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 including a number of high-profile cabinet ministers, ambassadors and officials.

Nazif began on a positive note, affirming Egypt’s position in the world. “We are a strong country… and I do think Egypt has a bright future,” he said, citing Egypt’s four key strengths. Firstly, he noted, Egypt is an emerging market with an annual import bill that tops $20 billion. “Some see this as a weakness,” he said. “I see it as an opportunity.”

Secondly, he went on to point out, Egypt has invested heavily in infrastructure that can support growth. “The infrastructure we have today can provide investors and Egyptian citizens with quality services,” he said. 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 proceeded to outline a plan for drawing 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.

He went on to elaborate on the national plan for drawing investment. “We’re restructuring the government’s interface with investors,” he said, noting that the General Authority for Investment and 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 put in place, existing legislation should be reviewed to eliminate impediments and investor services needed to be centralized into “one-stop-shop” facilities.

In terms of improvements to the business environment, Nazif pointed particularly to the need for customs reform, tax system revision, banking reform and investment development. He pointed out that banking reform required more than just measures to deal with non-performing loans (NPLs), it should make banks “stronger, bolder and more professional… and more technology-oriented.”

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, admitted 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, focus 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. He said a comprehensive education reform package was essential to improving the labor force, adding: “Anyone who has a good asset tries to keep it in shape.”

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.”

Entrepreneurship was something he said needed more attention. “Egyptians like to work for the government and I don’t know why,” the prime minister chuckled. He said that upon joining the government he discovered that the problem was not in the people, it was in the system. “Change the system and the people will change,” he asserted.

Nazif encouraged greater cooperation between Egypt and its number one trading partner, the United States. He pointed out that in the first three quarters of 2003-2004, the US accounted for $3.3 billion (26%) of all imports and $2.7 billion (36%) of all exports, as well as $800 million (36%) of all expatriate remittances. He pointed out that Egypt was the second largest recipient of US 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, “We can own the future, and – insha’allah – we will.”

The prime minister then took questions from the audience on a number of subjects that touched on subsidies; new tax laws; bank reform; competition from Dubai; the role of civil society; banking policies; and the likelihood of privatization in the tobacco sector.

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