bus ine not for …from 13.8 percent in the 2013/14 finan - cial year, and that gdp growth would...

w w w . a m c h a m . o r g . e g / b m o n t h l yNOT FOR SALE

BUSIN

ESS MO

NT

HLY

H

ERE C

OM

ES TH

E SUN

M

AR

CH

2015

M A R C H 2 0 1 5

▲▲

BLACK MARKET BLUES

▲▲

GREEN ENERGY HEATS UP

ALSO INSIDE

▲▲

CLICK AND RIDE

▲▲

TRADE WINDS

20 I Business Monthly – March 2015

With analysts cautiously opti-mistic that Egypt’s economy isrecovering, the government isunveiling $20 billion worth of pro-jects this month to investors fromaround the world. Officials arelooking to the high-profile eco-nomic summit in Sharm el-Sheikhto bring back foreign investmentthat fled the country after 2011.

Cover Design: Nessim N. Hanna

© Copyright Business Monthly 2015. All rights reserved. No part of this magazine may be reproduced without the prior written consent of the editor. The opinions expressed in Business Monthly do not necessarily reflect the views of the American Chamber of Commerce in Egypt.

34

28

Comeback

M A RC H 2 0 1 5VO L U M E 3 2 | I S S U E 3

24

26

28

32

InsideEditor’s Note

Viewpoint

The NewsroomIn BriefThe news in a nutshell

Region NotesNews from around the region

36

40

44

48

In DepthCourting investors, Egypt takes aimat black marketCentral Bank allows the pound to drop

Damietta grain project offers bigpromises Analysts remain wary of anotherToshka

World’s richest start-up takes Cairofor a spinClick-and-ride apps arrive in Egypt

Can green power help rechargeEgypt’s economyInvestors eye renewable energyprojects

Market WatchStock Analysis Weak pound gives the market aboost

Capital MarketsA glance at stocks & bonds

Money & BankingForex and deposits

Key IndicatorsThe economy at a glance

Egypt-U.S. TradeImports and exports

Corporate ClinicNew blood Three American businesses hit oninnovative ways to attract talent

66

72

78

80

81

84

The Chamber

Events

AmCham MENA Council

Member News

Announcements

Classifieds

Media Lite An irreverent glanceat the press


60

M A RC H 2 0 1 5VO L U M E 3 2 | I S S U E 3

44

48 Executive LifeDining Out Finally, good Mexican food comes to Cairo

DowntimeWhat to do in Sharm?

60

62

52

53

55

56

57

58

Last month, eight months after the new president promised to fix Egypt’stroubled economy, the International Monetary Fund said it was starting tosee signs of a “turnaround.” Striking a tone of cautious optimism, the IMFupped its growth forecast for the year to 3.8 percent, up from 2.2 percent

last year. The report came as welcome news to Cairo as Egypt aims to attract billionsin foreign investment at this month’s economic summit in Sharm el-Sheikh. HanyKadry Dimian, the finance minister, called the report “the message of confidence wehave been waiting for.” The economy was much in need of good news. Several years of turmoil and unrest fol-

lowing the 2011 revolution frightened off tourism and foreign investment and leftgrowth stagnant. Unemployment and poverty rates soared as the state struggled with aballooning deficit. Meanwhile, a worsening shortage of natural gas—which Egypt reliesupon to run its factories and electricity plants—forced blackouts on a regular basis, shut-tering industry and leaving millions sweltering in the dark. Now there are signs that things are looking up. Business delegations from Japan,

Britain and the United States have recently visited Cairo, looking for investment oppor-tunities in the Arab world’s largest market. Global corporate giants including Coke,Nestlé and BP have pledged to funnel billions into the country over the next few years.Last month, the stock market hit a six-year high. Like the IMF, investors have beencheered by a handful of reforms recently undertaken by the new government. Long over-due cuts to fuel subsidies last summer will help rein in the deficit, and in recent weeks,the Central Bank allowed the pound to depreciate, a move that should bolster exports andtourism while throwing water on Egypt’s thriving forex black market. A new compre-hensive, business-friendly investment law has been promised. Foreign investment alone won’t improve the lives of Egypt’s 90 million citizens, how-

ever. A new report released by the Egyptian Center for Economic and Social Rightspoints out that foreign investment peaked during the last years of the Mubarak regime,reaching 8.1 percent of GDP in fiscal 2007/8, while at the same time, the percentage ofthe population living in poverty rose steadily from 16.1 percent in 2000 to almost 21 per-cent by 2008 and 25.2 percent in 2011. That’s partly because Egypt’s investment frame-work favored “the interests of multinational corporations above the interests of the pub-lic,” argues the report. Foreign corporations are allowed to transfer all their profits off-shore, often untaxed. Egypt needs policies that ensure companies reinvest some of theirprofits back into the country and hold them accountable for corruption and violations ofenvironmental and human rights. Otherwise, the billions in investment pledged at thismonth’s conference won’t mean much more than a row of zeros to the Egyptian people.

IT’S ONLY MONEY


Editor’s Note

Director of Publications & ResearchKhaled F. Sewelam

Editor-in-ChiefRachel Scheier

Contributing EditorTamer Hafez

Staff WriterEric Knecht

Art DirectorNessim N. Hanna

Contributing WritersKate DurhamBrendan Meighan

PhotographersSoha El GabiSaid Abdelmessih

CartoonistJoseph Hakim

Production SupervisorHany Elias

Advertising DirectorAmany Kassem

Advertising & Circulation AssistantsTasneem Abo El Ezz

Market Watch AnalystAmr Hussein Elalfy

Chamber News ContactsNada Abdalla, Farida El Gueretly,Azza Sherif

U.S. address: 1615 H Street, NW • Washington, D.C. 20062Please forward your comments or suggestions to the Egypt editorial office:

Business Monthly American Chamber of Commerce in Egypt33 Soliman Abaza Street, Dokki 12311 • Cairo • EgyptTel: (20-2) 3338-1050 • Fax: (20-2) 3338-0850E-mail: [email protected]/bmonthly

CTP and printing: Sahara Printing Company, SAE – Nasr City Free Zone

RACHEL SCHEIER

Whenever you read about business val-uations it is always encouraging tolook at start-up statistics. Growing100 percent is always easy whenyour starting point is very low; on theother hand, when you reach maturity,

2 percent growth seems acceptable, and investors begin tolook for new funds to stimulate profits and may head for anexit of some sort.

There are lies, white lies and statistics, and if one does notread the fine print, then figures and rates can be totally mis-leading … that is why laymen ask the simple questions thatoften reflect the honest truth “Are we doing better?”, “Are weheaded in the right direction?”, “If we keep taking the sameactions, will we be alive in two years?” … In times of drasticchange, anxiety kicks in faster; we all want to know what thefuture holds starting with our immediate social circles, ourcountries, and sometimes the world. The media bombards uswith figures and projections lined with scary “what ifs” thatmakes everything sound like a firm “maybe”. That approachconfuses the general public because 50 percent is not a satis-factory answer, and without a context, that number does notmean anything.

The truth is that good news does not make the news; partic-ularly as it can be seen as boring, even more so if it does notdirectly affect the recipient. Market and media researchreflects that people need suspense or money in their pocketsbefore they react.

Like everything else, news is a commodity affected byoffers and demand. For the past four years, we have been sub-merged by avalanche of political news, economic predictions,

and wise forecasts that are not the fruits of exact science. Welive in the 50/50 zone. Thus we are “newsed” out. We inces-santly see a new world where uncharted territories havebecome fertile ground for extremists and criminals, makingour future look bleak and unpredictable.

Obviously all of the above is debatable and not conduciveto the desired changes. No matter how true the news, the pre-dictions and the statistics, we are still human beings who arefuelled and incentivized by hope, laughter and love. Thus weneed to give ourselves a chance for success by doing the bestwe can in our respective areas of expertise without attemptingto constantly rule the country and the world in the struggle toclaim the mantle of the winner before asking others for thatchance.

I am trying to shut off the conspiracy theories and defeat thebad odds by making “a job well done” my ultimate goal,regardless of who planned bad actions or failed to see thescary signs on the wall. The combined efforts of all, in a pos-itive direction, will gradually win the battle.

In a nutshell, in politics as well as in business, we need tocarefully choose our partners and base our decisions on facts.Not being all inclusive does not mean being exclusive and cer-tainly not abusive. On the contrary, regardless of academicpredictions, excluding bad elements from a society may leadaway from abusive destruction and towards creating a moreinclusive community.

We are all going through a reality check, learning about“friends” and selecting “partners”, trying our utmost to remainindependent and rely on diversified sources, in doing so weshould stay away from fear and avoid demoralizing statistics inorder to build a brighter future for our country and businesses.

Viewpoint


ANIS A. ACLIMANDOSPresident, AmCham Egypt

CHEER UP


In Brief

IMF predicts economic“turnaround” After four years of stagnation, Egypt’seconomy is showing signs of arebound, the International MonetaryFund concluded after its first compre-hensive review of the country since2010. “The authorities have embarkedon an economic reform program toraise growth, create jobs, and containfiscal and external deficits and the lossof foreign exchange reserves,” saidEgypt’s IMF mission chief,Christopher Jarvis. In particular, thereport praised recent subsidy and taxreforms, noting that “the authorities’objectives are ambitious but are broad-ly within reach with steady policyimplementation.” It also predicted thatEgypt’s budget deficit would dip below8 percent of GDP by 2018/19, downfrom 13.8 percent in the 2013/14 finan-cial year, and that GDP growth wouldreach 3.8 percent in fiscal 2014/15, ris-ing to 5 percent in the medium term. TheIMF estimates are less optimistic thangovernment projections of growthexceeding 4 percent in the current fiscalyear. Although broadly supportive ofgovernment policies, the IMF highlight-ed several areas of concern, includinglow foreign reserves and Egypt’s vulner-ability to regional insecurity. The gov-ernment and the IMF also disagreedabout the likely size of Egypt’s currentaccount deficit; the IMF predicts theshortfall will remain at 3.5 to 4.5 percentof GDP, while the government says itwill not exceed 3 percent. In remarksaccompanying the report, HazemBeblawi, who represents Egypt on theIMF executive board, indicated that the

government is pinning its hopes on theupcoming Egypt EconomicDevelopment Conference to boost for-eign direct investment.

Egypt, Russia strengthen tiesA state visit by Russian PresidentVladimir Putin culminated in the sign-ing of several trade deals, with furtheragreements between Cairo andMoscow still to be finalized. DuringPutin’s visit from Feb. 10 to 11, Putinand Egyptian President Abdel Fattahel-Sisi announced the establishment ofa free trade zone between Egypt andthe Russian-led Eurasian Economic

Union. The two leaders also announceda preliminary deal for a Russian invest-ment zone along the Suez Canal andplans for Russia to help establish anuclear power station in Egypt. Thetwo countries also plan to allow somebilateral transactions to be carried outin local currencies, cutting out the U.S.dollar—Russian tourists paying forholiday packages in rubles, for exam-ple, while Egypt could use those rublesto buy Russian wheat. Other dealsreportedly on the table include the pur-chase of Russian-made weapons, a gasimport deal with Russia’s Gazprom andcustoms officials have agreed to sharedata about the goods traded betweenthe two nations.

BUSINE

SS M

ONTH

LY ARC

HIVE

S

A VISIT BY RUSSIAN PRESIDENT VLADIMIR PUTIN LED TO SEVERAL TRADE DEALS.

Egypt inksLNG import dealsWith a floating terminal set to arrive thismonth that will allow Egypt to import liq-uefied natural gas, Egypt’s governmenthas signed a series of import agreementswith regional allies and international trad-ing houses. Deals signed last monthinclude a contract with Dutch tradinghouse Trafigura to supply 33 shipments ofLNG in 2015-16; a memorandum ofunderstanding signed by Egypt andCyprus to cooperate in the field of oil andnatural gas; and a contract for Noble Cleanfuels to supply EGAS, the EgyptianNatural Gas Holding Company, withseven LNG shipments for two monthsbeginning in April. EGAS also agreed toimport nine shipments of LNG from theSwiss company Vitol. Negotiations arestill ongoing with Britain’s BP for aprospective deal to buy 21 shipments ofLNG, and a deal with Russia’s Gazprom isalso in the works. An agreement withAlgeria was signed in December. If natur-al gas imports proceed on schedule, theycould greatly ease Egypt’s power shortageas it enters the peak summertime energymonths.

Nielsen: consumerconfidence up Egypt gained five points on global marketresearch firm Nielsen’s fourth-quarter con-sumer confidence index, closing 2014 witha score of 90. Scores below 100 indicatepessimism about local job prospects, per-sonal finances and immediate spendingintentions, while scores above 100 indicatean optimistic outlook. Egypt’s most recentscore puts it 14 points above the samequarter last year, making it one of theworld’s biggest gainers in 2014, althoughsome of the improvement is due to baseeffects from the fourth quarter of 2013, atime of particularly tumultuous domesticunrest. “Egypt’s consumer confidencescore has been climbing for the last twoquarters, and we see a direct correlation tothe country’s economic growth during thatsame period,” wrote Tamer El Araby,Nielsen’s managing director for Egypt,Levant and North Africa, in the report.

Unemployment lowestsince 2012Egypt's official unemployment ratedropped to 12.9 percent in the fourthquarter of last year, falling from 13.1 per-cent the previous quarter. The last timeunemployment figures dropped below 13percent was in the third quarter of 2012,when it stood at 12.5 percent. State statis-tics agency CAPMAS attributed theimprovement to a strengthening econo-my. On the eve of the 2011 revolution, therate stood at around 8.9 percent. Officialjoblessness figures do not include work-ers in the informal sector and are widelybelieved to be optimistic. According toCAPMAS, 3.7 million Egyptians wereunemployed in the fourth quarter of 2014among a labor force of 27.7 million.

Private sectorreports contractionFor the first time since last July, Egypt’snon-oil private sector slid into a contrac-tion in January, according to HSBC’sPurchasing Manager’s Index. The indexfell to 49.3 in January, down from 51.4 inDecember, indicating that operating con-ditions are deteriorating. Readings below50 indicate a decline. With output andorder declining, managers surveyed byHSBC said they were reducing their

workforces for the second month in a row.Input costs were also said to be on therise, with purchase prices climbing at thesharpest rate in four months. Despite ris-ing costs, for the third month in a row,companies reported lowering their prices.“The numbers show that Egypt’s recov-ery remains weak and vulnerable todownside risk. While we continue toexpect an upward trajectory for the econ-omy, the gains will come off a low base,”said HSBC Senior Economist RazanNasser in a press statement.

Butane prices feed inflation in JanuaryAnnual headline CPI eased to 9.66 per-cent in January, down from 10.13 percentin December, supported by favorable baseeffects from the previous year.Meanwhile, the monthly rate rose by 0.99percent in January, after a decline of 0.07percent the previous month. According tothe Central Bank, the monthly increasewas driven by regulated items, especiallybutane cylinders, the price of which hasshot up by almost 55 percent due to short-ages. Seasonal food price increases alsocontributed to monthly inflation. In relat-ed news, the Central Bank’s MonetaryPolicy Committee elected to keep keyinterest rates unchanged at its monthlymeeting, stating that lower global com-modity prices mitigate inflation risks,

In Brief

Business Monthly – March 2015 I 29

BUSINE

SS M

ONTH

LY ARC

HIVE

S

UNEMPLOYMENT DROPPED SLIGHTLY IN THE FOURTH QUARTER OF LAST YEAR.

while the country is showing promisingGDP growth but remains at risk due to“challenges facing the Euro Area and thesoftening growth in emerging markets.”

Mixed results for tourismTourist arrival numbers were up year-on-year in December, but still recorded thelowest figures in six months. According togovernment statistics agency CAPMAS,781,602 tourists visited Egypt inDecember 2014, up 15.3 percent comparedto December 2013, when around 677,650arrived, but almost 13 percent belowNovember 2014, when more than 898,000tourists visited. December is the peak ofthe European winter-holiday season andhas historically been a prime month forboth beach and cultural tourism in Egypt.Experts have attributed much of thedecline to the crash of the Russian ruble,which has prevented Russians—usuallythe single largest group of visitors, particu-larly to Red Sea resorts—from coming. Inrelated news, Minister of Tourism HishamZaazou told Reuters that tourist revenuerose to $7.5 billion last year, up from $5.9billion in 2013, with the country receiving9.9 million tourists in 2014 compared to9.5 million in 2013. However, 2014 figureswere far below expectations. In October2013, Zaazou announced that he expectedEgypt to see $11 billion in revenue and13.5 million tourists in 2014.

Officials move to liberalize energy sectorsPaving the way for the privatization ofthe country’s electricity sector, Egypt’scabinet approved a draft law Feb. 18allowing for free competition in the pro-duction, transfer, distribution and sale ofelectricity. The proposed legislation,which still must be approved by the StateCouncil before it can be formally adopt-ed, would move state entities toward aregulatory role rather than directly oper-ating and managing the sector. At pre-sent, the state-owned Egyptian ElectricHolding Co. is the market’s sole buyer,while its subsidiaries route power tolarge factories and retail consumers. Inprinciple, the proposed changes couldallow private producers to sell directly tocustomers. The draft law also aims tofacilitate plans to connect Egypt’s elec-tricity grid to those of neighboring coun-tries. The following week, Egypt’s oilministry announced it was setting up anew state-owned gas company to super-vise the sale and distribution of naturalgas. According to a press statement, theministry plans to allow any party inEgypt to import gas from anywhere inthe world, providing it doesn’t harmnational security. Gas importers will bepermitted to use the gas for their ownpurposes or to re-sell it to other compa-nies, paying a tariff to transport gas viathe national grid. ■

If you had $100,000 to invest in Egypt, whatwould you put it in and why?

I like the idea of putting my money in the stock market.In the past though, no matter which broker I worked withor what stocks I picked, it was too risky. But if I had$100,000 and didn't care if I lost it all, I would definitelyput my money in the EGX.

Salwa Tarek, 28, assistant professor

I would buy anything vintage. Stamps, vases, light fix-tures—anything I could find that I could hold onto untilits price goes up at some point down the line. If you doyour homework, you can easily find things that are guar-anteed to get more valuable over time. Plus, whateverI’d buy I could put in my home and enjoy every time Ilooked at it, unlike a piece of paper saying how manystocks I bought.

Fahmy Rashid, 52, food stand owner

I heard that the stock exchange is now offering some-thing called exchange-traded funds. They are supposedto be safe, because the investment is spread across theentire EGX 30. That means you don’t risk having theinvestment manager choose the wrong stock.

Ahmed Salem, 31, public relations executive

I would use the money to buy jewelry. I know that jewelswill never depreciate in value, and on the plus side, Iwould enjoy wearing it. I don’t think I’d go for goldbecause it’s getting cheaper. I would probably go for dia-monds or other precious stones, as long as $100,000would be enough. I already have a small collection thatwas passed on to me by my aunt and my grandmother.

Gamila Abdel Wahab, 24, waitress

That’s roughly LE 760,000. With that kind of money, I’dbuy a decent-sized apartment and rent it out. The rentmoney would do a lot to help supplement my income. Itwould also provide some peace of mind knowing that Ihad a nest egg, should I ever need it. I’ve been thinkingabout this for some time now. Unfortunately, I don't havethe money to buy a nice enough apartment to bring indecent income.

Rashid Saleh, 41, IT manager

I am not sure I would do anything other than put it in thebank. Dollars nowadays are as good as gold, and tryingto buy something or invest it in something might not payoff. Putting it in the bank and earning interest would bethe best move given the current economic situation.

Yassin Taher, 49, business owner

I would take the money, go back home to Minya, buy aplot of farmland, cultivate it and live off of the land.Where I come from, being a farmer is the only way toearn a decent living. Anything else is a disgrace.Unfortunately, I had to sell my land to pay for my broth-ers’ and sisters’ education. If I had that kind of money,that’s the only thing I would do.

Abdel-Tawab Taha, 58, office assistant

COMPILED BY TAMER HAFEZ


In Brief

S T R E E T S E N S E

BUSINE

SS M

ONTH

LY ARC

HIVE

S

TOURISM NUMBERS INCHED UP IN DECEMBER BUT REMAINED FAR BELOW EXPECTATIONS.

Persian

Indian Ocean

Gulf

Atlantic Ocean

JORDANISRAEL

KUWAITSYRIA

IRAQ

QATAR

YEMEN

LEBANON BAHRAIN

SAUDI ARABIA

Arabian Sea

RedSea

EGYPT

MOROCCO

ALGERIA

LIBYA

TUNISIA Mediterranean Sea

UAE

Black SeaCaspian

Sea

TURKEY

IRAN

SUDAN

SUDAN

SYRIALEBANON

CYPRUS

ISRAEL JORDAN

PALESTINIANTERRITORIES

SOUTH SUDAN

OMAN

■ Iraq withholds officials’wages Facing the twin blows of falling oilrevenue and rising costs in its waragainst Islamic extremists, Iraq hasstarted withholding the salaries ofsenior government officials.According to the Financial Times,the move aims both to free up cashand send a message to the country’selite about the severity of the eco-nomic crisis facing the country. Thegovernment is grappling with a $21billion shortfall, which it is trying toclose with loans, special drawingrights from the InternationalMonetary Fund and developmentgrants from the World Bank. Wagesare being withheld from governmentemployees with monthly expenseaccounts exceeding $400 as well asfrom workers at unprofitable state-owned factories. Iraq’s finance min-ister told the Financial Times that thegovernment eventually intends topay the wages but is delaying dis-bursement as a temporary move toease the country’s cash flow.

■ Libya’s oil revenuerunning dryAccording to an article penned byU.S. Ambassador to Libya DeborahJones, the North African countrycould go broke in 18 months or lessdue to disruptions to oil production asLibya’s security situation deteriorates.The country has historically dependedalmost entirely on petroleum revenuesto finance its budget. Sarir, the coun-try’s largest oil field, had to be shutdown twice last month, the first timedue to the bombing of a pipeline bymilitants and the second due to powerfailure caused by heavy rains. Otherfields have halted operations com-pletely due to unrest in the country,although last month Libya did resumeexports from its Zueitina port afteralmost a year of suspension. Thecountry’s internationally recognizedgovernment has also been unable toprevent militias from engaging in theillicit trade of oil, and officials haverequested help from an internationalmaritime force, a request Egypt isbacking.

■ Lebanon, World Bank sign tech hub dealIn an attempt to ease rampant youthunemployment, estimated at around34 percent, Lebanon’s telecom minis-ter signed a $6.4 million loan agree-ment with the World Bank aimed atlaunching an NGO to train young peo-ple who want to establish technologystartups. The Lebanese governmentwill provide an additional $6.4 mil-lion toward financing the effort,which is called the Mobile InternetEcosystem Project. “It aims at turningLebanon into a technology producerand not only a consumer, by develop-ing an ecosystem for the creation ofmobile applications,” said telecom-munications minister Boutros Harb ina press statement. Officials argue theproject will strengthen the country’seconomy in addition to slowing “braindrain” by encouraging Lebaneseyouth to remain in the country. “Itsobjective is to turn Beirut into a tech-nological hub in a bid to establish newcompanies and create job opportuni-ties,” said Harb.


Region Notes

Map intended for illustrative purposes only and may not accuratelydepict national boundaries or disputed territories.

In Depth

With a handful of reforms in place and a slew of ambitiousmegaprojects, economists are cautiously optimistic thatEgypt’s economy is beginning to turn around. At this month’sEconomic Development Conference in Sharm el-Sheikh,Egypt will offer up $20 billion worth of projects to globalinvestors from some 20 countries. The government is confi-dent it can lure back the billions in foreign investment thatfled following the 2011 revolution. Will the money createjobs and help better the lives of Egypt’s 90 million citizens?

Business Monthly – March 2015 I 3534 I Business Monthly – March 2015

INVESTMENT SPECIAL

COMEBACK

JOSE

PH H

AKIM

In Depth


On a windy Februaryafternoon, a wiryman in a leatherjacket ducks out ofthe Cairene sand-storm and into one of

the many forex joints along Zamalek’s26 July Street looking to buy $5,000.“Sorry,” says the guy at the counter.“Check the place down the street.” Theman persists, offering to pay LE 8.05per dollar, more than 50 piastres abovethe official exchange rate. One of theowners, Mohamed Abdallah, politelydeclines. “We don’t know who heworks for,” explains Abdallah after theman leaves. “We have a certain clien-tele of businesses and individuals towhom we give priority.” Sure enough,less than an hour later, a well-dressed,middle-aged woman in high-heeledboots walks into the exchange. Sheasks for $1,000; the teller offers her arate of LE 7.90. The transaction is com-pleted in minutes, with no fuss—and ofcourse, no paperwork. Such is the arbitrary nature of

Egypt’s underground forex trade.Businessmen, expats and anyone elsewho buys dollars on a regular basis arefamiliar with the currency black mar-ket—which is often the only source ofhard currency in a nation that reliesheavily upon foreign imports to run itseconomy. Since late January, howev-er—after several years of burningthrough foreign reserves to prop up adeclining pound—the Central Bank did

an about-face. Beginning in lateJanuary, the bank allowed the pound todrop by more than 6 percent, stabiliz-ing at around LE 7.6 to the dollar at theend of February. The bank also soughtto increase dollar liquidity by limitingdeposits of hardcurrency. AsEgypt preparesfor a make-or-break conferencein Sharm elSheikh that aimsto lure back for-eign investmentto the country,Central BankG o v e r n o rHisham Ramezsought to eradi-cate Egypt’s“parallel” cur-rency market,promising thatthe black marketwould “endsoon.” Over thepast year, however, while the officialvalue of the pound held steady ataround LE 7.14 to the dollar, theblack market thrived, with theexchange rate creeping up to aroundLE 8 as businesses were increasinglyforced to rely on the undergroundmarket for hard currency. This wasmostly due to the fact that the officialexchange rate was simply unrealistic,agree analysts. “Investors know the

real value of the pound,” says HanyGenena, head of research at PharosSecurities brokerage. Indeed, while watching their cur-

rency cheapen causes angst amongordinary Egyptians, investors and

economists—who have long believedthe pound was overvalued—havereacted positively. “It is a long overduemove,” says Amr El Alfy, head ofresearch at Mubasher.info, echoing thesentiment of many investors. “Weshould have seen this drop right afterthe 2011 revolution.” Egypt’s stockmarket, which registered the fourth-best performance in the world last year,hit a six-year-high in the week following

CURRENCY

COURTING INVESTORS, EGYPT TAKES AIM ATBLACK MARKET BY TAMER HAFEZ


In Depth

the pound’s devaluation. TheInternational Monetary Fund called thedecision to let the pound weaken “astep in the right direction” that wouldbolster Egypt’s efforts to right its lag-ging economy by supporting tourismand exports and helping to attractinvestment. Currency traders, mean-while, report that while the black mar-ket certainly hasn’t been stamped out,the gap between the official and unoffi-cial rates has narrowed. The black market has been a feature

of Egypt’s currency market since the1980s. It is controlled by illicit curren-cy traders who oversee a handful ofunderground forex spots in theirrespective districts; buying, selling andsitting on foreign currency to maximizeprofits. “They ensure that the supply offoreign currency is sufficient for it tohover within a particular range,”explains Abdallah, the forex proprietor

in Zamalek. “They constantly mon-itor the market and manipulate itaccordingly. If we are running out ofcurrency, we request more, and theyeither provide it, or tell us to sell at ahigher rate.” Businessman HashemFahmy, who back in the ‘80’s workedat the finance department of a multina-tional firm that made batteries, remem-bers strategizing with other companies,sharing ways to get their hands on

scarce hard currency to buy supplies.The black market dissipated after 2003,when the Central Bank free-floated thepound, and Egypt’s economy picked upsteam. But the illicit currency marketbegan thriving again in the tumultuousaftermath of the 2011 revolution, astourism and foreign direct invest-ment—Egypt’s prime sources of hardcurrency—dried up. In late 2012, bod-ies like the World Bank and the IMFbegan urging Egypt to implement agradual “managed currency devalua-tion” to protect the country’s rapidlydwindling foreign reserves, which areneeded to import key commodities. ButPresident Mohamed Morsi flatly reject-ed the idea. “This is completely out ofthe question,” the former president toldReuters in August 2012. Politically,dramatic dips in the currency can betreacherous, since people tend to viewits value as a key indicator of fiscal

health. Moreover, since Egyptimports much of its food andenergy, a weak pound wouldlikely have driven up pricesfor consumers at a momentwhen they were already strug-gling to make ends meet. That may help explain whyeven as President AbdelFattah el-Sisi’s governmenttook power, the CBE contin-ued to hold the pound steady,even as foreign reserves fell to

just above the currentcritical level of $15billion fromaround $36 bil-lion before the2011 revolu-tion. But onJan. 29, theCentral Bank,which controls the

pound’s value viaregular dollar auctions to

banks, allowed a 10-piastre increase inthe price at which banks could sell dol-lars. The bank also limited dollar bankdeposits to $10,000 per day, up to$50,000 per month, preventing compa-nies from putting large sums of blackmarket foreign currency in the bank.

For months, businesses that failed toobtain dollars through official channelscould instead deposit large amounts ofdollars briefly in the bank in order toobtain letters of credit for imports. Withthat avenue now closed and theirbiggest customers gone, the CBEhopes, black market dealers will beforced to sell their dollar holdings tothe banks. With a cheaper pound, blackmarket dealers can also unload theirhard currency without incurring seriouslosses. The idea is to encourage thereturn of hard currency back into thebanking system, enabling companies toaccess dollars without resorting to theblack market. By mid-February, bankswere indeed reporting a spike in dollarinflows, reported state-owned AhramOnline. “We have been selling some ofour excess dollars to commercial banksat the formal price,” confirmsAbdallah, the forex owner, adding thathe has indeed seen a dip in demand forhard currency in recent weeks. However, some analysts say this

could be a risky economic move for acountry whose private sector is soheavily dependent on imports. Over thelast year, large, publicly traded compa-nies were meeting 50 to 70 percent oftheir foreign currency needs via theblack market. “Smaller traders andbusinesses are at the end of the list,”explains Ahmed Shafik, who importsmedical products for pharmacies andhospitals. Small business owners likeShafik and Hashem Fahmy, who nowowns a downtown stationery store,have been forced to buy 100 percent oftheir dollars on the black market. If dol-lar liquidity improves and banks beginselling dollars to SMEs, the CentralBank’s strategy will have worked.Otherwise, says Alia El Mahdi, an eco-nomics professor at Cairo University,small businesses will find themselvesunable to access hard currency, whichcould carry clear negative economicrepercussions. She adds: “It could openthe door for even more currency trans-actions to happen outside the bankingsector.”Along with subsidy reform last July

and a raft of business-friendly new

JOSE

PH H

AKIM


In Depth

laws, the currency devaluation is clear-ly meant to send a positive message topotential investors that Egypt is gettingits fiscal house in order. “It’s part of themessage of confidence the governmentis sending out,” says Genena.Economists predict that the poundcould weaken to LE 7.8 to the dollarbefore the March conference, wherethe government will showcase some$20 billion worth of projects to interna-tional investors. Moreover, the recentdrop in global commodity prices—especially oil—could help keep pricesfrom spiking. “This is the best time forthe government to do this,” addsGenena. Foreign investors, on the otherhand, will likely keep their walletsclosed until the currency hits a floor. Analysts also point out that even if

the government’s strategy of pushingmegaprojects like the Suez Canalexpansion is successful at luring invest-ment back to Egypt, the bulk of thiscapital will, at least in the near term,remain concentrated in these projectsrather than circulating through the

country’s economy, where it might ben-efit the smaller businesses that make upthe vast majority of Egypt’s economy.“Demand for foreign currency willcontinue to increase, because importsare critical to Egypt’s economy andbusinesses,” says Abdallah, theexchange office co-owner. “The blackmarket will always be ready to fill anygap the government leaves.” Last month, unconfirmed media

reports circulated that Egypt couldexpect another $10 billion in aid fromits friends in the Gulf in advance of theMarch conference—cash that wouldcertainly add a much needed infusionof hard currency—but officials inEgypt and Kuwait told reporters theywere not aware of any such commit-ment. In any case, the largesse of Gulfcountries—which aided Egypt to thetune of $20 billion last year—while itdid keep the country afloat, was notenough to prevent its foreign currencyreserves from nearing critical levels inrecent months. Egypt simply doesn’thave enough cash to import key com-

modities like wheat and oil and contin-ue propping up the pound. In the longterm, unless more foreign currencystarts flowing into the country again inthe form of tourist dollars and foreigninvestments, the Central Bank’s recentmoves to eradicate the black marketcurrency trade won’t ultimately be suc-cessful, says Fakhry El Fiky, director ofManagement and Economics StudiesCenter. As long as demand for hard cur-rency exceeds the supply, the blackmarket will continue to flourish.“Whatever the exchange rate, if therearen’t enough dollars to buy, someoneis going to meet that demand at a pre-mium,” says Alfy. The long-term suc-cess of the devaluation depends onwhether Egypt can attrat more foreigncurrency. “It’s a short-term solution,” says Alfy

of the Central Bank’s recent currencygambit. For his part, Abdallah is stillbeing choosy about who he sells his dol-lars to. Fiky agrees: “As long as there isa shortage of hard currency, the blackmarket will continue to thrive. ■

BUSI

NESS

MON

THLY

ARC

HIVE

S

Last October, Prime MinisterIbrahim Mahlab and trade ministerKhaled Hanafy stood on an emptyplot of dirt in Damietta and announcedthat the site would transform Egyptinto a major player in the grain market.Not just as a buyer—Egypt is alreadythe world’s biggest wheat importer—but as a global storage, trade and pro-cessing hub for wheat as well as soy,sugar, maize and other basic food com-modities. The LE 15-billion megapro-ject is among some $20 billion worthof projects being offered to investors atthis month’s economic summit inSharm el-Sheikh. The proposalincludes a facility that can store up to65 million tons of grain and seeds,with five specialized industrial zonesfor various grain and food productslike flour, pasta and cooking oil.Officials say the project will tripleDamietta’s grain storage capacity to7.5 million tonnes, create thousands of

jobs and vastly improve Egypt’s foodsecurity. “We saw it would be better tointroduce it at the March conference inorder to expose the project to thebiggest number of investors possible,”said Hanafy at a press event lastmonth. “It’s a strong project. Itdeserves to have a huge audience.”Some analysts, however, are skepti-

cal as to how building an ambitiouslogistics center will enable Egypt tocapture a major share of the globalwheat trade, especially since most ofthe world’s grain trade routes do notcurrently bypass Egypt. And while theproject could potentially benefit Egyptstrategically and economically, thesheer scope of it makes them nervous.“I am very sensitive whenever I hear‘mega’ or ‘national project’ because Ialways see Toshka,” says Amr ElHeny, a board member of the indepen-dent Chamber of Cereals Industry,referring to the infamous 1990s engi-neering boondoggle in the WesternDesert. A 240-kilometer canal that wasto feed off the waters of Lake Nasser,the architects of Toshka promised thatit would ease crowding, create jobsand improve food security by relocat-ing millions of Egyptians. Instead itbecame a cautionary tale about badplanning and worse political decisions.

In Depth

GLOBAL TRADE

DAMIETTAGRAIN PROJECTOFFERS BIG PROMISESBY TAMER HAFEZ


In Depth

A grain hub project proposed in 2005was eventually shelved after officialsrealized that its scale was simply unre-alistic. At first, “[then Prime MinisterAhmed] Nazif and [trade ministerRachid Mohamed] Rachid wereextremely impressed and excited withthe project,” remembers Nader Nour-El-Din, who was one of Rachid’s aidesat the time. But after several months ofresearch, they realized that the pro-ject’s costs were simply too high togenerate reasonable returns. “We bothrealized it was not going to work,”says Nour-El-Din, adding that on thesurface, the current project looks simi-lar to the 2005 proposal. Greenlighted by President Abdel

Fattah el-Sisi last October, it was ini-tially slated to take five years, but thetimeframe was later shortened to twoyears at the behest of the president,according to the local news reports. Ajoint project between the ministries ofsupply and housing, the hub is to bebuilt on 3.35 square kilometers ofscenic open space owned by the NewUrban Communities Authority that’ssandwiched between the Nile and theMediterranean. The plan includes atotal of three ports—two seaside andone overlooking the Nile—with theremainder of the plot divided into siloand storage clusters with a total capac-ity of 7.5 million tonnes. According toMahmoud Diab, a spokesman for thesupply ministry, the hub will also fea-ture four industrial zones, each dedi-cated to processing a particular com-modity, such as flour, soy, cooking oiland sugar. A fifth zone will be dedicat-ed to processed, packaged foods likepasta, pastries and frozen burgers. Asof yet, there is no start date for con-struction on the project, saysMahmoud. “What will be the invest-ment model? From where will all themoney come to finance it? These areall questions they have not yetanswered,” says Yousry El Hawary, amember of the cereals division of the

Federation of Egyptian Industries.“We don’t even know the deadlinesand scope of investments for the dif-ferent phases of the project.” Nonetheless, foreign investors from

Sudan, China, Canada, Italy, Spain,Slovenia and the United Arab Emiratesare among those who’ve expressedinterest in the project, according tostatements from Hanafy to the media.According to an official press release,a group of Sudanese investors andbusinessmen signed a contract on thesidelines of the Arab Businessmen andInvestors Conference in Novemberthat involves storing and processingmore than a million tonnes of grainand sugar every year through the newDamietta hub. According to Egypt’sGeneral Authority for Investment, theUnited Arab Emirate’s Al GhurairGroup has also agreed to finance thebuilding of 25 state-of-the-art grainsilos for the storage of Emirati grain.Even before the Damietta project wasannounced, UAE officials committedto building 25 new silos in Egypt witha storage capacity of 1.5 milliontonnes.And Mikhail Orlov, president of the

Russian-Egyptian Business Council,says Russian grain exporters havesigned a memorandum of understand-ing to invest in the hub’s infrastruc-ture, saying the Damietta hub has thepotential to boost grain export fromRussia, the only potential investormentioned so far that currently exportswheat and corn to Egypt. Officials atthe Ministry of Supply expect moreinvestors to sign on after the Marchconference. The high-capacity, top-of-line grain

storage facilities slated to be built aspart of the Damietta grain hub couldalso cut Egypt’s import costs. Thecountry is badly in need of better grainstorage. Egypt imports some 10,000tonnes of wheat a year but expertsbelieve around 20 to 30 percent is lostto rot and pests during storage. Diab

says modern storage units could cutthose losses significantly to less than 5percent. Minister Hanafy has arguedthat the Damietta grain storage andtrade hub will thus increase food secu-rity for Egypt and other countries byenabling them to store enormousamounts of staple crops more efficient-ly, in modern facilities. Moreover, thenew equipment would enable Egyptmake fewer import trips to meet thecountry’s grain needs throughout theyear, thus reducing transportationcosts. The government would also savemoney on its annual food subsidy bill,which was nearly LE 34 billion lastyear. Hassan Ebeid, an economics profes-

sor at Cairo University, argues that theDamietta hub could enable Egypt tofunction as the hub of a “regional com-modity-exchange market for theMiddle East and Africa,” making pric-ing more competitive by enabling thecountry to better plug into global trade.Ahmed El Wakil, president of theFederation of Egyptian Chambers ofCommerce, adds that the grain hub fitsinto the current government’s strategyof bolstering trade relations with therest of Africa. “It will further highlightand strengthen Egypt’s standing placeas a business hub in the region,” saysWakil.Minster Hanafy told a television

interviewer last month that he esti-mates an internal rate of return of 16percent for investors in the newDamietta grain hub, a rate that someexperts say is overly optimistic.Hanafy’s logic rests on what officialshave long touted as Egypt’s strategictrade location at the intersection ofthree continents. Damietta “is connect-ed on one side by road, railway andriver to 15 grain-producing gover-norates, and on the other side, it pro-vides easy access to ports in theMediterranean, Black Sea and NorthAmerica,” explains a press releasefrom the Egyptian embassy in


In Depth

Washington, D.C. However, as NourEl-Din and others point out, globallytraded grains mainly reach their desti-nation markets via ocean routes—notvia the Suez Canal. Trade maps showthat when Gulf countries import wheatfrom Australia, Argentina or Russia,for example, it’s shorter and cheaper tosend the grain across the Indian andPacific oceans or, in Russia’s case, viaoverland routes, rather than expend theextra time and money to traverse theSuez Canal. Transportation costs are acrucial factor in sealing commodityshipping deals. “It doesn’t make sensefor a country to pay higher transportcosts for the grain or go out of theirway to make an extra transit stop ifthey don’t have to,” Nour El-Din says. Moreover, why should countries

pay for the extra cost and time ofinvolving an unnecessary middlemanin their import purchases, asks AbdelGhaffar El Salamouny, vice chairmanof the cereals division of the FEI. “Itwould work only if Egypt is process-ing this grain into consumer products

like macaroni,” he says. “But thatwould make it a macaroni exporter,not a global grain logistics hub.” Rashad Abdo, a Cairo University

finance professor and head of theEgyptian Forum for Economic andStrategic Studies, adds that becominga global trade player could also haveunintended consequences as a result ofopening up Egypt’s subsidized foodsystem to the global marketplace.“When Egypt becomes part of theglobal market, pricing will be deter-mined without government interven-tion,” says Abdo. That could force thegovernment to pay more to provide thepoor with subsidized wheat. Ahmed Sultan, an advisor to the

Ministry for Maritime Transport,also raises the issue of security.“Everything will be funneled intoEgypt via a single entry point,” saysSultan. “If it is sabotaged, who willpay for the lost crop? How muchwould this affect Egypt and countrieswho entrusted Egypt with itsreserves?” Sultan alquestions

whether Damietta’s aging infrastruc-ture— roads, electricity and sewageas well as roads and railway net-works that are in need of improve-ment—can support a mammoth glob-al grain hub. “Damietta is alreadyoperating at maximum capacity,” hesays. FEI’s Salamouny adds that thetimeframe of two years for a projectof this scope is “almost impossible.You need at least five years for sucha large-scale project to be up andrunning.” Eighteen years after Egypt broke

ground on the Toshka project, it stillisn’t finished, despite having the dis-tinction of being one of the Arabworld’s largest and most expensiveengineering projects. In the mean-time, some LE 10 billion has beensquandered, according to officialestimates. By way of comparison,the Damietta grain project is estimat-ed to cost LE 15 billion. “That’s a lotof money,” says Nour-El-Din. “I amsure no one wants to end up withanother Toshka.” ■

BUSIN

ESS M

ONTH

LY A

RCHI

VES


In December, Uber, the five-year-old taxi app that connectspassengers with private cars,was declared the world’s most

valuable start-up, with investmentsworth an estimated $41.2 billion. Butbeginning last month, the companymay be facing its biggest test to date.If the cashless car service can makeit in Cairo, where it officiallylaunched in February, it can probablymake it anywhere. That’s because

Uber’s taxi hailing app depends ontwo things in order to work smooth-ly: predictable traffic patterns—togive passengers an accurate assess-ment of how long it will take driversto arrive—and customers with creditcards (fares, including tips, are auto-matically charged to a pre-assignedcard). Cairo has neither.But Anthony Khoury, Uber’s 28-

year-old head of Middle East andAfrica expansions, nonetheless sees

Egypt as a key market for Uber,which is now operating in 277 citiesworldwide, with plans to expand intomany more. Six months ago, whenKhoury first arrived in Egypt toscout out Cairo’s suitability, heimmediately sensed that Egypt wason the verge of a “huge entrepreneur-ial wave.” Cairenes in particularstruck him as a young, tech-savvylot, the sort of crowd that wouldappreciate being able to hail a cab


In Depth

MULTINATIONALS

WORLD’S RICHESTSTART-UP TAKESCAIRO FOR A SPIN BY ERIC KNECHT

BUSIN

ESS M

ONTH

LY A

RCHI

VES

without looking up.Indeed, while less than 10percent of Egyptians havebank accounts and evenfewer have credit or debitcards, nearly everyone hasa mobile phone. Cell phonepenetration rates areamong the highest in theworld in Egypt, at morethan 116 percent, or more than 100million cell phone lines. Internet useis also growing by leaps and boundshere. In August, the communicationsministry reported that 46.2 millionEgyptians are now online, just overhalf the population. In a countrywhere the primary avenues of masscommunication have becomeFacebook and Whatsapp, it’s not dif-ficult for global tech firms like Uberto see Egypt’s potential. Khourysaid: “This is exactly where we needto be.” So in November, UberX—a ser-

vice that offers everyday compactcars such as Toyota Corollas andMitsubishi Lancers—launched in

beta, testing the service in select dis-tricts. In February, it officially wentlive across the city. There is clearly amarket for the service. A handful ofsmaller operations have sproutedover the last couple of years, includ-ing Careem, a Qatar-based ride app;PieRide, an app that enables resi-dents to carpool with neighbors; andEasy Taxi, an e-hailing service that’sbecome increasingly popular since itlaunched just over a year ago. It con-tracts with metered taxis and uses thetraditional cash-and-meter system,bypassing the need for a credit card. When it comes right down to it,

there’s nothing new or novel abouthailing a ride from your phone. After

all, people have been callingfor taxi and limousine ser-vices for years. But likeeverything else in the smart-phone age, the appeal of theproduct has less to do withinnovation and more to dowith ease, and the reasonUber—whose sleek app callsitself “everyone’s private dri-ver”—is now one of world’sfastest growing start-ups isthat it’s condensed the wholetaxi-hailing process into afew effortless taps. I’ve usedUberX to get around severalAmerican cities, and it hasalways worked seamlessly.Unfortunately, like manyparts of everyday life, Cairohas managed to make a sim-ple task into an arduousprocess. One chilly recentmorning, I decided to takeUberX Cairo for a test drive,so to speak. A swipe and a taplater, I was promised a driverat my door in 10 minutes.Sure enough, 10 minuteslater, a driver called to say hewas outside. When I wentdownstairs, though, the carwas nowhere in sight.Finally, after the waywarddriver and I had exchangedseveral phone calls andanother 15 minutes had

passed, I was on my way, now slight-ly late. Arriving safely and comfort-ably at my destination a short timeafter, I chalked up the initial delay toearly kinks in the system. Severalhours later, when I ordered a carfrom a hotel in downtown Cairo,however, I found myself waitingonce again—some 15 minutes afterUber said it would be seven. When Ifinally called the driver, he gave mean ETA of 45 minutes. I gave up. Afriend of mine uses the service regu-larly and says my experience is parfor the course. “I live in Nasr City, soI always allow 20 to 30 minutes,” shesays. “Once it told me 10 minutes,and it took an hour.”


In Depth

Those experiences notwithstand-ing, Khoury promises that the appshould get a car to you anywhere inCairo within 15 to 20 minutes. “Weare working day and night to getmore drivers, and to get this rangedown to eight to 10,” he says.However, I’ve also noticed that ifyou open the app early in the morn-ing (before 7:30 a.m.) or late at night(after midnight), there are no driverseven on the map. Despite the delays,my friend keeps using it anyway,though, because it’s convenient,comfortable and—best of all—there’s minimal risk of being intimi-dated, insulted or groped by a sleazytaxi driver. To guard against thingslike theft and sexual harassment,Uber has a policy of doing back-ground checks on all its registereddrivers. That may be a major sellingpoint in a city like Cairo, and it prob-ably explains why a large percent ofUber’s local customers are women. However, as Uber has aggressively

expanded, a handful of countrieshave banned the service after driverswere accused of sexually assaultingfemale customers. Uber has been for-bidden from operating in countriesincluding India, France, Spain andSouth Korea, while lawsuits havebeen filed against the company inseveral U.S. cities claiming that thefirm failed to properly vet its drivers.Controversy has also flared as aresult of Uber’s surge pricing system(which isn’t active in Cairo), whichcharges higher fares when demandpeaks. This caused outrage inSydney in December when pricessoared as users tried to flee a sectionof the city where a gunman had takenhostages. Following these controversies,

Uber seems to be exercising extraspecial caution as it enters Cairo,working exclusively with drivers forlicensed tourism and limousine com-panies who have been with the firmsfor at least two years. “We hand pickevery driver that works on the Ubersystem. We do a background checkand drug test; we interview them

one-on-one; we make sure they havecity knowledge,” says Khoury,adding that the service has been aboon to tourist companies, whoserevenues are down. “They are veryhappy with us. It’s a new revenuestream for them.” Now may be the time to give the

service a try. To ramp up local pub-licity, the company has trotted out aslew of clever marketing schemes.New users get promotion code topass on to friends, who get a free giftof LE 90 toward their first ride. If therecipient uses the code, the originalcustomer also gets a free ride, creat-ing a sort of pay-it-forward incentivescheme with kickbacks. OnValentine’s Day, Uber partnered withthe popular food discovery websiteelmenus to sponsor a contest inwhich couples posted videos ofthemselves singing cheesy lovesongs on the elmenus Facebookpage. The three couples with themost “likes” won a Valentine’s Daydinner. Some days, Uber leavescoupons for popular local restaurantchain Mori Sushi in their cars’ backseats, and once even surprised cus-tomers with complimentary Nola

cupcakes, the Uber logo written ontop in sugary frosting.Also, UberX’s rate is on average

10 percent cheaper than that of stan-dard, metered taxis. If Uber evertakes off widely in Cairo, this factcould create friction with the thou-sands of taxi drivers roaming thecapital. In France, unsurprisingly,taxi drivers succeeded in getting theservice banned in some areas afterprotesting that Uber was unfairlyundercutting their livelihoods. ButUber’s greatest challenge in Cairomay be figuring out a way to reachthe masses of Egyptians who havesmartphones—but no credit cards.Khoury says the company is explor-ing options like offering an e-wallet,essentially a pay-as-you-go accountthat’s rechargeable through offlinemeans, which Uber has used to getaround the same problem in coun-tries like India. A number of banksand mobile telecom companies inEgypt have teamed up in the lastcouple of years to launch mobilefinancial services, which have suc-cessfully enabled millions elsewherein the developing world to performcashless transactions with creditcards. The services have been slowto take off here, largely because ofEgypt’s stringent financial regula-tions, say analysts. But as the coun-try regains stability and the govern-ment aims to modify laws that ham-string business, that may begin tochange. “Once there is a modicum ofstability, people will start to thinkabout what makes their lives moreconvenient,” says Khaled Hegazy,Vodafone’s head of governmentrelations. The appeal of UberX is clear—a

safe ride from a registered driver,free from many of the stresses thataccompany taxi rides in Cairo,including whether you’ll be harassedor cheated, whether you have exactchange or whether your driver knowsor doesn’t know (or pretends to knowor not know) the way. Uber might yettake off in Cairo— if the cars man-age to make it to your door. ■


In Depth

On a rainy February after-noon, in a second-floorclassroom on theAmerican University in

Cairo’s high-tech GrEEK campus, 12would-be solar technicians are doingsomething people rarely do inEgypt—waiting for the sun to comeout. They are part of a three-daytraining on the installation of photo-voltaic energy systems being spon-sored by the Solar EnergyDevelopment Association, or SEDA,

an NGO that pushes for solar powerdevelopment. Eventually, the rainpeters out and a burst of sunlightparts the clouds. The students—mostly young, male 20-some-things—look relieved as they putaway their notepads filled withtrigonometric equations and maketheir way up to the roof, where theyconnect two solar panels to a smallblack inverter. “A lot of technicianswant to work in the solar field,” butthey lack training, says instructor

Karim Donato, the CEO of Rodosol,a local solar firm that launched lastyear. Until recently, courses like thisdidn’t exist, explains Donato. That’sall changed in the last six months orso, as there is a growing sense thatEgypt’s solar energy market is on thebrink of exploding. The government has been nominal-

ly committed to developing renew-able energy resources since at least2008, when the electricity ministryset the ambitious target of increasing


In Depth

RENEWABLE ENERGY

CAN GREEN POWERHELP RECHARGEEGYPT’S ECONOMY? BY ERIC KNECHT AND BRENDAN MEIGHAN

JOSE

PH H

AKIM

green power to account for 20 percentof Egypt’s energy mix by 2020.Currently, however, Egyptians still get94 percent of their power from fossilfuels, especially natural gas, whichpowers the country’s aging electricityplants and most factories. As the coun-try grapples with a chronic gas short-age, Egypt is heading into its fourthsummer in a row of widespread rollingblackouts, bringing factory productionto a standstill and leaving residentssweltering in the dark. It wasn’t untillast fall that the government put inplace a long-awaited feed-in tariff,which encourages the development ofgreen energy by guaranteeing that pro-ducers can sell it to the government at aguaranteed price. In countries likeGermany, such tariffs have given ahuge boost to renewables. “There wasno market before this tariff. It’s allcompletely new,” says SEDA founderKhaled Gasser. Suddenly, he says,everyone seems to want a piece of thealternative energy market. “You don’teven have a market yet, but you havecompanies registering as solarinstallers every day,” says Aya Salah,executive manager at The Solar EnergyCo., which sells parts for solar powersystems. Almost overnight, Egypt’s green

energy sector has become a majorfocus of the government’s efforts tolure back foreign direct investment toEgypt. While few details have beenreleased, officials have promised tounveil several renewable energy pro-jects at this month’s economic summitin Sharm el-Sheikh. Before the feed-intariff, “We never saw large-scalerenewable energy developers world-wide investing in Egypt,” says WaelHamdy, general manager of Cairo-based ElSewedy Electric, which makesenergy equipment for export world-wide. ElSewedy, which operates manu-facturing plants all over the MiddleEast and Africa, is among a handful ofmajor companies setting up large-scalesolar and wind projects in Egypt. Aslew of foreign companies are also“moving seriously” toward investing inEgypt’s green energy market, says

ElSewedy. Following the passage ofthe feed-in tariff last September, theNational Renewable Energy Agencybegan collecting applications to pro-duce a total of 4,300 megawatts ofgreen electricity over the next couple ofyears—roughly equal to Egypt’s ener-gy shortfall during peak demand seasonlast summer. In part, the sudden interestamong big firms is thanks to the wayofficials structured the tariff, whichoffers a much more generous rate tosolar projects than wind projects, andbig projects are heavily favored oversmall ones. In fact, the rate for largesolar projects is one of the highest inthe world—more than twice the feed-intariff for similar energy projects inDubai, for example. As a result of thisskewed tariff scale, in January, theNREA announced that it had failed toattract enough wind power proposals toreach the 2,000 megawatts it had hopedfor. On the solar side, meanwhile, itreceived applications totaling 14,000megawatts—many more projects thanEgypt can accommodate. According toElSewedy, many of the companies nowwaiting to move forward in the tender-ing process are multinationals. Last summer, when record energy

shortfalls led to almost daily rollingblackouts, Egypt needed around 27,000megawatts of electricity to keep itslights and air conditioners on and fac-tories humming—about 4,000megawatts fewer than it produced. “Itwas the worst year we have ever seen,”says Osama El Said, managing directorof electrical consulting and contractingfirm Masa Electro and a former senioradvisor to the Ministry of Electricity.For producers of renewable energy, thesilver lining of the power crisis is that,“the market has very high potential,”says Silvia Macri, a Middle East andNorth Africa energy analyst with IHS,an international research firm. That’swhy “Despite the political uncertainty,companies are interested,” she says.With a ballooning population, Egypt’senergy needs are growing every year.Said, who advises firms looking toenter the local energy market, sayscompanies from India, Korea, China


In Depth

and Spain are among the prospectiveplayers. Small-scale, local solar producers,

on the other hand, are not nearly soeager to get into the game. They com-plain that unlike big companies, smalloutfits get such a low rate that there isno incentive for them to buy in. Thissetup is the opposite of that in mostother countries, says Donato, wherehigher tariffs are offered to small-scalepower producers in order to empowerhomegrown SMEs. “From our experi-ence in all other countries, the govern-ment should give higher rates to thesmall and medium projects,” saysGasser of SEDA. “If you use the feed-in tariff to empower small and mediumprojects, then these will be implement-ed by small and medium companiesthat are coming from Egypt. Thatmeans you are injecting money intoyour country.”Moreover, while large-scale projects

have the potential to give a single largejolt of power to the national grid, theyalso require land allocations, lengthyresource assessments, tender processesand reams of other types of red tape;and after all that, they often fallthrough in the end anyway. (It’s worthnoting that none of the proposedrenewable projects currently on thetable are a sure thing.) In Hurghada andKom Ombo, the government has beentrying to launch large-scale wind andsolar plants since 2011. “But what hasthe government actually accomplishedin four years? Just resource assess-ments,” says Salah. She describes thecurrent proposals as little more than“an expression of interest” by compa-nies. Analysts like Macri point out thatmany of the projects are very long-term—20 to 25 years—and there is stilla sense among the global businesscommunity that Egypt is a powder keg;things are now relatively stable, butwill they remain that way? “Once yousign the contract, you are committed tothe project for the next 20 years,” shesays.On the other hand, the government is

missing an enormous opportunity bystructuring the tariff in a way that dis-

courages small-scale local outfits fromsigning on, says Gasser. If just one per-cent of Egyptian households—some200,000 homes—installed solar panelson their roofs, it could produce, usingthe most conservative estimates, 1,000megawatts of power. Moreover, headds that opening up the sector in thisway would create “new SMEs, andyoung people would start working—you’d open a new market for a lot ofpeople. It’s not a dream.” According toGasser, simply raising the low end ofthe tariff scale by some 20 to 30 per-cent could create enough new smallprojects to keep local solar producers“in business for the coming 20 years.” Gasser argues that the green ener-

gy sector has great potential to helpsolve Egypt’s power crisis andsimultaneously boost the economy,but this will require a more holisticapproach. His group has lobbied thegovernment to do things like requireindustries to use more renewableenergy and provide incentives forhotels to switch to solar waterheaters. Currently, “We have morethan 6 million water heaters in ourhomes,” says Gasser. “It takes two

power stations just for Egyptians totake a shower.” Other countries havecreated huge savings by creatingsimple financial incentives for home-owners to switch to solar waterheaters that pay for themselves infive years.Despite these criticisms, Gasser

acknowledges that the solar market isrife with opportunity. Flashy adver-tisements for lé Park, a self-described“smart eco-housing” compound inSharouk City that advertises itself asEgypt’s first solar-powered com-pound, began blitzing Egyptian air-waves in mid-February. Meanwhile,Donato, the solar energy systemstrainer, says there is increasing inter-est in his installation courses, as stu-dents look to acquire skills that willland them jobs in the future. Salah, thesolar equipment supplier, agrees thatthere is growing interest, thoughwhether Egypt’s prospective greenenergy projects actually come tofruition remains to be seen. “This mustmean they are all seeing something.But none of us can confirm whether it’sa real planet or just a shooting star. Wehave to wait to see.” ■


In Depth

BUSIN

ESS M

ONTH

LY A

RCHI

VES


Stock Analysis

Continuing last year’s winning streak, the bench-mark EGX 30 was up some 9.6 percent year-to-date, representing a 2.4 percent increase in the

period from Jan. 15 to Feb. 15. The market gave a strongperformance across the board, with other major indicesclosing up as well. The EGX 70 gained another 3.9 per-cent to register a 6.1-percent year-to-date hike, while theEGX 100 was up 2.1 percent for an 8.1-percent year-to-date increase. Investors were clearly buoyed by theCentral Bank’s decision to allow the pound to drop,resulting in a gradual devaluation over two weeks fromaround LE 7.15 to the dollar to around LE 7.60. At presstime, the pound had settled at around LE 7.5 to the dollar.

It is also annual earnings season in Egypt. Two majorbanks reported positive results that beat analyst expecta-tions. CIB’s fourth quarter 2014 earnings spiked 36 per-cent year-on-year to LE 1.03 billion, beating expectationsby 9.5 percent. CIB's board recommended a 1-to-4 stockdividend. Credit Agricole Egypt also posted 6 percenthigher earnings of LE 682 million in 2014, beating theanalyst consensus by 12 percent. Its board has recom-mended a cash dividend of LE 1.42 a share, a 6.4 percentyield and a 1-to-12 stock dividend. In the period, shares

of CIB, Egypt’s largest private bank,, climbed by 6.1 per-cent; while Credit Agricole saw its shares jump some 17percent to LE 22.23—the highest increase in several years.

Interestingly, milling stocks are back in favor, and ear-lier than usual. Milling firms close their financial yearson June 30, with dividend season usually falling inSeptember or October. But this period, Central EgyptMills, North Cairo Mills, Alexandria Mills and Middle &West Delta Mills saw their shares up 28 percent, 20 per-cent, 14 percent and 13 percent, respectively. Meanwhile,Arabian Cement ended the period up 16 percent at LE18.54 per share, more than double its IPO price last May.The cement maker is the first company to switch to coalfor production. Meanwhile, as Orascom ConstructionIndustries N.V. prepares to demerge its construction unit,Orascom Construction (OC), OCI shares jumped 17 per-cent to LE 317.49 in anticipation of the former’s plan todelist the stock from Egypt. Meanwhile, shares of the carmanufacturer GB Auto lost 12 percent to LE 36.73.

Investors’ eyes were on this month’s economic confer-ence in Sharm el-Sheikh. Indeed, high expectations forthe event may have dampened the stock market asinvestors adopt a wait-and-see approach.

Qalaa Holdings, Egypt’s largest private equity firm,decided recently to change its business model. Theswitch to an operating company entails raisingstakes in its subsidiaries, which has been donerecently through a share swap. The firm is nowundertaking its third capital increase since its list-ing. It will be exchanged for higher stakes in certainsubsidiaries. The firm has also been exiting non-core operations such as Pharos Holding. During theperiod, Qalaa Holdings stock went up 9.5 percentfrom LE 2.85 to LE 3.12, with more than 242 mil-lion shares worth around LE 754 million changinghands.

Qalaa HoldingsIN THE SPOTLIGHT

Weak pound gives the market a boost


Market Watch

CapitalMarkets

Egyptian price indices - EGX 30

EGX 30 9785

Egyptian price indices - EGX 70

EGX 70 600

Selected sector performance

Market Watch


Corporate News

CapitalMarkets

International stock price indices

OCI N.V. separates construction businessOCI N.V. will demerge its construction unit, OrascomConstruction (OC), which will trade on the Nasdaq Dubai witha dual listing on the Egyptian Exchange. As part of the demerg-er, OC will increase its capital by up to 15 percent through anIPO in Egypt at a range of $13.33 to $15.23 a share.Meanwhile, OCI N.V. presented a mandatory offer to buy329,601 shares of its subsidiary Orascom ConstructionIndustries (OCI), or 0.157 percent of OCI’s capital, to eitherbuy stock at LE 255 a share or be exchanged for one share inOCI N.V. Regulators were still reviewing the offer.

Orange to buy out OTMT’s stake in MobinilFrench telecom Orange and Orascom Telecom Media &Technology agreed that the former company will purchase allOTMT’s shares and voting rights in Mobinil for a total consid-eration of €209.6 million. That includes OTMT’s 5-percentdirect stake in Mobinil at LE 280.7 a share and 28.75 percentof the voting rights of MT Telecom, Mobinil’s holding compa-ny that is fully owned by Orange, for a consideration of €45.8million. The transaction is expected to be finalized by end ofthe first quarter as part of Orange's call option under a share-holder agreement signed with OTMT back in 2012. As a result,Orange will increase its stake in ECMS. Meanwhile, Mobinilwill consider boosting its free float on the Egyptian Exchangeto comply with Egyptian capital market regulations. The firm,which currently has 1.08-percent free float, may also consider-ing seeking a strategic investor to acquire a major stake.

Qalaa Holdings to raise its capital againQalaa Holdings has approved a share swap with subsidiarycompanies equal to a LE 1.7 billion ($223 million) capitalincrease. This move is the firm's third capital increase since itwas listed on the Egyptian Exchange in 2010. It comes as thecompany considers a series of money-raising divestments torestore profits. The capital increase will involve swappingshares in the holding company for larger stakes in subsidiaries,

mostly in the energy and cement sectors, and would bring thecompany's capital to LE 9.7 billion from LE 8 billion. QalaaHoldings will issue 340 million shares, 255 million of whichwould be common shares and 85 million preferred shares.Meanwhile, Qalaa has hired investment bank EFG Hermes toadvise on the possible sale of its food businesses, a deal theconglomerate said would help put the company back in theblack by the end of the year. Qalaa is considering selling con-fectioner Rashidi El-Mizan and dairy producer Dina Farms.

Bidding war continues for Arab DairyPioneers Holding said it is still interested in buying Arab DairyProducts Co. through a sealed-bid process under the supervi-sion of the Egyptian Financial Supervisory Authority.Regulators have already approved a request by Al Noor forDairy Industries Co., a subsidiary of French dairy Lactalis, toraise its offer price for Arab Dairy to LE 65.75 a share for aminimum 51-percent stake. This price is 2.25 percent higherthan Pioneers’ rival bid of LE 64.30 a share.

Pioneers Holding approves Roiaa acquisitionPioneers Holding’s board of directors has approved a plan toacquire a 60-percent stake worth LE 1.2 billion in RoiaaHolding, having endorsed the fair value study prepared by twoindependent financial advisors estimating the company’s valueat LE 3.4 to LE 3.5 billion. Pioneers Holding is considering aninitial public offering for Roiaa following the acquisition.

Naeem Holding ventures into fructoseNaeem Holding reached a preliminary agreement with twolocal banks for a syndicated loan to finance 50 to 60 percentof a $155 million investment to establish a fructose plant.Naeem would own 95 percent of the plant, with 40 percent ofits investment financed internally. The proposed facility isexpected to be completed in 30 months, with a total grindingcapacity of 1,500 tons of corn per day.

DOW

Feb. 15 Jan. 15 Nov. 14 Sept. 14

value % change value % change value % change

18,019.35 17,320.70 4.03% 17,634.74 2.18% 17,031.14 5.80%

NASDAQ 4,893.60 4,570.82 7.06% 4,688.54 4.37% 4,518.90 8.29%

S&P 500 2,096.99 1,992.67 5.24% 2,039.82 2.80% 1,984.13 5.69%

FTSE 100 6,873.52 6,498.78 5.77% 6,854.37 0.28% 6,804.21 1.02%

NIKKEI 225 17,913.36 17,108.70 4.70% 17,490.83 2.42% 15,911.53 12.58%


BANKING & RESERVES (in millions of LE)

INTEREST RATES

EGYPTIAN POUND EXCHANGE RATES

Market Watch

Money & Banking

Currency Feb. 15Jan. 15, 2015 Nov. 15, 2014 Sep. 15, 2014 Feb. 15, 2014

Amount change Amount change Amount change Amount changeAustralian Dollar 5.904 5.799 1.82% 6.206 -4.86% 6.345 -6.94% 6.256 -5.62%Bahraini Dinar 20.044 18.775 6.76% 18.792 6.66% 18.196 10.16% 18.318 9.42%British Pound 11.712 10.824 8.21% 11.172 4.84% 11.421 2.55% 11.587 1.08%Canadian Dollar 6.109 5.954 2.60% 6.277 -2.68% 6.328 -3.46% 6.331 -3.50%Chinese Yuan 1.238 1.163 6.42% 1.160 6.74% 1.142 8.40% 1.138 8.84%Euro 8.665 8.396 3.22% 8.886 -2.48% 9.102 -4.79% 9.504 -8.82%Indian Rupee 0.122 0.114 6.97% 0.116 5.56% 0.115 6.47% 0.112 9.29%Japanese Yen (100) 6.403 6.082 5.28% 6.134 4.39% 6.541 -2.11% 6.812 -6.00%Jordanian Dinar 10.688 10.014 6.73% 10.050 6.35% 9.878 8.20% 9.771 9.38%Kuwaiti Dinar 25.746 24.203 6.38% 24.422 5.42% 24.476 5.19% 24.582 4.74%Lebanese Pound (100) 0.503 0.465 8.17% 0.464 8.41% 0.456 10.31% 0.456 10.31%Russian Rouble 0.120 0.111 8.65% 0.151 -20.45% 0.186 -35.26% 0.198 -39.19%Saudi Riyal 2.028 1.898 6.82% 1.899 6.77% 1.872 8.33% 1.851 9.54%Turkish Lira 3.094 3.121 -0.87% 3.181 -2.74% 3.156 -1.96% 3.175 -2.56%UAE Dirham 2.071 1.940 6.76% 1.940 6.76% 1.911 8.36% 1.890 9.59%US Dollar 7.612 7.127 6.80% 7.128 6.79% 7.022 8.40% 6.943 9.63%

End of April May June July August Sept. October November

Reserve Money 3,461,611 347,865 364,473 364,473 370,901 374,619 368,636 363,202

Int'l Reserves (net, US$ mln) 17,512 17,306 16,687 16,737 16,836 16,895 15,905 15,356

Domestic Liquidity 1,459,568 1,484,420 1,516,591 1,545,032 1,557,379 1,543,756 1,560,327 1,572,950

Foreign Assets (net) 122,614 126,059 128,425 117,934 1,131,557 1,115,556 1,128,931 1,138,833

Domestic Assets 1,336,954 1,358,361 1,388,166 1,427,098 1,437,647 1,425,945 1,448,684 1,470,645

Dollarization Rate (%) 19.06 19.42 18.95 19.01 18.66 18.83 18.50 18.17

Discounted Bills (except CBE) 3,600 3,649 3,786 3,519 3,608 3,848 3,755 3,896

Bank Loans (except CBE) 565,871 575,850 584,066 584,484 584,378 597,394 611,952 614,397

Securities (except CBE) 797,267 812,226 825,524 830,089 845,896 863,626 866,843 884,375

Currency in Circulation 275,432 283,716 289,875 305,067 299,073 299,333 295,508 292,653

2014

Total

Exports (Q1 14-15) Imports (Q1 14-15) Balance (Q1 14-15)

6469.2 16211.3-9,742.1U.S.A 682.0 822.4

E.U. 2,328.4 4,392.6 -2,064.2Other European countries 365.4 1,130.1 -764.7Russian Federation & CIS 305.2 631.8 -326.6Arab countries 1,512.6 4,747.0 -3,234.4Asian countries (non Arab) 773.4 3,260.4 -2,487.0African countries (non Arab) 123.7 123.6 0.1Australia 10.6 82.9 -72.3Other countries 367.9 1,020.5 -652.6

The CPI (Consumer Price Index)and PPI (Producer Price Index) are based on the results of surveysof expenditure and consumption andrelevant baskets of goods and weights.

Gross Domestic Product (GDP) growthrates are based on 2001-02 prices.

Year 2013-142012-132011-122010-112009-10

Tourists7.97 million11.96 milion10.95 millon11.93 millon13.7 millon

Change-34.7%9.2%-8.2%-12.9%11.4%

TOURISM VISITS

SOURCE: CENTRAL BANK OF EGYPT

SOURCE: CENTRAL BANK OF EGYPTSOURCE: CENTRAL BANK OF EGYPT SOURCE: CENTRAL BANK OF EGYPT


DEMOGRAPHICS

BALANCE OF PAYMENTS (in millions of U.S. $)


NON-PETROLEUM TRADE (in millions of U.S. $)

GDP GROWTHINFLATION

2006 2007 2008 2009 2010 2011 2012 2013

Total Population (millions) 73.6 77.5 79.1 83.5 84.5 88.0 90.2 92.2Labor Force (millions) 19.4 23.9 24.7 25.4 26.2 25.8 27.0 27.6Labor Force / Population (%) 31.8 32.5 32.8 33.1 33.4 33.0 32.7 32.7Unemployment Rate (%) 10.6 8.9 8.7 9.4 9 12.0 12.7 13.2

Q4 End of Year Q1 Q2 Q3 Q4 End of year Q1

Trade Balance -7,724.6 -31,542.0 -7,687.1 -7,752.3 -9,742.7 -9,607.2 -33,702.7 -9,742.1

Exports 6,152.1 25,971.3 5,939.2 6,631.2 6,252.1 6,564.0 26,119.0 6,469.2

Imports -13,876.7 -57,513.3 -13,626.3 -14,383.5 -15,994.8 -16,171.2 -59,821.7 -16,211.3

Services (net) 1,178.4 6,692.0 135.8 36.8 1,155.2 560.3 978.5 2,109.8

Receipts 4,953.0 22,220.9 3,965.3 4,027.1 4,832.1 4,806.9 17,631.4 6,448.8

Payments 3,774.6 15,528.9 3,829.5 3,990.3 3,676.9 4,246.6 16,652.9 4,339.0

Balance of Goods & Services -6,546.2 -24,850.0 7,551.3 -7,715.5 -8,587.5 -9,046.9 -32,724.2 -7,632.3

Transfers 4,850.8 19,267.9 8,308.3 6,202.7 9,110.6 7,233.7 30,367.9 6,188.6

Balance of Current Account -1,695.4 -5,582.1 757.0 -1,512.8 523.1 -1,813.2 -2,356.3 -1,443.7

Capital & Financial Account 5,413.2 9,686.7 3,978.7 -992.4 546.1 1,984.6 4,934.5 811.4

Foreign Direct Investment 1,628.6 3,004.7 1,246.4 1,602.7 1,840.6 1,045.0 4,119.3 1,773.2

Overall Balance -2,327.2 -237.0 -3,746.7 1,747.4 -218.2 -738.9 -1,478.6 410.0


012/13 2014/15

Market Watch

Key Indicators

2013/14

SOURCE: US INTERNATIONAL TRADE COMMISSION (USITC)

Market Watch

Egypt-U.S. Trade

EGYPTIAN EXPORTS TO THE U.S.(in millions of U.S. $)

EGYPTIAN IMPORTS FROM THE U.S.(in millions of U.S. $)

U.S.-EGYPT TRADE DEFICIT(in millions of U.S. $)

EGYPTIAN EXPORTS TO THE U.S. DURING NOV. 2014

EGYPTIAN IMPORTS FROM THE U.S.DURING NOV. 2014



Hiring

The lack of jobs for young Egyptians—even edu-cated ones—was a key factor driving the 2011revolution, and the situation today has only got-ten worse. At the end of 2010, the unemploy-ment rate was 8.9 percent; by last year, the num-ber had climbed above 13 percent, and since

official statistics only count active job seekers, experts say theactual number was certainly much higher. In February, state sta-tistics agency CAPMAS reported that the unemployment ratehad declined slightly to 12.9 percent. Still, as a report from theInternational Monetary Fund pointed out in 2012, the proportionof unemployed youth is higher in the Middle East than any otherregion in the world. In Egypt, nearly two-thirds of the jobless areunder 30. Counterintuitively, unemployment here tends to behighest among those who have university and even graduatedegrees, suggesting that there is a clear mismatch between thedemands of the job market and the skills young people are beingtaught. Of course, youth unemployment is a problem that is by no

means unique to Egypt; finding and hiring talented, qualifiedworkers is a challenge with which companies worldwide strug-gle. The Economist Intelligence Unit recently set out to profile ahandful of firms that sought to apply an innovative approach tothe problem. The idea was that firms trying to find good talentmight seek to emulate the companies’ “creative youth hiringmodels.” “Innovations in Youth Hiring,” profiles three smallbusinesses in different parts of the United States that sought to

apply “innovative strategies to hire and upskill young workers ”while reducing “the unemployment hardships that dispropor-tionately impact disadvantaged young people.”

Points for performance Unemployment rates in the small town of St. Mary, Kansas, mir-ror Egypt’s: Regionally, 20 percent of residents under 19 don’thave a job. Of course, when the economy tanks, there are a hand-ful of businesses that flourish. LiveWatch security, a local firmthat makes wireless alarm systems, was one of them. When rev-enue jumped 56 percent, from $6.1 million in 2009 to $9.5 mil-lion in 2012, the company found itself desperate for a “pipelineof trainable, tech-savvy employees,” to service its growing cus-tomer base. With a population of just 2,600, St. Mary is a tiny,rural community; many of its youths who go to college moveaway to find jobs elsewhere. So in December 2012, LiveWatchlaunched what it calls its “gamification” training program. Thetwo-week, game-based program combines lessons in technologydevelopment, business development, marketing, accounting,billing and customer service. Trainees work with actual cus-tomers, and they earn points based on how well they performand “their willingness to try new tasks.” LiveWire CEO BradMorehead, who teaches entrepreneurship at NorthwesternUniversity in Evanston, Illinois, explains that the idea is toengage and motivate the new workers by using a trainingmethod that speaks to them. “It’s almost like a video game,” heexplains.

NEW BLOODThree American businesses hit on innovative ways toattract talent

Published by the Economist Intelligence UnitAnalysis by Eric Knecht

Even after training is over, LiveWatch employees can contin-ue to rack up extra points for accomplishing tasks like renewingcustomer accounts. The points are recorded on an online “dash-board,” which keeps track of employee stats and even ranksthem, translating the points into dollars, which can really add up.“You can have two people in the same position and one makingdouble,” says LiveWire President Chris Johnson, who adds thatthis leads “the person who is making half as much to look at thisother person and say ‘What are they doing?’” By rewardingemployees who go the extra mile, the system motivates theworkers to give their best.

The game approach has been so successful that LiveWatchhas gotten rid of performance reviews. The “gamification” sys-tem hasn’t just helped with recruitment—the company’s work-force has grown more than fivefold since 2010—it has helped toretain talent as well. Around 90 percent of new hires are stillworking for LiveWatch after a year. Morehead adds that the sys-tem is so simple that even companies without technology exper-tise can apply it with a simple whiteboard on an office wall. “Weused a pen and paper to figure out how we wanted it to work,”he says. “You can score this the old-fashioned way and turn itinto a game.” In Cairo, a growing sector is call centers, which have become

a popular first job for recent university graduates. But executivescomplain about committing money and time to train newemployees, only to see them leave after a few months for morelucrative opportunities. A solution could be rewarding youngworkers for doing their jobs well in way that makes work morefun.

A reason to stay Jobs that demand highly specialized skills often require firms toinvest heavily in training. The problem is that workers oftendon’t stick around long enough to make the large upfront invest-ment in them pay off. Ron Reichan, CEO of Precision Body &Paint, an auto body shop in Beaverton, Oregon, faced a shortageof skilled mechanics. “There are soft metals and hard metals inevery car, and differences in the ways the energy is absorbed atdifferent crash zones,” explains Reichan, who employs 98 work-ers in two locations and grosses $10 million in annual sales. Heexplains that his company would invest years in trainingunskilled workers, only to see them depart just as they hadbecome profitable. So he set up a novel, “contract-based system” to attract and train

mechanics. To pay for five years of training, he loans new hires$4,000 per year, for a total loan of $20,000. For every year anemployee stays with the company, Precision forgives the loan, butif a worker leaves before training is completed, he must repay thecost of his training. Since Reichan set up the system nine yearsago, he has never had to enforce the terms of the contract, becauseno one has ever left early. Moreover, workers that graduate fromPrecision’s training program get certificates to work on specificcar models, which can benefit them throughout their careers.

The new hires begin working right away as helpers tosenior mechanics, and later, mid-level technicians, whichoffsets some of the training costs. An approach that’s simi-lar to European-style apprenticeships, it’s easy to scale up ordown. Any business grappling with a shortage of skilledtechnicians can adopt such a model, Reichan says; the keyis to attach incentives to training so workers stick around.He works with a local community college to identify poten-tial recruits; he also hires former prison inmates. His work-ers are “buying homes. They’re buying washers and dryers.They’re putting their kids through college,” he says. “If Ican give them a skill set, no one can ever take that away.”

Giving backThe average age of American soldiers returning fromAfghanistan and Iraq is 22. Like their Egyptian counterpartsreturning from compulsory army service, these Americansoften struggle to find jobs. With less time to rack up intern-ships and work experience after college, they often have lessexperience than their non-serving peers. Despite such short-comings, Karen Ross saw veterans as a deep potential talentpool. The CEO of Sharp Decisions, a New York City-basedtechnology consultancy that is one of the city’s biggestwomen-owned firms, Ross says: “They committed to us. Whynot commit to them?” In 2013, Ross launched the Vocations, Education and

Training for Service Members, or VETS., which offers mili-tary veterans six weeks of “boot camp” training in qualityassurance and software testing. Then they’re placed on a sam-ple project to evaluate their skills. So far, Sharp Decisions hastrained 50 veterans, with a retention rate of 94 percent, andRoss hopes to have 200 veterans on her staff by the end of theyear. They go on to serve high-profile clients like FreddieMac, EmblemHealth and Experian. The program gives thevets a chance to acquire specialized skills and a potentialfuture career in a field that often excludes those without techconnections. What’s more, this ready-made pool of eager,trainable talent also means Ross doesn’t have to wait monthsto secure visas for tech-savvy immigrants, as many U.S. techfirms often do. Ross aims for the program to mimic the group dynamics of

the military—“No man left behind.” The vets are deployedto client companies as a unit, in teams of three or more, andthe group ensures that everyone understands what’s going onby motivating and teaching one another. Freddie Mac, theU.S. mortgage giant, has so far hired 10 veterans from theprogram, and found them “very focused.” Sharp uses popu-lar online job posting sites like Monster.com to recruit youngveterans and screens them in a series of interviews. “I don’tcare if they have a college degree,” says Ross. “Can theypresent? Can they articulate what their skills are? Can theylook you in the eye and shake your hand?” ■


Hiring

Dining Out


Forthe last few years, we’retold, Cairo has been under-going a restaurant renais-sance, as the chatteringclasses have discoveredthe joys of going out to eat.

Indeed, in tony enclaves like Zamalek andMaadi—and recently in farther flung satel-lite city locales—trendy new eateries haveopened at a steady clip. Unfortunately, Ican still count on one hand the number ofCairo restaurants that actually serve first-rate food. And nothing seems to preventmediocre establishments from chargingshockingly high prices. Another problem is

that the proprietors rarely seem to givemuch thought to what the market actuallyneeds—you can find all manner of“European” cuisine, interpretations ofwhich vary widely, but Mexican food—popular, relatively cheap and easy to pre-pare—is practically nonexistent. Which is why Barbacoa Mexican Grill, a

new spot just off Maadi’s popular Road 9expat mecca, is a welcome addition toCairo’s restaurant scene. Open since lastsummer, the place has already garnered aloyal following among the local expatriatepopulation. On a recent Friday evening, Iwaited for my dining companions in one of

the big, cowhide chairs in the lobby as var-ious expat families from the nearbyAmerican school greeted each other casual-ly. The chairs are in keeping with the ranchtheme announced by the giant steer headover the front door. The upstairs diningroom is festively decorated with Mexicanflags and colorful papel picado bannerssuspended from the ceiling. We were seat-ed one of the comfy, red vinyl booths,which, together with the low lighting, mar-ble floors and strange, textured-steel pillarsin the center of the room, manage to createa wonderfully tacky ambience that’s halfOld West bordello, half hotel cafeteria.

SOHA

ELGA

BI

FINALLY, GOOD MEXICAN FOODCOMES TO CAIRO BY RACHEL SCHEIER

Next door to us was a birthday party ofabout a dozen young Egyptians who werehaving a grand time, the girls gamely don-ning sombreros over their hijabs when thewaiters sang “Happy Birthday.” Unlike certain other Cairo establish-

ments advertising “margaritas” that turnout to be teetotaling Slurpee-like concoc-tions laden with sugar water, Barbacoaserves the real thing. Their cocktail menufeatures Latin favorites such as the mojito(LE 70), the piña colada (LE 80) and san-gria (LE 70), and a few other populardrinks like the cosmopolitan. But the fea-tured item is, of course, the house mar-garita (LE 70), made with blendedTequila, Triple Sec and lime juice in a fes-tive, long-stemmed glass with salt on therim. Full disclosure: My party, beingbooze snobs, brought our own tequila andgave the barman special instructions as tohow to prepare the drinks, which were—needless to say—excellent. Before that,however, I tried a plain old house mar-garita, which wasn’t bad. It reminded meof the sort of margarita you’d drink withyour workmates at Friday night happyhour in a suburban mid-range Mexicanrestaurant in the United States. Anyone who has ever imbibed happy

hour margaritas knows that you’d bettereat, and nothing goes with a cold margari-ta like chips and salsa. I will admit I waspleasantly surprised to find thatBarbacoa’s chips were properly home-made, lightly fried and coated with salt,while the salsa featured a nice balance offresh chilies, tomatoes and coriander.Even better was the Guacamole de laCasa (LE 45), and having grown up inCalifornia, I consider myself a connois-seur of the beloved avocado dip. There aremany ways to make guacamole, but thebest ones use good, ripe avocados, plentyof lemon and garlic and don’t attempt toadd unnecessary fillers like mayonnaiseor sour cream. Barbacoa’s guacamole metall these criteria and disappeared so fast Ithought the kids were going to lick thebowl. Equally popular were the Nachos(LE 45), which featured the aforemen-tioned chips, not piled into a basket as I’dexpected but served in the more authenticstyle, layered with beans, melted cheeseand chilies with sour cream and pico de

gallo (a mild salsa crudo mixture oftomatoes, onions and cilantro) on the side.I was pleasantly surprised to find Sopa deTortilla, or tortilla soup, (LE 37) on themenu, as it’s not an item you generallyfind in run-of-the-mill Western-styleMexican restaurants. The standout amongthe soups, however, was the Sopa Azteca(LE 40), a spicy tomato soup with shred-ded chicken and panela cheese withchopped onions, avocado and corianderserved on the side. Pace yourself with the appetizers,

though, because there’s lots of good stuffahead. Barbacoa offers the usual assort-ment of quesadillas, burritos and tacos,including Ensenada Fried Fish Tacos withTamarind Sauce (LE 75), which I have yetto try, and Grilled Fish Tacos withCilantro-Lime Mayonnaise (LE 75),which were very tasty—mild grilledwhite fish with avocado and pickledonions, along with the dressing for kick.My only complaint was they would havebeen better with the small, soft corn tor-tillas you find at Mexican groceries inCalifornia, which, to my knowledge, arenot sold anywhere in Cairo. My son’sBeef Enchiladas (LE 85) consisted of tor-tillas stuffed with tender, flavorful Brisketbeef and dipped in red sauce with meltedcheese and sour cream on top. While theymight have been saucier and cheesier, thebeef was excellent. But the most interest-ing dish of all, fittingly, was the restau-rant’s namesake, the Barbacoa de Cordero(LE 140), a traditional Mexican dish ofshredded lamb slow-cooked, seasonedand wrapped in a banana leaf. It camewith spicy rice and warm flour tortillas for

making your own tacos, along with fla-vorful lamb consommé. I confess that I’mnot much of a lamb lover, but the meatwas so deliciously cooked that I polishedthis off after my girlfriend couldn’t finishit—and that was after eating an entireplate of fish tacos. Interestingly, the proprietors of

Barbacoa turn out to be an unlikely pair—a Sudanese from Khartoum and an Italianfrom Milan who happened to marry sis-ters from Mexico. The latter fact, and anhonest assessment of what the Cairorestaurant scene was lacking, led them toopen this friendly but elegant Mexicanjoint. Barbacoa is offering a number ofpromotions to help bring in new cus-tomers, such as Taco Tuesdays (30 per-cent off tacos), Señorita Sundays (half offhouse drinks for ladies after 5 p.m.) andMargarita Mondays (30 percent off mar-garitas.) It also offers a set two-course“business lunch” for LE 120 per person.Osman Abdelmoniem, the Sudanese halfof the team, admits that despite that need,introducing Egyptians to real Mexicanfood has not been without challenges.“They can be tough,” he says. Part of theproblem, he acknowledges, is the absenceof a “food culture” that emphasizes fresh,seasonal foods and diverse flavors.Thanks to places like Barbacoa, perhapsthat is now beginning to change. ■

Dining Out


SOHA

ELGA

BI

Barbacoa Mexican GrillRoad 10, next to Metro marketMaadiOpen Daily, 2-midnight2751-5333

The economic summit promises three days of pre-sentations, panels and networking, all aimed atencouraging the crème de la crème of the busi-ness world to invest in Egypt. As an added

bonus, it’s being held in one of the region’s most popularresort cities, Sharm el-Sheikh. This is one business trip

where you might want to consider arriving earlyand staying late. Here are some suggestions to

fill that extra day or two.

On the rocksSome of the most produc-

tive meetings happenafter hours, over

d r i n k s .S oh o

Square( W h i t eKnight Beach,Sharks Bay, 010-0010-9109, soho-sharm.com) is home to theIce Bar, Africa’s only water-ing hole made entirely of ice.Chairs, tables, bars, even the glassesare frozen, which is great for those who liketheir ice outside their drink. The first drink isfree with admission, and the bar boasts vodka shoot-ers “as they were meant to be served.” More importantly,it offers ankle-length winter robes for those who forgot topack their ski pants and parka. Soho also houses theOxygen Bar (Sharks Bay, 010-0010-9109), where youcan get shots of pure, scented oxygen to clear your lungs—think a shisha pipe without the tobacco.

Let looseSharm’s mainstay nightspot is Pacha (Malek El Bahrein,Na’ama Bay, 012-7786-6663, www.pachasharm.com),the multi-story disco in Na’ama Bay featuring themesnights for house, techno, jam, Oriental fusion and more.The club has space for private parties and a rooftop terracewith stunning views of Na’ama Bay. For a night out oftown, Dolce Vita (Sharm El-Sheikh Desert Road, 012-2133-4466, www.tajmahalsharm.com), is an open-airdiscotheque that hosts concerts and DJs at desert partiesevery Wednesday and Friday.

Dive inSharm El-Sheikh is consistently rated among the 10 bestdive sites in the world, so now is your chance to exploreoffshore in snorkel or scuba gear. For history buffs, theThistlegorm, a wrecked WWII British supply ship thatsank in 1941, is a veritable underwater museum. Ranked

one of the top five dive sites worldwide, the siteinvolves a full-day boat excursion for advanced

open-water divers, with two dives outsideand inside the wreck and a third

after lunch at the Shark andYolanda Reef,

another notable site at the tip of the Ras MohammedNatural Protectorate. A boat excursion to the Strait ofTiran can accommodate all levels of reef lovers fromsnorkelers to advanced divers. Gordon Reef’s southernflank has a sandy plateau with coral gardens suitable foropen-water divers, while the steep walls and stronger cur-rents around the three other reefs to the north offer moreintense drift diving and the occasional shark sighting. If you’re an uncertified beginner and want to try diving,

ask about an intro dive, in which a divemaster takes youout on the local reef to experience the feeling of cruisingweightless underwater. The guide takes care of all theequipment, so all you have to do with breathe, kick yourfins a little and admire the fish. A house reef intro dive canbe completed in a morning or an afternoon, and many cen-ters can arrange one on a boat excursion. They start ataround LE 300, and many hotels have a dive center onsiteor can recommend one.

Where the rubber meets the roadGhibli Raceway (Peace Road, near Hyatt Regency in frontof Hollywood Sharm, 069-360-3939|3737, www.ghiblirace-way.com) lets you fulfill your dreams of being an F1 racer,albeit on a very small scale. The facility has four different go-kart circuits geared to children, amateur drivers, corporateevents and has hosted a number of national and internationalkart racing championships over the years. The Arrive & Drivesession lets you race the kart against the clock, with a racecontroller giving you your lap stats for the 15-minute session.

By moonlightMount Sinai, or Jebel Musa (Mount Moses), as it’s knownlocally, boasts one of the most spectacular sunrises in Egypt,well worth a 2 a.m. trek up a camel trail that windsaround the 2,285-meter peak.

The stars quietly retreat from a blue-black sky as the pre-dawnlight rises like a tide and, the sun crests over the ridges andfloods the valleys below. The show is often accompanied byexuberant singing from pilgrims visiting the site where Mosesis said to have received the Ten Commandments.From Sharm, tour organizers arrange transportation that

departs around 10:30 p.m. for the three-hour drive to theMonastery of St. Catherine, where the trail begins. LocalBedouins will be happy to give you a lift up (or down) on acamel, but the last stretch to the peak has to be done on foot.Limited parts of the monastery are also open to tourists from9 a.m. to noon, including a small museum with ancient man-uscripts and icons, as well as an ossuary housing the bones ofmonks.

Virtual tourismDon’t have time to see the rest of Egypt? Head toCulturama (www.cultnat.org/General/Culturama.aspx,[email protected]) in Soho Square, where youcan virtually visit the pyramids of Giza, the tombsand temples of Luxor and Cairo’s Islamic archi-tecture. Projected as a 180-degree panorama onnine screens, this guided multimedia presen-tation is interactive, letting you pick anera and surround yourself with signifi-cant monuments from that time. Theprogram is presented by theCenter for Documentation ofCultural and NaturalHistory, affiliated withBibliothecaAlexandrina.

WHAT TO DO IN SHARMBY KATE DURHAM AND TAMER HAFEZ

Downtime

Downtime

62 I Business Monthly – March 2015 Business Monthly – March 2015 I 63

American Chamber of Commerce in Egypt – Tel: (20-2) 3338-1050 – Fax: (20-2) 3338-1060 For more information about AmCham services and news, please visit www.amcham.org.eg or our US mirror site www.amcham-egypt.org

Chamber news

COMMITTEELEADERS(July 2014 to June 2015)

Agriculture and Food SecurityChair: Tarek Tawfik, International Company for Agricultural Productionand ProcessingCo-Chairs: Seif ElDin Saad ElSadek, Agrocorp For Agriculture InvestmentTony Freiji, Wadi Holding

Banking and FinanceChair: Zeinab Hashim, Abu Dhabi Islamic BankCo-Chair: Nadir Shaikh, Citibank, NA Egypt

Corporate Social Responsibility (CSR)Chair: Mohamed El Kalla, Cairo for Investment and DevelopmentCo-Chair: Shereen Shaheen, Pepsi-Cola Egypt

Customs and TaxationChair: Hassan M. Hegazi, Master Trading, SAECo-Chair: Hossam Nasr, Allied Accountants - Ernst & Young

EducationChair: Amr Ezzat Salama, The American University in Cairo Co-Chairs: Elizabeth KhalifaShahinaz Ahmed, Amideast Egypt

EnergyChair:Khaled Abu Bakr, TAQA ArabiaCo-Chairs: Ali Bakr, ExxonMobil EgyptArshad Sufi, BG EgyptOsama ElSaid, Masa Electro

Entrepreneurship and InnovationChair: Alaa Hashim, ECESCo-Chair: Hashem El Dandarawy, Team 4 Security

Health & PharmaceuticalsChair: M. Maged El Menshawy, ManapharmaCo-Chairs: Ahmed Ezz El Din, Johnson & Johnson Medical EgyptMohamed Roushdy, Amoun Pharmaceutical Company

Human ResourcesChair: Somaya El Sherbini, Microsoft EgyptCo-Chair: Maisa Galal, General Motors Egypt

Industry & TradeCo-chairs: Mostafa El Halwagy, The Egyptian Company for InternationalTouristic Projects (Americana)Omar El Derini, FAOM Consult/Red WingSuresh Narayanan, Nestle Egypt

Information & Communications TechnologyChair: Bassel Mubarak, Oracle EgyptCo-Chairs: Ayman Elgohary, Cisco International SystemsReem Asaad, Raya Holding

InsuranceChair: Alaa El-Zoheiry, Arab Misr Insurance Group (AMIG)Co-Chair: Mike Newton, Commercial International Life InsuranceCompany (CIL)

International CooperationChair: Hanaa El Hilaly, Social Fund for DevelopmentCo-Chair: Rafeh Saleh, CID Consulting

Investment & Capital MarketChair: Alaa El-Afifi, Qalaa Holdings Co-Chair:s Hussein El Sherbiny, Pharos Holding for Financial InvestmentsSharif El Akhdar, Beltone Private Equity

Legal AffairsChair: Ahmed Abou Ali, Hassouna and Abou Ali Law OfficesCo-Chairs: Emma El Meligi, Pepsi-Cola EgyptGirgis Abd El Shahid, Sarwat A. Shahid Law Firm

MarketingChair: Hisham Ezz El Arab, Danone EgyptCo-Chairs: Mai Aly, 4PR CommunicationsTamer El-Araby, Nielsen Egypt

Real Estate Chair: Mohamed Abdalla, Coldwell Banker Affiliates of Middle East & Greater AfricaCo-Chairs: Abdalla El-Nockrashy, Majid Al Futtaim Properties - EgyptHala Bassiouni, Egyptian Housing Finance Company

Transport & LogisticsChair: Alfred Assil, Menarail Transport ConsultantsCo-Chairs: Amr Kabil, National Stevedoring GroupAmr Tantawy, DHL ExpressTarek Fahmy, Mediterranean Shipping Company (MSC)

Travel & TourismChair: Karim El Minabawy, Emeco TravelCo-Chairs: Cesare Rouchdy, Four Seasons Hotels & Resorts, EgyptRoland Bunge, Carlson Wagonlit Travel

Women in BusinessChair: Hala El Barkouky, Allied Business ConsultantsCo-Chairs: Ghada Hammouda, Qalaa Holdings Jailan Shindy, Shindy and Associates

PRESIDENTAnis A. Aclimandos, Transcentury Associates

EXECUTIVE VICE PRESIDENTSCurt Ferguson, Middle East & North Africa Business Unit, The Coca-Cola CompanySherif Kamel, School of Business, The AmericanUniversity in Cairo

VICE PRES IDENT, MEMBERSHIPDalia Wahba, CID Consulting

V ICE PRES IDENT, PROGRAMSAmr Talaat, IBM

VICE PRES IDENT, LEGAL AFFA IRSSaid Hanafi, Orascom Hotels & Development

TREASURERSherif El Kilany, Allied Accountants-Ernst & Young

MEMBERS OF THE BOARDAhmed El Daly, Dale Carnegie Training Egypt (Westwood Group)Amr Allam, Misr Sons Development - Hassan Allam SonsNevine Loutfy, Abu Dhabi Islamic BankOmar Mohanna, Suez Cement Group of CompaniesThomas Maher, Apache Egypt Companies

PAST PRESIDENTM. Gamal Moharam, MGM Financial & BankingConsultants

CHIE F EXECUTIVE O FFICERHisham A. Fahmy

BOARD OF GOVERNORS

ÇÇÇ

J

G

˚

t


Events

“We currently have students from primary to secondary yearswho don’t know how to read and write,” said Minister ofEducation Mahmoud Abul Nasr at a Feb. 23 AmCham breakfastmeeting entitled “Education in Egypt: Issues, Challenges andOpportunities” held at the Cairo Marriott Hotel & OmarKhayyam Casino. “We have a strategic plan that will be com-pleted by 2030. The first phase will end in 2017, where we willbe laying the strategy’s foundations,” he said.

There are 20 million Egyptian youth in school, 18.5 million ofwhom are enrolled in public schools. “This is the biggest agegroup in Egypt’s demographic,” said Abul Nasr. The educationministry has more than 47,000 schools nationwide, with an aver-age classroom density of 90 students per classroom. “This is avery high figure,” said Nasr.

The strategic plan President Abdel Fattah el-Sisi approved lastyear aims at increasing children’s access to formal education,given that there are 1,163 rural villages in Egypt with no accessto education. The Ministry of Education is working to set up sin-gle-classroom mini-schools for students under the age of 15 inmore than 760 of these villages. These facilities are very smalland highly localized, but they teach the same curriculum as theformal education system and are supervised in a similar fashion.These schools allow students to join the formal education systemany time, said Nasr.

With a goal of bringing classroom densities down to 40 stu-dents, the ministry will also to extend its school expansion plansto cities and villages that already have schools. “We need almost200,000 classrooms, or the equivalent of 10,000 schools toachieve that,” said Nasr, noting that that would cost the ministryLE 65 billion. “Our budget from the government only allows usto build 8,000 classrooms every year,” he said.

Pushing forward, Nasr has signed deals with other Arab gov-ernments and domestic businessmen who have helped the min-istry build 26,000 classrooms so far this academic year. “We arehoping that by the coming academic year we would have 35,000classrooms,” said Nasr. “All this will improve the quality oflearning, and hence the students’ employment and careerprospects.”

The Ministry of Education is also trying to make edu-cation more relevant to the skills and knowledge busi-nesses need. To achieve that, the ministry has decreedthat each vocational school is to have a mini-factorywhere experienced workers teach students how operatemachinery and other necessary skills. Each factory willhave at least three vocational classrooms, each capable ofaccommodating at least 25 students. “We have seen a lot

of interest from factories to build such classrooms ontheir premises,” said Nasr.

On the academic side, two STEM secondary schools—spe-cialized in science, technology, engineering and math—wereestablished in 2011 in 6 October City and Maadi, each backed byconsiderable government support. To enroll, prospective stu-dents must demonstrate academic excellence in their prep yearsas well as pass several entrance exams. “Students were enteredinto global competitions and achieved third place overall in twoconsecutive years,” said Nasr. Students in these schools havealso registered 15 patents, mainly related to water treatment.“Some of them have gotten scholarships at universities outsideEgypt,” said Nasr.

The government is currently planning to expand these specialschools nationwide as well as international baccalaureateschools that teach in Arabic, which currently exist only in SheikhZayed City and Maadi.

The ministry has also launched a pilot program to teach stu-dents in primary one through primary three how to read andwrite Arabic. “The program achieved 85 percent success,” saidNasr. However, in the last academic year, when it was expandedto all grades, its success was only 65 percent. “We have made alot of modifications to the program for this year and are await-ing the results,” said Nasr.

He added that the ministry is in talks with the Ministry ofSocial Solidarity to link the aid given to poor families with theirchildren’s school attendance. Officials are also looking into hav-ing one school in each of the ministry’s 278 educational districtsobtain global certifications in every aspect of education. “Theseschools would then be responsible to help other schools becomecertified,” said Nasr.

The minister said there is still a long way to go toward grant-ing all Egyptian children a decent education. “When we started,the glass was empty. Now it’s 30 percent full, and every year wewill fill it a little bit more,” said Nasr. “We know we will neverreach 100 percent success or effectiveness. It’s not humanly pos-sible. But we want to reach just short of what is impossible.”

EDUCATION

A class half-full


“How does one align incentives in a very complex organizationso that everybody knows the company’s score?” asked AshrafBakry, managing director of Unilever Mashreq, at a Feb. 4 ses-sion of the AmCham Marketing Committee’s Inspiring YoungTalents roundtable series. Through anecdotal examples, Bakryinvited the audience to question how managers can interact withtheir teams to produce successful outcomes.

“On a sports field, the football player knows the game, its pur-pose, its rules, his position on the field and the overall team strat-egy. The player also knows how to score and can always see thegoal,” Bakry said. The player also has coaches, trainers, man-agers, captains and supporters who recognize achievement.Bakry compared this kind of team dynamic to a chessboard,where the pieces do not know the rules or the strategy and aremoved by a single player. “If the goalkeeper is lying flat on hisface in the mud, and the center forward is the best person to pre-vent the opposition from scoring a goal, [the center forward]

does not stand back and say, ‘This is not my job,’ and lets themscore,” he said, switching metaphors to explain the importanceof aligning the incentives of the team.

He concluded by emphasizing that it is the role of managers todevelop their employees into good players by making sure theyunderstand how to score as a team, deploying the team in theright skill/job match and following the rules of the game andensuring that the incentives of their employees are aligned.

MARKETING

Employees as players

Egypt was the first Arab state to join the InternationalStandardization Organization, said Hassan Abdel Magied, chair-man of the Egyptian Organization for Standardization andQuality at a Jan. 13 meeting of AmCham Egypt’s Industry &Trade Committee. As the sole organization in the countryresponsible for enforcing standards and quality control, the EOSissues quality marks and conformity standards for Egyptianproducts as well as the halal mark for food. Most recently, theEOS began standardization in the cosmetics sector. It serves asthe technical branch of the Consumer Protection Authority, saidAbdel Magied, adding that his group offers advice and technicalsupport to help organizations properly apply standards, mea-surements, calibrations and quality control. Keeping pace withtechnological updates, the EOS has also developed a user-friend-ly, downloadable mobile application known as EOSQ.

The EOS, which also fields consumer complaints, hasissued consumer protection standards such as those protect-ing hospital patients. The EOS, a member of the UnitedNations Economic Commission for Europe, also has a spe-cial unit for cars to develop and leverage Egypt’s competi-tiveness in the automotive sector by helping carmakers meetinternational safety and quality standards. Its newly devel-

oped energy efficiency unit offers technical advice to con-sumers about the differences among energy efficient appli-ances. The organization also helps SMEs by offering techni-cal support on the application of standards, calibrations andproduct testing.

With over 1,700 professionals responsible for developingstandards, the agency has issued close to 10,000 standards viamore than 150 technical committees, and Abdel Magied notedthat 95 percent of all EOS standards are based on internationalstandards. He added that the EOS is just one of several organi-zations that play a key role in standardization and quality, includ-ing the World Trade Organization, the European Committee forStandardization and the European Organization for Quality.

INDUSTRY & TRADE

Keeping standards up


Events

“What I have learned from experience is that you shouldnever let a crisis go to waste. And this is what is happeningin Egypt,” said Philip ter Woort, Egypt director for theEuropean Bank for Reconstruction and Development, at theAmCham Banking & Finance Committee’s Feb. 11 interac-tive panel discussion “Project Financing and SyndicatedLending—Case Studies” at the Four Seasons Cairo at NilePlaza.

This sentiment will be the stepping stone for domesticbusinesses and investors to gain access to internationalfinancing institutions like EBRD, the International FinancialCorporation and Citigroup. Understanding the trends domi-nating project financing worldwide will prove important fordomestic lenders and borrowers alike. One such trend,according to David Dubin, Citigroup London managingdirector and head of the Europe, Middle East and AfricaProject and Infrastructure Finance Division, is that long-term debt financing is no longer dominated by banks andinsurance firms. Equity and capital markets are showinginterest in this type of financing. “Debt investors wantinglong-tenure investment in a variety of markets is something

that was unheard of in the past three or four years,” saidDubin. Since 2008, rates have fallen sharply, which has ben-efited borrowers immensely, he said. “Some borrowerscould borrow at 3 to 5 percent interest for 20-year loans.”

The IFC has played a major role in project financing inEgypt with a portfolio of $1 billion, the largest in the regionalong with Pakistan, said Nada Shousha, IFC manager forEgypt, Libya and Yemen. The IFC generally finances long-term projects, but when many foreign investors exited Egyptafter 2011, it stepped in with short-tenure investments. Thefocus of the IFC in the coming four years will be to financereal estate and micro-lending projects.

BANKING & FINANCE

Funding the future

Egypt’s sales tax has been in place for more than 23 years. “Itbrought in LE 90 billion in tax revenue in the last fiscal year,”said Mamdouh Omar, advisor to the Minister of Finance andTaxation and former chairman of the Egyptian Tax Authorityat a Feb. 18 committee meeting at the Conrad Cairo Hotel.“Now however, its shortcomings are becoming more appar-ent, and it is becoming an obstacle to investments,” said Omar,explaining why the government is retiring the sales tax.

One of these shortcomings is that the minimum capitalrequirements for a corporation to be liable to pay sales tax hasnot changed since 1991, when the tax law was passed.Companies with a minimum of LE 54,000 in capital arerequired to register with tax authorities. The LE 54,000 reg-istration limit set in the 1991 is now equivalent to LE500,000,” said Omar. Also, this limit is different for industri-al firms and traders. “There is no technical reason for this tobe the case.”

Another shortcoming is that not all products and servicesare taxed equally. “This creates massive discrepancies inaccounting,” says Omar.

Meanwhile, the sales tax law registration doesn’t apply to

every product or service. Also, the definition of processedgoods is vague. “Despite my best efforts, there were problemsthat never got solved and were always disputed,” said Omar.

The VAT law will address all these problems by unifyingthe registration limits for all businesses and the rates andprocesses to calculate the tax. It will also allow companies todeduct taxes paid on raw materials from the taxes due on thefinal product. “We have only a short list of exemptions forproducts that the poor frequently use and goods bought fornational security or the army,” said Omar. “We are also inte-grating the VAT with foreign country VAT laws to facilitateimports and exports.”

CUSTOMS & TAXATION

The benefits of VAT


This year, senior executives from Oracle, IBM, MasterCard,DHL, EMC2 and Microsoft met with Minister of

Communication and Information Technology Tarek Helmy todiscuss their plans for growth in Egypt. “These visits send out aloud and clear message to the whole world that Egypt is at theright place and on the right track,” said Helmy at a Feb. 16AmCham breakfast meeting entitled “The Role of IT in DrivingEgypt’s Economic Growth” at the Four Seasons Hotel Cairo atNile Plaza. The meeting was hosted by Google Egypt.

The rise of information technology has forced companies toadopt so-called disruptive technologies by digitizing their busi-ness operations to offer completely new and innovative prod-ucts and services. “We have seen industries such as the record-ing industry, printing and publishing, postal services, photog-raphy and film, and even traditional currencies transformed bytechnology,” said Juan Jones, Oracle senior vice president forglobal customer support services. “Disruption will be a com-petitive advantage.”

These technologies have changed the definition of innova-tion, said Jones. Instead of businesses focusing on creating newapplications while maintaining their existing platforms, “Thefocus now is mainly around the user experience when execut-ing transactions,” he said. “How can we make the experiencemore effective and personalize it for the customer?”

The second aim of innovation is to make processes and pro-cedures more efficient. The third is to develop new businessmodels that will allow a company to expand by doing things ina completely new way. According to Jones, 73 percent of sur-veyed executives have a digital strategy, but only 19 percentfeel they have the right tools to execute their vision. “So thereis a lot of opportunity to deliver solutions.”

These solutions will be based on a single familiar platform,but rather will require the integration of brand new platforms.The Internet of Things, for example, allows automobiles andhome appliances such as the refrigerator to communicate withthe Internet via familiar platforms such as mobile phones and

cloud computing. Jones pointed to the example of Oraclehelping the National Australia Bank switch from a systemusing paper checks to one with using mobile applicationsthat enable customers to transfer cash between accounts andgenerate statistical reports. “It’s richer than writing on apiece of paper,” he said.

The Egyptian government is also planning to adopt disrup-tive technologies. “Our vision for converting Egypt into a dig-ital economy is moving from the planning phase to the execu-tion phase,” said Helmy. The minister explained that the planwas first introduced in mid-2014 with vision to “provide pros-perity, freedom and social equality for all citizens,” by allow-ing government services to be accessed anytime and anywherevia cheap, simple tools.

The ministry’s first goal is to develop a unified digital portalthrough which all government services will be offered. “All wehad so far were ad-hoc attempts, which pose huge securitythreats,” said Helmy. The second goal is to improve Egypt’sglobal attractiveness as an outsourcing hub, and the third is forEgypt to become an Internet hub, given that it already has 17submarine cables passing through its territory.

The conversion, Helmy said, will cost around LE 120 bil-lion, of which the government will finance up to 20 percent,and the private sector will cover the rest. Changes to invest-ment and labor laws will further support the ministry’s visionfor Egypt. The aim is that by 2020, investment in the ICT sec-tor will top LE 195 billion, or 8.4 percent of GDP, up from LE58 billion (3.8 percent of GDP) at the end of 2014. Annualgrowth should increase from 10 percent to 18 percent in fiveyears.

The minister said the ICT sector has remained intact and sta-ble despite the challenges it had faced since 2011. “Duringthose difficult years we have maintained growth forecasts andin some areas even exceeded them,” said Helmy. “This provesthat Egypt, despite all the negatives and instabilities, is movingin the right direction.”

ICT

A Digital Vision for Egypt

“If Egypt retains its fossil fuel products, renewable andnuclear products and undergoes energy efficiency reforms,we will still need to meet 37 percent of our energy needs,”said Mohamed Salah Elsobki Jr., executive chairman of theNew & Renewable Energy Authority, at a Feb. 2 AmChamEnergy Committee meeting entitled “The Future ofRenewable Energy in Egypt” at the Conrad Cairo Hotel. TheNREA chairman added that with 7,650 square kilometers ofEgypt’s land allocated to renewable energy projects in thecoming years, this offers a great opportunity for the countryto diversify its energy mix.

Elsobki explained that Egypt faces many challenges in theenergy sector, including high demand, limited financing andcommercial regulations. To address these challenges, thegovernment is working on providing alternative energyresources, attracting investment and gradually transformingthe sector into a commercial one. Egypt aims to increaseenergy efficiency on both the supply and demand levels anddevelop the national grid.

The NREA chairman provided an overview of the solarand wind atlas, explaining that Egypt enjoys excellent windconditions, particularly in the Suez Gulf. The nation also hasintense sunshine, with direct solar radiation ranging from2,000 to 3,200 kWh/m²/year from the North to the South,with nine to 11 hours of sunshine per day.

Elsobki surveyed the various renewable energy develop-ment schemes that will be used to promote the sector, rang-ing from independent power producer projects to feed-intariff schemes.

ENERGY

Going green


Events

On Feb. 4, AmCham hosted a special orientation meetingfor Ambassador Georg Stillfried of Austria, AmbassadorMarkus Leitner of Switzerland, Ambassador PremjithSadasivan of Singapore, Deputy Head of Mission Jean-Pierre Reymond of Switzerland and Deputy Chief ofMission Mark Seah of Singapore.

AmCham members included Farid Saber, vice chairmanand managing director of AIG Egypt Insurance Company;Giel-Jan M. Van Der Tol, CEO of Emirates National Bank ofDubai; and Maggie N. Nassif, executive director of the

Binational Fulbright Commission in Egypt. Those in attendance listened to a presentation by AmCham

CEO Hisham Fahmy on AmCham activities followed by aquestion-and-answer session focusing on Egypt’s politicaland economic challenges and the positive role the Chambercan play in the country’s economic development.

AmCham regularly hosts meetings to familiarize diplo-mats with its role in promoting trade and investment betweenEgypt and the United States and advocating for a businessfriendly environment.

BREAKFAST BRIEFING

AmCham welcomes foreign diplomats


Successfully completing the major Suez Canal expansioncurrently in the works will be key to demonstratingEgypt’s ability to pull off large-scale investment pro-

jects, said AmCham President Anis Aclimandos in his intro-ductory remarks at a Feb. 22 AmCham breakfast event held atthe Conrad Cairo Hotel entitled, “The Suez Canal AreaDevelopment Project: Master Plan – Nearly Accomplished.”Yehia Zaki, managing director at consulting firm Dar al-Handasah, provided an overview of the Suez Canal masterplan, detailing the “consolidated canal corridor” project,which will develop areas of land east of the canal near suchlocales as El Arish and east of Ismailia. He also explained the“regional integrator plan,” which seeks to develop better inte-gration between the canal and Cairo. The major question, saidZaki, is how to get the population in and around the crowdedcapital to move to new areas—an area of East Port Said andan urban zone east of Ismailia, for example, have both beendesignated as potential new population centers. Given howexpansive the project is, “We had to get the vision of all thestakeholders,” said Zaki, noting workshops and focus groupswere held in order to understand the interests of the variousparties.

The expansion of the Suez Canal comes at a time when thevessels passing through it, and their containers, are getting sig-nificantly bigger. Fortunately the new canal can cater to thesewider and deeper vessels. The master plan envisions tripling

the number of containers that pass through Port Said, whilethe port’s basin will be extended by 800 meters, with new con-tainer terminals and a logistics area. The goal, said Zaki, is totransform Port Said into one of the top 10 ports in the world.In Ain Sokhna, a 33-kilometer area has been designated fordevelopment, 27 kilometers of which will be dedicated toindustrial activity, with the rest for things like housing andICT.

The canal megaproject entails 600 square kilometers of landand promises to create a million jobs over 10 years—“Thiswould represent 15 percent of Egypt’s employment and 2 to 3percent of GDP in Egypt,” said Hany Serei ElDin, chairmanof legal firm Sarei El Din and Partners. Given the project’senormous scale, he said, “The setup has to be right from dayone.” The sheer number of actors raises a key question: “Dowe need new legislation for this type of project or can we useexisting laws and regulations?” In the end, he concluded thatthe laws currently in place, particularly the tenders law from2002, which he called, “the best piece of investment legisla-tion since the investment code of 1948,” are enough to carrythe project. However, Serai ElDin added that completing itwill require a more “enabling framework.” He discussed thecreation of a new economic board to run the canal zone thatwould have “exclusive and inclusive” authority over econom-ic matters, meaning it would have final say over the approvalsthat are normally needed from outside authorities.

SUEZ EXPANSION PROJECT

The new canal

Members of the AmCham MENA RegionalCouncil comprising nine AmChams fromacross the region gathered in Abu Dhabi Jan.30 for their annual board meeting and to recog-

nize the winners of the third annual AmCham MENA CouncilWomen in Business Awards. The ceremony was part ofAmCham Abu Dhabi’s fifth annual Excellence Awards andannual charity gala. The event brought together more than 300senior business executives and government officials fromacross the Middle East North Africa region to recognize theaward winners, sponsors and AmCham members.

The MENA Council Women in Business Awards recognizesthe notable achievements of Middle Eastern women leaders inthe corporate world as well as entrepreneurs and civil societyleaders whose achievements have set a benchmark. This year,a new category was introduced to recognize regional compa-nies with effective gender diversity programs.

The winners of the four awards are:Best Woman in the Corporate Sector was awarded to Nadia AlSaeed, CEO of Bank Al Etihad in Jordan, for her exceptionalefforts on behalf of the bank for more than a decade. She wasbehind the introduction of mobile banking; the launch ofShorouk, a full array of banking solutions; and for havingstrong female representation at the senior managerial level.She was recognized for her key contributions to Jordan inboth the public and private sectors.Al Saeed has held various roles throughout her career; mostnotably, she served as Jordan’s minister of communicationsand information technology from 2004 to 2006, and beforethat as an economic advisor to the ICT minister.Al Saeed was selected as one of 2014’s most powerful womenin the country by Jordan Business Magazine and was selectedas one of the most powerful women in the corporate sector byForbes Middle East.

AmCham MENACouncil Women in Business Awards Ceremony


AmCham chairmen & CEOs from Egypt, Bahrain, Jordan, Lebanon, Morocco, Tunisia, Palestine and Abu Dhabi-U.A.E

Best Woman Entrepreneur was awarded to Sarah Beydoun,the founder and creative director of Lebanon’s Sarah’s Bag – ASocial Entrepreneurship Business, a fashion boutique thatretrains underprivileged women, prisoners, ex-prisoners andother disadvantaged individuals as designers. They learn bead-ing, embroidery and crochet in order to become financially inde-pendent and earn a living. Today, Sarah’s Bag is one of the mostsuccessful social entrepreneurship brands in the region, a desti-nation for stylish women from Tokyo to Caracas. Beirut andParis are sitting up and taking notice.

Best Woman in the Non-Profit Sector was awarded to RaniaFahmy, executive director of the Banati Foundation in Egypt forher work with at-risk youth.

The foundation brings together at-risk kids and children ofprisoners to keep them off the streets and inspire them to buildbetter lives. The average ratio of caregivers to children at theorganization is 1:6. Children are provided with a passport to eco-nomic empowerment through the workshops offered at Banati.Fahmy recently won the 2014 Larissa Award from the AfricanChild policy forum. Banati has also been selected as the 2014Stars Impact winner in the category of protection.

A new category, Best Company for Women to Work for wasawarded to General Motors Egypt for their outstanding commit-ment to developing female potential in the company.

GM Egypt fosters an inclusive working environment forwomen. It has developed unique programs designed to support


Left to right: Hisham Fahmy, CEO AmCham Egypt and regional coordinator,AmCham MENA; Matthew E. Byrd, chairman, AmCham Abu Dhabi andAmCham MENA; Nadia Al Saeed, CEO, Bank Al Etihad and winner of the BestWoman in the Corporate Sector Award; Hala El Barkouki, chairwoman of theWomen in Business Committee, AmCham Egypt and AmCham MENA.

Left to right: Hisham Fahmy, CEO, AmCham Egypt and regional coordinator,AmCham MENA; Matthew E. Byrd, chairman, AmCham Abu Dhabi andAmCham MENA; Paola Chakhtoura, director, AmCham Lebanon, accepting onbehalf of Sarah Beydoun, founder and creative director of Sarah's Bag, winnerof the Best Woman Entrepreneur Award; Hala El Barkouki, chairwoman of theWomen in Business Committee, AmCham Egypt and AmCham MENA.

Left to right: Hisham Fahmy, CEO, AmCham Egypt and regional coordinator,AmCham MENA; Matthew E. Byrd, chairman, AmCham Abu Dhabi andAmCham MENA; Rania Fahmy, executive director, Banati Foundation and win-ner of the Best Woman in the Non-Profit Sector Award; Hala El Barkouki,Chairwoman of the Women in Business Committee, AmCham Egypt andAmCham MENA.

Left to right: Hisham Fahmy, CEO, AmCham Egypt and regional coordinator,AmCham MENA; Matthew E. Byrd, chairman, AmCham Abu Dhabi and AmChamMENA; Tarek Atta, managing director and Maisa Galal, human resources director,accepting the Best Company for A Woman to Work For Award on behalf of GeneralMotors Egypt & North Africa; Hala El Barkouki, Chairwoman, Women in BusinessCommittee, AmCham Egypt and AmCham MENA.

and invest in female talent including short-term developmentalassignments abroad and an eight-month course for developingtop female talent, focusing on personal leadership, peer-sharingand mentoring. In 2010, the Women Forum was established,sponsoring health, education, and leisure activities. GM Egypt isequally committed to female blue-collar workers and has startedtraining female vocational students.

MENA Council Board MeetingAmCham Abu Dhabi, the current chair of the MENA Council,hosted chairmen, presidents, members of the board and directorsof eight AmChams from across the region who met to discuss thecouncil’s plans for 2015. The meeting was also attended byKhush Choksy, director of the Middle East Department at theU.S. Chamber of Commerce.

Members discussed the upcoming Annual Conference sched-uled to take place on April 8 in Abu Dhabi under the theme#ThinkMENAbiz: “Boosting Cross-MENA Business Venturesand FDI from the U.S.” Speakers at the conference are set toinclude regional investors, venture capital outfits, angel investornetworks, ministers of trade and investment as well as U.S.diplomats from across the region.

Discussions also focused on several potential joint programsbetween AmChams including cooperation with the U.S.-ArabBilateral Chamber of Commerce to offer a webinar seriesfocused on “Doing Business in the MENA Region” featuringsuccessful business leaders from around MENA who would pre-sent their perspectives on the business environment and potentialopportunities for U.S. investment.

Tax issues were also a key topic of concern among theAmCham Abu Dhabi expat community. The issue will beaddressed at the AmCham Abu Dhabi/MENA advocacy week inWashington, D.C., scheduled to take place April 20.

Members also shared information on upcoming missions andmajor events held by various AmChams, including AmChamTunisia’s upcoming Entrepreneurship and Investment

Conference scheduled for March 5 and Egypt’s EconomicDevelopment Conference scheduled for March 13-15.

Khush Choksy expressed the commitment of the U.S.Chamber of Commerce to support the MENA Council and toadvocate for issues of importance for its members.

AmCham Abu Dhabi 5th AnnualExcellence Awards This year’s winners of the AmCham Abu Dhabi annualExcellence Awards, which recognizes best-in-class Americanand Emirati individuals and businesses for their achievements inthe Abu Dhabi business community, are Salem Rashid AlNoaimi, CEO and managing director of Waha Capital andPartner; SeedStartUp, winner of the the Young Achiever award;Janice Phillips, general manager, Olgoonik Global Security andwinner of the Women in Business award; Kassem Alom, founderand vice chairman, Al Noor Hospitals Group and winner of theFalcon Individual award; Etihad Airways, winner of the FalconOrganization award; and Cleveland Clinic Abu Dhabi, winner ofthe Bridge of Excellence award.

Sponsors of the event raised proceeds to mark the 15th year ofAmCham Abu Dhabi giving back to the community. Those con-tributions went to charities and educational institutions in AbuDhabi including the Emirates Red Crescent, the Make-A-WishFoundation U.A.E., the American Community School of AbuDhabi and St. Joseph’s School.

Sponsors of the event included the Al Noor Hospitals Group,Cleveland Clinic Abu Dhabi, Etihad Airways, Gulf DiagnosticCenter Hospital, Lockheed Martin Global, AV Concepts,Occidental Petroleum Corp., Sultan International Holding,Nirvana Travel & Tourism, Tasleeh Entertainment, Abu DhabiTourism & Culture Authority, dnata travel, Europcar, GulfAlliance Company - A Perot Company, Jumeirah at EtihadTowers, Oshkosh Corp., Patchi, Raytheon International, SayahEngineering MENA, The International New York Times andGray Mackenzie & Partners.


AmCham Egypt Delegation at the Awards Ceremony.

MENAAmCham

April 8, 2015Abu Dhabi, UAE

The AmCham MENA Regional Council Cordially invites you to attend its Annual Conference on:

“Boosting Cross-MENA Business Venturesand FDI from the U.S.”

#THINKMENABIZ 2015 Summit

Hosted by AmCham Abu Dhabi

Current Chair of the AmCham MENA Regional Council

The upcoming Conference will focus on:

The Conference will feature as speakers:

For more information and to register, please contact: [email protected] For available sponsorship opportunities: [email protected]

SAVE THE

DATETHE

VE SASAVE

VE

E

AmChamAmChamAmChamAmChamAmChamMMM

ATDTHE

E

AmChamAmChamAmChamEE

AmChamNANA

AmChamAmChamEE

AmChamNAEEM

New MembersNew replacements in member companies

Amr El-AshryGeneral Manager, Middle East for Consultations

Ali RedouaneDirector & Country Representative - Egypt, Area BusinessManager, North Africa & Levant, Chevron Egypt Lubricants

Yasser Mohamed YehiaExecutive Director- Head of GM HSBC Egypt, HSBCBank Egypt, SAE

Mai AzmyManaging Director, JWT

Mohamed Mahmoud El EterebyChairman, Banque Misr

Ahmed Mohie El Din Abo ElezzVice Chairman, Banque Misr

Maged Ibrahim Boules Finance & Controlling Senior Manager, Egyptian GermanAutomotive Co. (EGA)

Yasser Zahreddine General Manager – Egypt, Aramex International Egypt

Carlos Hernandez Managing Director Operations, Spanish EgyptianGas Co. (SEGAS), SAE

Nihal Zaki Consumer Business Unit Director, Vodafone EgyptTelecommunications, SAE

Haitham Taher Bassiouny Corporate Solutions Director, MetLife Alico(Pharaonic American Life Insurance Company)

Akram Hatem Kheir Grundfos Sales Manager, Kheir Group

Khaled Shash Vice President, Industrial Sector, Raya Holding

Yasser Abdul Malak Chairman & CEO, Nestle Egypt

Dante Campioni AlexBank Managing Director – CEO, AlexBank Sameh Habib Business Development Section Head, Al Ahly RealEstate Development Co.

Aziza Mohamed Sadek El SharkawyManaging Director- Manager of Design Sector, Saleh& Hegab Integrated Engineering Economical Consultancy

Usama ZakiChief Executive Officer (CEO) – Bariq, RayaHolding

Ibrahim SafwatCommercial Manager, BG Egypt, SA

Jonathan KurtzHR & Administration Manager, Apache EgyptCompanies

For any change to contact information, please contact the MembershipServices Department at the Chamber’s office

Tel: (20-2) 3338-1050, ext. 0016 – Fax: (20-2) 3338-1060 E-mail: [email protected]

Category: Associate ResidentSector: Accounting

Category: GeneralSector: Petroleum

Category: AffiliateSector: Transportation

Category: Associate ResidentSector: Petroleum

Category: Affiliate Sector: Service Providers

Category: AffiliateSector: Insurance

Category: AffiliateSector: Industrial

Machinery & Equipment

Category: AffiliateSector: Information

Technology

Category: MultinationalSector: Food & Beverages

Category: AffiliateSector: Financial Sector

Category: AffiliateSector: Real Estate

Category: AffiliateSector: Consultancy

Category: AffiliateSector: Information

Technology

Category: AffiliateSector: Petroleum

Category: AffiliateSector: Petroleum


Category: GeneralSector: Service Providers


Category: GeneralSector: Financial Sector

Category: AffiliateSector: Automotive


Change in company addressDHL ExpressCCC Cargo Village, Cairo Airport RoadHeliopolisTel.: (20-10) 6006-3683

L'Oreal Egypt LLC69, 9th street, Wadi Degla building(2 buildings after HSBC) - New Cairo Tel.: (20-2) 2614-7429

CorrectionAhmed FayekChief Operating OfficerTanmeyah Micro Enterprise Services


Member News

SCHNEIDER ELECTRIC

In line with its commitment to build the skills of Egyptian technicians, SchneiderElectric Egypt and Northeast Africa, in cooperation with the National Academyfor Science and Skills, launched its Professional Electrician program under theauspices of Minister of Urban Renewal and Informal Settlements Leila Iskandar.Schneider and the NASS Academy awarded graduation certificates to the firstbatch of professional electricians to complete the program, which includedhands-on training in energy efficiency and electrical fixtures.

AUC

The UAE’s Al Habtoor Group and the American University in Cairo announcedthe establishment of the Khalaf Ahmad Habtoor Scholarship, which will enable10 outstanding Egyptian students to study at the university. Company founderKhalaf Ahmad Al Habtoor has a history of educational philanthropy, foundingthe Al Ittihad School in 1975 and the Emirates International School in 1991,which was the first school in the UAE to provide an international curriculum. Thesigning ceremony was attended by AUC President Lisa Anderson and other dis-tinguished guests.

QNB

In cooperation with Misr El Kheir Foundation, Qatar National Bank hasannounced the construction of the Al Sheikh Eissa for Primary Education schoolin the Minya governorate. The project took 10 months to complete. The newschool can accommodate 500 students from preschool up to the beginning ofhigh school. Three classrooms are devoted to each grade, except preschool,which has two. The new school is part of QNB’s master plan to finance 100schools in Upper Egypt by either building them from scratch or sponsoringmajor renovations.

CITYSTARS

Ibrahim Nashaat was promoted to general manager at the Holiday Inn CairoCitystars. He brings more than 25 years of experience in the hospitality industryto the position. Prior to the promotion, Nashaat was the manager of theInterContinental Cairo Citystars. He first joined the InterContinental Hotels Groupback in 1988 when he took a position at the Semiramis InterContinental down-town. In 2003, he moved to the InterContinental Cairo Citystars, where he joinedthe hotel pre-opening team as area director of information technology.


Announcements

Industry Transport

Electromechanical WorksEnergy

Request of international offers to supply 25,000 tons of rails of 54 Km/ meterinternational standard weight per specs.

Supply, erection, testing & guarantee of the MDM equipment required for the remotereading of electricity meters to adapt to the applied system in 6th October Zone. Thisis a repeated tender with extended deadline. Ref. 6/ 2015.

E.N.R. Egyptian National Railways Authority, thePurchases & Stores Dept

Southern Cairo Electricity Distribution Co.,, TheCashier,

300,000 EURO10,000 LE

600,000 LE25,000 LE

March 15, 2015

March 10, 2015

www.amcham.org.eg/TASFor further information, contact the Business Information Center at AmCham Egypt

Tel: (20-2) 3338-1050 – Direct: (20-2) 3761-9641 • Fax: (20-2) 3338-9896 • E-mail: [email protected]: www.amcham.org.eg • US Website: www.amcham-egypt.org

Description Client Bid bondSpecs feesDeadline Sectors

Beneficiary Sectors Generating Sectors

For more information about these jobs and others, visit: www.amcham.org.eg/recruitment – e-mail: [email protected], Tel: (20-2) 333 88 220 Ext. 1513 - 1514 Fax: (20-2) 333 73 779

Jobs

Top Tenders

AMCHAM RECRUITMENT CENTER

TOP TENDERS FROM TAS

Code Vacancies Company Name88739 Facility Manager CONTRACK FM S.A.E88677 Marketing Manager Smart Villages Co.88766 Shift Supervisor Egyptian Glass Company88744 Oracle Supply Chain & CRM Consultant Mobiserve88731 Consultant - IT Audit Professionals Deloitte - Saleh, Barsoum & Abdel Aziz88680 Tax Advisor Helmy, Hamza & Partners (Baker & McKenzie)

U.S. Exhibitions

*Please refer to the Commercial Service at the US Embassy for any updates on the exhibitions.

Listings are now available on our website:www.amcham.org.egExhibitions related to the following sectors are scheduled for the upcoming months

Sector Show Name Website Embassy Contact

March

Healthy/Beauty Natural Products Expo West/ Engredea 2015 expowest.com [email protected]

Consumer Goods International Home + Housware Show 2015 houswares.org [email protected]

Plastics NPE 2015 - The International Plastic Showcase npe.org [email protected]

April

Broadcast The 2015 NAB Show nabshow.com [email protected]

For more information about these exhibitions, please contact: The Commercial Service at the US EmbassyTel: (20-2) 2797-2330/ 40 - E-mail: [email protected]


Benefits

The Institute of Management Accountants (IMA) is pleased to offer a special 30% discountto AmCham Members on IMA Membership.

As a member of the IMA , you can benefit from a wide array of benefits from networking,to access to thought leadership, CPE opportunities and special corporate offers:

•Peer Networking. •IMA Middle East Website and Newsletter.•CMA Certification. •Career Resources.•Continuing Education. •Publications.

* Please browse the benefits file on AmCham Cyberlink to see the offer detailshttp://www.amcham.org.eg/cyberlink

**Discounts wil l be granted fo r AmCham members upon presentingtheir AmCham 2015 membership card**

For more information, please contact:Renad HamzaTelephone: (20-2) 2461-8534Email: [email protected]

Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlinkfor more information on all AmCham benefits

Offer is valid until December 31, 2015

THE INSTITUTE OF MANAGEMENT ACCOUNTANTS(IMA)

The BUSINESS MONTHLY Classifieds section is open exclusively to AmCham member companies. Text ads are £E 150 for up to 30 words, £E 5 per additional word. Abbreviations, phone numbers and e-mail addresses count as one word. Display ads are£E 100 per cm in height, per column (max. 20cm in combined total height). Discounts are offered for regular advertisers and repeat bookings.Insertion orders, payment and ad content must be received by the 15th of the month preceding publication. All classified ads subject to editorial approval. For moreinformation, or to place a classified ad, contact Amany Kassem at (20-2) 3338-9890, fax (20-2) 3338-0850, e-mail: [email protected]

Enjoy a special offer from Fairmont Nile City Hotel on food & beverages and gym:

- 20% Discount on Food & Beverage at Saigon Restaurant & Lounge, Napa Grill, Bab El Nil,Onyx Lounge, and Sky Pool (Excluding Alcoholic beverages).

- Willow Stream Spa Gym Annual Membership L.E. 6,000 instead of L.E. 7,000 (Including atrainer for six private sessions).

* This offer is not applicable during holidays & peak periods and cannot be combined withanother promotion.

***Discounts will be granted for AmCham members upon presentingtheir AmCham 2015 membership card***

For more information, please contact:Farida ZakiOffice: (20-2) 2461- 9494 • Mobile : (20-10) 0110-8847Email: [email protected]


Offer is valid until December 31, 2015

FAIRMONT NILE CITY HOTEL

School of Business is co-hosting with Tuck School of Business at Dartmouth, USA and the GlobalBusiness Schools Network based in Washington DC a one- day Summit on experiential learningunder the theme “Learning by Doing, The Power of Experiential Learning in Management

Education” to explore opportunities for applying experiential learning approaches to managementeducation in MENA.

The Summit is targeting business executives, deans, directors, faculty from different parts of theworld. The Summit will take place on March 16, 2015 at AUC New Cairo Campus. For full details,

please visit www.gbsnonline.org/ELSummit andhttps://globalbusinessschoolnetwork.box.com/s/d35na20bdnvf0hytwkg4

AmCham members are offered a preferential registration rate of US$ 135 vs. normal rate forEgyptian residents of US$ 150. For registration please use the code: summit10

For more information, please contact:Sally MorshedOffice: (20-2) 2615-3320 • Email: [email protected]


Offer is valid until March 10, 2015

THE AMERICAN UNIVERSITY IN CAIRO

Oracle Egypt, Ltd. Is pleased to offer a 50% discount on Oracle Workforce DevelopmentProgram, in addition to, a 25% discount on Oracle certification exams.

.

***Discounts will be granted for AmCham members upon presenting theirAmCham 2015 membership card***

For more information, please contact:Mohamed HanafyTelephone: (20-2) 2580-8888Mobile: (2-010) 9309-1350; 010-0656-6623Email: [email protected]


Offer is valid until May 1, 2015

ORACLE EGYPT, LTD.


Advertorials

AAIB and Visa are launching a marketing campaign for the bank’sVisa cards. Cardholders will be rewarded for using their cards via avariety of loyalty programs. The campaign, launched in February,will run for 10 months, until October, and applies to both debit andcredit cards. “The bank’s strategic focus is to increase card usage forpaying on POS for purchases and to make it a primary transactiontool instead of cash,” said Himanshu Shrimali, AAIB’s head of RetailBanking. “Payment cards are convenient, safe and reduce theadverse impacts of cash on the general economy.”

ARAB AFRICAN INTERNATIONAL BANK

Architect Vincent Callebaut has designed a one-of-a-kind futuristiccomplex called The Gate on Al Nozha Street in the heart ofHeliopolis. Sponsored by Abraaj Misr, The Gate will be constructedahead of its Parisian counterpart, Smart City, which reflectsCallebaut’s vision of Paris as an eco-friendly city in 2050. The Gatewill feature residential, business and commercial units and will show-case its green credentials by integrating renewable energy technolo-gies such as wind turbines and solar energy facilities.

ABRAAJ MISR

For 10 days, the Kempinski Hotel Soma Bay hosted the 24 contestantsvying for Miss Germany. The beauty pageant hopefuls were in Hurghadato receive training and participate in photo shoots prior to the final com-petition back in Germany on Feb. 28. “We are proud to be chosen as adestination for international events,” said George Ganchev, general man-ager of the Kempinski Hotel Soma Bay. During their stay, the contestantsenjoyed a tour of the hotel facilities, including the world-renownedThalasso Centre & Spa, the 18-hole Championship Golf Course, the KiteHouse and the newly developed marina.

KEMPINSKI HOTELS

IKEA at Cairo Festival City mall is offering a new loyalty programcalled IKEA Family. Members will hold smart cards, which they canuse to take advantage of special promotions every time they shop atIKEA. For example, members will receive free coffee or tea whenev-er they buy a main course at IKEA’s Swedish restaurant, and they canreturn items to the store up to 60 days after purchase compared to 30days for non-members. Cardholders will also get exclusive discountson certain products for a limited time.

IKEA

Construction on the Mall of Egypt, the Majid Al Futtaim Group’s mostrecent local project, is underway and projected to in 2016. The develop-ment is estimated at LE 4.9 billion, employing an eco-friendly construc-tion approach that uses local materials from around the site in 6 OctoberCity. Project officials said half of the materials used in the project wouldbe sourced locally. The Mall of Egypt is also partnering with local wastemanagement company Ertekaa to ensure that all the waste generatedduring construction is tracked and documented. In December, the recy-cling rate for the Mall of Egypt project was more than 90 percent.

MAJID AL FUTTAIM GROUP

The Cairo Marriott Hotel & Omar Khayyam Casino collaborated withIRAM Jewelry to treat clients to a one-of-a kind Valentine’s Day cel-ebration. Guests enjoyed a reception at the hotel’s Salon Royal, fol-lowed by a jewelry show featuring the AURA collection, which wasinspired by the pharaonic lotus flower. The collection includes a widearray of stunning, limited edition pieces with extravagant diamondcreations.

THE CAIRO MARRIOTT HOTEL & OMAR KHAYYAM CASINO

To help women achieve a good work-life balance, PEPSICO announced itsFlexiCo program to help female employees balance their home and worklives by giving them choice over when, where and how they work. Forexample, female employees can compress a five-day week into four, workfrom home one day a week or adjust their schedule around core workhours. The program was announced at the Women for Success-GlobalPartnership for Women’s SMEs, which was hosted by the Arab League lastmonth in Cairo.

PEPSICO

MEAComS has signed an agreement with public relations giant Edelmanto be the firm’s exclusive affiliate in Egypt. MEAComS will provide localexpertise and on-the-ground market support for the global PR firm.Meanwhile, the local company’s staff and clients will have access toEdelman’s regional and global network of experts, best practices and pro-fessional development and training programs. “Edelman is renowned forsetting industry standards. We are proud to be an affiliate with a globalfirm whose reputation for innovation and approach to strategic communi-cations precedes them,” said Fatma Ahmed, MEAComS managing director.

MEACOMS



Feb. 7, Al Masry Al Youm

Media Lite is a satirical review of items published in the local and international press. All opinions and allegations made in them belong solely to theoriginal publications and no attempt has been made to ascertain their veracity.

IN HOT WATEREgypt’s Antiquities ministry has gottensome bad press lately, particularly aftera bumbling museum worker broke offthe beard from King Tutahkhamun’siconic golden mask and tried to stick itback on with super glue. Now officialsare trying to figure out how three price-less, ancient sarcophagi were spottedfloating in an irrigation canal in UpperEgypt. It’s unclear how the woodencoffins—which date from Egypt’sGreco-Roman period around the fourthcentury B.C.—ended up floating by thesleepy village of Auda Basha in Minya.The artifacts might have been dug upby illicit treasure hunters and tossed intothe canal, speculated an antiquities offi-cial, who said the ministry wouldlaunch an investigation. Two of the sar-cophagi, meanwhile, after being fishedout of the water, were found to containmummies, while the third was empty.

Mada Masr, Feb. 2

BLAME THE VICTIMPolice succeeded in breaking up amajor burglary ring after a phone callfrom a distraught housewife whosehome had been hit led investigatorsstraight to them. The thieves had beensuccessfully breaking into luxury homesin 6 October and Sheikh Zayed citiesand making off with their valuables. Afew days after the woman’s home washit, however, she got an even biggershock when police arrested her hus-band. Apparently the inept burglarshad accidentally targeted their boss’shome by mistake.

Al Shorouk, Feb. 7

FIRE SALEDubizzle, Egypt’s online classified mar-ketplace where one can buy second-hand items online, has been known tofeature some strange items. Apparently,there is no limit to the kinds of things

Egyptians will part with in order to raisesome extra cash. In addition to the tensof thousands of no-longer-wanted usedcars and mobile phones, Dubizzle hasrecently featured listings for live birds, ahelium-filled balloon and an emptywhiskey bottle. Perhaps one of theweirdest items ever advertised, howev-er, was a used packet of cigarettes.The second-hand packet of Marlbororeds still contained 12 smokes, with thepacket “in pristine condition withoutany scratches, with the thin, transparentplastic cover,” wrote the seller, whohad furnished potential buyers with aclose-up photo of the gently used fags.He asked LE 18, a little steep given thatthe market price for a brand new packwas LE 21 at the corner kiosk, thoughhe added he’d be “traveling soon,”indicating that he’d take the first bestoffer. Sure enough, a few days later,the ad was gone.

Dubizzle.com, Feb. 20

Media Lite

A Glance At The Press

“Stand your groundman...you can do it!”

bus ine not for …from 13.8 percent in the 2013/14 finan - cial year, and that gdp growth would...

Documents