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follow up us music producer nudges
arabic bandwagon back in 1986, british female pop music band the bangles made egypt into a worldwide hit with the release of the chart-topping smash “walk like an egyptian.” now, bangles manager and famed american music producer miles copeland has made a mission of raising the profile of egyptian and arab music and belly dancing on the us entertainment scene. while in cairo in late january, copeland – who has also managed the likes of sting, r.e.m., the go-go’s and the police – said arab music was “going through a renaissance,” and that it held the potential to ease tensions between the united states and the arab world. “america needs to know more about the arab world. the great ambassador could be music,” copeland said. copeland’s ark 21 records, founded in 1996, has become the first us-based record label committed to marketing arabic music in the west. in 1999, ark 21 produced the hit arab music sampler desert rose and arabian rhythms, including sting’s duet with algerian rai superstar cheb mami. this album, copeland said, “got the ball rolling” to release the records of many arab artists, including egyptian shaabi superstar hakim’s three latest albums. ark 21 and cairo-based media conglomerate founoon have formed a joint venture in los angeles to release records from founoon ’s arab musicians in the united states at the same time as their middle east releases. founoon has independently set up a similar office in france. “we believe that the arabic flavor is the next flavor that will be in favor in the west,” said frederic giaccardo, president and ceo of founoon marketing & distribution. founoon holding was established by efg-hermes in 2000 to buy intellectual property rights in music and cinema, including music legends abdel halim hafez and farid al atrash. the seven major record companies under the fonoun umbrella have signed 25 major arabic artists, including egypt’s amr diab, hamid el shaeery, hani shaker, hisham abbas, mohamed fouad, mostafa kamar, ali el haggar, angham, medhat saleh and mohamed mounir. the latest albums from mounir, morocco’s samira saeed and lebanon’s nawal el zoghby were introduced to us music stores in november 2002, while amr diab’s latest album made it onto shelves by the end of february, the same month as its middle east release. giaccardo hopes the new marketing will attract all americans, not only arab expatriates, and reel in more money for the local industry, which suffers from low levels of cd penetration and piracy levels of over 50 percent. another traditional arab art form gaining popularity in the united states is belly dancing, which copeland said would help hook audiences to arab music “much like riverdance helped irish music.” he is producing a documentary about america’s top bellydancers and said he has intentions to “work with egyptian dancers later.” copeland and founoon are also collaborating to produce a movie of major arab music artists touring america, to be filmed in june. copeland said he and his brothers stewart and ian (also both in the music business), discovered arabic music while living in egypt, syria and lebanon as children – when their father was a middle east-stationed us central intelligence agency agent. during college, the young miles and his best friend, the son of the egyptian ambassador to lebanon, would listen to classics like the songs of esteemed lebanese diva fayrouz. while arabic music is “selling records,” copeland said arab artists must tour the united states to succeed, as hakim has done over the past two years. copeland added that, like with the live aid concert staged by prominent
pop musicians from the west in 1985 – which raised over $100
million for victims of famine in ethiopia – the arab world
has a powerful political tool in its music. “we want arabic
musicians to realize the strength of their music and go out and
show the world,” he said. daliah merzaban ministry scrutinizes sukari
mining venture australian mining company centamin’s right to mine gold in egypt may be revoked if it fails to present an adequate feasibility study on its mining operations at the sukari hill gold mine, minister of industry & technological development ali el-saiedi warned late last year. centamin egypt’s subsidiary pharaoh gold mines (pgm) secured the right to excavate a 5,000-square-kilometer area in the eastern desert in 1994, under law 222. sukari hill, located 20 kilometers west of marsa alam, is one of 15 mines secured in that concession. under the agreement, centamin is required to perform thorough feasibility studies on its mining efforts. but el-saiedi said the studies submitted by centamin in 2000 and 2001 were incomplete, covering only a 500-meter section of sukari, not the entire hill, which stretches three kilometers. pgm chairman sami el-raghy contested the minister’s claim, saying that a comprehensive feasibility study was presented in october 2000. he added that in october 2001, centamin announced at a press conference that at least 2 million ounces of gold could be extracted from the mountain. pgm public relations manager hamdy daoud said the government had been hindering centamin’s ability to carry out daily mining operations. “we are working 24 hours per day to get our first mine in production, [but] we are struggling against egyptian bureaucracy, which is costing us time and money,” daoud said. el-raghy said that centamin had filed many complaints with the government about violations of law 222, but the cases have gone unresolved. for instance, he said, customs officials place 3-percent duties on instruments and tools imported by centamin for its mining efforts – in violation of an agreement that exempts these items from duties. egyptian geological survey & mining authority (egsma) chairman abu el-hassan abdel raouf said the authority had not impeded pgm’s operations. he said the government was boosting its efforts to attract investment in gold extraction and manufacturing. in 1999, us-based cresset precious metals incorporated attained rights to explore and produce gold and other minerals in the desert. now, the government is reportedly preparing to issue new tenders for excavations in the eastern desert, and several international groups have expressed interest in recent months. el-raghy affirmed that egypt has enough gold to be one of the top 10 gold producers in the world, and to create 15,000 jobs in mining or related industries. but international investors avoid egypt because of unrealistic government demands for a huge portion of profits, he said. under law 222, centamin must bear all extraction costs, provide the state with 3 percent of all revenues and, in the event of commercial success, 50 percent of profits. centamin, el-raghy said, has funneled more than $25 million into its mining efforts at sukari, abu marawan and al-barramiya, drilling 299 shafts since 1997, and collecting and analyzing 12,000 samples. but egsma researcher nagi shoukry boutros said feasibility studies performed by companies like centamin are “not objective, because they are based on analyses of unspecialized private labs.” the government, however, launched a massive “geo-chemical
map” project in 1995, with 16 geological expeditions working
in the area between the south of aswan and the red sea. according
to boutros, geologists collected over 32,000 rock samples, but the
project was halted in 1999, before completion. “to preserve
the public interest and money, a high-level scientific team must
review the situation,” he said. khaled moussa al-omrani khattab defends privatization,
private sector while a devalued pound has brought at least some foreign capital back into the local market, the perennial debate over privatization continues. in a rousing session of parliament on february 6, nasserist mp haidar baghdadi accused the ministry of public enterprise of adding 14,000 workers to the already swollen ranks of the country’s unemployed. baghdadi specifically mentioned employees of aswan’s kima fertilizer company, whom, he said, the government had “renounced” through early retirement schemes. additionally, haider alleged that the ministry had, over the course of egypt’s decade-old reform process, sold 180 state-owned companies at a loss. while conceding that the sales had brought a total of £e 18 billion into government coffers, he claimed that “the companies were sold at less than their real values.” he cited the assiut cement company, sold in november 1999 for £e 1.2 billion to mexico’s cemex, when “its assets were estimated at £e 8 billion.” the mp went on to attack the private sector, saying that, despite the many privileges and exemptions it enjoys, it has not played an effective role in egypt’s development. minister of public enterprise mokhtar khattab fired back, countering that egypt must, given new economic realities, roll with the punches. “the general economic atmosphere is changing, and we are now part of an international economic system. we do not live on isolated islands,” he said. “however, we care fully for the rights of labor, and we haven’t fired anyone. we offer the early retirement system to whoever’s interested, in agreement with labor unions.” khattab added that the companies sold had mostly been incurring costs greater than their profits, “costing the government up to $44.7 billion since the early 1990s.” he asserted that “privatization proceeds up to this point have reached £e 14.7 billion.” as for kima in aswan, khattab insisted that “we are not closing the factory or letting the laborers go, despite the fact that the company is consuming 1.5 million kilowatts of electricity per hour and costs more than the value of its production.” the minister insisted that the selling process was “evaluated and audited” by a central accounting authority. “we apply transparency measures and openness,” he said. “we have studied carefully other countries’ experiences in privatization and are progressing safely.” the minister stated that privatization is consistent with the international trend towards liberalization, adding that egypt “is not under any external pressures.” khattab went on to wax nostalgic about president anwar sadat’s historic shift to capitalist economic policies in early 1970s, long in advance of the fall of the soviet union. sadat’s decision, the minister noted, was a reaction to the unsustainability of egypt’s collapsing state-dominated economy. khattab defended the private sector, saying that since 1971, private
companies had invested £e 358 billion in the country and created
more than a million job opportunities. in 2002 alone, he said, egypt’s
private sector expanded by £e 10 billion. mohamed mursi government nurtures petrochemical
plants the government expects to attract over $10 billion in investments over the next 20 years to tap into egypt’s extensive – and until now largely untouched – natural gas reserves. the egyptian petrochemicals holding company (echem) has devised a three-stage strategy to build a competitive, large-scale petrochemical industry, with plans for 14 new petrochemical complexes expected to create 100,000 new jobs and generate $7 billion in annual revenues, including $3 billion from exports. “our vision is to be a world-class manufacturer, producer and marketer of petrochemical products in egypt,” echem executive deputy chairman sherif i.a. ismail said at a recent conference organized by the middle east economic digest (meed). the ministry of petroleum established echem in january 2002 to manage egypt’s burgeoning petrochemical industry. the country’s 58.5 trillion cubic feet of gas reserves, established infrastructure, tax incentives, customs duty exemptions and low-cost labor give it an edge over competitors in the gulf and algeria, ismail said. egypt has set aside 32 million square feet of land for the projects, at low prices, in special economic zones. “we will give them gas, land, facilities and labor, and they can own and operate the plant,” ismail said. he noted that foreign investors are entitled to own 100 percent of their projects in egypt, in contrast to the gulf, where a local partner must own at least 50 percent of any plant. but according to graham fox, regional general manager for dow exports sa, egypt faces a lot of competition in the global petrochemical arena. big investors have a “limited amount of capital available” for establishing new, risky ventures, he said. “let’s not underestimate the difficulty of attracting capital to these kinds of opportunities,” fox said. “it is really a tough proposition to market a country to corporations.” aside from assessing political and regional stability, multi-national investors expect the government to support world-scale projects through efficient organization, uncomplicated financing, investment in up-to-date technology, competitive feedstock prices and a gas-production sector that will support petrochemical plants, fox said. the egyptian natural gas holding company is working in partnership with echem to guarantee long-term gas supplies at competitive prices to feed the egyptian-based petrochemical projects. shell chemical’s commercial operations manager for the middle east and pakistan, ghassan ashqar, added that high interest charges on bank loans, lengthy customs procedures at ports, time-consuming dispute settlement and the lack of easily accessible market and financial information continue to dissuade investors. undaunted, echem has already secured $2 billion in its investments for the first phase of the initiative (2004-09), which will focus on high-demand petrochemical products. the most important are ethylene and polyethylene, which ismail said form the “foundation of the petrochemical industry anywhere in the world.” each phase of the project will involve the construction of a $1.5 billion ethylene and polyethylene plant. the first of these is slated for completion by the end of 2008. ismail said it would be an export-driven operation, with 80 percent of production sold abroad. encouraging exports is a “vital component of investment,” according to fox. “an international company that invests in a world-scale facility in egypt will do so largely [to use egypt] as an exporting country, a sourcing point,” he said. downstream plants for vinyls, polyester, acrylics, aromatics, styrenics and detergents will also be built during each stage of the plan. one of the first plants to be built will be a propane dehydrogenation facility in the northwest gulf of suez area, which will produce 350,000 tons per year of propylene – used in producing carpets, textiles, packing films and garden furniture – for oriental petrochemicals company (opc). the plant’s feedstock will come from a new natural gas liquefaction facility in west port said, to be opened this summer. opc – which commands 75 percent of the domestic petrochemicals market – currently imports its propylene. in addition, a $186 million facility will be built in alexandria to produce 80,000 tons per year of linear alkyl benzene, a component used in the production of household detergents and industrial applications. ismail said echem would hold a minority equity stake in all of
the projects, to be divested to the private sector once the plants
begin production. “the public sector needs to lead [only] in
the beginning,” he said. abdalla f. hassan metro bidders await final
round more than 40 egyptian and foreign companies are waiting anxiously for bidding to start on the contract to build cairo’s third underground metro line. the deadline for proposals to construct the third line – which will run 33 kilometers from imbaba, in the giza governorate, to cairo international airport – was november 2002. since then, the national authority for tunnels (nat) has been short-listing the most technically sound tenders. nat chairman said shehata told al-ahram that the authority would announce its decisions in early march. he did not say when bidding would begin. harvé biquet, a commercial counselor with the french embassy, said the nat was searching for the “best offer in a free competition.” a french consortium, he said, was hoping to secure the contract. minister of state for foreign affairs fayza aboulnaga emphasized that the government was looking for the most cost-effective scheme, especially considering the large amounts of hard currency that would be needed for metro construction. “we are in the study phase to select the most attractive financial package that would not entail a huge burden on the budget,” she said. according to ministry of transportation estimates, building the third line will cost $2.8 billion, spread over three phases of construction. last september, the cabinet approved the allocation of £e 1.866 billion to the ministry’s five-year plan (2003 to 2007) for tunnel development. aboulnaga confirmed that french and japanese consultants were among
a number of international bodies that have “expressed interest”
in securing the contract. magdi ebeid one-stop investment facility
draws mixed reactions egypt is no stranger to the global tussle for foreign capital. “the issue to realize,” national democratic party (ndp) economic policy insider mahmoud mohieldin said at the now famous january 28-29 economist conference, “is that we’re competing for fdi.” to this end, prime minister atef ebeid on january 10 inaugurated the center for investment services at the headquarters of the general authority for investment (gafi) in nasr city. working under the auspices of 22 ministries and 72 different governmental bodies, the center is meant to provide investors with a single place to pick up all the official documents and approvals that are needed to set up an investment project. according to gafi chairman mohamed al-ghamrawy, the center aims to “remove obstacles and overcome bureaucracy.” investors are never expected to deal with all 72 departments, he added. “if an investor wants to establish a business in the field of land reclamation, for example, he will need only to go through the 13 bodies associated with that sector,” al-ghamrawy said. reactions from the business community have been cautious. gamal el nazer, chairman of the egyptian businessmen’s association and a former minister of tourism, conceded that it was a good idea to consolidate investment-related authorities under one roof. the move “should have been made 20 years ago,” he said. but he added that such centers, in themselves, would hardly guarantee more investment. other steps must also be taken. “the judiciary system, for example, makes cases last for 10 years, causing big losses of investment,” el nazer said. “it is therefore essential to amend laws to provide for quick dispute settlement.” greater transparency is also necessary, he said, “especially with regard to statistics and economic laws, so that accurate feasibility studies – necessary for the success of any investment – can be prepared.” financial consultant hisham hasabo also expressed reservations, saying the center would have difficulty finding staff with the necessary expertise to deal with documentation from so many different ministries and agencies. “those at the center cannot be fully aware of every legal, technical and economic matter related to all sectors,” he said. hasabo suggested training law and commerce graduates to deal with investment procedures. these graduates could then run the bureaucratic obstacle course for investors – who would pay a nominal fee to gafi. “this experience worked in lebanon and attracted a lot of investment,” hasabo said. whatever the scheme’s pros and cons, more investment centers
are in the works. according to ebeid, similar one-stop permit shops
will be ready for business in assiut, ismailiya and alexandria by
mid-year. additional centers are also planned for tenth of ramadan
city, sixth of october city and alexandria’s new burg al-arab
city. khaled moussa al-omrani transit shippers face down
port said customs office they didn’t have to riot in the streets like their merchant counterparts, but port said’s transit-shipping companies have won a stay of execution from the local customs office. company owners reacted with civilized outrage in december when the customs office threatened to confiscate goods they were holding for re-export. up to now, transit cargoes have been regarded as “bonded goods” – imports stored in designated warehouses without incurring customs duties. but the december 14 announcement called on transit-shipping companies to sell or re-export all their remaining goods within a month, or else be slapped with tariffs. failure to pay the tariffs would result in confiscation of the cargoes, the customs office said. although the decision has not been officially revoked, strident objections from a powerful local shipping lobby led the authorities to put the plan on ice for now. under the 1963 free-zone law, transit storage facilities are not regarded as ordinary warehouses, but have a special status permitting them to hold imported goods for re-export. “the customs administration should leave these storage spaces alone,” said aggrieved shipping owner aly al-kayal. another transit shipper, ragab al-shenawy, said it was “logical” for shipping firms to hold bonded goods, a role that supports export trade without export subsidies. “we bring in foreign currency for the country.” al-shenawy said. “the government should not make things more difficult for us to do business.” fahmy abu hashish, deputy head of the port said chamber of shipping, affirmed that transit trade was vital for port said’s economy, especially following the january 2002 cabinet decision to scale back the city’s status as a duty-free port of entry. the port said free zone will be fully eliminated by 2006. port said merchants recorded devastating losses last year, after fixed tariffs of up to 700 percent were slapped on ready-made garment imports – effectively eliminating the city’s main economic activity. the construction of a massive container port at east port said, along with a 190,000-square-meter petrochemical facility and other, smaller industrial and agricultural projects, is expected to absorb some job losses. port said governor mustafa kamel said the government had set aside £e 12 billion in its current five-year plan (2002-07) to help port said make the transition from a free zone into an industrial, commercial and tourist city. abu hashish, however, insisted that transit trade was “an
essential way to revive the port city.” he said that the city’s
transit-shipping companies would not yield to pressure from customs
officials. “the owners of these goods would rather throw them
into the suez canal or even burn them than hand them over to the
customs authority,” he said. khaled moussa al-omrani |
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