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VIEWPOINT

Answering the call for Tushka

Everyone by now knows about the Tushka project, Egypt's giant effort to reclaim land in the Western Desert to allow its people to finally break out of the confines of the tiny Nile Valley. What isn't as well known is the potential this project holds for attracting investment and trade from the U.S.

In September, a U.S. Congressional delegation led by Representative Robert Smith, the chairman of the House Agric-ulture Committee, explained that the $88 billion project had drawn a lot of attention in the U.S. He encouraged Egyptian businessmen to build on this interest by traveling to the U.S. to make the case in person. AmCham, whose mission is to develop trade and investment opportunities between the U.S. and Egypt, answered his call. A delegation of government officials and AmCham members recently traveled to Washington, and Rep. Smith held up his end of the bargain by organizing a meeting of investors to explore opportunities for both trade and investment.

AmCham's Business Studies & Analysis Center provided the report that served as the basis for dialogue at that meeting. To date, our report is the most comprehensive available. It offers background on the history and rationale for the project, and it addresses the issues that will be crucial to the projectÕs success. The report suggests that Egypt - relying upon responsive and flexible coordination between the government, the private sector and Arab and international funding agencies - is now positioned to meet the economic, technological and long-term planning needs of a project of such scale.

With more than 62 million Egyptians wedged into an area half the size of Jordan, land reclamation is a top government priority. The country has a strong track record in this field. Arable land has in-creased by 80 percent since the turn of the century. But the population has increased 600 percent in the same period, so more needs to be done. To remedy the situation a comprehensive scheme was drafted in the early 1980s to expand Egypt's arable land from the current 8 million feddans to 11.4 million feddans by the year 2017. Progress has been steady. Cultivable land has expanded by nearly a quarter since 1982, and there has been a 30 percent de-crease in reliance on imported wheat. A third of this reclamation project involves land in the Tushka and East Oweinat areas west of Lake Nasser, collectively referred to as the South Valley.

For the moment, U.S. investors appear primarily interested in selling equipment and supplies needed to complete the projectÕs infrastructure. The first phase of the project calls for completing the Sheikh Zayed Canal and building the world's lar-gest pumping station, which by the end of the year 2001 should be pulling irrigation water out of Lake Nasser. Construction and infrastructure, U.S. investors noted, will also count for a significant share of future phases of development. The agricultural aspects of the South Valley project are expected to constitute 8 percent of total investment. Construction and infrastructure, however, will account for 31 percent and 17 percent, respectively. Industry and tourism sectors have also entered the picture, and all areas were seen as sources of opportunity and cooperation between the U.S. and Egypt.

Additionally, the House Committee for Agriculture expressed a strong interest in land reclamation and irrigation methods that will be employed. The South Valley will have to showcase the most advanced techniques available due to the harshness of the climate and the scarcity of water, but the project will create investment opportunities in these fields in other areas as well. As the AmCham report points out, meeting the project's water requirements will require rationalization of Egypt's water use nationwide, which will be carried out by more carefully selecting crops and upgrading existing irrigation canals and conveyance systems.

The implications of the South Valley project are vast, far-reaching and designed to do no less than transform our country. What's more, it is but one of several other projects under way - including those in the Gulf of Suez and East Port Said - that I believe will ensure Egypt's pride of place in the new century. AmCham is preparing reports on the status of each of these megaprojects, with an eye on opening new lines of communication and developing investment opportunities to help ensure the success of these endeavors. We'd like to encourage you to access the information we are producing and enter this historic dialogue - and the process.

Ahmed Shawki
President, AmCham

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