Business monthly March 01   LETTER FROM THE EDITOR FEATURE EXECUTIVE LIFE VIEWPOINT REPORTS SUBSCRIPTION FORM ROUND UP FOLLOW UP ADVERTISING RATES YOUR ASSETS Search Business Monthly | Back Issues

VIEWPOINT

Crossing the Rubicon

After nearly six long years of headlines announcing that the Egypt-E.U. trade agreement would be signed in a matter of weeks, it actually was. Well, it’s been initialed anyway. For the business community, like the neighbors of the boy who cried "wolf," the news is somewhat anticlimactic, preceded as it was with much haggling and controversy. It must be said that while debate is a necessary means of arriving at an agreement of great importance, a sense of perspective is just as vital. Egypt is not the first to travel this road. Indeed, the EU has already made agreements with Morocco, Tunisia, Jordan, Palestine and Israel, and negotiations for partnerships are under way with Syria, Algeria and Lebanon.

The time has come to be satisfied to secure our collective interest. In any case, further delays would have served no useful purpose. Controversy regarding the details of the agreement is unlikely to subside quickly, but energies would be better spent in a less contentious, more constructive fashion. Egypt’s export performance has to shape up, and a comparison with other emerging markets illustrates this point. Turkey, for example, in 1982, recorded exports of US$9.2 billion while Egypt’s stood fairly close, at $8.6 billion. In 1999, Turkish exports hit $52 billion while Egypt’s were still less than $5 billion.

Right now, around 40 to 45 percent of Egyptian trade goes to EU countries. Egypt also happens to be one of the largest beneficiaries of developmental assistance, receiving one third of the funds granted by the EU to Mediterranean countries. We’ve received significant funding over the last three years for technical assistance, with more forthcoming as part of an industrial modernization program. Both government and private sector entities are aware of the need for deeper modernization as well as the many other measures that must be taken to profit from the challenging context this agreement provides. We’ve had a chance to adjust, but now we’re in a transitional phase. Tariffs on EU goods will be reduced gradually over the coming 15 years, during which we must proceed with less rhetoric and more action.

The private sector will have to work full out on organizational, management and information-technology upgrades, as well as better marketing and R&D practices. Meanwhile, the government has serious issues to address, like facilitating bank credit and debt rescheduling at reasonable rates. Greater flexibility and prompter action is required to remove obstacles to enterprise on the legislative, bureaucratic and fiscal fronts. The newly drafted anti-trust law is just one important step towards creating a healthier, more competitive business scene and thereby strengthening industry and every aspect of the economy.

Industries’ concerns regarding their readiness to confront the agreement may well be valid, but the course that we’ve taken cannot be reversed. For an aspiring member of the global economy, and within the context of GATT, there is no alternative but to advance. I have no doubt that over the coming years we will experience the realities of a Darwinian process of selection. But if survival of the fittest seems harsh, remember that the task of building an economy is not personal, nor can it be assessed in an emotional way. The success of any operation is commensurate with its participants’ ability to act efficiently, and ours – on a government and private sector level – is about to be put to the acid test.

If Egypt is to enter the global arena, it must do so as a full partner. This year marks the 25th anniversary of USAID activity in Egypt, and it comes at a time when the move from aid to trade is an accepted fact. The EU trade agreement underlines this shift from the old donor-recipient arrangements towards a new era of self-reliance. Inherent in this bilateral relationship is a more open and mature political and cultural dialogue, one that will address issues of importance to society, including human rights, security and the role of NGOs. For Egypt to achieve the kind of economic and social transformation that it has set out for, fresh vision and energy will be demanded from every quarter.

We know what we’ve begun and why. It’s time to face the music – so we’d better get up and start dancing.

Submit your comment

Top