On September 12, AmCham hosted a luncheon at the Cairo Conrad hotel, featuring as guest speaker Minister of Industry and Foreign Trade Rachid Mohammed Rachid, who presented a brief outline of his ministry’s short-term intentions vis-à-vis the industrial sector, exports and trade agreements.

AmCham President Taher Helmy took the podium to acknowledge the many distinguished guests in attendance, which included a number of current and former cabinet ministers, foreign ambassadors and members of various trade missions and associations. He went on to give a brief bio of Rachid, noting his successful career with the multinational manufacturer Unilever, and listing the many business associations in which he has been active, including the Egyptian Center for Economic Studies (ECES) and AmCham. Praising Rachid’s background as a businessman, Helmy referred to him as a “non-politician” and “a new breed of cabinet minister,” adding that despite the many grave challenges his dual portfolio will entail, his appointment had received “wide approval from both inside and outside the country.”

Helmy then introduced the minister, who began by expressing his thanks to AmCham for hosting the event. “After two months in public life [during which he has been subject to close scrutiny by the local press], it’s nice to be back among people who like me,” Rachid began, drawing laughter from the audience.

He went on to admit that his experience in politics was limited, given the enormity of the challenges his ministry will face. Nevertheless, he was quick to add, the government was eager to partner up with the private sector to “share a vision and a work plan” in order to confront several vital issues, including “restructuring, competitiveness and exportability.”

In terms of national exports, Rachid was optimistic, even though despite a recent surge of export activity Egypt’s current figures remain relatively grim. “We export 4 percent of our industrial product,” with total exports racking up some LE6 billion to LE8 billion a year, he noted, comparing these figures unfavorably to other developing countries, like Turkey and Tunisia.

The bulk of Egypt’s exports, meanwhile, which constitute mainly raw materials with no value added, he added, were “not very profitable.”

Rachid explained that, in order to improve local industry and exports, the ministry would- in partnership with the private sector- “focus its resources” on a few of the most pressing problems. He went on to spell out the ministry’s “vision” for the twin sectors, in which local industry and exports are made more competitive by maximizing existing strategic advantages, resulting in both higher value-added and the penetration of fresh export markets.

The minister set down three specific short-term goals, namely: to boost the annual growth rates of total export values by 17 percent; for manufacturing value-added by 6 percent; and for strictly industrial exports by 20 percent.

Rachid then listed ten “strategic thrusts” aimed at achieving these goals, the most important of which he elaborated on:

1) Revolutionize the environment for business
The minister explained that this was largely about encouraging a process of simplification, including the elimination of obstacles to business; decentralization; and pushing legislative reform. Additionally, in cooperation with other ministries, the Ministry of Industry and Foreign Trade will press for customs and tax reform; financial-sector reform; more vigorous efforts to privatize; and the elimination of non-performing loans.

2) Develop industrial-sector strategies
Rachid explained that these strategies aimed chiefly to promote transparency and the disclosure of the criteria for government intervention. Strategies were also aimed at locating – then maximizing – the industrial sector’s competitive advantages. “We can’t expect an inflow of investment [in industry] until we articulate our plans,” he noted.

3) Support and promote export

4) Re-engineer the Export Development Fund

5) Modernize the industrial sector
The minister explained that this would involve the improvement of quality, standards and accreditation; innovation and technology transfer; access to knowledge; the upgrade of institutions; and the convergence of the Industrial Modernization Program’s (IMP) activities with the ministry’s own.

6) Maximize the benefits of trade agreements
This can be done, Rachid explained, by maximizing the benefits accrued by existing free trade agreements; continuing the drive towards a US-Egypt FTA; raising awareness of existing opportunities; and assessing the potential benefits and feasibility of additional FTAs.

7) Enhance the contribution of local human resources

8) Maximize and mobilize financial resources

9) Build Egypt’s image

10) Communicate and inform
Rachid concluded by saying that other challenges, too, besides those cited above, had to be met. “We need to change the existing mindset regarding global integration,” he said, as well as “align our efforts in one direction.” The minister went on to note that greater social responsibility had to be promoted, as “parts of the population still have to be taken care of.”
“The challenge is great,” he concluded. “But the opportunity is huge.”
AmCham President Helmy then returned to the podium to present the minister with an honorary chamber membership.

The minister also answered a number of questions from the audience on a number of topics, including: his 5-year export plan; subsidies and issues of social responsibility; possibilities of establishing Qualified Industrial Zones (QIZs) with Israel; recently announced tariff reductions; government price controls on “strategic” food products; and impending IPR legislation.

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