Minister of Trade and Industry Rachid Mohamed Rachid addressed an AmCham luncheon held at the Grand Hyatt Hotel on May 15. The minister spoke about the government’s record of economic achievements, while assessing the many challenges that lie ahead.

He began by recalling his first speech delivered to AmCham, in September 2004. At the time, he stated: “Egypt will transform its industry and export sectors to become dynamically competitive, sustainable and globally integrated. Egyptian industry and exports will be key growth engines to the Egyptian economy.”

Rachid said the ministry had aimed to achieve annual export growth of 17 percent and annual industrial growth of 6 percent. “Today, I can share with you that what has happened in the last two and a half years has exceeded even my own expectations.” Last year, export growth was 46 percent and industrial growth reached 7 percent, he said. Investment in industry also rose, from $5.6 billion in 2004 to $12.7 billion in 2005 and $16.4 billion in 2006. Through the first six months of 2007, that figure has already reached $18 billion, and Rachid said he thinks it could reach $32 billion by the end of the year.

The growth of trade and industry has resulted in impressive increases in investments, greater diversification in industry and better skills for Egyptian workers. “In the last twelve months, 852 factories started production - 168 [as part of] the President's commitment of [establishing] 1,000 factories. We also have 1,400 factories in Egypt today under construction,” he noted. “[In] the area of people, we have seen significant progress. We, the Ministry of Trade and Industry, succeeded last year to develop skills for 56,000 new laborers,” through training, which came as part of the ministry's program to upgrade the skills of workers in Egypt.

In cooperation with the Industrial Modernization Center, MTI created the Industrial Training Council to provide Egyptian workers with much needed training programs. “This year we have a commitment of 500,000 young men and women in Egypt to go through the program.” He says this will significantly to the development of employment opportunities and of industry.”

The minister said another positive aspect of the Egyptian economy is its network of free trade agreements.

Rachid noted that while some of these trade agreements are new, such as the Qualifying Industrial Zones (QIZ) Agreement, which allows Egyptian products containing a minimum 10.7 percent Israeli content quota- and duty-free access to the US. Others however, are old agreements that were signed long ago, however, were simply not exploited by the Egyptian government to their fullest. Now they are.

But the remainder of his speech was spent addressing his concerns about the future. “Well, many things have happened since 2004, but in the government we are worried,” he said. “All my colleagues and I are worried; extremely worried, because we want this to be sustained. We want to make sure that what we have started will take its own momentum and outlive all of us individuals. We might not be here next year; we want the reform to be there.”

Among those concerns, Rachid highlighted education, energy, financing, infrastructure, market discipline and inflation. In addition, he said two areas in particular were serious. One was attracting a pool of highly qualified applicants to government jobs. “The problems faced by the government of Egypt are huge, they are serious, and they are very complicated. It can only be the best minds in this country and the best talents in this country that will solve it.”

Rachid added: “I was in Kazakhstan last week and I met the deputy minister of trade, [an] extremely bright young man, 27 years old. Well, until we get similar situations in Egypt we have not done our work yet. We need to ensure that people in their twenties and thirties can be ministers, and can be ministers not because they look good, but [because] they are good.”

Another problem he highlighted was the need to raise the level of corporate governance in Egypt. “We need a private sector that will not tolerate and will not allow companies that are cheating on taxes; will not tolerate and will not allow companies that do not respect labor laws; that will not tolerate or allow companies that do not respect competition laws; and, most important, that will not tolerate or allow companies that do not respect and work hard to give consumers their rights.”

Following his presentation, Rachid answered questions from audience members covering a range of topics, such as the pricing of natural gas, energy subsidies, and bilateral free trade agreements with Turkey and the US.

Following the May 15 luncheon, AmCham's three presidential candidates, Hamed Fahmy, managing director of Allied Corporation Egypt; Omar Mohanna, chairman Suez Cement Group of Companies; and Ramzi Roshdi, chairman and CEO of Roshdi Group/Majestic Hotels, met for the first-ever AmCham presidential debate. The three candidates shared their election platforms addressing a variety of issues concerning the needs of the members and the role of the Chamber.