. Jordan’s Fastlink, the company’s first ICT project abroad, was followed by activities in countries around Africa and the Middle East.

In time, OT’s rapid and extensive expansion proved a burden on its human resources. As a result, it shifted to what Sawiris called a “leaner approach.” It sold its licenses in countries with small populations, while holding on to those in markets with greater potential for subscriber growth.

On the basis of that strategy, the company has bid for contracts in Iran and Saudi Arabia. OT’s goal is to be the largest GSM operator in the Middle East, with networks up and running in five to seven different countries.

Concerning OT’s successful bid last year for the GSM license in central Iraq, Sawiris said that the company’s experiences operating in volatile settings such as Pakistan, Algeria and Yemen proved decisive.

As for Egyptian companies eyeing the Iraqi market, he urged them to take the plunge. “The opportunities are immense for the [Egyptian] private sector,” he said, highlighting Egypt’s warm relations with Iraq and their common language.

He noted, however, that, in order to seize such opportunities, companies must take the initiative. “Don’t depend on the government,” he said. “Just go.”

On April 5, Peter Chase, U.S. State Department special negotiator for biotechnology, addressed AmCham’s Trade & Commerce Committee at a breakfast briefing. Chase works with U.S. agencies, embassies and non-governmental stakeholders to help build international support for the regulation of agricultural biotechnology.

He began his speech by outlining how biotechnology can help improve crop yields, and how the development of agricultural productivity in developing markets is crucial.

According to Chase, developing countries’ agricultural yields grew dramatically between 1980 and 2000. Half of that growth, he explained, can be attributed to improvements in the agricultural sciences.

Chase argued that agricultural biotechnology can help meet the demands of consumers, illustrating how economic forces and technology interact to create new markets. He said that future challenges include the need to regulate the use of agricultural biotechnology and the control of diseases that harm crops.

Chase added that biotechnology wasn’t a tool available only to wealthy countries, but that developing countries, too, can reap its benefits.

Pointing to developing countries’ fears that their produce can be blocked from entering Europe if they use biotechnology, Chase said that an essential condition for the adoption of biotechnology is confidence that that scenario won’t happen. It is thus the obligation of developed countries to establish science-based regulations that won’t be used as trade barriers.

At a time when food security is an issue of global concern, it’s important to consider the opportunities presented by agricultural biotechnology, Chase asserted. Considerable potential is found in drought-resistant crop varieties for Africa, for example, while other technologies can boost health and nutrition. Agricultural biotechnology can also help to foster economic self-sufficiency for subsistence farmers in developing countries.

A new members’ orientation breakfast meeting was held on June 9 at the AmCham Egypt premises to familiarize new Chamber members with AmCham’s programs and its role in the community, and to consider ways to better serve its membership. Vice president, membership Anis Aclimandos kicked off the meeting with welcoming remarks, after which the new members in attendance introduced themselves and explained their respective companies’ activities. Executive director Hisham Fahmy then gave a presentation on the various services offered by AmCham as well as its role as a bilateral chamber of commerce.

Board of Governors breakfast meeting with Congressman Tom Lantos

Members of AmCham Egypt hosted visiting congressman Tom Lantos (D-CA) over a working breakfast on August 17. The breakfast provided an opportunity for a frank and constructive dialogue with AmCham’s board and leading members of Egypt ’s private sector on a wide range of issues relating to Egyptian-American relations, and ways of strengthening the relationship in light of the circumstances faced by the region.

AmCham members expressed their appreciation for U.S. economic aid and recognized its importance to the Egyptian economy. They also pointed to the assistance as a source of stability in the Egypt-U.S. relationship.

The proposal put forward by Lantos and others to convert U.S. military assistance to Egypt to economic aid was raised during the course of the discussion. AmCham members expressed clearly their view to Lantos that such a proposal would not be in the interests of Egypt or the U.S. , and would undermine the close strategic partnership that both countries have managed to build over the past 30 years. AmCham recognizes that the military and security relationship has and will continue to serve as the pillar of the strategic partnership between the two countries. AmCham members also emphasized the importance of maintaining the strength of the Egyptian military because Egypt is a strong and stabilizing force in the region. Additionally, Egypt ’s stability is paramount to the growth of the private sector and allows it to flourish and play its part in economic development.

AmCham welcomed the opportunity to relate these views to Lantos, and looks forward to further pursuing and enhancing such dialogue in the spirit of friendship and mutual respect that has characterized Egypt-U.S. relations over the years.

AmCham briefs diplomats and members

On September 1, AmCham executive director Hisham Fahmy, along with AmCham managers, held a breakfast briefing with a number of foreign ambassadors to Egypt , including Japan ’s Kunihiko Makita , Poland ’s Jan Natkanski and Mexico ’s Miguel Angel Orozco Deza. Ashraf El Rabiey , Egypt ’s minister plenipotentiary at the embassy’s commercial representative office in New York , also attended.

Joining the diplomats were prominent AmCham members, including Unilever Mashreq chairperson Hosna Rachid; BG Egypt president Oscar Prieto; International Air Conditioning Co. CEO Ahmed K. Ashour; Mac Carpet COO and boardmember Alaa Hashim; Master Gas chairman Tamer AbuBakr; Pharaonic AIG Insurance Co. vice chairman and managing director Mujib Khan; Suez Oil Co. (SUCO) general manager and managing director Hans H. Andreae; and Xerox Egypt vice president and general manager David Dyas.

The AmCham team informed attendees about the Chamber’s latest activities and explained how best to make use of the Chamber’s website and other member services. AmCham regularly briefs members of the business, political and diplomatic communities on its activities and services.

‘Where have all the managers gone?’

On September 9, AmCham held a special breakfast meeting featuring guest speaker David Fagiano, chief operating officer of Dale Carnegie & Associates.

Fagiano raised the question, “Where have all the managers gone?” looking in particular at the challenges faced by management in the contemporary business climate.

Dale Carnegie & Associates is a performance-based training company with 80 offices worldwide, programs in 20 languages and 6 million graduates. The organization has provided human resources training since 1912.

Bannerman offers views on U.S. elections

On October 14, AmCham organized a breakfast briefing with visiting guest speaker Graeme Bannerman, president of Bannerman & Associates and Egypt ’s official lobbyist in the U.S. , for AmCham board members and DoorKnock participants.

Bannerman, a former staff director of the Senate Foreign Relations Committee, began by pointing out that the rhetoric of the U.S. presidential candidates should be taken with a grain of salt. He said that regardless of candidates’ platforms, their stance towards Middle East issues would ultimately be determined by their staff.

While he acknowledged concerns about American perceptions and foreign policy, Bannerman explained that one of the advantages the U.S. has as a culture is its willingness to change. He pointed out that there are signs that Americans are now questioning assumptions.

Bannerman went on to discuss American concerns over democratic reform in the Middle East and the challenges posed by Iraq . He also answered questions on a variety of topics, including the candidates’ stance on the Palestinian issue, ways of improving bilateral communication and prospects for a U.S.-Egypt FTA.

Thai ambassador visits AmCham

On November 9, AmCham executive director Hisham Fahmy, along with AmCham managers, held a breakfast briefing with Thailand ’s ambassador to Cairo , Charivat Santaputra, and prominent AmCham members, including Eli Lilly country general manager Nabil Daoud; Pierre Francon, HSBC Bank Egypt deputy general manager of corporate banking; and Guy Poupet, managing director of National Société Générale Bank (NSGB). The AmCham team informed attendees about the Chamber’s latest activities and advised on maximizing the impact of the Chamber’s website and other member services.

AmCham regularly briefs members of the business, political and diplomatic communities on its activities and services.

SPECIAL EVENTS

Veteran members honored

On January 5, AmCham held a special gathering to honor members who have held membership with AmCham for 15 years or longer. Long-standing members were welcomed and thanked by AmCham president Taher Helmy; vice president, membership Anis Aclimandos; and executive director Hisham Fahmy. In appreciation of their commitment to AmCham’s objectives and purpose, the members received a golden scarab pin and a membership certificate.

AmCham ‘seizes the future’ with special guest Bill Gates

AmCham Egypt – along with the Egyptian Businessmen’s Association and the U.S.-Egypt Business Council – had the honor of supporting a special event, hosted by Microsoft, featuring Microsoft CEO and chief software architect Bill Gates and Gamal Mubarak, head of the National Democratic Party (NDP)’s policy secretariat.

The event – attended by over 1,200 members and special guests, including Prime Minister Atef Ebeid, Minister of Communications & Information Technology Ahmed Nazif and several other ministers – was held on January 24 at JW Marriot’s Mirage City.

Ali Faramawy, Microsoft’s regional director for the Middle East and Africa , introduced Gates, who began his presentation with a brief autobiographical background. Gates recalled his first glimpse of a computer at age 13. In those days, he said, “people tended to think of [computers] as more oppressive than empowering.” His vision, he added, was to “allow the computer to become an instrument of empowerment.”

Now, he explained, the pace of chip-based technology is moving faster than ever, while optical-fiber cable technology is improving at an “exponential” rate. Technology, he added, is moving “fast enough that it’s impossible to tell where we’ll be in a hundred years.”

As to what can be expected in the next decade, Gates predicted that computers would be smaller, more secure and rely more on voice-recognition technology, allowing their owners to literally talk to them.

Turning his attention to Egypt , the Microsoft founder said, “the primary resource that Egypt has is its human resources,” adding, “we’re proud of the work we’ve done on training developers here.”

Faramawy also introduced the evening’s other key speaker, Gamal Mubarak, who opened his speech by expressing his pleasure at Gates’ visit – who he described as “a man whose name has become synonymous with technology” – on the famous innovator’s first trip to Egypt .

The occasion, he explained, was “a good chance to step back and take stock of where we are,” in terms of political, economic and social reform – all issues close to Mubarak’s heart. Additionally, he asked, “What does the future have in store for us as a nation? And... how can we equip ourselves for tomorrow?”

Mubarak urged the audience to marvel at the technological strides made in the last century, noting that the fields of aviation and medicine had seen particularly revolutionary progress in the 1900s.

“Now we stand at the threshold of a new technological era – a revolution in communications and information technology,” Mubarak said, noting, “It’s not just about expanding bandwidth... It’s the intersection of IT with all spheres of human interaction. These breakthroughs will transform the way we work, play, live and organize.”

The information age, he went on, “brings with it a transformation in the relationship between governments and citizens. It forces governments to adopt greater standards of transparency and openness – and all of this is happening at an ever accelerating pace.” He then asked, “Can any society afford not to be a part of this new world?”

Mubarak reminded the audience that it wasn’t the first time the Middle East had undergone a historical, technology-based transition, pointing out that, in the 18th century, the region had suffered through the upheavals of the Industrial Revolution. “Education – then, as now – becomes the answer,” he said. He also noted Egypt ’s particular role as a regional leader. “ Egypt was at the forefront of this process of creating a modern, industry-based economy.”

Inauguration of the new Sound and Light show at the Giza Pyramids

On the occasion of the inauguration of the new Sound and Light show at the Giza Pyramids, the Travel & Tourism Committee organized a cocktail reception on March 10 for AmCham members and their guests.

The event, attended by more than 250 people, included an exclusive viewing of the new show, which narrates the history of ancient Egypt amid magnificent sound and light effects.

AmCham expressed its appreciation to its sponsors, the Conrad Cairo Hotel and the Misr Company for Sound & Light, for helping make the event a success.

Ambassadors visit AmCham

AmCham Egypt executive director Hisham Fahmy and managers briefed Panayopis Viassopoulos, ambassador of Greece to Egypt; Tjeerd De Zwaan, ambassador of the Netherlands; and Abdel Rahman Salah, deputy assistant minister for North American affairs at the Egyptian Ministry of Foreign Affairs.

Joining the ambassadors were distinguished members, chairwoman of Shell Companies in Egypt Iman Hill; regional vice president for Africa of Halliburton Ahmed Hussein Lotfy; chairman and managing director of Suez Canal Bank Wagdi Rabbat; general manager, passenger sales Egypt and director, Northeast Africa of Lufthansa German Airlines Peter Emmerich; and policy and corporate affairs manager of BG Egypt Michael Barron. The visit took place on July 15. AmCham’s team informed attendees about the Chamber’s latest activities and how to make use of its state-of-the-art website, which includes all the services that AmCham provides its members.

U.S. State Dept. official discusses bilateral economic relations

On August 23, AmCham members participated in a roundtable discussion and luncheon with guest speaker Elizabeth Dibble, deputy assistant secretary for Near Eastern affairs at the U.S. Department of State.

The discussion, held at the Cairo Marriott Hotel’s Aida Ballroom, focused on Egypt-U.S. economic relations.

AmCham hosts Congressman Jim Kolbe and delegation

On September 20, AmCham Egypt board members met with Congressman Jim Kolbe (R-AR), chairman of the House Foreign Operations Subcommittee of the U.S. Congress’ Committee on Appropriations, along with subcommittee staffers.

Also present was Rachid Mohamed Rachid, minister of foreign trade and industry.

Discussions focused on U.S.-Egypt relations, specifically on U.S. assistance to Egypt and trade issues.

Kolbe reconfirmed his strong support for the reform measures currently undertaken by Cairo , vowing to relay his positive impressions of the Egyptian business community to his colleagues in Congress and the administration.

AmCham inaugurates a ‘Special Achievement Award’

AmCham president Taher Helmy launched a new tradition on September 28 when he presented Loula Zaklama, president and managing director of PR and marketing firm RadaResearch & Public Relations Co., with the first ever AmCham Special Achievement Award.

Helmy said the award is reserved for AmCham members that can boast “outstanding achievements in the furthering of Egypt-U.S. relations; have received prestigious international awards; or have performed an exceptional service to the community.”

Zaklama, elected last year as the future president of the International Public Relations Association (IPRA), is a longstanding AmCham board member and has participated in 18 AmCham DoorKnock missions.

“It is indeed a great honor to be the first recipient of this prestigious award,” Zaklama said.

AmCham also honored nine individuals and 13 corporations which have been members of AmCham for

15 years or more.

Visiting USTR official briefs AmCham

On October 19, AmCham Egypt hosted a meeting between Ned Saums, director for Middle Eastern affairs for the United States trade representative (USTR), and AmCham board members and DoorKnock participants.

AmCham president Taher Helmy welcomed Saums and described the current situation of Egypt-USTR relations, which, he pointed out, are undergoing a transition phase under the newly formed cabinet.

Saums briefed participants on the USTR’s view of Egypt ’s prospects vis-à-vis a Free Trade Agreement (FTA) and qualifying industrial zones (QIZs). He said the Egyptian government’s significant commitment to reform offers a special opportunity for Egypt-U.S. trade relations.

Saums went on to point out that the U.S. had much at stake in the Middle East , including a strategy to strengthen economic ties by working towards establishing a Middle East Free Trade Agreement (MEFTA) within 10 years. He said the USTR has several mechanisms to prepare countries in the region for a MEFTA, including the Trade & Investment Framework Agreement (TIFA). The primary function of the TIFA is to assess and evaluate the implementation of policies, provide concrete steps to follow and serve as a predecessor to an FTA. A TIFA meeting is planned in the near future, possibly before the end of the year.

Embassy official addresses U.S. visa concerns

On November 3, AmCham Egypt held an off-the-record meeting with Peter Kaestner, consul general of the U.S. embassy in Cairo . Kaestner headed a team from the embassy to discuss visa-related issues including non-immigrant visa procedures (business/tourist/medical) and immigrant visas. They also discussed American citizen services.

The purpose of the meeting was to clarify and simplify issues related to U.S. visas to AmCham members. The meeting included a question and answer session, in which members from the audience queried the panel about obstacles and/or problems they have faced when applying for a U.S. visa.

Implications of the new administration and 109th Congress on U.S.-Egypt relations

On November 8, AmCham Egypt held a panel discussion to address the “Implications of the new administration and 109th Congress on U.S.-Egypt relations.” The panel consisted of Congressman Gary Ackerman (D-NY), on a brief visit to Cairo , and Moustafa El-Fekki, chairman of the Egyptian Foreign Relations Committee. Taher Helmy, president of AmCham Egypt , moderated the discussion. Ackerman is the ranking Democrat of the U.S. House of Representatives’ International Relations Subcommittee on the Middle East & Central Asia.

Taher introduced the panelists, stating that foreign policy, particularly in the Middle East , was at the heart of the U.S. elections this year. In light of the timing of the event, five days after President George W. Bush’s re-election, a lively debate occurred about the future of U.S. foreign policy in the region. Ackerman partially attributed Bush’s success in the elections to his strength as a leader, remarking on his resolution and steadfastness.

Ackerman asserted that Egypt-U.S. relations are strong, while praising Egypt for its contribution to the war on terrorism and continued voice of moderation in the Middle East . According to Ackerman, both the U.S. and Egypt are bound by the common goal of bringing peace and stability to the region. “ U.S. economic and political assistance to Egypt will remain unshakeable. This is what friends do to friends,” he declared.

In the congressman’s opinion, the U.S. could face several scenarios in the Middle East , which he described as the good, the bad and the ugly. Catching Osama bin Laden would be good; Iraq turning into another Vietnam would be ugly, and would not bode well for democracy in the Middle East ; the bad would be for Bush to resume his first-term policies in the Middle East .

El-Fekki, on the other hand, felt that Bush’s first four years were not all negative, and that if we look at the positive elements of his first four years, and build on that momentum, then there is hope. Some of these elements included Bush’s first-term commitment to the creation of a Palestinian state.

The Bush administration was the first to adopt a UN Security Council resolution calling for the establishment of an independent Palestinian state. El-Fekki noted that while the Bush administration’s involvement in the peace process has waned over the years, it nevertheless was the chief proponent of the Road Map. El-Fekki asserted that all Arab states, and especially Egypt , were fed up with the crisis and that a breakthrough is needed for peace.

On the issue of reform, El-Fekki said that Egypt and the Arab world are well aware that they need to reform. With a reasonably strong parliament and a respect for human rights, Egypt has a solid base for achieving democratization.

Congressional delegation addresses U.S.-Egypt partnership

On November 10, AmCham held its annual iftar with guest speakers Congressman William Thomas (R-CA), chairman of the US House of Representatives’ Ways & Means Committee, and other distinguished members of the committee, including: Congressman Phil English (R-Penn), Congresswoman Nancy Johnson (R-CT), Congressman Ron Lewis (R-Ken) and Congressman Michael McNulty (D-NY).

The topic addressed was “U.S.-Egypt: partners for growth,” but a host of other issues were also discussed, such as the potential of the U.S.-Egypt Free Trade Agreement, implementing the qualifying industrial zones (QIZs) agreement and the reality of a Middle East Free Trade Area (MEFTA).

The Ways & Means Committee is the oldest standing committee in Congress and because of its legislative authority involving economic policy, international trade, welfare and health-care policy, it occupies a pivotal place in the House committee system. The delegation was in the country as part of a fact-finding mission to Egypt , Oman and Tunisia to assess potential candidates for free trade agreements with the U.S. The delegation also traveled to Jordan , which enjoys a Free Trade Agreement with the U.S.

Taher Helmy, president of AmCham Egypt , introduced the group and spoke of the ongoing reform process in Egypt . The newly appointed cabinet, he noted, marks the cooperation of the public and private sector in a joint reform effort.

Speaking to leaders from the private and public sectors, including Minister of Foreign Trade and Industry Rachid M. Rachid and Minister of Communications and IT Tarek Kamel, Thomas said a particular purpose of the mission was to focus on trade and investment to encourage economic development in the region through trade agreements. He said that the inclusion of private sector leaders such as Rachid in the new government bode well for a U.S.-Egypt FTA in the future. Thomas viewed Egypt as having tremendous potential for economic progress, citing several reform measures by the new government that will help improve economic conditions.

The establishment of QIZs, a joint Egyptian-Israeli venture whose products will be exported duty-free to the U.S. , was also discussed. McNulty said that the failure to get an agreement resulted from the Egyptian government’s reluctance to engage economically with Israel .

Johnson addressed some economic and trade issues associated with U.S.-Egyptian bilateral relations and the Middle East region. On the question of reform and a MEFTA, she said: “ Egypt is the country in the region by which all others are judged and judge themselves.”

At the end of the event, Helmy thanked the delegation and presented them with honorary memberships in AmCham Egypt .

Cooperation agreement

AmCham Egypt and AmCham Iraq sign MOU

AmCham Egypt and the Iraqi American Chamber of Commerce & Industry (IACCI) signed a memorandum of understanding (MOU) on March 8 to enhance the spirit of cooperation and friendship between the two organizations. AmCham president Taher Helmy and IACCI CEO Raad Ommar signed the agreement at a ceremony in Cairo .

The two bodies will strive to “encourage, promote and facilitate effective cooperation in areas of trade, economic and industrial activities, and to establish effective means of communications between companies, private businesses and organizations,” according to the MOU’s first article.

The 12-article memorandum also states that the two organizations will cooperate to introduce programs aimed at facilitating bilateral business opportunities, while also exchanging information on the latest economic and regulatory developments in their respective countries.

The two chambers will further endeavor to organize meetings aimed at bringing together businesses from both countries.

In sum, any measures that will “enhance and strengthen bilateral economic ties” will be undertaken by the signatory parties.

Field trip

The AmCham Egypt delegation, in preparation for the annual DoorKnock mission to Washington , DC at the end of March, 2004, made a March 18 visit to the Middle East News Agency (MENA) for discussions with media professionals on Egypt-U.S. relations.

The visit is part of a new approach taken by AmCham aimed at getting the insights of media leaders on the status of bilateral ties. MENA chairman Mahfouz El-Ansary welcomed the delegation to MENA offices, where they received a tour of the building before sitting with him and a number of the agency’s journalists to discuss the Egypt-U.S. relationship.

Several key issues were addressed: the importance of having information available to ensure fair reporting and coverage; the status of free trade negotiations with the U.S. ; the nature of U.S. assistance to Egypt ; and AmCham’s role as a non-governmental entity that conveys points of view on important issues affecting the strategic relationship.

DoorKnock delegates will relay points of the discussion to policymakers in Washington during the mission, scheduled for March 29 to April 6.

STAFFERS VISITS

AmCham hosts senior U.S. congressional staffers

AmCham Egypt , in collaboration with the Egyptian American Cooperation Foundation, hosted the fourth group of senior congressional staffers from June 27 to July 5.

Keeping in mind that congressional staffers are extremely influential in Egyptian-American relations, AmCham Egypt extended invitations to a delegation of senior staffers for a week-long visit to Egypt to meet first-hand with high-ranking government officials, including Osama El Baz, political adviser to President Mubarak, and several members of the Egyptian parliament.

The delegation received a detailed overview from El Baz on the regional political situation and Egypt ’s past and current stances on the issues. The Palestinian-Israeli conflict was one of the most prevalent issues throughout the majority of meetings.

El Baz stressed that prior to rightly understanding the situation and proceeding with finding a solution, one must take into consideration all the details, including issues of precise land division, and account for all refugees. He asserted that there is still a great deal to be done towards bringing peace to the region, but also advised the staffers not “to waste the great deal of good will from the Arabs,” adding that America’s strength in the region stems from the fact that it “was never a colonizing state” in the Middle East.

The congressional staffers met with parliament members for an interactive session headed by Moustafa El-Fekki, chairman of the People’s Assembly’s Foreign Relations Committee. During the session, attended by Hoda Rezkanna, member of parliament, El-Fekki expressed Egypt ’s frustration over the Palestinian-Israeli conflict and the biased support for Israel in the U.S. Congress. He also noted that open lines of communication must be maintained to increase understanding. The notable progress in gender equality issues and human rights standards were also topics touched upon by parliament members.

Representatives from the Ministry of Defense also met with the delegation of congressional staffers. General Mohamed Saeed El Assar, assistant minister of defense, and General Ahmed El Motaz Bellah each spoke of the strength of Egyptian-American relations and the potential for enhancement in many areas.

During a luncheon hosted by the Ministry of Foreign Affairs, members of the delegation got a chance to interact individually with representatives of the ministry.

The delegates also met with Egyptian and American businessmen, including Dan McCarthy, chairman and managing director of General Motors Egypt and executive vice president of AmCham Egypt , who discussed the makeup of his company in terms of ownership and staff.

During a short, one-day visit to Upper Egypt , the congressional staffers toured Luxor ’s ancient sites, temples, as well as the Valley of the Kings .

At the conclusion of their visit, the delegation of congressional staffers rated their trip as the highest in caliber in terms of educational and recreational value. Most importantly, the mission had succeeded in presenting Egypt , government and people as it really is, through cultural, social and political discussions and excursions.

AmCham hosts U.S. Congressional staffers and CRS members visit

The American Chamber of Commerce in Egypt hosted a U.S. delegation during the week of September 18-24. The group consisted of Congressional staffers and members of the Congressional Research Service (CRS), a component of the Library of Congress that prepares reports on non-partisan information relevant to foreign policy decisions.

The delegation visited with a number of Egyptian government officials, including Osama El Baz, presidential political adviser; Moustafa El-Fekki, chairman of the Foreign Relations Committee in the People’s Assembly; Mahmoud Mohieldin, minister of investment; and Rachid Mohamed Rachid, minister of foreign trade and industry.

El Baz stressed during a meeting with the delegation that while “reform is a necessary and continuous process, the final vision for reform should come from the people.”

At a later meeting, El-Fekki detailed Egypt ’s positions on four main topics: the Israeli-Palestinian conflict, the Iraq situation, the deteriorating conditions in Darfur and regional reform.

Ambassador Shadia Farag of the Ministry of Foreign Affairs hosted the delegates for an informal luncheon where issues concerning Arab-American relations and the image of Islam in the West were discussed. The delegates also met with Mohieldin, who gave an overview of his plans for the privatization of public sector assets, detailing debts and revenues. For his part, Rachid said during his meeting with the visitors that Egypt was serious about global integration, and was instigating and consolidating reform policies.

The delegation attended sessions of the National Democratic Party (NDP)’s conference, held from September 21 to 23. They participated in an interactive reception pertaining to Egypt ’s economic policy and its stance on reform with leading members of the NDP including Gamal Mubarak, Youssef Boutros-Ghali, Dr. Hossam Badrawi and Mohamed Kamal.

At the end of the week, AmCham Egypt hosted a breakfast in honor of the delegation and visitors from the Carnegie Endowment for International Peace, the Brookings Institution, the Council on Foreign Relations, the Institute for Middle East Peace & Development and Georgetown University . Guest speaker Ziad Bahaa El-Din, recently appointed as chairman of the General Authority for Investment & Free Zones (GAFI), spoke of his plans for the authority during the breakfast, which provided a valuable opportunity for interaction between the delegates and AmCham Egypt members.

American Chamber of Commerce in EgyptCongressional staff trip January 2004

The 2004 Congressional staff trip, sponsored by AmCham, was a resounding success. The visit met the crucial objective of increasing participants’ awareness and appreciation of the critical partnership that exists between the United States and Egypt , while at the same time educating the staff on AmCham’s historic mission of promoting U.S-Egyptian relations.

Many of the participants, who have served on numerous overseas delegations in the past, said that the AmCham visit was the most valuable trip they had experienced. Throughout the week, the staff regularly commented on the impressive itinerary, particularly the number of high-level meetings with Egyptian officials, such as Prime Minister Atef Ebeid, chairman of the Policy Secretariat of the National Democratic Party (NDP) Gamal Mubarak, head of Egyptian intelligence Omar Soliman and presidential adviser Osama El Baz. The discussions with these officials and U.S. ambassador David Welch were extremely candid and informative, with a constructive exchange between the staff and hosts. General topics covered at many of the meetings included the overall U.S.-Egyptian relationship and, more specifically, the U.S.-Egyptian trade relationship; the war and ongoing reconstruction in Iraq ; the Middle East peace process and U.S. aid to Egypt .

The staff also gained a greater appreciation for the increasingly important role played by AmCham in increasing the exchange between U.S. and Egyptian companies. The AmCham breakfast, for example, demonstrated the wide array of sectoral representation in AmCham and how it contributes to promoting bilateral investment relations. Some of the staff said that they would use AmCham as a resource when researching U.S.-Egypt investment.

The group first met with Gamal Mubarak. The meeting provided an excellent introduction to Egyptian national and international politics as well as an overview of Egyptians’ current perspectives on the United States . Mubarak spoke about the long relationship that the U.S. has had with Egypt, emanating from peace talks with Israel; the leadership role that Egypt plays in the Arab world, especially around Israel and Iraq; attempts to increase democracy through government and party reforms; and attempts to institute gender equality in the government and workforce.

During the visit, AmCham hosted a roundtable luncheon in honor of the visiting group, at the Conrad Hotel in Cairo . The event was the first opportunity for the staff delegation and AmCham members to voice their concerns and explore the underlying perceptions of the U.S.-Egypt relationship and the obstacles to the establishment of a Free Trade Agreement.

Members of the delegation had the opportunity to meet with representatives of the Ministry of Defense. The meeting was chaired by General Mohamed Saeed El Assar and was attended by several other military officials. As a strategic partner, Egypt has proven to be a productive partner in U.S. efforts to broker Middle East peace since the 1978 Camp David accords.  Representatives from the Ministry of Defense described their own efforts to combat terrorism, and declared themselves a partner in the worldwide war on terror. 

The group’s discussions with Soliman focused on ways of advancing the peace process between the Israelis and Palestinians, and the American presence in Iraq . Throughout the meeting, Soliman emphasized the importance of the American-Egyptian partnership.

The group’s meeting with El Baz was described as being very informative and thought provoking. The presidential adviser’s personal involvement in the Egypt-Israel peace process provided a depth of knowledge about Middle Eastern affairs that was remarkably interesting and important for the mission of the delegation.

In addition, the delegation visited the National Council for Women (NCW), headed by Dr. Farkhonda Hassan. The visit left a favorable impression among the group. They also met with Dr. Youssef Boutros-Ghali, minister of foreign trade. Discussion focused on the potential Egypt-U.S. Free Trade Agreement.

The group’s meeting with Ebeid focused on economic issues, the role of private capital and investment in Egypt , and the current status of privatization of stated-owned or controlled enterprises. The delegation’s meeting with Moustafa El-Fekki, chairman of the Foreign Relations Committee of the People’s Assembly, focused on the war on terror, and its implications on the region. The group also met with Sameh Fahmy, minister of petroleum. Discussions focused on the role that energy policy plays in the Egyptian economy, and specifically direct U.S. investment in Egypt , the important role of natural gas in the Middle East , and the increased use of renewable energy in the region.

Finally, the delegation met with U.S. ambassador David Welch. The discussion focused on U.S.-Egypt trade relations.

AMCHAM Egypt Conference

Symposium examines financial sector reform

AmCham Egypt organized and hosted a two-day conference devoted to the latest developments in Egypt ’s financial sector. The symposium, held from April 26 to 27 at the Cairo Conrad Hotel, brought together finance heavyweights from the local private sector and multilateral institutions who spoke about a range of issues, including: financial sector reform; the banking sector; capital markets and fund management; regulation and the government role; insurance; real estate; and corporate finance.

The first day of the conference was split into three sessions:

The first session , “Vision for financial sector reform,” chaired by Taher Helmy, AmCham Egypt president and partner in law firm Helmy, Hamza & Partners (Baker & McKenzie), featured guest speaker Mohamed Taymour, EFG-Hermes Holdings chairman. The session focused on the importance of the financial sector in mobilizing savings and re-directing them towards investment.

Egypt ’s financial system was compared to other emerging economies with similar development backgrounds: Turkey , India , Thailand , Brazil and South Africa . Compared to its peers, Egypt did not witness significant improvements in savings and investment from 1992 to 2002.

As for attracting foreign direct investment (FDI), Egypt is an average performer. Although Egypt ’s total debt as a percent of GDP is very high, at 140 percent, external debt alone is similar to its peers. Finally, the growth of per capita income since 1998 has been very low.

Speakers also presented an overview of the main subsectors of the financial system: banking, insurance and the capital market. They noted that the currency float was seen as a positive sign and recent legislation would drive reform, once implemented.

Later in the session, Nadeem ul-Haque, country representative for the International Monetary Fund, discussed “The global experience.” He presented a selection of ideas from global research pointing to misconceptions of finance and the importance of financial depth to future growth, especially productivity growth.

Financial markets are crucial for credit allocation, risk management and price discovery, he said. However, in most less developed countries the government is the player, owner and regulator all at once. He went on to present different models for the role of the regulator, citing the “referee” model as the best example of a competitive financial market. A good referee makes sensible rules, allowing players to compete vigorously, he explained.

The second session was devoted to the banking sector and was chaired by Hassan Hussein, chairman and managing director of United Bank of Egypt and chair of the AmCham Egypt Banking, Finance & Insurance Committee. Speakers included Hassan Abdallah, deputy chairman and managing director of Arab African International Bank, and Roderick Richards, managing director of Egyptian American Bank.

The first part of the session focused on how banks are managed in Egypt , primarily through short-term funding. Likewise, lending is also based on short-term funding. Long-term loans with short-term funding, speakers noted, result in mismatching of the balance sheet.

Although FY 2002-03 witnessed no growth, the potential is there, speakers stressed. However, lending has remained stagnant, foreign currency loans have decreased and dollarization has led to a decrease in profitability for local banks.

Speakers identified challenges faced by the banking sector including the high costs of land or real estate settlement, non-performing loans and low-earning investments. Recent bank reforms include a £E 500 million minimum capital requirement decree, and a change in the Central Bank of Egypt (CBE) management and the management of public sector banks in general. New reforms should focus on reducing barriers to entry, the encouragement of mergers and the provision of tax exemptions.

The third session, “Capital market and fund management,” was chaired by Capital Market Authority (CMA) board member Hazem Yassin. Speakers included Mustafa Abdel-Wadood, co-chair of the AmCham Investment & Capital Market Committee, and Beltone Asset Management chairman Aladdin Saba. Panelists included H.C. Securities & Investment chairman Hussein Choucri and Cairo Capital Group CEO Khalil Nougaim.

The session was divided into a two-part presentation, one focusing on the capital market and the other on fund management. Abdel-Wadood began by providing an overview and history of the capital market and detailed recommendations for development of the market. While there is good infrastructure in place to support the Cairo & Alexandria Stock Exchanges (CASE), much needs to be done, he concluded. This includes strengthening listing requirements; defining the CMA’s role as regulator; improving the mergers and acquisitions process; streamlining the offering process; addressing the bankruptcy law and related exit mechanisms; and developing an efficient dispute settlement mechanism.

Saba focused on fund and portfolio management, noting that the main constraints to fund management were due to the underdevelopment of the capital market, coupled with inefficient access to capital and limited financial instruments.

Balancing the role of regulator and accelerating the financial market was seen as the “inherent tension” for the regulator. Regulators should not aim to treat everyone equally; rather, they should offer protection to small investors that lack financial sophistication and reduce protection for financial institutions and large investors with the capacity to get financial and legal advice.

Speakers also urged the reform of the pension system to include individual pension accounts, private pension accounts and endowments. Investment pension funds should be managed through professionals, while debt-to-equity swaps weren’t recommended.

Choucri and Nougaim both saw that privatization and pension reform were the two key aspects of rejuvenating the capital market. Compared to emerging market peers, Choucri viewed Egypt ’s performance as “dismal,” compared to say, Turkey ’s. He recommended increasing the market capitalization rate and a more creative – and well-managed – economic policy.

The second day of the conference consisted of four sessions:

The first session , devoted to “Regulation and the government role,” was chaired by Samir Radwan, executive director of the Economic Research Forum (ERF). Speakers included Ziad Bahaa Eldin, managing partner at Bahaa Eldin Law Office; Ahmed Abou Ali, partner at Hassouna & Abou Ali Law Offices; and EFG-Hermes Holdings CEO Yasser El Mallawany.

El Mallawany’s presentation focused on the role of government in the privatization process. He stressed the importance of bank privatization, as banks are the dominant financial institutions. He said that Egypt had made significant strides towards a more liberalized financial system in terms of legal structure. Passing the new Banking Law (88 of 2003) has established approximately 80 percent of the required framework.

Two sequential steps were recommended: the privatization of joint-venture banks, followed by the sale of the big four public sector banks. Sale of the big four will be tough but manageable with equity sweeteners.

The second presentation, delivered by Abou Ali on the legislative process, stated that there were at least 20 pieces of legislation currently governing the financial system in Egypt , excluding executive regulations. Securities regulation in Egypt aspires to achieve three objectives: investor protection; an efficient and transparent market; and the reduction of systemic risk. The presentation concluded with a detailed regulatory assessment of existing elements pertaining to the financial system.

Finally, Bahaa Eldin’s presentation focused on identifying the constraints hindering a better legal and regulatory framework for the financial system and what the government can do with respect to registration, regulation and dispute settlement procedures. According to Bahaa Eldin, one constraint is that Egypt ’s use of civil law requires a continuous need to adopt practices from the common law system.

The second session was devoted to the insurance sector and was chaired by Allianz Egypt chairman John Metcalf. The main speaker was Saad Mered, vice chairman and managing director of AIG Pharaonic Insurance Company and AmCham Egypt Banking, Finance & Insurance Committee co-chair.

Mered began by giving a presentation on the insurance market called “Thoughts on restructuring for dynamic growth.” He focused on the current state of affairs in the local insurance market, which is dominated by four public sector insurance companies, one of which is a reinsurance company. These firms hold a total market share of around 75 percent, although 11 other companies also operate locally. Annual premiums account for just 1.1 percent of GDP.

Mered listed obstacles to the growth of the insurance industry including legal restrictions, public sector control, the unclear role of the regulator and public mistrust of the sector. There are also structural impediments to growth, which tend to be more complex and convoluted in nature. These are primarily found in excessive stamp duties and premium taxes.

To develop a more sophisticated insurance market, Mered prescribed the following: privatization of pension funds that provide tax and fiscal incentives; creation of fluid distribution channels and a legitimate broker infrastructure; expansion of opportunities for privately owned insurance companies; and the establishment of a fully independent regulatory authority.

The third session , chaired by Housing & Development Bank chairman and AmCham Egypt Real Estate Committee chair Fathy El-Sebai Mansour, was devoted to “Real estate and the mortgage system.” The main speaker was Amira Shalaby, a consultant for Housing & Development Bank and representative of Canada Mortgage & Housing Corporation (CMHC) in Egypt .

Participants expressed optimism that the real estate market would be reinvigorated following the enactment of the mortgage law (No. 148 of 2001). Nonetheless, there are still plenty of challenges facing the real estate market. One of these is the massive demand – approximately three-quarters of a million additional housing units are needed each year, with some 450,000 required by newly married couples.

Yet there is also opportunity. Shalaby highlighted the fact that the CBE began to allow banks to use 10 percent of their portfolios for housing loans, up from the 5 percent previously stipulated, while Mansour noted that fees had been reduced to 5 percent during the past year, adding that lowering them further would encourage people to register property. Speeding up the process of registration, as well, would encourage people to register, he said.

The fourth session was devoted to “Corporate finance in Egypt .” Tarek Mansour, the country senior partner for Mansour & Co. PricewaterhouseCoopers, outlined both government-related and financial-market issues to be dealt with before Egypt can take its place as a competitive destination for investment.

While Egypt represents a relatively “secure and hospitable environment,” he said, it “doesn’t attract as much foreign investment as it could.” He noted that the current uncertain state of the foreign exchange rate regime was a primary deterrent for investors, and referred to Decree 506 – which demands that forex earners transfer 75 percent of their foreign currency into Egyptian pounds – as “inadequate.” The regulation, he said, resulted in a “lack of confidence” in monetary policy and caused multiple disruptions within the market.

Vodafone Egypt CFO Martin Moorhouse spoke next, explaining how “CFOs are driven by risk.” The first thing that multinational companies look for in a potential investment destination, he explained, is “alignment with international standards.”

Mustafa Bakier, finance director of Al Mansour Automotive Co. Mansour Chevrolet, explained that, while developing countries need investment to boost economic growth, investors need transparency – “even more than strong natural and human resources.”

Concluding the panel discussion, Ricardo Resende, finance director of General Motors, blamed the lack of institutional transparency and reform in the region. Resende added that the region is also being threatened by the growing influx of cheap imports from China . He added, however, that China has also become an enormous market, the demands of which are on the rise.

AmCham president Helmy closed the symposium with thanks to the participants, saying, “The private sector drove this conference from beginning to end.”

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