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Committee Highlight
Banking, Finance & Insurance Committee In February, Saad Azhari, chairman of Blom Bank, and Elias Aractingi, the bank’s vice chairman and managing director, discussed the bank’s overseas strategy. They discussed the restructuring of the Lebanese banking sector in the 1990s including hiring new executives, mergers and acquisitions, improving technical infrastructure and a shift to focus on retail and private banking product Established in 2004, the Courier Services Committee is dedicated to promoting and improving commerce within Egypt and between countries by fostering the development of a competitive express transportation industry. The committee works in conjunction with the AmCham Customs & Taxation Committee on specific customs clearance and tax-related issues on express shipments. In February, Hosny Gad, head of the Tax Authority, took part in a Question & Answer session to clarify Egypt’s new tax legislation. The topics covered included the public’s negative perception of tax inspectors. Gad explained that the authority is working to change the behavior of inspectors in compliance with the new law. Questions regarding the ability of auditor to submit a tax declaration with a separate declaration that includes his or her comments were answered with the simple explanation that the new self-assessment mechanism requires a sole document for tax payment. Gad explained that no comments should be added to the declaration, as this would increase taxpayers doubts. In June, Yasser Sherif, general manager of the private consultancy firm Environics, outlined recent modifications to the executive regulations for Environment Law 4/1994. The executive regulations first issued in 1995 were modified in November 2005 via Ministerial Decree 1741/2005. They strengthened the role of the Egyptian Environment Affairs Agency (EEAA) by bolstering the environment impact assessment (EIA) process and by providing it with new authorities. However, the newly granted power for the EEAA to levy fines and demand compensation for damage to the environment lacks an implementation framework to determine the value of fines. This will create implementation problems. Health & Pharmaceuticals Committee The Health & Pharmaceuticals Committee aims to establish itself as a point of contact and forum for dialogue with the Egyptian government on healthcare issues and the pharmaceutical industry in Egypt. Committee issues include protecting intellectual property, combating counterfeit medicines, encouraging ethical pharmaceuticals marketing and social responsibility programs. In February, guest speaker Ibrahim Abouleish, chairman of Sekem Group, discussed the company’s experience in sustainable development. He explained how his holistic vision of enhancing human living and society materialized in the launch of organic food producer Sekem 27 years ago, when Egypt lacked the technology to reclaim desert land. The goal was to cultivate land without harmful fertilizers or pesticides, applying biodynamic agricultural methods. It has managed to provide high-quality agricultural products marketed in partnership with farmers, producers, vendors and consumers. Sekem also aimed at improving human conditions through social, educational and health initiatives. Information & Communications Technology Committee The Information & Communications Technology Committee is committed to raising awareness about the latest developments concerning this sector and promoting the advancement of information and communications technologies in Egypt. AmCham’s Industry Core Committee hosted Minister of Trade and Industry Rachid Mohamed Rachid in February. He gave an overview of the industrial sector’s outlook, noting that an industrial strategy for Egypt has been developed, defining the ministry’s vision for the next 25 years, with a budget of LE 157 billion. Domestically, the market lacks efficiency when it comes to transferring value to the consumer. Internal trade also suffers from informal trading. New policies will address this. Also discussed was the need for ministry support on drawbacks and duty relief, industrial regulations and enforcement, registration of products, contract manufacturing and executive regulations of the antitrust law. Investment & Capital Market Committee A panel discussion was hold in November to discuss whether the Egyptian stock market would continue to rise or drop. Panelists Aladdin Saba, chairman of Beltone Financial, Hassan Heikal, co-chairman and CEO of EFG-Hermes, Hussein Choucri, chairman of HC Securities & Investments and Neveen El Tahri, chairperson of Delta Securities focused on the stability and prospects of the Egyptian stock market. They highlighted the importance of both Egyptian and foreign investors. They expressed concern that long-term stock valuations were not based on technical analysis, leaving the market open to large fluctuations and regional political instability. The impact of Central Bank policies, the role of privatization and the scarcity of information in Egypt were also discussed. The Legal Affairs Committee aims to address legislation and legal matters that concern AmCham member interests Mohamed Abdel-Latif, legal manager of BP Egypt, Ismail Mubarak, vice-chairman of the Amiral Corporation, and Philip Littlejohn, managing director, Suez Canal Container Terminal (SCCT) discussed concession agreements in Alexandria in March. They outlined the current concession between public and private sector players as well as several government agencies. EGPC drafts agreements for the State Council, Shura Council and People’s Assembly to ratify before being signed. The speakers noted that several projects are taking place throughout the country at locations suited for the creation of industrial zones. In March, Mohamed El-Hamamsy, deputy chairman of Vodafone Egypt, discussed whether corporate social responsibility (CSR) is a way to put consciences at ease or a tool to support business objectives. He stated that a socially responsible corporation aims at profit while taking into account the impact of its operations on the community. In the mobile industry, CSR entails responsible marketing, purchasing and concern for the environment by recycling batteries, phones, office supplies, paper, glass and plastic. An effective CSR policy consolidates brand image and reputation in the community, creates goodwill, improves customer retention, increases investor confidence and motivates employees. Guest speaker Zainul Rahim, managing director of Shell Egypt, addressed the challenges confronting energy companies in September. He highlighted the role of industry in exploration and resource exploitation as well as the technological challenges involved. Rahim noted that energy demand, particularly from emerging economies will continue to grow, increasing environmental challenges. He argued that increased oil prices will reduce demand and encourage investment in supply, but due to the inelasticity of energy prices they may not fall soon. Energy for transportation will continue to monopolize consumption. The Real Estate Committee is committed to simplifying relevant legislative processes as well as raising overall awareness and increasing transparency for issues of concern to the sector. The Trade & Commerce Committee aims to serve AmCham members by addressing topics that foster business opportunities, helping to develop improved laws and regulations and lobbying on behalf of AmCham members to facilitate trade between Egypt and the United States. Saad Shehata, chairman of the National Authority for Tunnels (NAT), addressed the issue of Cairo’s third metro line in April. He explained that Cairo’s booming population, expected to reach 20 million by 2022, will put even greater pressure on transportation infrastructure. The third metro line will stretch over 34 kilometers, linking Imbaba to Cairo International Airport, with 29 stations to accommodate 2 million passengers a day. It will be built in four phases: Phase 1 linking Attaba to Abbasiya costing LE 3.6 billion; Phase 2 linking Abbasiya to Haram (6.2 km, four stations) for LE 2.8 billion; Phase 3 linking Attaba to Imbaba (11.6 km, 12 stations); and Phase 4 linking Haram to Cairo Airport (12.1km, eight stations). In January, Carmen Niethammer, director of the Gender Entrepreneurship Markets (GEM) program of the International Finance Corporation (IFC), discussed the opportunities and challenges facing women doing business in the Middle East. Based on her research in Egypt, Oman, Morocco and Yemen, the unemployment gap between males and females in the region is the largest in the world at around 6 percent, while women comprise 32 percent of the labor force, the lowest in the world. Women represent from 3 to18 percent of entrepreneurs, mostly in informal, micro- and home-based businesses. She stressed the importance of spreading awareness and providing the training and finance necessary for starting small and medium-sized enterprises (SMEs). In February, guest speaker Oscar Prieto, president of BG Egypt, discussed the company’s strategy as the largest natural gas producer in the Egypt with cumulative investments from 2000 to 2005 topping $5 billion. It is the main partner in the Edku Liquefied Natural Gas (LNG) project, a joint venture of EGPC and EGAS together with BG Group, Petronas and Gaz de France, which achieved a record output of 2.5 bcfd. Having signed two new offshore concessions in El Burg and El Manzala, BG continues to expand in Egypt. Furthermore, the Rosetta P2 domestic development project and LNG upstream supply projects (Simian, Sienna and Sapphire) were all delivered ahead of schedule Qualifying Industrial Zones (QIZ) In November, guest speakers Amr Assal, chairman of the Industrial Development Authority (IDA), and Ahmed Zaki, a representative of the QIZ Unit at the Ministry of Foreign Trade and Industry (MTI), discussed the availability of industrial land and investment incentives in Egypt. Assal highlighted the role of the IDA in promoting industrial development, while Zaki provided statistics on QIZ operations. Assal explained that IDA initiates policy and regulation reforms with an emphasis on simplifying processes and reducing the financial and administrative burden. He went on to discuss available business opportunities in industrial zones. The IDA also has plans to allocate some 30 million square meters to new industrial zones. The Construction & Development Committee is dedicated to optimizing Egypt’s competitiveness in the construction industry, both locally and regionally. Established in 2006, the Corporate Governance Committee aims to raise awareness and address issues of corporate governance within Egypt. Incorporating stakeholders from both the public and private sectors, the committee serves as a resource for implementing and advancing effective corporate governance. Corporate Social Responsibility The newly formed committee held a meeting in September entitled “Corporate Social Responsibility: From Charity to Change” with guest speaker Barbara Ibrahim, director of the John D. Gerhart Center for Philanthropy and Social Engagement at the American University in Cairo. Ibrahim defined a socially responsible corporation as embodying transparency, ethical behavior and respect for stakeholders. She emphasized the importance of CSR as an agent of sustainable development, arguing that “business is good for development and development is good for business.” In February, Art Daniels, former assistant deputy minister of the government of Ontario, Canada, highlighted that governments have to be customer-oriented, restructuring systems to meet the needs of “customers” to attract more business to their countries. The Canadian government has cut red tape, reduced lineups, created “one-stop” services, simplified forms and extended office hours. The Canadian government then repealed over 50 acts, amended another 200 and eliminated over 1,700 regulations. As part of a USAID project (TAPR II), consultants working with Daniels are preparing a report for the Egyptian government on improving government services for the private sector to boost investment. The Travel & Tourism Committee works to promote the development of travel and tourism between the United States and Egypt and to address complementary issues within Egypt. The committee incorporates many members of the government, travel and tourism sectors, and other AmCham committees in order to provide the tools and resources necessary for advancing their objectives. Women in Business/Legal Affairs The Women in Business and Legal Affairs committees held a joint meeting in February with speaker Martin Steindl, project officer of IFC – Private Enterprise Partnership – MENA Egypt Corporate Governance Project. He focused on the importance of corporate governance. He defined corporate governance as “structures and processes to ensure fair, transparent and accountable corporate behavior.” It is important for family-owned businesses to have a strong board of directors that guarantees uncompromisable standards of merit-based personnel decisions. ICT/Investment & Capital Market The ICT and Investment & Capital Market committees jointly hosted Maher Asham, managing director of Egypt for Information Dissemination (EGID), Tarek E. Abdel-Bary, managing director of Misr for Central Clearing Depository & Registry, and Mohamed Sultan, chief product officer of LINKdotNET, in April to discuss IT developments on the Cairo & Alexandria Stock Exchanges (CASE) and online trading. Abdel-Bary defined online trading as the ability to place, execute and manage investors’ transactions using a single system. Online trading will increase liquidity, transparency, daily market volume, investor protection and foreign investments, reducing human errors. Asham argued that online trading is highly efficient, but will require IT infrastructure upgrades by any company that wishes to use it. Finally, Sultan explained that remote online trading decisions are fully transparent, based on live online data, such as stock quotes and company/industry news. Industry/Legal Affairs In March, Mona Yassine, chairwoman of the Egyptian Competition Authority (ECA), and ECA executive director Khaled Attia, addressed the Industry and Legal Affairs committees to discuss Egypt’s Law on the Protection and Prohibition of Monopolistic Practices. The ECA is an independent government body that collects economic analysis, conducts research to detect acts that obstruct free competition and takes action against such obstruction. The new law addresses three infringements: horizontal restraint, vertical restraints and abuse of dominant position. International Cooperation/ ICT In December, the International Cooperation and ICT Committees jointly hosted a meeting with guest speaker Scott Jazynka, head of the Egypt ICT Entrepreneurship Program (EIEP), a joint undertaking of USAID and the Egyptian Ministry of Communications and Information Technology (MCIT). Its objective is to increase the competitiveness of Egyptian ICT firms. The program has two main components: the ICT Business Development Center (I-BDC) and the Entrepreneurship Training Program. The I-BDC evaluates a firm’s performance and assists it in creating a short- and long-term financing strategy. The EIEP upgrades the training provided to university students by “training the trainers.” Faculty members of six Egyptian academic institutions are instructed in entrepreneurship, business management and marketing skills tailored to the ICT market. Furthermore, a “start-up” training program is offered to 10-15 firms. Banking, Finance & Insurance/Legal Affairs Also in December, Samir El Sharkawy, a professor of commercial law at Cairo University, spoke to the Banking, Finance & Insurance and Legal Affairs on committees on the use of bank checks in light of Trade Law 17/1999. The check, he said, is considered an immediate instrument of payment – in contrast to promissory notes, which are payable only when the recipient submits them to the issuer. Under the law, checks are the only commercial documents whose validity is protected by the penal code. But their effectiveness as an immediate instrument of payment has been reduced by the common practice of postdating checks. Trade Law No. 17/1999, implemented after a long delay, includes a section governing the use of checks. The word “check” should now be clearly written on the document. Checks can now only be withdrawn from the issuing bank, and a personal stamp or fingerprint can carry the weight of a signature. Postdated checks can be cashed the day they are signed. |
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