outof - amcham-egypt.org · april 2014 volume 31 | issue 4 12 14 16 20 inside editor’s note...

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A P R I L 2 0 1 4

OUT OF

GASThe energy crisis comes to a head

8 I Business Monthly – April 2014

With Egyptians poised to elect anoth-er new president, the power crisis ismore serious than ever. Experts saythe country can no longer afford topostpone painful but necessary struc-tural changes to its energy policy.

Cover Design: Nessim N. Hanna

© Copyright Business Monthly 2013. 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.

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InsideEditor’s Note

Viewpoint

The NewsroomIn BriefThe news in a nutshell

Region NotesNews from around the region

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In DepthFish farms seek tohook new marketsLocal industry targets upscale,overseas niches

Government mega-projects sparkhope, skepticism New plans for low and middle-incomehousing

Market WatchStock Analysis Liquidity-driven market buoysinvestors

Capital MarketsA glance at stocks & bonds

Money & BankingForex and deposits

Key IndicatorsThe economy at a glance

Egypt-U.S. TradeImports and exports

Corporate ClinicHelp wantedThe global unemployment crisis

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The Chamber

Events

Member News

Announcements

Classifieds

Media LiteAn irreverent glanceat the press


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46 Executive LifeDining Out Lovely Mirai tries a little too hard

War danceEgypt’s growing capoeira scene

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Appearing for what he said would be the last time in his brown camouflageArmy uniform, Field Marshall Abdul-Fattah El Sisi announced on state tel-evision March 26 that he was quitting the military to run for Egypt’s highestoffice. Without providing any details on his programs or policies, Sisi

acknowledged that the country faced “large challenges,” including mass unemploymentand a weak economy. “This is unacceptable,” he said.

It is virtually a foregone conclusion that Sisi will win. Egyptians weary of three plus yearsof social and political turmoil are betting that a pragmatic military strongman is their best betfor a return to more prosperous times. “Sisi is like our father,” a shopkeeper in downtownCairo recently told The Christian Science Monitor. “Our economy is bad, and things are hard,but we know that he will treat us well and do the right thing.”

There is no doubt that security and stability will have a positive impact on the economy. Butdisplays of strength will not fix the structural problems that have brought Egypt to the brinkof financial disaster. At the root of this quagmire is a decades-old crony capitalist system andan indiscriminate energy subsidies framework that mostly benefits the wealthy. As MaggieHyde writes in this month’s Cover Story, such subsidies have ballooned to consume aroundone-fifth of the budget, contributing to a power shortage that is hobbling industry and forcingEgyptians to cope with regular blackouts, posing a serious challenge to the country’s prospectsfor economic recovery. On March 30, Egypt’s finance minister said that the current LE 130billion energy subsidies bill would grow next by 10 to 12 percent next year unless somethingis done immediately.

Officials have been talking about reforming Egypt’s bloated energy subsidies regime foryears, but thus far, its leaders have been unwilling to spend the political currency necessary todo so. President Anwar Sadat’s attempts to lift food subsidies in the 1970s infamously sparkedriots. Mohamed Morsi’s failure to articulate any coherent economic strategy culminated in thefuel shortages and power cuts that spurred last summer’s mass protests, ultimately ending inhis removal. More recently, the interim government has relied upon generous aid from theGulf to mask gaping deficits. The welcome infusion of cash from Arab neighbors has no doubtkept the economy afloat, but economists point out that it has also enabled Egypt to postponemaking the hard policy choices the country desperately needs.

A number of nations have successfully overhauled costly energy subsidies to channelresources to those who truly need the state’s help. Countries like Ghana and Brazil successfullycombined public education efforts with social benefits that compensated the needy in the faceof rising energy prices to successfully phase out subsidies. In 2010, the Iranian governmentreplaced most power subsidies with monthly cash transfers to citizens—a strategy that notonly saved the government billions but re-routed the bulk of state spending to target the poorinstead of the rich.

One thing is certain—whoever becomes Egypt’s next president must take action to addressthe country’s fiscal realities and promote lasting growth. In announcing his candidacy lastmonth, Sisi told his fellow Egyptians that “we are all in the same boat.” This may be the lastchance to turn it around.

DADDY ISSUES


Editor’s Note

Director of Publications & ResearchKhaled F. Sewelam

Editor-in-ChiefRachel Scheier

Assistant EditorMaggie Hyde

Contributing EditorTamer Hafez

Staff WriterMat Wolf

Art DirectorNessim N. Hanna

Contributing WriterMichael Braha

PhotographersAlfred Alfons, Soha El GabiSaid Abdelmessih

Production SupervisorHany Elias

Advertising DirectorAmany Kassem

Advertising & Circulation AssistantRaghda Salama

Market Watch AnalystAmr Hussein Elalfy

Chamber News ContactsNada Abdalla, Nihal Alaa, Shorouk Genena, Salma Shaaban

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

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The needed receive what they ask for, whichmight be what they deserve and is sometimesmore than they are worth. The needy getwhatever others are willing to give them,which might be less than they are worth.

Publicly, the needed are respected while the needy areoften treated in a condescending manner. To be needed, youmust be qualified, in the right place at the right time and dif-ficult to replace. This theory applies to individuals, organiza-tions and states. The most comfortable negotiating position ishaving something the other party wants badly enough to makeconcessions to get it.

As a patriot, I am tired of being needy; I am sorry to bemostly on the receiving end. I dream of living to see Egyptmaximize its potential and switch to a different mode. Is itdoable? Certainly, it has many of the attributes needed forsuccess. The logical question is what is missing? Why arewe here? What needs fixing?

We need first to trust ourselves, because if we do not,nobody will. Then we must ask questions in the propersequence. Are we qualified? Are we in the right place? Isit the right time? Qualifications have to be demand-drivenand adequately calibrated, and the weighted conclusion isunequivocally yes. Egypt has an ample supply of qualifiedpotential leaders who are capable of steering the country inthe right direction. We are also in the right place, and the

time is definitely right; the advantages of the location areuncontested, and youth momentum has never beenstronger. The whole neighborhood is messy. Egypt rela-tively has remained credible in the midst of failed states,demolished economies, destructive ideologies and dividedcountries. The West has realized this state of affairs andhas no choice but to act accordingly, and those to our eastare terrified; they want to maintain Egypt as a buffer and abastion of stability. Their livelihoods are tightly linked toour future in spite of the fact that the financial and cultur-al gaps between us are enormous. Traditionally, we arecultural leaders in the Arab world; Egyptian educators,movie producers and jurists have laid the foundation formany of our neighbors’ systems. Although it has beenchallenged at times, this deeply entrenched legacy is stillvery much alive.

Having confirmed that we have the irrefutable elementsof success, we have to admit that we are missing disci-pline, productivity and organizations that are results-ori-ented. Previously in this space, I have discussed training,productivity and work culture, which are imperative if wewant to regain international recognition of the fact that weare needed and proud to be so. No pessimist has ever builtanything; only pragmatic optimists can move ahead andlead. Anyone who sees Egypt as a hopeless case is lookingin the wrong direction.

Viewpoint


ANIS A. ACLIMANDOSPresident, AmCham Egypt

THE NEEDEDAND THE NEEDY

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In Brief

Sisi announcespresidential runFollowing months of anticipation,Defense Minister Abdul-Fattah el-Sisiannounced March 26 that he was quittingthe Army to run for president. In videocomments posted on Facebook and airedon state television, the 59-year-old Sisitold Egyptians that although this would behis final appearance in uniform, he wouldremain first and foremost a soldier. “I willfight every day for an Egypt free of fearand terror,” he said, referring to the mili-tary government’s continuing battles withIslamic militants and street protests thathave continued since the ouster ofPresident Mohamed Morsi last July.Alluding to the country’s lagging econo-my, the U.S.-trained general also hintedthat Egyptians would need to make sacri-fices in order to get the “wheel of produc-tion” turning again. “The state needs toregain its posture and power,” he said.“Our mission is to restore Egypt.” Thestock market, which had reached a five-year high just the day before Sisi’sannouncement, dipped sharply followingthe news, with the benchmark EGX 30closing the day down 2.7 percent. Noelection date has been set, but a Sisi win,which is widely expected, would makehim the sixth military man to lead Egypt.Only one other candidate, leftistHamdeen Sabahi, has announced hisintention to run.

U.S. postponesresuming aidThe restoration of U.S. aid to Egypt wascalled into question following concernsabout the recent death sentences handed

down against 529 members of Egypt'soutlawed Muslim Brotherhood. U.S.State Department spokeswoman MarieHarf called the Egyptian court’s March 24decision “shocking,” adding that “it defieslogic that over 529 defendants could betried in a two-day period in accordancewith international standards.” She said thedeath sentences “will have consequencesfor future American aid.” U.S. Secretaryof State John Kerry had said March 12that the U.S. could decide soon whether toresume some $1.5 billion in annual aid toEgypt, some of which was suspended fol-lowing the Egyptian government’s crack-down on protesters following the removalof President Mohamed Morsi. Egypt isthe second largest recipient of Americanaid after Israel, most of which comes inthe form of military arms contracts.

Ukraine unrest triggersrising wheat pricesWith ongoing unrest in Ukraine showingfew signs of abating, Egypt could beforced to pay more for its imported wheatas Middle Eastern countries look else-where for the key commodity. Egypt andthe rest of the Middle East have come torely increasingly on wheat from Ukraineand southwestern Russia, as suppliesfrom the United States have decreased inrecent years due to higher prices causedby unpredictable weather. Egypt is theworld’s biggest importer of the grain,which is mostly used for government sub-sidized bread. Egyptian officials said theyare looking to Russia, Romania, and pos-sibly France as wheat-supplier alterna-tives to the Black Sea region. An Egyptian

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government source told Reuters: “Weneed to open the door to as many originsas possible and then choose.”

Government to entermobile market State-owned landline and Internet serviceprovider Telecom Egypt will be granted along-awaited license permitting the com-pany to operate mobile service, officialsannounced earlier this month.

The license will enable TE, the soleprovider of landlines in Egypt, to roll outits own mobile services without buildingits own network, while giving Egypt’sother three mobile operators—Mobinil,Etisalat and Vodafone—access to parts ofits fixed infrastructure. Concerns havebeen raised that the move unfairly favorsTE since it has sole control of the fiberoptic cables by which cell phones transferdata. Vodafone has said it will consider fil-ing an international arbitration suit whenthe license is issued. Telecommunicationsminister Atef Helmy told Reuters that itwould be activated before June 30.Egypt’s mobile phone industry was dena-tionalized more than a decade ago. Sincethen, mobile phone market penetrationhas greatly increased, with mostEgyptians owning at least one cell phone.

UAE giant to buildnew mallsDubai retail developer Majid Al-Futtaimsays it will expand its investments inEgypt by around LE 16.5 billion over thenext five years. The ambitious planinvolves building 32 Carrefour outletsand three new shopping malls in additionto remodeling the Maadi and AlexandriaCity Centre complexes. Majid Al Futtaim,which develops shopping malls, retail andleisure facilities across the region, said ina press release that Egypt’s PrimeMinister Ibrahim Mehleb has given hisblessing to move forward with the opera-tions. The investment is the latest sign ofEgypt’s growing relationship with theUnited Arab Emirates, which has given itbillions of dollars in aid since last year’souster of President Mohamed Morsi.

“Egypt continues to be a key market forus and we remain committed to ourinvestments there,” Iyad Malas, CEO,Majid Al Futtaim Holding, said in a state-ment on the company’s website.

Free trade with RussiaEgypt is considering creating a free tradezone with the customs union of Russia,Belarus and Kazakhstan, Egyptian andRussian officials said March 26. Russia islooking to strengthen relationships withcountries that are large importers of itscrops and goods as the United States andEuropean Union have threatened to bol-ster sanctions over Moscow's interventionin Ukraine. Egypt is currently the largestimporter of Russian wheat. “We haveagreed to resume these negotiations and todiscuss sectors of cooperation,” Russianagriculture minister Nikolai Fydorov toldReuters, adding that a final decisionwould be made after Egypt’s presidentialelections. Russia has proved to be one ofthe biggest supporters of the country’smilitary-backed interim government.Egyptian trade, industry and investmentminister Mounir Fakhry Abdel Nour saidEgypt is looking to work with Russia on anumber of possible projects, includingenlisting help from a state-owned Russianfirm to build a nuclear power plant andimporting Russian natural gas.

Economic growth reviseddownwardEgypt’s economy expanded by just 1.2percent in the first half of fiscal2013/14, less than forecast, accordingto the government. Minister ofPlanning Ashraf El Arabi said Egypt isaiming to bump up its growth rate bycontinuing to spend stimulus money,much of which is being funded by aidfrom the United Arab Emirates. “Weaim to achieve a growth rate in the thirdquarter of more than 2 percent,” Arabitold Reuters.” So far, the governmenthas spent around LE 25 billion of theLE 64 billion allotted to the effort.However, newly-appointed financeminister Hany Kadry Dimian remarkedbefore the announcement that growth

In Brief

Business Monthly – April 2014 I 17


this financial year should hover around 2to 2.5 percent, less than the 3 to 3.5 per-cent previously forecast by officials.Dimian also told reporters that heexpects the budget deficit will remainhigh at around 12 percent rather than the9 to 10 percent the government had pub-licly been targeting due to a number offactors including high subsidies and anew minimum wage. Egypt’s GDP grewby 2.1 percent in the last fiscal year.

Food subsidy overhaul to beginDescribing the current bread distributionsystem as a “failure,” newly-appointedsupply minister Khaled Hanafi said thatEgypt will implement a new subsidy sys-tem within three months. The new plan,which launched a pilot program in PortSaid in February, will broaden the varietyof subsidized foods, allowing people tochoose from milk, fruits and vegetables, aspokesman for the Ministry of SupplyMahmoud Diab told Ahram Online.Using a smart card system that wasannounced last year under formerPresident Mohamed Morsi, the new planwill also impose a per-person limit onsubsidized bread. Reuters reported thatHanafi said he expected the past fiscalyear’s bill for food subsidies to be LE 30

billion. Smart cards are also supposed tohelp officials track consumption patternsand prevent black market profiteering,which Hanafi described to a reporter fromstate-owned Al Gomhuria as a a flour-smuggling “mafia”. He said approximate-ly LE 7 million annually gets eaten by thesmuggling of subsidized products.

Tourism numbers bleakOfficials announced more bad news forEgypt’s tourism industry, with even fewervisitors than last year in the first twomonths of 2014. Tourism plummeted 28percent in January and February com-pared to the same period the previousyear, according to CAPMAS. In particu-lar, there was a decline in visitors fromneighboring Middle Eastern countriessuch as Libya, Syria and Bahrain, whileEmirati tourists actually increased. Thedeadly bombing in February of a bus fullof South Korean tourists in the Sinaipeninsula has put Egypt back on the trav-el warning list for at least 14 Europeancountries as well as the United States.Officials recently dispatched a delegationof British experts to Sharm El-Sheikh toassess the safety of Sinai's resorts, AhramOnline reported. Tourism ministerHisham Zaazou said the government waseyeing visitors from emerging marketssuch as India.

How would the removal of energy subsidies affectyou?

Looking at the big picture, there will be a big impact ifsalaries don't reflect the increase in prices. It would notaffect me much because I mostly stay at home, and myjourneys with the car are relatively short and few.

Habiba Fouad, 28, housewife

It would affect me greatly. I don't have the option ofusing public transportation because it is extremely incon-venient. It either passes at random at arbitrary times, orthere are too many people on board. My daily commuteby itself is 70 kilometers.

Shady Yassin, 32, telecom specialist

I don't own a car, and my everyday life is within walkingdistance, so I don't think it would directly affect me. Ofcourse, I suspect that everything would become moreexpensive, but that’s nothing new.

Mohamed Abdel Sattar, 41, gas station attendant

That would be a huge problem because at current fuelprices, I can barely keep up. I have to live far away fromwhere I work because it’s the only thing I can afford, andthere is no public transport, so I need my car. I wish I did-n't, but I do.

Rachid Abdel Rahman, 38, gas station attendant

That would be really bad because I live very far awayfrom everything and can barely cover my car's fuel billtoday. If gas prices increase, I have no idea what I amgoing to do. I would hope that the government will raiseprices only on the fuel expensive cars use.

Morsi Abdel Wahid, 27, teacher

It really depends on how they manage it. If incomemoves with the rise in prices, I think it will be fine… Butif fuel subsidies are removed in one blow, that will bereally bad. Personally, I will think longer and harderabout using the car for trivial journeys.

Yousria El Ahmady, hotel housekeeper

I really don't care about fuel subsidies because it affectsonly the rich, and I will never own a car. What I careabout is the price of food— if that doesn't increase thenI’m OK.

Sayeda Abdel Gawad, street vendor

It would definitely affect me, but I can't tell to whatextent. We saw prices rise in 2008 and 2013, and Iadjusted my budget. Things will just get a little tighter,and my lifestyle—what I buy and how many times I goout—will be different.

Sayyed el Zayed, 51, lawyer

Of course it would affect my spending priorities. Maybe Iwould use the car less, but that would mean I wouldn't goout as often.

Sara Naser, 28, public relations representative

COMPILED BY TAMER HAFEZ


In Brief

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■ Iran to phase out energy subsidies Iran’s president has announced that thegovernment will completely eradicateenergy subsidies in the coming monthsas the country’s economy struggles afteryears of operating under Western andUnited Nations sanctions. Last month,the government announced that it wouldcease making monthly cash payments tomost Iranians and raise the prices ofsome subsidized goods in an attempt toease the burden on the cash-strappedgovernment. The phase-out could leadto a 90 percent increase in the cost ofelectricity and gasoline for mostIranians, economists told The New YorkTimes. Iran began lifting subsidies somefour years ago, mediating the financialblow by dispersing monthly checks tothe country’s poorest citizens. Very low-income Iranians will still be eligible toreceive monthly checks. In January, anumber of countries agreed to lift someof the sanctions against Iran. However, aMarch 18 Reuters story reported thatIran’s oil exports for the last severalmonths have been above levels allowedunder the deal.

■ Turkey stands by social media banTurkish Prime Minister Recep TayyipErdogan imposed bans on popularsocial media networks following hisimplication in a widespread corruptionscandal as the country prepares fornational elections. Defying interna-tional criticism of its March 21 blockof Twitter, the government banned thevideo-sharing website YouTube aweek later, citing “national security”after leaked recordings of meetingsbetween top officials were posted onthe site. In February, Turkey passed acontroversial Internet law that allowsregulators to block websites without acourt order. Social media users werepublicizing ways to skirt the bans.Erdogan has long seen social media asan increasing threat to his authority,but the situation escalated when a cor-ruption investigation ensnared dozensof elite government officials and busi-nessmen. Erdogan’s AK Partynonetheless appeared to have pre-vailed in local countrywide electionsin late March, according to unofficialtallies at presstime

■ U.S. captures renegade oil tanker The U.S. Navy seized a rogue oil tankerthat was being used by a rebel militia tosmuggle oil out of Libya. The tanker,Morning Glory, was reportedly loadedwith $30 million worth of crude before itleft the port of Es-Sidra on March 11, evad-ing the Libyan Navy and precipitating apolitical crisis in which the Libyan parlia-ment sacked Prime Minister Ali Zidan.Observers say the debacle demonstratedthe weakness of Libya’s central govern-ment. Libyan officials had threatened toblow up the North Korea-flagged tanker ifit left the port, which is among severalbeing held by rebels who are demanding abigger share of Libya’s oil profits. OnMarch 19, American Navy SEALs forciblyboarded the ship off the island of Cyprus.A recent report by the EuropeanCommission said the port closures havecaused Libyan oil production to slip from1.6 million barrels per day pre-2011 toaround 250,000 currently. The security sit-uation has become a major drag on Libya’seconomy, which depends on the petroleumsector for 90 percent of its revenue andmore than 70 percent of its GDP.


Region Notes

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

In Depth

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AQUACULTURE

FISH FARMS SEEK TOHOOK NEW MARKETSBYMATWOLF

Off the Cairo-AlexandriaDesert Road nearSheikh Zayed City,where there is little lifeapart from some olivegroves and the Dandy

Mega Mall, Faris Farrag, 42, is raisingfish and gourmet vegetables in thedesert. Several fiberglass tanks andgreenhouses make up BustanAquaponics, which Farrag boasts isEgypt’s first and only aquaponics oper-ation. A hybrid of aquaculture andhydroponics, it combines fish farmingand gardening to create a food chainthat’s mutually beneficial to the ani-mals and plants. Farrag, a former

investment banker who spent time liv-ing in the United States and Britain, start-ed Bustan (Orchard) two and a half yearsago after hatching an interest in sustain-able farming. By recycling the nutrient-rich water from his four giant tilapia fishtanks into his vegetable beds, he growsbaby spinach, purple kale, arugula, celery,tomatoes, sage and a plethora of artisanallettuces, to name just a few. His crops and“pesticide-free” tilapia—branded with ahip logo picturing fish with their tailsentwined around a green lettuce leaf—have become a hit at high-end restaurantsand farmers’ markets in tony neighbor-hoods like Zamalek, and Farrag says he’smaking money. He’s building new tanks

and hopes to triple his current productionin the coming years. “We’re not going tofeed the world,” Farrag says, “but thinkfrozen dinners—I mean, these aren’t thecrap you and I ate in college. Todaythey’re gourmet. Egyptian Tilapia filetswith a little olive oil and lemon—thatcould do well in grocery stores.”

Farrag represents what is perhaps a newgeneration in a homegrown Egyptianindustry that has expanded rapidly inrecent years despite an inadequate infra-structure and regulatory system and verylittle marketing. Bustan produces five toseven tonnes of fish every year—a smallyield compared to the massive fish farmsin the Nile Delta. But there is a strong

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local demand for his “cleaner, higher end”tilapia, says Farrag. Egyptians buy a lot ofthe native breed, a mild white fish that hasbecome increasingly popular worldwidein recent years. Egypt is now the world’ssecond largest producer of tilapia behindChina, despite the fact that the country’sentire export market consists of a tinyamount of fresh tilapia shipped mostly tothe Arab Gulf. In 2011, the most recentstatistics available from the UnitedNations’ Food and AgricultureOrganization show that the Egyptianaquaculture industry produced just shy ofa million tonnes of fish and seafood, post-ing revenues of almost $2 billion, makingit the world’s eighth largest producer offarmed fish. A 2011 industry study report-ed that the sector directly employed atleast 100,000 people, as well as providedjobs in the shipping and feed industries,according to an international industrygroup, despite the fact that Egyptian fishfarmers register poor yields due to a lackof modern aquaculture techniques or newfish strains. Industry experts add thatEgypt doesn’t currently have adequategovernment enforcement of standardsthat ensure safe, healthy fish, making itdifficult to persuade bodies like theEuropean Union to allow the import offarmed Egyptian fish.

Egyptians are believed to have prac-ticed fish farming for millennia, but themodern industry was negligible until thelate 1970s, when the governmentlaunched a plan to develop the sector.They saw farmed fish as a cheap source ofprotein for a booming population withoutthe expense and land needed to raise live-stock. The industry grew exponentially inthe mid-1990s, with the introduction ofnew “intensive pond” technology. In1997, Egypt produced 73,500 tonnes offarmed fish. By 2009, a little more than adecade later, that yield had grown nearlyten-fold. The government’s idea of push-ing farmed tilapia as a cheap alternative tomeat was successful—perhaps too suc-cessful in some ways. While Egyptians’eat far more tilapia than ever before, it’sdeveloped an image as a poor man’s fish.Most Egyptian-grown tilapia is sold bystreet vendors rather than supermarkets.Fish farmers say better marketing efforts

and infrastructure could unlock a vastuntapped potential in the industry byhooking foreign and higher end buyers.“We have the hatcheries, we have thetechnology, we have the experts and wehave the know-how,” says Abdel-FattahEl-Sayed, an oceanography professor atthe University of Alexandria.

A recent project funded by the Swissgovernment aimed to increase productiv-ity and employment in the sector, and a2012 study in connection with that projectconcluded that, despite the rapid growthof recent years, Egyptian fish farmers’profits could disappear if the industrydoesn’t develop measures like fish pro-cessing and freezing that could open thedoor to new market niches like the oneFarrag is seeking to tap. His operation isunique among Egyptian fish farms in sev-eral ways. First, his fish are grown intanks versus large earthen ponds. Farraguses basic chemistry to create a symbiot-ic system. He introduces bacteria into thewater from his fish in order to break downthe ammonia created by their waste, turn-ing it into nitrogen. The plants benefitfrom the nitrogen while re-oxygenatingthe water, which is mostly pumped backinto the fish tanks. Some of it, rich in fishmanure, is used to water his olive trees.“Combining fish and plants is a well

known thing. The ancient Egyptians didit,” Farrag says. “We’ve just modernizedand commercialized it.”

Before giving a recent tour of his farm,which employs 12 workers, Farrag insistson changing into a collared shirt in orderto “look like a businessman, not afarmer.” Strolling through his green-house, he picks and offers samples of fra-grant fresh basil and fennel. He stops athis tilapia tanks to toss in the soy-basedpellets on which the fish feed, and theyrush to the top, splashing with enthusi-asm. Farrag uses social media to promotehis products, all of which, he says, are“sustainable and clean.” He travels toregional agriculture conferences andexpos to speak on green farming meth-ods, and he recently established a partner-ship with Offah.com, a local online deliv-ery service of premium fresh fruits andvegetables. Farrag would like to branchout to exporting his tilapia, but like othersin the industry, he lacks access to theexpensive refrigeration equipment hewould need to make that possible.Meanwhile, Egyptian fish farmers arelegally barred from using freshwater,which is prioritized for agriculture. TheEuropean Union, for example, currentlywill not import most Egyptian farmed fishbecause it is not satisfied that conditions



In Depth

are being met to guarantee its safety,according to industry members.

Sayed, of the University of Alexandria,has worked as a consultant to the region-al fish farm industry for 40 years and donefield research for the UN. He says thatthere is a general stigma associated withfish farmed in brackish water, like thatfound in the lakes and Delta pond farmsthat house most of Egypt’s farm-raisedfish. It’s true that some number of theseoperations are unlicensed and illegal andcan use stagnant agricultural runoff waterthat contains sewage or an excess of fishmanure from improper cleaning. Suchinformal farms not only often growunhealthy fish but can risk contaminatingdrinking water sources. However, MagdySaleh, an expert in fish health and man-agement who used to work for theEgyptian government, says that the notionthat Egyptian farmed fish is diseased orcontaminated just because it’s largelygrown in brackish water isn’t true. Breedslike tilapia, mullet and Nile catfish actual-ly thrive in relatively salty water, he says,which is unsuitable for anything else,making it a very efficient use of resources.A 2010 study by Cairo University and theNational Institute of Oceanography andFisheries found that, on average, the fishin Egyptian farms did not contain pesti-cides, chemicals or heavy metals inunsafe levels. The report’s authors con-cluded that fish farming in agriculturalrunoff water, which does contain traces ofsubstances like lead and cadmium, is stillsafe, and other studies have come to sim-ilar conclusions. “We’ve been doing itthat way for 40 years,” Saleh says, “I letmy own children eat it.”

Even with negligible exports, however,Saleh points out that the local fish farmsalready enjoy a big market. In addition toconsuming almost all the fish it produces,Egypt imported some 400,000 tonnes offish annually according to data publishedin 2012. But Diaa Elbeshbishy, whosefamily owns a 200-acre fish farm in KafrEl-Sheikh in the Nile Delta that is amongthe nation’s largest, says he could markethis fish better and sell it for more if he waslegally permitted to use freshwater. Hisfamily has been in the fish farming busi-ness since the 1980s and has grown the

operation into a successful enterprise,raising around 1,500 tonnes of tilapia,mullet and catfish yearly using mostlybrackish water. Elbeshbishy says he getsabout LE 12 per kilogram for his fish.Many farmers simply break the law anduse freshwater anyway, but they risk jailtime and fines if they get caught. Hisbrackish water-raised fish are healthy, heinsists, but it’s an issue of perception hewants to fix. “We need to reach the con-sumer and tell them it’s good for yourhealth,” he says.

Wadi Food, the local specialty foodgiant, runs a saltwater fish farm at RulaFarm in Wadi Natrun, about 80 kilome-ters inland from the Mediterranean Sea,that started by accident. Workers culti-vating land for olive groves hit a natur-al saltwater aquifer. Wadi decided touse the water to house saltwater-hardyspecies such as sea bream, red tilapiaand sea bass, with the latter breed par-ticular popular on the export market.The Rula aquifer, a clean, closed sys-tem that replenishes itself, now exportssea bass to Italy, while the runoff waterfrom the tanks is used to cultivate salt-resistant plants such as salicornia,artemisia and atriplex, which are soldas salad ingredients.

Wadi’s success with the saltwaterspecies has led some to speculate thatexpanding Egypt’s much smaller marinefish farm industry could be lucrative,

given the higher demand in the West forocean fish. However, Egypt lacks thefjords and bays of successful marine fishexporting countries like Norway andChile, and the country’s coastal waters aretoo rough to house large numbers of off-shore cages, the setup for most marinefish farms. Moreover, much of Egypt’scoastline is earmarked for tourism.“There are huge amounts of resorts, andthere’s very little room left for marineaquaculture,” says Sayed of theUniversity of Alexandria. Finally, whilethe final product can be sold for more, thistype of fish farming has higher up-frontcosts than freshwater varieties.

Salah Taher, a fish farm expert who iscurrently a consultant on the Wadi pro-ject, is adamant that the industry needs toestablish an independent union that couldlobby support for the industry as well as abetter government system to reliably setand enforce realistic and up-to-date regu-lations to ensure its fish is safe andhealthy. “When I started this, I didn’tthink [the fish farm industry] wouldbecome so big,” says Taher, who nonethe-less points out it has a long way to gobefore supermarkets in Europe andAmerica are stocking frozen packages ofEgyptian-made tilapia. “We need to cre-ate a generic brand, ‘fish made in Egypt’or something like that,” he says. “Egypthas been very successful, but we have tobecome an international player.”

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Ard El Lewa, a poordistrict that lies onthe other side of theSudan Street rail-road tracks that bor-der Mohandeseen, is

a poorly planned neighborhood ofmulti-storey apartment buildings liningnarrow streets jammed with beepingtuk-tuks. Beyond that is an informalzone that has expanded ever westwardwith Cairo’s urban sprawl, a ghetto ofunpaved alleys and unpainted, tin-roofed dwellings where the tuk-tuks arereplaced by donkeys clip-cloppingthrough piles of trash. This is whereAbdallah Faizy, 39, makes his homewith his wife and two grown sons, in aground floor cubicle divided by bedsheets for privacy. “My roof dripped

rain non-stop during the worst of therainy days. We had to bring towelsfrom the neighbors to dry the roof andfurniture,” complains Faizy, addingthat on dry days, dust comes rightthrough the porous, stone and concretewalls, even when the windows areclosed. “That’s not to mention our dailystruggles with water and sewage prob-lems.” he says, which include over-flows and routine water cuts fromblocked pipes. But this is what Faizy,who clears LE 2,000 a month at his jobat a Mohandeseen law firm, can afford.

He is not alone. Informal settlementshouse some 67 percent of greaterCairo’s 18 million-strong population,according to World Bank data from2011. Despite government efforts cost-ing billions and stretching back more

than half a century to Nasser’s pledgeto provide all Egyptians with decent,affordable housing; successive govern-ments have been unable to keep pacewith the country’s mushrooming popu-lation. Meanwhile, ambitious projectshave been marred by corruption,incompetence and bad planning. TheMinistry of Housing estimates that800,000 more units are needed annual-ly to accommodate Egyptian home-seekers. While plenty of luxurydwellings stand empty and available, adearth of lower-end homes has left anaffordable housing deficit of some-where between 1 million and 3 million.The latest grand plans to remedy theproblem were announced last month,when military chief Abdul-Fattah el-Sisi announced that the Army had

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signed a LE 280 billion deal withEmirati construction giant Arabtec toprovide one million affordable homesfor “Egypt’s youth.” That is on top ofthe Social Housing (or “Million Units”)Project launched two years ago by thehousing ministry in cooperation withprivate sector developers, in addition toseveral other state-sponsored efforts.

The two projects are complementedby an affordable real estate financinginitiative sponsored by the CentralBank of Egypt as well as an effort bythe Financial Supervisory Authority toencourage real estate investment fundsto attract more investment in the sector.The New Urban CommunitiesAuthority recently revised its housingpolicy to ease conditions for newdevelopments. At a March 2 meetingwith ministry staff and reporters imme-diately following his appointment asEgypt’s new top housing official, hous-ing minister Mostafa Madboulyadmonished ministry employees thattheir goal should be “preserving thedignity” of every Egyptian by “offeringproper services, infrastructure andoffering him an affordable home.”

Egypt’s first government-subsidizedhomes were built in the 1950s underPresident Gamal Abdel Nasser by state-owned real estate developers. Theywere sold at below cost and paid for ininstallments, which slowed developers’cash flow and construction, making ithard to keep pace with demand. Theprojects were supposed to house work-ing class Egyptians, but since buyersweren’t required to show proof ofincome, many took advantage of thechance to purchase cheap homes andresell them at a profit one or two yearsdown the line, with some unscrupulousinvestors actually renovating and flip-ping the properties by marketing themas luxury homes. Moreover, they oftenexceeded the average Egyptian’s bud-get. “They were too pricey,” remem-bers Hany El-Assal, chairman of localdeveloper Misr Italia Holding. FormerPresident Hosni Mubarak’s NationalHousing Project, launched in 2006, wasmarred by bad planning, incompleteinfrastructure and legal disputes, and in

the end less than half of the 5,200promised units were actually finished,while most of those that were builtremain vacant, tied-up in contractualdisputes and allegations of shoddy con-struction. NUCA’s “Build Your Home”project in 2007 was a similar boondog-gle. Last year, Nabil Abbas, NUCA’sfirst deputy chairman, told Al Masry AlYoum that the project had failed due to“lack of proper planning” and acknowl-edged that it had incurred “massive”losses.

With its “Million Units” project, offi-cials have promised to remedy some ofthose problems, focusing on building inhigh-demand areas rather than in outly-ing communities, where cheap landmay abound but few jobs exist.Qualifying buyers must prove they arefirst-time homebuyers, between theages of 21 and 50 and earn a maximumannual income of LE 27,000 for indi-viduals and LE 40,000 for families.Flats cannot be sold for seven years,and the poorest buyers will receive pri-ority. The project was initially sched-uled for completion in 2018, at a rate of200,000 new homes annually. But twoyears in, just 94,000 units are ready,according to Ministry of Housing FirstUndersecretary Nafisa Hashem, whoadds that turmoil has stalled progress.She declines to give sale prices but saysbuilding costs for each unit will rangefrom LE 100,000 to LE 160,000. “Wehave yet to agree on the subsidizedprice,” says Hashem.

News of Sisi’s Arabtec project,meanwhile, dubbed “For Egypt’sYouth,” comes as the country’s topgeneral is preparing to run for presi-dent. The homes will be built on160,000 square meters of land donatedby the military on 13 sites around the

country, with apartment sizes rangingbetween 85 and 120 square meters.Qualifying income requirements havenot been released. “From the outside,the project looks really good,” saysMohamed Abdallah, chairman ofColdwell Banker Affiliates of theMiddle East and Greater Africa, whononetheless stresses that the project’sdetails remain vague. One issue he rais-es is its LE 280 billion price-tag, whichwould work out to a cost price of someLE 280,000 per unit—a lot for a low-income home. “This is a huge sum,especially given that the land wouldmost probably be free because itbelongs to the Army,” says Abdallah,who also points out that Arabtec—which helped build the Burj Khalifa inDubai, the world’s tallest building—specializes in luxury high rise property.“It has little experience with this kindof construction,” he says. Others havequestioned the feasibility of the scale ofthe project, especially given that thegovernment is already lagging behindon one million-home housing effort.Critical issues such as ensuring ade-quate infrastructure and raw materialshave yet to be addressed. “I don't real-ly expect a lot, given what we haveseen in the past,” admits Abdallah.

Officials still hope the projects couldgive Egypt’s economy a much-neededshot in the arm, given that some 80 otherindustries are connected to the realestate sector. The Arabtec-Army project,which is being billed as the region’slargest housing initiative, promises tocreate 1 million jobs for Egyptians.Traditionally, developers here havefocused on high-end mixed-use devel-opments in the Cairo suburbs, whichtended to offer better and more consis-tent returns. The result has been Egypt’sdramatically imbalanced housing mix.However, there is now a general recog-nition that “the government can't meetthe rising demand for low and middleincome housing alone,” says El-Assal ofMisr Italia, who says that such projectsmust nonetheless deliver adequate mar-gins of around 6 percent to privatedevelopers in order to be attractive. Thiscould prove difficult due to the limited

“THE ONLY WAY THATSOCIAL HOUSING CAN BEMADE AFFORDABLE IS FORTHE STATE TO TACKLE THE

ISSUES WITH MORTGAGEFINANCE.”



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purchasing power of the target market.On the other hand, demand is robust, hesays. “It could be delayed for two or threeyears, but demand always materializes.”

Other efforts have been undertakenrecently to encourage growth at thehigh and the low ends of the real estatemarket. NUCA Chairman MagdyFakhry announced several measuresdesigned to offer financial breathingroom for developers: postponingpenalties on developers for late pay-ments, for example. The agency willsoon announce new policies expectedto “resolve old problems that resultedin land and property prices spiralingout of control,” says Fathallah Fawzy,head of the construction committee atthe Egyptian Businessmen’sAssociation. The changes involvemore flexible project deadlines; a fair-er, more transparent system of decid-ing which needy Egyptians qualify forfree homes; and granting support tostruggling developers.

To stimulate investment in real estateprojects, financial authorities haveallowed the creation of sector-specificinvestment funds. “This is an excellentmove,” says Tarek Shoukry, chairmanof Arabia Group for Development and

Urban Progress, who points out thatprofit margins for developers arealmost three times higher than in com-parable markets. What’s more, com-mercial banks are awash with cash. InDecember, deposits increased by LE53.8 billion, the biggest monthlyincrease of the year, while debtdecreased by just LE 4.637 billion.

While the Ministry of Housing,NUCA and EFSA have addressed thesupply side of the equation, the CentralBank is addressing the demand side viaa LE 10 billion financing initiative thataims to expand Egypt’s relativelyunderdeveloped mortgage market bygranting low-interest loans to low andmiddle-income homebuyers.Individuals earning less than LE 8,000a month and families earning a maxi-mum of LE 10,000 a month could qual-ify for home loans at an annual interestrate of 7 or 8 percent rather than the 13to 15 percent market rate. “It couldincrease to LE 20 billion if the programproves successful,” said CBE headHisham Ramez at a press conference inearly March. Faizy, the office assistantfrom the informal quarter near Ard ElLewa, paid a total of LE 15,000 for hishome in 2000, including a LE 7,500

down payment. There was no paper-work—Faizy simply handed the previ-ous owner a wad of cash. Beforehand,though, he had considered a bank loanto enable him to afford a safer, properhome for his wife and kids, but afterinquiring at a local bank, he rejectedthe proposition as too risky and expen-sive. “What if I lost my job?” he asks.Stories like his are why Abdallah ofColdwell Banker believes the availabil-ity of low-interest financing is crucial.“It will open the door for more individ-uals to buy apartments at favorableconditions,” he says.

Local banks have shown interest inthe initiative, recognizing a potentiallyenormous untapped market for low-interest mortgages. The National Bankof Egypt, which holds more than halfof all Egyptian savings accounts, willdisburse LE 3 billion of the financingmoney through its real estate sub-sidiary. “Our main work now is how toensure these loans,” says Walid Nagy,retail products and sales director at thebank, adding that that the mortgageswill be riskier than most because theCBE has dictated that banks cannotconfiscate properties purchased withsuch loans if a borrower defaults. Also,the 20-year borrowing period is consid-erably longer than the average life of atypical Egyptian loan, points out BasselRahmy, retail banking head at the Bankof Alexandria, which will nonethelessparticipate to the tune of LE 500 mil-lion. “The only way that social housingcan be made affordable is for the stateto tackle the issues with mortgagefinance,” said developer Hassan Dorain a February report by the OxfordBusiness Group.

In the meantime, Faizy and millionsof other Egyptians who live in illegal,makeshift residences probably won’tget excited just yet about the newambitious affordable housing plansrecently announced by his country’sdefense minister and possible futurepresident. “The government thinkspoor people like us still believe theirpromises,” he says. “We don’t—unlesswe have the keys and the propertydeeds in our hands.”

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COVER STORY

Cover Story_cover story Aug.qxd 4/2/14 5:21 PM Page 2


As Egypt heads into another summerof rolling blackouts, the interim gov-ernment has pledged to enact long-overdue changes to the nation’senergy policy, including reformingsubsidies and developing renewables.But with a presidential election aroundthe corner, are Egypt’s leaders willingmake the hard choices necessary toend the power crisis?

BY MAGGIE HYDE

DARKIN THE


Around 7 p.m. on arecent weeknight, aDokki street goesblack. A few cellphone flashlightsblink on, and a noisy

generator sputters to life in a small gro-cery store. Insects and squinting passers-by gravitate to the fluorescent glow of themarket, while bouabs light cigarettes andsettle down at their posts to wait for thelights to go back on. It’s a familiar sceneacross the Egyptian capital. This year, thefrequent blackouts that have become aregular feature of the sweltering Cairosummer began in January, a symptom ofthe government’s inability to secureenough fuel to operate the country’spower stations. On this leafy, middle classblock, it was already the third power fail-ure this week.

Last summer’s removal of PresidentMohamed Morsi coincided with a suddenrespite from the daily rolling blackoutsand long gas queues that had fueled grow-ing anger toward his regime—spurringwidespread, wishful speculation that the

power crisis had come to an end. It’s nowobvious that that wasn’t the case. Nearly ayear since Morsi’s ouster and more thanthree years since the January 25 revolu-tion, there is no end in sight for Egypt’senergy shortage, as the interim govern-ment scrambles to find solutions. Energy-intensive industries like cement are rais-ing prices in response to shortages andcost hikes, causing ripples across Egypt’slagging economy. In late January, a majorBritish gas player publicly complainedthat the Egyptian government was takingvirtually all its fuel—violating its produc-tion contract with the firm—in its struggleto keep the lights on. Egypt’s ever-enter-prising street vendors, meanwhile, aredoing a brisk business in battery-operatedlights and fans.

Egypt’s energy crisis goes back years,rooted in an unsustainable energy-subsidymodel that is a holdover from the social-ist promises of the Nasser era. Thenation’s addiction to power subsidies nowcosts Egypt upwards of LE 130 billion ayear, about a fifth of government spend-ing, according to recent official estimates.Egyptians themselves foot the bill for

only around 10 percent of the market costof many types of fuel, with the govern-ment shouldering the rest—somethingeveryone agrees it can’t keep doing formuch longer. The political turmoil ofrecent years has only accelerated thedecline of a model that was already anti-quated and wasteful, experts agree, mak-ing a long-overdue restructuring of thesystem even more pressing.

Part of the problem is Egypt’s heavyreliance on natural gas. The countrycounts on oil and gas products for 96 per-cent of its electricity needs. Renewablealternatives are being explored, includingsolar, wind and nuclear power, as well asless fashionable, much dirtier optionssuch as coal. But none of these long-termsolutions on its own will solve Egypt’senergy woes, which boil down to the factthat it needs more fuel—fast. As Egyptgets ready for the summertime peak ener-gy season, the recent spate of unusualwinter blackouts has left many fearful ofhow the power grid will hold up onceEgyptians begin to switch on their airconditioners. The answer is sure to figureheavily in Egypt’s imminent presidential


In Depth

RUNNING ON EMPTY: IN ADDITION TO A SHORTAGE OF NATURAL GAS TO POWER ELECTRICITY PLANTS, THE ENERGY CRISIS IS COMPOUNDED BY AN AGING AND INEFFICIENT GR


election, which Army chief Abdul-FattahEl-Sisi is heavily favored to win.

When the power goes out at theRadioShack on Mohi El Din Abul EzzStreet in Dokki, employees are instructedto lock the doors to guard against theft,explains 25-year-old sales clerk IslamGameel. “Of course, this means we getfewer customers,” he says. In sector aftersector, anecdotes abound illustrating theeconomic consequences of power cuts:assembly line shifts cut short, patrons fil-ing out of restaurants. Factories that usedto remain open for two or three shifts nowhave only enough power for one.

Egypt’s ballooning population and thepredominance of energy-intensive indus-tries such as cement, glass, iron and fertil-izer have accelerated electricity demand,which grows by around 7 percent annual-ly. The evening blackouts with whichCairenes have become familiar coincidewith peak consumption, when most peo-ple come home from work and turn ontheir lights, televisions and computers.The reason you can sometimes stand onyour balcony during a power outage andgaze at the fully lit high-rise across the

square, says Osama El Said, a formersenior advisor to the Ministry ofElectricity who is now managing directorof electrical consulting and contractingfirm Masa Electro, is due to arbitrarydecisions by switchboard managers as towhich blocks to switch off to relieve strainon the grid when demand exceeds supply.“They disconnect buildings at random,”he says.

An aging, inefficient system also con-tributes to the power failures. An adequatesupply of fuel, pressure, and the plant’smachinery all need to be operating cor-rectly in order for Egyptians to be able tosuccessfully flip on their air conditioners,lamps and appliances. “The main problemis our grid is very old,” explains Said. “Ifone of these things is not working, then,poof—no electricity.”

Storm clouds gatheringAt an AmCham luncheon in an airyballroom at the Four Seasons HotelCairo at Nile Plaza in late March, petro-leum minister Sherif Ismail spoke to acrowd of high rollers from Egypt’s oil

and gas sector, including executives frombig players like Apache, British Gas andBritish Petroleum, all of which have sig-nificant local stakes. His frank speech waswell received by industry players, whoseemed to agree it represented a rare doseof reality from an Egyptian official, espe-cially on the subject of subsidies reform,which has long been considered a thirdrail in Egyptian politics. In the past, “Wehave been misled by unprofessional dataand information released for political pur-poses,” says Khaled Abu Bakr, chairmanof energy production firm Taqa Arabia.

The Ministry of Petroleum recentlyforecast that in the upcoming financialyear, natural gas consumption wouldreach 5.57 billion cubic feet per day, out-pacing expected production of 5.4 billioncubic feet per day, according to Reuters.Since much of that production is alreadytied up in export contracts, the shortfall issignificant. “We’re in a crisis,” declaredthe petroleum minister at the luncheon.“There’s no link between what’s hap-pening in the world and what’s happen-ing in Egypt.” According to Ismail, therecent spate of winter blackouts is


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NT GRID AND YEARS OF WASTEFUL CONSUMPTION HABITS. ON MANY OF EGYPT’S ROADWAYS, STREETLAMPS REMAIN LIT DURING THE DAY AND SWITCH OFF WHEN NIGHT FALLS.


directly connected to the problems withthe North Alexandria Block, a mammothoffshore gas field held mostly by BP thatwas expected to come online by the thirdquarter of 2014, in time for the peak sum-mer energy season, bolstering Egypt’snatural gas supply by 18 percent.However, “environmental concerns”among local residents forced the post-ponement of production from the conces-sion until sometime next year.

Moreover, the political turmoil that hasrocked Egypt in recent years has scaredaway foreign investors, which expertssay is another factor behind the slump infuel production. BP, for one, maintainsthat its operations in Egypt “haven’t beenaffected at all” by the upheavals of thelast three years, according to spokesmanRobert Wine, who adds in an email thatoperations are proceeding as planned onthe North Alex field, despite delays dueto the relocation of a receiving port thatsparked protests among locals. However,Hassan elTorie, an energy analyst withinternational research firm IHS says thatthe notion that instability hasn’t impactedenergy exploration and production inEgypt is false, the company linesnotwithstanding. “They have been

affected,” he says, adding that a num-ber of firms have stopped making biginvestments in the sector.

Another telling move regardingEgypt’s current natural gas supply situa-tion came in the form of a January pressrelease from the U.K.-based BG Group,which counts on Egypt for around one-fifth of its total production, that it wasissuing a profit warning to investors anddeclaring force majeure for its Egyptoperations due to the government’s“ongoing diversions of gas volumes tothe domestic market,” leaving the com-pany unable to meet its export obliga-tions to customers. Like other multi-national energy firms, BG has a produc-tion-sharing arrangement with Egyptthat entitles it to a share of the gas itextracts from the ground, while the gov-ernment pumps the rest into the nationalgrid to power factories, electricity plantsand households at below-market rates.But the government, lacking enough gasto meet domestic needs, has beensiphoning almost the firm’s entire pro-duction capacity of 1 billion cubic feetper day to the local market, according toBG, which took pains to stress that it“remains committed to the Egyptian

LNG Project and will continue to nego-tiate with the Egyptian authorities andother stakeholders to seek a long-termsolution.”

The unusual move has made waves inEgypt's oil and gas industry, in whichscuffles related to public-private partner-ships are typically dealt with behindclosed doors. On the sidelines of theMarch 24 AmCham luncheon, EgyptianGeneral Petroleum Corp. Chairman TarekEl Molla downplayed the issue. “Wenever had a problem with BG,” he says. “Idon’t know what they told their investors,but I sat right next to the BG guy today.Just because they issued force majeuredoesn’t mean we can’t do business.”

In his speech, Ismail alluded to ongoingefforts to build an offshore regasificationterminal, which would enable Egypt toimport gas without building a pipeline toa neighboring producer. Plans to buildsuch a facility were announced back in2012, but the project fell apart before offi-cials had picked a contractor. Accordingto a February Reuters story, Norwegiancompany Hoegh had won a contract tobuild the LNG facility but had subse-quently backed out, citing a lack of finan-cial and commercial guarantees from the


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TECHNICAL DIFFICULTIES: EXPERTS SAY ONE BROKEN LINK IN THE ENERGY CHAIN—SUCH AS A DOWNED POWER LINE—CAN CAUSE A BLACKOUT.


government. A spokeswoman fromHoegh declined to comment on “projectswe are tendering for.” Ismail toldreporters following his speech at theAmCham luncheon in response to ques-tions about the project that “everything isback on track,” with Hoegh’s contract tobuild the LNG facility. But he added thatthe regasification plant, which had beenslated for completion this summer, wouldbe delayed until at least August. Industryinsiders said the end of the year is proba-bly more realistic.

In the meantime, a shorter-term stop-gap solution may be importing moremazut, a heavy, inefficient fuel oil that isalready in use. Molla of the EGPC saysmazut may be Egypt’s best hope of get-ting through the summer with enoughfuel, since most of its power stations canrun on it in place of natural gas, althoughit is significantly more expensive as wellas polluting. The petroleum minister hassaid the amount of mazut available topower such plants would increase from22,000 tons to 35,000 tons within thecoming year. Meanwhile, officials areconsidering a controversial proposal bycement companies for permission to runon coal, which has caused an uproaramong environmentalists. In any case,officials needed more fuel yesterday. “Wedon't have enough fuel at certain times,”says Fathy El-Sayyed, chairman of theUpper Egypt Electricity ProductionCompany, which oversees dozens ofpower stations from southern Cairo toAswan.

In the current spirit of looking to theprivate sector to help perform publicfunctions, one possible solution is so-called independent power producers, orIPPs, companies that make and sell ener-gy at market prices to willing customers,such as industries and well-heeled con-sumers who don’t mind paying a premi-um for an uninterrupted power supply.According to Said, firms from Korea andthe Gulf have expressed interest in open-ing large-scale power stations in Egyptunder an IPP arrangement, which couldprovide a way for Egypt to revitalize itsenergy infrastructure and increase pro-duction capacity at little cost to publiccoffers.

But first, the government must provideguarantees to firms that secure theirinvestments and ensure that promisedfuel required for production won't fail tomaterialize. The Central Bank couldissue sovereign guarantees promisingthem compensation if something goeswrong, say industry experts.Unfortunately, Egypt’s track record offulfilling its financial obligations hasn’tbeen terribly reassuring lately, as thecash-strapped state has racked up petrole-um debt. Since the 2011 uprising, some19 arbitration claims have been filedagainst the Egyptian government byinternational oil and gas companies, nineof which have been settled. Thanks to bil-lions in aid from its friends in the Gulf,the interim administration has been ableto pay down some of its outstanding bills,

but it still owes some $4 billion to foreignoil and gas companies, including BG.

New exploration of untapped naturalgas wells—in particular, rich onesbelieved to lie deep beneath theMediterranean Sea—has also beendelayed thanks to bureaucratic red tapeand the state’s failure to provide financialguarantees to energy firms. The EgyptianNatural Gas Holding Co. has madeattempts to remedy some of these prob-lems, but Ismail says newly discoveredconcessions in the Western Desert, forexample, are still three to five years awayfrom yielding fruit.

Look to the sunFor a long-term solution to its powerproblems, experts say Egypt must


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LIGHTS OUT: POWER FAILURES ARE MOST COMMON IN THE EVENING, WHEN CONSUMPTION IS HIGHEST.

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ultimately develop renewable energysources. Of these, many experts agree thatthe most promising is solar, for whichEgypt’s dry, sunny weather conditions areideal. “We have the strongest and longestconcentration of sun in the world,” envi-ronment minister Laila Iskander said at aFebruary conference on climate changesponsored by the German Embassy.

Currently, though, solar energyaccounts for an almost negligible frac-tion of Egypt’s electricity supply. Thenation’s only solar hybrid power plant,Korymat in Beni Suef, produces a maxi-mum of 20 megawatts of electricity dailyfrom the sun’s energy compared to 100megawatts from traditional fuels. YasserSherif, general manager of Environics,an international environmental consult-ing, firm who has previously advised thegovernment on renewable energy, saysEgypt needs to produce at least an addi-tional 2,000 megawatts of power a day tomeet its current energy needs. “In thelong term,” he says, “we need a totaltransformation.”

Inside an enormous domed auditoriumat Egypt’s British University in SharoukCity, 50 or so journalists and energyindustry types gathered on an afternoon inmid-March for the launch of a new solarinitiative called Yalla Shams, whichencourages households and businesses topurchase solar panels. The enormous hallwas chilled by blasting air conditionersdespite the breezy spring day, promptingreporters to don sweaters. Yalla Shamsco-founder Ahmed Moussa, who hasadvised tourist operations and other busi-nesses on establishing green practices,told the gathering that Egyptians can’tafford to count on the state to solve theenergy shortage. “If everyone is waitingfor the government to do something,nothing will happen. It’s about awareness,social responsibility. We can do it withoutgovernment.”

Their commendable can-do spiritnotwithstanding, others in the energyindustry have pointed out that few com-panies or individuals are likely to take upsolar—or any renewable power source,for that matter—when there is cheap, sub-sidized gas available. Omar Hosny, chieftechnical officer at Zamalek-based Karm

Solar, says it simply doesn't make eco-nomic sense for them. That’s why KarmSolar, which sets up solar energy systemsfor homes and businesses, almost exclu-sively serves clients outside the NileValley who aren’t hooked up to thenational power grid. Currently, saysHosny, this is the only viable market forsolar, apart from a smattering of wealthyconsumers among whom solar panels ontheir North Coast villas are considered astatus symbol. Yalla Shams foundersacknowledged that they have so far strug-gled to sign up solar panel productioncompanies, which are required to donate2 percent of their profits to buildingrenewable energy networks in under-served villages. Solar energy will nevertake off in Egypt until it’s no longer com-peting with subsidized fossil fuels, saysHosny. Which is why he believes thatsubsidy reform is the only way forward.“Without it, there’s no hope,” he says.

Officials have talked for years aboutreforming energy subsidies, whichwere phased out long ago in most other

countries around the world, but thus farnone have displayed the political will togo through with them. The restive cli-mate in the Egyptian streets since 2011has made the situation even more deli-cate. During the peak consumptionmonths last summer, officials dancedaround the crisis, blaming the fuel short-age on everything from the black marketto stealing to fluctuations of the interna-tional energy market. The petroleumminister says subsidies will be liftedgradually within the next five to sevenyears, “so the economy can absorb itwithout a shock to the system.” Thingscould get much worse if these long-over-due structural changes to Egypt’s energypolicy are postponed much longer,experts stress. But Ismail insisted that theinterim government is no longer interest-ed in applying Band-Aids. “Most of theefforts we’re doing now are not to solvethe problems of today,” Ismail told thecrowd at the Four Seasons. “I trust thatthings will eventually get better, but notimmediately.”


In Depth

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PLAN B: A BOOMING TRADE IN GENERATORS IS A COROLLARY EFFECT OF EGYPT’S POWER SHORTAGE.



Labor

Joblessness is a worldwide problem. According to theInternational Labor Organization, global unemploymentis set to rise in 2014, with more than 200 million peoplewithout work, as the long-term effects of the 2008 glob-al financial crisis continue to wreak havoc on manycountries. Even in developed economies, youth unem-

ployment is expected to hover above 15 percent. In parts of south-ern Europe, between 33 percent and 50 percent of young peoplewho are eligible to work lack jobs. But nowhere on the planet isthe youth unemployment crisis more serious than in non oil-pro-ducing nations in the Middle East and North Africa. An ILO sur-vey concluded that the Middle East’s 2012 youth unemploymentrate of 28 percent was the highest in the world, with North Africacoming in a close second at 24 percent. For young women, the fig-ures are even starker—43 percent and 37 percent, respectively.With more than half the population under 25, tens of millions morejobs will be needed by the end of this decade to absorb the hordesof young people about to enter the regional labor market.According to recent data released by CAPMAS, the state statisticsagency, Egypt’s official unemployment rate remained around 13.4percent in the fourth quarter of 2013, nearly 70 percent of thembetween the ages of 15 and 29. However, these numbers don’treflect the vast informal sector, where unemployment is believedto be much higher. And the picture has gotten steadily worse: Lastyear, the period from July to September alone left an estimated30,000 more Egyptians unemployed as a result of ongoing politi-cal instability and escalating violence, according to the WorldBank’s most recent quarterly economic report for the MENAregion. Between 700,000 to 800,000 new Egyptian job seekersenter the labor market every year. Estimates by the World Bank

show that Egypt’s economy will need to grow by at least 6 percentto make a dent in the unemployment rate by 2020. “Short-termpolicy actions like raising wages and increasing subsidies onlyexacerbate the problem, which is driven by longstanding structur-al weaknesses.”

A report by the World Economic Forum presented at the orga-nization’s annual meeting in Davos, Switzerland in late Januaryurged governments to take action. The paper, entitled“Unemployment: Rising to the Global Challenge,” points out that,like several other countries in the region, Egypt faces a catch-22 asit struggles to solve the unemployment crisis and get back on itsfeet following three years of political turmoil. It desperately needspolitical stability to achieve an environment conducive to job cre-ation, but job creation is necessary in order to achieve political sta-bility. “Somehow, a way must be found to strengthen popular faithin the government’s ability to inject energy into the economy,attract foreign investment and generate jobs,” write the authors.

Developed nations and wealthier neighbors in the Arab Gulfhave a key role to play “by assisting their counterparts in theregion to restructure their economies, launch administrativereforms and provide much-needed investment.” The Egyptianstate, meanwhile, must focus its efforts on stimulating job creationin sectors where the impact will be the highest, in industries thatare globally competitive and labor intensive. Entrepreneurshipshould be encouraged by providing funding and streamlining reg-ulations, for example, “enabling new dynamic companies to pro-duce growth and jobs.” In particular, Egypt must strive for “polit-ical stability, which provides the very foundation for economicefforts” and work to strengthen the social safety net, “preventingthe unemployed middle class from sinking into the abject povertythat is likely to provoke yet more social upheaval.”

HELP WANTEDThe global unemployment crisis

Published by the World Economic Forum and the Brookings InstitutionAnalysis by Rachel Scheier

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Solving the youth unemployment crisis in Egypt, however,will require more than policy shifts. As well as economic stag-nation and social upheaval, the problem is rooted in unrealisticcultural expectations, in particular among educated Egyptianyouth, who often prefer to hold out for cushy public sector jobsthat no longer exist, points out a recent report by Akira Murataof the Brookings Institution, “Designing Youth EmploymentPolicies in Egypt.” Such ideas are the result of the longstandingEgyptian government policysince the 1950s of guarantee-ing public employment to uni-versity graduates, which hassent young people “distortedsignals about the labor mar-ket.” Moreover, aiming tosolve joblessness with the pastBand-aid of simply creatingmore state positions is no longer sustainable and has only ledover time to a costly and “bloated public sector.” The “mis-match between young people’s expectations and the reality ofthe job market has undoubtedly led to much frustration.”

Nor will education alone solve the problem. A disproportion-ate percentage of unemployed young people in Egypt are in factthose with advanced degrees. The problem is compounded bythe fact that, in part because employees lack any solid “meansto evaluate the applicant’s competence in an objective manner,due to the lack of a formal and comprehensive qualification sys-tem,” many jobs in Egypt are awarded on the basis of personalconnections rather than whether or not the candidate is quali-fied. Meanwhile, Egyptian firms struggle to find qualifiedworkers, as job seekers desperately need work experience butlack the means to acquire it. “Formal training after employmentis almost entirely lacking, and vocational training opportunitiesfor jobless and unskilled Egyptians are also limited.” A recentILO study in Egypt found that young Egyptians, particularlywomen, encounter “serious difficulties” trying to land a jobafter graduation. CAPMAS data shows that “while femaleschool enrollment through secondary school exceeds 40 per-cent, a study on school-to-work transition shows that only 4 per-cent of females make the transition from school to career jobsas opposed to 30 percent of males in the same age group.”

Youth unemployment in the MENA region is predicted to hitalmost 30 percent over the next four years, according to theWorld Economic Forum, which “could lead to a severe weak-ening of social cohesion.” The damaging macroeconomiceffects of joblessness include slow growth and wasted produc-tivity. “Youth unemployment, especially if of long duration, hasa scarring effect, increasing the likelihood of worklessness laterin life and reducing the potential of lifetime earnings.” Chronicunemployment also increases the likelihood of physical andmental illness, taxing the health care system as well as the econ-omy. But the WEF report stresses that the quality of available

jobs is as important as the quantity. “‘Bad jobs’ are likely toleave those at the bottom of the labor market in a depressingcycle, which takes them from joblessness to an active labormarket program, to low quality work, to joblessness.”

Apprenticeship and training programs are an important short-term step that can have positive long-term effects toward alle-viating the youth unemployment crisis. “The fact remains thatprivate companies do not want the region’s stereotypical uni-

versity graduate, who possesses unre-alistically high expectations despitevery little work experience.” Anotherimportant step is “to ensure that SMEswith a proven potential for growthhave access to the support they needto develop and create new employ-ment opportunities.” Other possiblemeasures include reducing payroll

taxes, providing state-guaranteed loans for new businesses andimplementing schemes for “seed accelerators” that provideyoung companies with “mentoring, training and funding” inexchange for a share of equity. The social security safety netshould be maintained and improved, preventing the unem-ployed middle class from sinking into the abject poverty that islikely to provoke yet more social upheaval.” Moreover, inEgypt, steps need to be taken to narrow the disparities betweenpublic and private sector jobs, especially with regard to pay. Insurveying young Egyptian job seekers in the field of engineer-ing, the Brookings paper found that improving social benefitsand IT infrastructure added significantly to the attractiveness ofprivate sector work.

Jobs and economic growth enjoy a symbiotic relationship,declares the WEF report. “Demand will be depressed andgrowth will be sluggish unless more people return to work.Above all, the restoration of confidence is needed.” Consumersmust believe in their jobs and their economic prospects in orderto spend as well as save. And businesses have to be assured ofa rising demand for their products and services before they canbe confident that an investment is worthwhile. At the root of theproblem in Egypt and other countries that suffer from chronicstructural unemployment is the fact that the social contract hasunraveled. “Young people who see no future for themselves feelincreasingly disenfranchised. They have now been joined byprotesters who believe that they are bearing the brunt of a crisisfor which they have no responsibility, while people on highincomes appear to have been spared.” What is needed, morethan anything, is “an improvement in business confidence sothat enterprises release some of the cash from their balancesheets and begin to create jobs.” Simply put, it’s critical that“good policies” that create jobs must be boosted, and “bad poli-cies” that discourage employment must be avoided. This mightsound like obvious advice, but many governments, includingEgypt’s, have failed to follow it.


Democracy

"Companies do not want the region'sstereotypical university graduate,who possesses unrealistically high

expectations despite very little workexperience."

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Dining Out


My favorite restau-rant in the worldis a trattoria inTrastevere, a dis-trict of Rome,not far from

where I grew up. The waiter brings thefood while munching on tastes of thingshe’s put in his mouth on his way out ofthe kitchen. At the end of the meal, heasks you what you had and adds up the

bill right there on the oily, brown papertablecloth. Only if he likes you will heshare a laugh or two. He is no non-sense—some would even say rude—butthe food here is so good, so utterly gen-uine, that he doesn’t need to prove any-thing to you by being polite. That’s thesubtext.

Cut to Mirai, a new “Asian fusion”spot brought to us by the owners ofSequoia in Zamalek, which is right next

door. The scene is stunning; her majestythe Nile is a sparkling beauty. Walkingdown the stairs past the two smilingsecurity guards, I gaze hypnotized at thetwinkling lights reflecting off the waterand the restaurant’s vast glass walls.What am I looking at? Is it the inside? Isit the outside? I can’t really say, but Ilike it.

A dark suit rushes over to seat us.He is all smiles. The décor is Eastern

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minimalist, sort of, with wood panelingand faux bamboo screens. Steamemanates from behind a bar, whereEgyptian-looking chefs in Japanesehappi coats are busy steamingdumplings and cutting sushi. We sitdown and open the menu, which isactually a mini-book. It even has pic-tures. It’s stylish, but it has too manypages; it’s confusing me. There’s a bigtree in the middle of the room, encasedin glass walls. It’s beautiful and majes-tic, and I would like to touch it, but Ican’t. There’s a transparent but tangiblewall between the tree and myself.

The solicitous waiter comes by sev-eral times to see if we need help withthe menu. In the end, we get soup,some Thai and Vietnamese appetizersand a big plate of sushi. Ordering is outof the way, thank God. What aboutwarm sake? Mmm, not possible, sorry,but you can have a mojito (LE 48)instead. The manager brings us cardswith personalized Chinese horoscopes(seriously?). Mine is the year of thesnake, and it tells me I’m going to havea lucky year. The mojito arrives, and ithas barely any rum in it. “Very sorrysir, let us do it again.”

The food arrives quickly, and it isbeautiful. There is Meiang Yuoun (LE35), fresh vegetable spring rolls rolledin rice paper with peanut sauce, andTung Tong (LE 45), fried shrimp andvegetable wontons with sweet chili.The Miso Soup (LE 30) is nice and hotwith chunks of tofu and seaweed, and itcomes in an interesting, curvy whitebowl. Then comes the sushi. We get theNigiri and Sashimi Set (LE 190), aGreen Dragon Roll (LE 75) and a SpicyTuna Roll (LE 45). The fish is good, Ihave to say—really good. Not as goodas that time in San Francisco, but still.It comes all together on a big whiteplate, a rainbow of raw fish garnishedwith red and orange shavings of carrotand beet and a green rosebud of wasabi.

The waiter comes by every three sec-onds to change the ashtrays or movethe water glasses around or ask if weare sure that everything is alright. He’strying his best to be professional, but Iwish he would leave us alone. My guestis so pretty, I would like to keep look-ing at her. I don’t need you tell me thatI am about to eat raw fish on a prism ofrice, thank you very much. I miss myno nonsense hometown trattoria.

There’s a table of six people behindme who are speaking Italian. My guestpoints out that all of them have spentthe better part of their meal staring attheir smart phones. Please guys, try tomake an effort, at least? In my world,food is not just about eating; it’s aboutsharing, being together. What couldthese fellow Italians be thinking? Butthen I think that’s exactly what iswrong with a lot of fancy, fashionablerestaurants. There’s something unrealabout the whole experience. The foodis good; the service is excellent.Nothing wrong with being pampered.My soul simply needs more.

We pay the bill and finish our drinksand walk outside into the breezy springevening. The city lights are still twin-kling on the river as we hail a taxi to gohome. The driver asks for double theregular fare. And he does so with a bigsmile.

Dining Out


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Mirai 53 Abou El Feda StreetZamalek2735-0014Open Daily 1 p.m. to 1 a.m.

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One recent sunny Saturday morning at theAquarium Grotto (better known as FishGarden) in Zamalek, a group of friends pre-pared to square off. Rather than throwingfists or stones, however, the performersused their grace, strength and rhythm. They

were drumming up publicity for the Brazilian martial art ofcapoeira, an exuberant mix of dance, acrobatics and musicthat was first developed by African slaves in the 16th Centuryand has become increasingly popular in Cairo in recent years.“Nothing combines music and sports like capoeira,” saysYassin Gad El Hak, a 29-year-old French teacher who beganstudying just over a year ago after seeking an activity to helphim recover from a shoulder injury. Now an advanced studentat Olorum Bahia Capoeira Egypt (01000555677/01144442065), which has locations in Mohandeseen,Zamalek and Heliopolis, among others, Gad El Hak—whosecapoeirista name is Isso (“That’s it” in Portuguese)—nowtakes five classes a week and even helps out with beginners.“The way you move with the music is beyond comprehensionand beautiful to watch,” he says.

Mohamed El Saied, aka Tigre (Tiger) founded Egypt’s firstcapoeira school, Capoeira Coquinho Baiano Cairo Egypt(formerly TK Capoeira, 18 Emad El Din St., 01144874799)in downtown Cairo in 2000. Seven years previous, he hadstumbled upon the form after meeting a capoeira trainer whowas visiting Egypt on business. The advent of widespread

Internet access made it possible for Tigre to market his pas-sion to the Egyptian public. “From 2000, things started pick-ing up,” he says.

Today there are three capoeira schools in the Egyptian capital,which also include Olorum Bahia, led by a Brazilian-native andveteran capoeirista of 22 years known simply as Passoka, andCapoeira Brasil Egypt (inside Fibers Gym in Maadi,01093682692), which was started as part of Grupo CapoeiraBrasil, an organization that teaches in over 15 countries.

The recent capoeira showcase at Fish Garden marked thefirst time Egypt’s three competing schools combined forces todrum up interest and new students. To the rhythms of live tra-ditional Afro-Brazilian music, several dozen students tookturns performing a graceful face-off of twirling kicks sur-rounded by a roda, a circle made of clapping, singingcapoeiristas and musical instruments. Capoeira was inventedby African slaves who had been shipped to Brazil byPortuguese conquistadors in enormous numbers, many ofthem to work in sugar cane fields under inhumane and gruel-ing conditions. Still, rebellions were rare due to a lack ofweapons and the disparate cultures of the Africans, andcapoeira arose as a clever combination of martial arts and tra-ditional African and Brazilian dance by which slaves couldpractice fighting techniques without being detected by thecolonial authorities. With the abolishment of slavery in thelate 19th century in Brazil, capoeira found new uses by crim-inals and warlords who employed capoeiristas as bodyguards


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WAR DANCEBY TAMER HAFEZ

Brazilian culture


and hit men, and it was strictly banned. Practitioners adoptednicknames, or apelidos, to avoid being arrested, a traditionthat has endured.

As it remained an underground practice until nearly the mid20th century, capoeira developed into several distinctive styles.Conveniently, Egypt’s three schools each train in a differentone, according to the specialty of the lead instructor. CapoeiraCoquinho focuses on the Old Angola style, which is slower and“needs a lot of muscle control and flexibility,” explains Tigre.The name goes back to the beginning of slavery in Brazil, whenAfricans were shipped to Luanda, Angola on the West Africancoast for transport to the Americas and hence subsequentlyknown as Angolans regardless of their home country.Mohamed Bassyony, or Habibi, the lead teacher at CapoeiraBrasil Egypt, prefers the Banguela style, known for its acrobat-ics and fluid, graceful movement. Olorum Bahia Capoeiramainly trains in Capoeira Regional, which places greateremphasis on its combative essence. Capoeira Iuna, the onlystyle not represented by a local institution, is a highly technicalversion of Capoeira Regional that is only practiced by skilledcapoeiristas. Kamal Anis, known as Gente Boa (Good Guy), a33-year-old internal audit consultant who has been practicingfor five years, adds that visiting capoeira masters from Brazilhave visited periodically to train students in other styles.

Since the 1970s, when capoeira masters began emigratingand teaching it around the globe, capoeira has become a sym-bol of Afro-Brazilian culture worldwide. In this tradition, thelocal capoeira schools are teaching students how to sing tradi-tional capoeira songs and play traditional musical instrumentslike the berimbau, a tall, single string instrument that sets thetempo and tone; the pandeiro, a sort of tambourine; the agogo,which resembles a bell; the atabaque, a traditional Africandrum; and the reco-reco, a bamboo instrument that’s like aBrazilian version of a washboard. There is a complex code ofetiquette. The lead berimbau player always signals with hisbow when the roda begins and ends.

Capoeira is impressive to watch, and one might think it requiresthe strength of Hercules and the flexibility of a pretzel. It doesn't,say the local capoeiristas. Anyone, regardless of their age, sex,weight or physical fitness can take it up. Olorum Bahia currentlyhas one 52-year-old student, while Capoeira Brasil has a 12-year-old. Of course, the younger you begin, the better. “There aremoves like the backflip that are difficult if you start when you’reolder,” says Isso, who nonetheless stresses that a background indance or martial arts isn’t necessary and that students often graspthe wide range of capoeira moves more quickly than they expect.“People come to me dreaming of doing cartwheels, and beforethey know it, they are doing much more complicated stuff,” saysGente Boa.

One thing that’s sure is that the passion in the eyes of thecapoeiristas is contagious. Nothing can beat the naturalhigh, says Habibi. Gente Boa adds that as well as burningcalories, strengthening muscles and improving balance,capoeira provides a social outlet and a graceful way to blowoff steam. “I get to meet new people and know old friendsbetter,” he says.

Brazilian culture

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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

COMMITTEECHAIRS

(July 2013 to June 2014)

Agriculture and Food SecurityChair: Tarek Tawfik, International Company for AgriculturalProduction & ProcessingCo-Chairs: Tony Freiji, Wadi HoldingSeif ElDin ElSadek, Agrocorp For Agriculture Investment

Banking and FinanceChair: Hussein Abaza, Commercial International Bank (CIB)Co-Chair: Zeinab Hashim, National Bank of Egypt

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

Customs and TaxationChair: Hassan M. Hegazi, Master Trading, SAECo-Chairs: Hossam NasrSherin Noureldin, Moore Stephens Egypt

EducationChair: Amr Ezzat Salama, The American University in CairoCo-Chair: Elizabeth Khalifa, Binational Fulbright Commission inEgypt

EnergyChair: Khaled Abu Bakr, TAQA ArabiaCo-Chairs: Basil El Baz, Carbon HoldingsOsama ElSaid, Masa ElectroThomas Thomason, Egyptian Refining Co.

Entrepreneurship and InnovationChair: Ahmed Bedeir, Dar El ShoroukCo-Chair: Nader Iskander, Egypt & Middle East Co. (EME)

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

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

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

Information & Communications TechnologyChair: Bassel Mubarak, Oracle EgyptCo-Chair: Reem Asaad, Raya Holding

InsuranceChair: Alaa El-Zoheiry, Arab Misr Insurance Group|gigCo-Chair: Rabih Abdel Khalek, Pharaonic American Life InsuranceCompany (Metlife Alico)

International CooperationChair: Hanaa El Hilaly, Social Fund for DevelopmentCo-Chair: Magda Shahin, The American University in Cairo

Investment & Capital MarketChair: Alaa El Affifi, Citadel CapitalCo-Chair: Sherif A. El Akhdar, Beltone Private Equity

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

MarketingChair: Hisham Ezz El Arab, Danone EgyptCo-Chairs: Tamer Hamed, Procter & Gamble Egypt, Ltd.Tamer Elaraby, Nielsen

Real Estate Chair: Mohamed Abdallah, Coldwell Banker Affiliates of Middle East &Greater Africa.Co-Chair: Hala Bassiouni, Egyptian Housing Finance Company.

Transport & LogisticsChair: Alfred Assil, Menarail Transport ConsultantsCo-Chairs: Amr Kabil, National Stevedoring GroupAmr Tantawy, DHL Express

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

Women in BusinessChair: Hala El Barkouky, Allied Business ConsultantsCo-Chairs: Ghada Hammouda, Citadel CapitalJailan Shindy, Shindy & Associates, Inc.

P RESIDENTAnis A. Aclimandos, Transcentury Associates

EXECUTIVE VICE PR ESID ENTSCurt Ferguson, Middle East & North Africa Business

Unit, The Coca-Cola CompanySherif Kamel, School of Business, The American

University in Cairo

VICE P RESIDEN T, MEMB ERSHIPDalia Wahba, CID Consulting

V ICE P RESIDEN T, P ROGR AMSAmr Talaat, IBM

VICE P RESIDEN T, LEGAL AFFA IRSSaid Hanafi, Orascom Hotels & Development

TR EASU RERSherif El Kilany, Allied Accountants-Ernst & Young

MEMBER S 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 P RESIDEN TM. Gamal Moharam, MGM Financial & Banking

Consultants

CHIE F EXECUTIVE O FFICERHisham A. Fahmy

BOARD OF GOVERNORS

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Events

Perhaps nothing is more important to an organization’s suc-cess than the level of passion and engagement of the staff.Employee engagement is a term that refers to the staff’sinvolvement and enthusiasm toward reaching a firm’s goals,said Hisham El Bakry, managing director of LeadershipTraining and Consultancy, at a Feb. 3 interactive sessionhosted by AmCham's Human Resources Committee. Peopleoften mistake satisfaction for engagement. “You can have asatisfied employee who is not engaged.”

According to a recent global Gallup survey, only 13 percentof the workforce is actively engaged in their jobs. Bakry said thetwo factors behind employee engagement are a sense of purposeand mission and how much control a worker possesses over herjob and work environment. Staff members at NGOs, for exam-ple, tend to be highly engaged, perhaps because they feel thattheir jobs are meaningful. Enabling employees to do things likechoose their own projects builds their sense of engagement. Abig killer, on the other hand, are continuous interruptions in theform of constant messages from multiple platforms. “We need to

have allocated time—uninterrupted time—to make sure thatpeople are engaged,” he stressed.

Team-building and training employees to work together arekey. Workers should be allowed to connect with their organiza-tion’s leaders. Building trust among employees and managers isalso an important factor. “People sometimes feel mistrust, andthat negatively impacts the organization,” he said.

HUMAN RESOURCES

Engaging people

Ali Rafea wanted to create something that would changepeople's lives. So he created Bey2ollak, an award-winningmobile application that enables users to share real-time traf-fic information in and around Cairo and Alexandria. Rafea,now the head of marketing and products at Bey2ollak, spokeat a March 4 executive development session sponsored byAmCham’s Marketing Committee. With a background incomputer science, he developed the app with the help of fourof his cousins. “We thought of creating a platform wherepeople could interact and help each other,” said Rafea. It waslaunched via Blackberry in 2010 and immediately wentviral, with 6,000 registered users on the first day. One monthlater, Bey2ollak signed Vodafone Egypt as a sponsor.

He began his career like most people, with a regular job. Aftercollege, Rafea joined a software house and later landed a spoton Vodafone's marketing team, where he was responsible formanaging some LE 500 million. Rafea noticed that people weretalking to each other daily about traffic developments withfriends and co-workers. So he created a cross-platform viawhich people could exchange such information using crowd-sourcing, social interaction and localization. Today, Bey2ollak

has more than 800,000 registered users, 250,000 Facebook fansand 105,000 Twitter followers. It is still backed by Vodafone.

Rafea stressed that the founders of Bey2ollak were not dri-ven by money, as they didn’t make a profit until 2012, butrather by the desire to help solve one of society’s ills.However, he laments that entrepreneurship has not beenappreciated in Egypt, with most people simply seeking acomfortable job guaranteeing a stable career. “It is importantto define what happiness and success is for you,” he said.

MARKETING

Find your bliss



Lamees El Hadidi, the well-known Egyptian television host,says she’s had to make some difficult decisions along her jour-ney to success. The first was sacrificing a job with a prestigiousnewspaper after she refused to carry out an assignment shebelieved would distort Egypt’s image. On Feb. 26, AmCham'sWomen in Business Committee hosted Hadidi as part of a serieson successful Egyptian women entitled “Fighting the Odds: TheJourney to the Top.” Hadidi spoke about her career in the mediaand the challenges she faced. She takes pride in the role sheplayed leading up to the mass protests of June 30, 2013, consid-ering it one of her most significant achievements. “The country'sidentity was changing,” she said. Discrimination against womenand Coptic Christians was widespread, she said, and controver-sial measures concerning female circumcision and the marriageof young girls were being discussed. Hadidi fiercely opposed theIslamist regime of President Mohamed Morsi and wasn’t afraidto voice her criticism.

“I have never been impartial,” acknowledged Hadidi. Knownfor her outspoken political views, she believes there is no such

thing as an objective journalist. The media is driven by politicaland financial motives, she declared. “I am biased for a principlethat I believe is right.” She voiced outspoken criticism of Morsi’sregime on her talk show, “Hona El Assema” despite receivingthreats. She said she was forced to move after Islamist TV chan-nels broadcast her home address and phone number. Althoughshe believes she came perilously close to getting herself jailed orassassinated for airing her opinions, El Hadidi continued toexpress her views against “religious backwardness.”

WOMEN IN BUSINESS

Speaking her mind

The tougher the times, the greater the chance to distinguish your-self, said Tamer Hamed, commercial operations director atProcter & Gamble Near East. He spoke at a Feb. 17 meeting ofAmCham’s Marketing Committee entitled “Winning in ToughTimes: Are You Prepared to Win with Your Business Regardlessof the Challenges?” With political turmoil over the last threeyears creating currency devaluation, business disruptions andinstability for employees, Hamed said the importance of leader-ship cannot be ignored. Dialogue is key, as is maintaininghealthy profits. “You need to have enough margins so you caninvest back in the business,” he said. P&G invested substantial-ly in improving its wide array of household products and deviseda strategy by deciding on a role for each of the brands in its port-folio. As a result, the firm has consistently registered double-digit annual growth.

Mona El Sayed, head of commercial banking at HSBC Egypt,said that as well as the political and social changes facing Egypt,the bank was undergoing a massive internal restructuring.Surviving the storm meant growing, seeking opportunities andcontinuing to deliver growth and maintaining its commitment to

customers and employees. HSBC invested significantly in tech-nology during recent years; they were the first to launch mobilebanking last year, said Sayed. Thanks to these successful strate-gies, HSBC continued its impressive growth.

Frank Konings, chief technical officer at real estate developerSODIC, described how before January 2011, his firm had beenpitched toward a luxury market. That all changed in the after-math of the revolution. “We widened our segment downward tomore of an upper-middle income sector,” said Konings. In 2011,the company brought many design and management tasks backin-house rather than relying on outside consultants.

MARKETING

Glass half full



Events

Telecom regulators are focused on encouraging new investmentand maintaining a healthy balance among Egypt’s current threemobile players as well as ensuring the rights of consumers andtheir access to information. On Feb. 4, Hesham El Alaily, exec-utive president of the National Telecommunications RegulatoryAuthority, spoke at a meeting hosted by AmCham’s ICTCommittee. He explained that traditional telephone voice callingis steadily declining, while Internet applications that enable peo-ple to make voice and video calls for little or no money arebooming. As online traffic worldwide is expected to increase sig-nificantly in coming years, “The devices will replace thehumans,” he said. By 2050, 50 billion devices are expected toconnect a global population of 9 billion souls. In the Middle East,IP traffic is expected to grow by nearly 40 percent by 2017. ForEgypt to keep pace with this growth, it needs to invest in betterand faster infrastructure to pave the way for the digital economy.

NTRA aims to double Egypt’s LE 30 billion mobile telecomsector in the coming decade by enacting policies that enableoperators to provide a range of services. The so-called unified

license enabling telecoms as well as Telecom Egypt, the coun-try’s sole landline operator, to operate both fixed-line and mobilenetworks reflects how the industry is developing, he said. Newregulations pertaining to issues of cyber-security, e-signaturesand the transfer and ownership of data will also be implement-ed. Significant achievements of 2013 were the launch of mobilemoney services, he said, loosening restraints on mobile operatorsand launching an electronic vehicle tracking system.

ICT

Connecting to the future

Though Africa’s GDP has grown steadily in recent years, “Ithas not been inclusive,” said Leila Mokaddem, resident repre-sentative of the African Development Bank in Egypt. TheAFDB seeks to remedy that, she said at a March 2 meetinghosted by AmCham’s International Cooperation Committee.Regional GDP growth has expanded intra-African trade, shesaid, which strengthens regional cooperation as well as privatesector growth.

The bank has two strategic objectives in the region: inclu-sive growth and green growth. Within this are five operationalpriorities: regional integration; governance and accountability;skills, technology and infrastructure; and developing the pri-vate sector. AFDB supports both the private and public sectorsby offering financing in the form of loans with commercialterms, subordinated debt, equity and guarantees, among others.Private sector investments must meet a number of criteria toqualify for such financing, including following the country’seconomic plan, encompassing a developmental outcome anddemonstrating commercial viability.

The bank has an active private sector investment portfolioworth $39.2 billion. “In Egypt, the private sector is the engine for

growth” she added. AFDB is currently implementing 28 projectshere, with a current investment portfolio of almost $2 billion.The bank’s 28 projects include four public sector loans (repre-senting 71 percent of its commitments), three project-assistingprivate sector loans (16 percent), two regular private sector loans(12 percent) and 19 grants (1 percent). Mokaddem noted thatnearly 80 percent of the AFDB’s Egyptian portfolio representsinvestment in the energy sector. The bank also offers technicalassistance and financing for franchises.

INTERNATIONAL COOPERATION

Spreading the wealth



“Our vision and strategy revolve around securing and satis-fying local demand for energy, delivered at reasonableprices in order to fuel sustainable economic development,”said Minister of Petroleum Sherif Ismail at a March 24AmCham luncheon held at the Four Seasons Hotel Cairo atNile Plaza entitled, “The Oil and Gas Sector in Egypt: Visionand Challenges.” In his talk, Ismail discussed the energychallenges Egypt faces and the policies being adopted by theministry, which he hopes will help provide enough fuel tokeep the country running in the coming years.

As a string of blackouts have engulfed areas of Cairo indarkness since the beginning of the year, Egypt's energy crisisonly appears to be getting worse. The unseasonable shortageshave many experts saying that the country will face even moreserious energy scarcity in the upcoming summer season, whenelectricity use spikes. Egypt currently gets about 96 percent ofits energy from oil and natural gas, 3 percent from hydropower via the Aswan High Dam and 1 percent from coal.“This is way off global norms,” he said. Worldwide, some 60percent of energy comes from oil and gas, 10 percent fromnuclear energy and 20 percent from coal.

Egypt is also overly dependent on fossil fuels, with 91 per-cent of its power coming from oil and gas compared to 27percent globally. Coal isn’t currently in use in Egypt, butworldwide it generates 41 percent of power, according toIsmail. “As it stands the energy and power generation mixmakes Egypt’s energy supply insecure, not economicallyviable and unsustainable,” he said.

Ismail said the situation is the consequence of Egypt’s fuelsubsidies policy which has kept the price of 80 octane fuel, forexample, at the same level since 1992. “We have never fol-lowed any norms or trends when pricing fuel, and we havenever coped with international prices,” said the minister. Thispolicy of insulating Egyptians from market energy costs hasleft the government with an estimated $130 billion fuel subsidybill for fiscal 2013/14. “It will continue to increase as Egyptseeks to grow its economy between 6 to 7 percent annually,”said Ismail. He said the government will gradually removesubsidies over the next five to seven years.

On the supply side, he said that many of Egypt’s gas fields arereaching maturity, having been in operation for nearly 10 years.Egypt granted new concessions to foreign oil and gas companiesin 2010 but none of these are producing fuel yet. However, thegovernment is hopeful about new concessions granted to gasexploration companies last year. Ismail hopes that an $11 billion

project, the North Alexandria Block, which had been expect-ed to come online in the third quarter of 2014 but wasdelayed due to objections by local residents, would havebumped Egypt’s gas production by some 18 percent.However, the project is currently not expected to yield fueluntil 2018. “The government is losing $15 million every daydue to this delay,” he said. Egypt’s modest oil productionremains stable despite the fact that most of its oil fields havebeen operating since the 1960s.

Aging infrastructure is also a problem. For example, Egyptlacks a port big enough to accommodate the 45,000 ton freightership that ferries oil and gas. Instead, the ministry employs small-er boats to move the fuel from ship to shore, an expensive stop-gap measure. “It has been 14 years since the last major infra-structure project came online,” said Ismail. “It is still the sameinfrastructure that has to deliver an increasing amount of LPG.”

As the ministry struggles to pay for the subsidized fuel, it hasfallen into debt and disputes with foreign oil and gas companies,Ismail said, but the ministry has recently resolved nine of the 19international arbitration suits. The Egyptian General PetroleumCo., which is responsible for concession agreements, has alsopaid off some $1.5 billion of its debt to oil companies, leaving itwith a $4.8 billion outstanding bill. “It will continue to be a chal-lenge to pay the remainder of the debts,” he said.

However, these steps combined with the interim govern-ment’s “roadmap” have improved conditions for the ministry,Ismail said. It has signed 29 new oil and gas concession agree-ments worth $2 billion, with nine worth at least $200 millionstill on the negotiating table. The petroleum ministry will soonincrease fuel allocation to power stations from 22,000 tons to35,000 tons per day to meet higher electricity demand duringthe summer.

PETROLEUM

Bracing for a long, hot summer



Member News

PHILIPS

Shell and Philips Egypt have teamed up to install free Philips LED solar lightingsystems in the Western Desert village of Haqfet Elgallas in the MatruhGovernorate. In addition to outfitting 15 houses and 30 families with the tech-nology, they will also provide nighttime lighting for a local football field andcommunity street lights. Local officials said they hope the projects will increaseeconomic activity after-dark.

EXXONMOBIL

On May 20, ExxonMobil celebrated the grand opening of its School ofExcellence at the Suez Advanced Technical Industrial School. The facility will usethe STEM system, which combines science, technology, engineering and mathe-matics to train students in skills needed for jobs in the petrochemical industry.The new school is a collaboration between ExxonMobil, the Misr El-KheirFoundation and the Ministry of Education.

DHL EXPRESS

DHL Express Egypt was awarded a 2014 Stevie silver award for its performancein 2013. Its customer service team also won Team of The Year – RecoverySituation honors for its performance in overcoming delivery issues created bycurfews and security concerns during last year.s political unrest. Since 2002,the U.S.-based Stevies have been awarded internationally to recognizeoutstanding companies and businesspeople.

ABU DHABI ISLAMIC BANK

Abu Dhabi Islamic Bank has been named Egypt.s best Islamic bank for thefourth consecutive year by Islamic Finance News. The bank also won its firstaward for best Islamic finance mudarbah deal in connection with its handlingof a $110 million capital finance agreement with the East Delta ElectricityCompany. The awards were presented to ADIB CEO and Managing DirectorNevine Loutfy at a Feb. 24 ceremony in Dubai.



Member News

Chevron Egypt LubricantsHisham Mostafa El-KabbanyDirector & Country Representative

Address: Smart Zone, Smart Village ProjectBuilding B2401, Kilometer 28, AlexandriaDesert Road,Tel.: +202 35358000Fax: +202 35370549Website: www.chevron.com

Membership TypeGeneral

Turkiye Is Bankasi - Egypt Representative OfficeMehmet GüzelChief Representative

Address: 2005C North tower, 27th Floor,Ramlet Boulak, CairoTel.: (20-2) 2461-9811/2/3Fax: 24619810Website: www.isbank.com.tr

Financial sector

Membership TypeAssociate Resident

Shell Lubricants EgyptSaher HashemManaging Director

Address: Corner St. 254 & 206, Degla,Maadi, CairoTel.: (20-2) 2755-7500/ 1Fax: 25198818

Petroleum


Industrial machinery & equipment

The Egyptian General Company forTourism and Hotels (EGOTH)Ayman Abdel AzizChairman & Managing Director

Address: 4, Latin America Street, GardenCity, CairoTel.: (20-2) 2795-0603/ 7876Fax: 27964830Website: www.egoth.com.eg

Hospitality/Tourism/Travel


Personnel changes at member companiesAhmed El SheikhNEA BU General Manager - Pepsi-Cola Egypt

Nicolas MiegevilleMarketing Director - Saint-Gobain Glass Egypt

Mohamed MahranManaging Director - Allianz Insurance Co.Egypt

Mahmoud Said Mahmoud, CMAFinance Manager - Seaharvest

Ahmed Salah El Din Adly RashwanDirector - PricewaterhouseCoopers

Mohamed Sayed Mostafa MeneassyArea Manager - North AfricaITS Global Business Solutions

Geoffroy de VaulgrenantFinance & Operations DirectorCairo American College

Doaa FahmyHR Director - Danone Egypt

Mohamed ShihabManaging Director - Maersk EgyptShipping Agency

Category: GeneralSector: Food & Beverages

Category: Associate ResidentSector: Building Materials

Category: AffiliateSector: Insurance

Category: AffiliateSector: Petroleum

Category: AffiliateSector: Accounting

Category: GeneralSector: Information

Technology

Category: GeneralSector:

Academic/Educational/Research &Development (R&D)

Category: AffiliateSector: Food & Beverages

Category: GeneralSector: Transportation

Delemar Company for Aluminum ProfilesMahmoud Ahmed Abd Elaal HarounCEO

Address: Industrial Area, Abou Rawash,KM28.8, Entrance to the Smart VillageTel.: (20-2) 3539-4033/ 36Fax: 35394037Website: www.delemaralu.com


Service providersMEAComSFatma El Zahraa Ahmed Abdel MohsenFounder & Managing Director

Address: 12, Mohamed Bayoumi Street, ArdEl Golf Suite 22, Heliopolis, CairoTel: (20-2) 2415-7254, 2290-8298Fax: 24157254Website: www.meacoms.net

Membership TypeAssociate Resident



Affiliate MembersAcademic/Educational/Research & Development (R&D)Dahlia Kamal El Din HelalyDeputy Director - INJAZ

AccountingSameh MontasserCEO BDO Esnad - BDO Khaled & Co.

AutomotiveKhaled HosnySales Director - Abou Ghaly Motors

Building MaterialsAhmed Aaly WafikSales & Marketing Director - Saint-Gobain Glass Egypt

Wafik Emad BesharaHuman Resources Director - CEMEX Egypt (Assiut Cement Co.)

ChemicalsMohamed Abu EitaVice President - OMYA Egypt Company for Mining

Construction/Engineering Sayed Farouk Abdel Hamid ElbaroudySenior Vice President - Arab Contractors (Osman Ahmed Osman)

Financial SectorAngie HelmiDirector - Abraaj Investment Management, Ltd.

Essam El WakilManaging Director - Arab International Bank

Lamise A. NegmVice President - Citibank, NA Egypt

Mohsen El-Shammaa, PhDRegional Director, EMP North Africa - Emerging Markets PaymentsAfrica S.A.E. (EMPA)

Karim HelalChairman - ADIB Capital - Abu Dhabi Islamic Bank – Egypt

Shady KamalChief of Staff & Corporate Finance Director - Barclays Bank Egypt, SAE

Sherif Abdel AalExecutive Director - Head of Investment Banking - Pharos Holdingfor Financial Investments

Food & BeveragesRobert EdwardsStrategy & Business Development Director - Coca-Cola Egypt –Atlantic Industries

Hospitality/Tourism/TravelEman ElyasakyArea Director of Public Relations - Kempinski Nile Hotel

Christopher TuttyDirector of Sales & Marketing - Sofitel Cairo El Gezirah Hotel

Industrial Machinery & EquipmentAmro KandilDirector of Services, GE Healthcare - General Electric InternationalOperation

Tamer SaidCountry Manager, Egypt, Lybia & North Sudan- GE HealthcareGeneral Electric International Operation

Information TechnologyAhmed Mokhtar HegaziConsultant - Master Trading, SAE

Ahmed KhalilCEO - Raya Ventures Investments - Raya Holding

Mohamed Yousri Abdel SalamManaging Director- Summit Technology Solutions

Mona ArishiCorporate Citizenship & Corp Affairs Manager,IBM Egypt & MENA - IBM

Sherif AminBroadband Solutions Director - Etisalat Misr

Sherif El-SanadilyMarketing Director - ITWorx

Tamer Abd El-Aziz HeidaCorporate Communication Director - Raya Holding

Nada El MosalamyMember of the Board - MZ Investments

Legal ServicesSara HintonPartner - Ibrachy & Partners

Tarek Mohamed Moheb Mostafa El GazzarPartner - Ibrachy & Partners

PetroleumAbdel Rahman Yehia HelalPetroleum Sector Affairs Manager - Shell Lubricants Egypt

Gadir Galal GawdatCFO - Shell Lubricants Egypt

Karim GalalVice President, HR & Administration - Setcore Group

Tarek El HawaryManaging Director - TAQA Arabia Gas Arm

Pharmaceuticals/Medical/HealthFarouk Tarek GaafarAssistant General Manager - Al-Kamal Import & Marketing Co., WLL

Karim Mohamed AfifiCOM - Al-Kamal Import & Marketing Co., WLL

Real EstateFairouz TayseerSenior Legal Counsel - Majid Al Futtaim Properties-EgyptHanan MoselhyHR Manager - Majid Al Futtaim Properties-Egypt

Asser HamdyDirectory of Hospitality - Emaar Misr for Development

Alaa Abdullah ZayedManaging Director - Al Rowad Group


For any change to contact information, please contact theMembership Services Department at the Chamber’s OfficeTel: (20-2) 3338-1050, ext. 0016 – Fax: (20-2) 3338-1060

E-mail: [email protected]

Change in titlesTAQA Arabia Gas ArmHala Abdel Hamid AbouBakrCFO

Evyap EgyptHosam SabryPresident

AIG Egypt Insurance Company S.A.E.Tarek F. TadrousSVP, Chief Financial Officer and Operations

ExxonMobil Egypt, SAEHassan DarwishEgypt Logistics Manager

Changes in company details:MadarCapital Investment ManagementAddress: 15 Ahmed Sabry Street, 1st floor, Zamalek, Cairo

National Telecommunications Corp. (NTC)Phone: (20-2) 3345-5615 - Fax: 33455618

TAQA Arabia Gas ArmAddress: 12 & 13 H/1 El Nasr Street, New Maadi, CairoPhone: (20-2) 2517-4588/ 2 - Fax: 25174589

RAMW for Tourism & HotelsPhone: (20-2) 2389 2050/1/2 - Fax: 2389-2104

Cairo Financial HoldingAddress: 7, Lazoghly St., 8th Floor, Isis Building, in front of the USEmbassy, Garden City, Cairo

WorleyParsons Engineers Egypt, Ltd.Address: Level 3, Plot 69, 90th St., 1st Sector, 5th Settlement, NewCairo, Cairo

Bakier StationeryAddress: 33 Road 269, New Maadi, CairoPhone: (20-2) 2520-1296 - Fax: 25201293

Derya Travel-Representative Turkish Airlines in Egypt(GSA)General Sales AgentAddress: 17 Kasr El Nil St, Talaat Harb Square, Downtown, Cairo

Category: Associate ResidentSector: Petroleum

Category: MultinationalSector:

Pharmaceuticals/Medical/Health

Category: AffiliateSector: Insurance

Category: AffiliateSector: Petroleum


Member News



AmCham Egypt members can now enjoy the benefits offered by AmCham Abo Dhabi, Lebanon, AmCham Morocco and AmCham Tunisia as AmCham MENA Council members.For details, please visit http://www.amchammena.org/index.asp?p=1

Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlink for more information on all of the above AmCham benefits

Company Member Benefits Expiry

Hotels & Restaurants

Cairo Marriott Hotel

Four Seasons Hotelsand Resorts, Egypt

SemiramisInterContinental Hotel

Steigenberger NilePalace Luxor

All AmCham members are exclusively entitled to a 15% discount onfood and beverages at all Cairo Marriott outlets (This offer does notrequire having a room at the hotel)In addition to a special accommodation rate of:• $100 per single room per night (B&B at Omar’s Cafe) • $115 per double room per night (B&B at Omar’s Cafe) • 25% discount on laundry during your stay* Subject to availability and prior reservation, valid at any day of the week.* Rate is subject service charge and taxes. * Offer valid for members only and has to be reserved through and used by the member.

Enjoy 15% discount in all restaurants (food and non-alcoholic bever-ages only) as well as spas at all Four Seasons Hotels in Egypt.

All AmCham members are exclusively entitled to a 30% discount onaccommodation at weekends (Thursdays, Fridays & Saturdays)• L.E 699++ per single and double Superior Nile view room basedon bed and breakfastIn addition to:- A special Restaurants Packages In Weekdays (Sundays to Wednesdays).- A special Packages on Spa, Health Club & Laundry Packages* Offer includes 25% discount on Laundry services. * Offer includes 50% discount Parking

Enjoy an exclusive special discount in the heart of the Nile atSteigenberger Nile Palace Luxor with a 10% discount on accommo-dation on all room types and meeting packages as well. *Rate is based on Bed and Breakfast.

December 31, 2014

December 31, 2014

June 30, 2014

August 30, 2014

Airlines

EgyptAir Enjoy special preferential reductions on all classes on EgyptAirinternational flights ONLY.

No letters required when purchasing your ticket, just have your2014 AmCham membership card.

Booking is also available through Astra Travel office accordingto Astra Travel terms and conditions.

August 30, 2014

Optical

Magrabi Group Use your AmCham 2014 membership card to have an exclusive15% discount on medical frames, sunglasses and lenses availableat all Magrabi Optical stores in Egypt.

December 31, 2014



Advertorial

Burberry, founded in 1856, has launched its latest women’s fragrance,Brit Rhythm. The new fragrance is a mix of traditional and modern scents,with top notes of English lavender, pink peppercorn and neroli. Its heartnotes are orange flower, orris and blackberry leaves, with its baselinecomprising vetiver, musks and a selection of wood fragrances. It all comestogether in a smoky pink liquid. The fragrance will be offered in eau detoilette (three sizes), body lotion (150 ml), body splash (150 ml), bodywash (150 ml), deodorant (100 ml) and hair mist (50 ml).

BURBERRY

The snackfood giant along with its partner Lay's is introducing five newinternational flavors for their popular chips. The new flavors are BrazilianMixed Grill, Japanese Sweet and Sour, Mexican Chili Con Carne, SpanishBlack Olive and South African Feta and Tomato. The five flavors are beingmarketed under the company’s Survival of the Tastiest campaign, withonly the winning flavor surviving to become a permanent addition toChipsy's offerings. The five new flavors also required a new productionline that cost $140 million and employs 9,000 workers.

CHIPSY

The official Jaguar dealership is now offering the latest XJ luxury sedanupdates for 2014. The basic model has a 2.0 liter four-cylinder tur-bocharged engine with a power output similar to the normally aspirated3.0 liter engines. It also offers a 3.0 liter diesel engine, for the lowest fuelconsumption figures in the lineup and the XJ R, a bespoke model thatcomes with custom designed front and rear bumpers and side sills. It willhave a 550bhp, 5.0 liter engine with unprecedented speed and newlevels of luxury and comfort with its yacht-inspired interior.

JAGUAR

At Beyman, the high-end cosmetic and fragrance outlet in the FourSeasons Cairo at Nile Plaza Hotel, Lancôme has launched its entirelineup of female cosmetic products for the first time in Egypt, includ-ing skincare products and custom fragrances. The event was attend-ed by artists and celebrities, who were offered free skin and makeuptreatments from Lancôme. The brand was founded in 1935 byArmand Petitjean and has been a subsidiary of L'Oreal since 1964.

LANCÔME PARIS



Chevrolet is launching its all-new Optra, a small family sedan, to replacethe current model. The new design is more streamlined and aerodynam-ic. The car has a bigger interior and a 10 percent larger trunk, comfort-ably storing up to 440 liters. It comes with the usual array of options,including parking sensors and USB and AUX ports for music. It will beoffered with an all-new 1.5 liter, 4-cylinder engine which is geared towardfuel efficiency, using just 7.3 liters per 100 kilometers. The price is set tostart at LE 128,000 for the basic model.

GM

With only one motor show scheduled for 2014, Mercedes-Benz Egyptseized the opportunity to launch 11 new models, including the latest S-class and CLA, all three variants of the E-class, the GLK, B-class and theA-class. The S-class will come as an S400 model and is the first car with apetrol-electric hybrid engine to be sold in Egypt. In 2013, Mercedes-Benzsold 3,000 cars, almost 3 percent more than in 2012, despite the overallnew car market shrinking by 7 percent, according to Zakaria Mackary,director of sales and marketing.

MERCEDES-BENZ

Noting that Egypt is a trendsetter for the region, Essie, one of theworld’s top nail polish brands, is introducing 100 shades locally. Itspolishes are long-lasting and have a unique no-chip formula. Essie isavailable in over 100 countries and has been worn by A-list celebritieson red carpets at the Grammy Awards, the Golden Globes and theOscars.

ESSIE

Toyota Egypt showcased its entire lineup of vehicles at the Automech-Formula car show, held from March 13 to 18. On display were the lat-est iterations of the Corolla, Yaris, Avanza Fortunner 4X4 and Auris,which are already hugely popular in the domestic market. It has alsobrought out the Land Cruiser, Rav4 and Camry, all newcomers toEgypt. Toyota is opening a spare parts hub in Sadat City to stockToyota Egypt maintenance centers and outlets as well as a newIsmalia maintenance center.

TOYOTA



Announcements

Construction Projects Local AdministrationAuthorities

Electromechanical Works Education

Three tenders for the conducting the asphalt works (base layers) for streets withinsubordinated locations. Pre bid meetings are set for 3/30, 3/31 & 4/1/2014. Biddersneed be classified by the Contractors Federation not less than < grade 3 > for thefirst & third job & not less than < grade 4 > for the second job.

Request of international offers for the supply & erection of a PVC pipes production line touse as collector pipes with related spare parts under finance from the IslamicDevelopment Bank. This is a repeated tender with extended deadline. Ref. 2/ 2014.

General Authority for New Urban Societies, AlObour City Development Agency

Suez Canal University, the University Hospital

350,000 LE30,000 LE

150,000 LE500 LE

April 15, 2014

April 08, 2014

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 Name77981 Deputy IT Manager Alwaseet for Advertising & Publication77951 Packaging Area Section Head GlaxoSmithKline- GSK77939 Financial Manager SADKO - Group77801 Marketing Manager United Beverage & Food Co. (UBF)77691 Property Manager Paradise Capital Holding for Financial Investments S.A.E77621 Material Planner Franke Egypt

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 Contact Person Tel #

April

Environmental Waste Expo 2013 www.wasteexpo.com Rania Mekhail 2797-3487

ICT-Broadcasting The 2014 NAB Show www.nabshow.com Hend El Sineity 2797-3482

May

Energy-Oil Offshore Technology Conference www.otcnet.org/2014 Mai Abdelhalim 2797-2146

Hospitality The National RestaurantAssociation Restaurant, Hotel-

Motel Show (NRA Show)

www.restaurant.org Mai Abdelhalim 2797-2146

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


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]

Benefits

Is pleased to offer 15% discount on Food & Beverages in the below restaurants:- Oak Grill - Kamala ,Asian bar and dining restaurant - Solana all day dining restaurant

-Jayda Lounge and Bar (serves Lebanese cuisine)* Discount is applicable on the mentioned Food & Beverage outlets

* The discount is not applicable on public holidays * Discount is not applicable on alcoholic beverages

In addition to a special accommodation rate of:$90 per single room based on bed and breakfast

$100 per double room based on bed and breakfast* Above rates include free internet and free upgrade subject to hotel availability

***Discounts will be granted for AmCham members upon presenting theirAmCham 2014 membership card***

For more information, please contact: Food & Beverage bookings:Rasha Said, Food & Beverage CoordinatorTelephone: (202) 2580-8410 - Email: [email protected] reservations: Telephone: (202) 2580-8000 (Direct line); (202) 2580-8888Email: [email protected]

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

This offer is valid until December 31, 2014

CONRAD CAIRO HOTEL


Emaar Misr for Development is pleased to offer 20% discounton food & Non- alcoholic beverages only at the below venuesat the club house Uptown Cairo: •Oliveto restaurant "Serving

Italian food" •Baslico restaurant "Serving International food" •19 BarIn addition to:

-10% discount on Business meetings and social/private events(Excluding weddings and Engagement parties)- VIP Treatment “Hot towel, welcome drink”

- Usage of the Cigar Lounge anytime.- Free Wi-Fi - Free parking.

*Reservation has to be in advance for the Special Occasions"

***Discounts will be granted for AmCham members upon presenting theirAmCham 2014 membership card***

For more information, please contact:The Club House Guest Services: Telephone: (202) 2503- 2133Mobile: (20)12-835-57000 - Email: [email protected] Ahmed Maher (Sales Person): Telephone: (202) 2503-2082Mobile: (20)10-920-11180 - Email: [email protected]

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

Offer is valid until March 1, 2015

THE CLUB HOUSE - UPTOWN CAIROEMAAR MISR FOR DEVELOPMENT



Youm7, March 1

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.

PLAYING HOOKYPanic ensued in a village in SohagGovernorate when a student climbed thetower of the local mosque and used themegaphone to broadcast an urgent warn-ing that bombs had been planted insideseveral nearby schools. Of course, classeswere dismissed and the police sent every-one home. After no explosives turned up,investigators discovered that a schoolteacher had bribed the boy to report thebombs as part of an elaborate ruse toleave early. The shiftless pedagogue haddecided to take matters into his own handsafter the school principal refused to givehim the day off, even though he wasscheduled to embark on a vacation on theafternoon train. One can safely assumethe educator has now been granted hiswish for time off.

Al Ahram, March 18

DODGING TRAFFICDrivers on the 6 October Bridge almostcaused a pileup one recent afternoonwhen they spotted a mounted horse

galloping across the span from Zamalekto Dokki. As the rider reined his trusty steedtoward the tight exit onto El Batal AhmedAbdel Aziz Road, he encountered anobstacle—a car wreck at the bottom of theexit. According to eyewitnesses, hedemonstrated top-notch horsemanshipskills, diverting his mount, which leapt theheight from the bridge to the roadbeneath, avoiding the accident. A policeofficer detained the triumphant duo at thenext stoplight, but they got off scot-free,there being no law prohibiting hoofed ani-mals on Cairo’s thoroughfares.

Al Shorouk, March 20

FOUND AGAINA three-year mystery around the disap-pearance of 67 priceless pharaonicrelics has been solved. In February2011, the pieces departed the LuxorMuseum for a restoration lab in Cairo.Unfortunately, they never got there.Recently, the missing artifacts turned upinside the Egyptian Museum, where theyhad been all along, under the safe care

of antiquities authorities. Apparently, thedriver transporting the relics had re-routedthem to the museum after finding his instruc-tions fishy, while museum security offi-cials—also not wanting to take anychances—signed for the unexpected deliv-ery, figuring they’d guard the pieces untilsomeone claimed them. Why no one everbothered to question either the driver or theguards is unclear—perhaps police didn’twant to risk getting into trouble either.

Al Akhbar, March 8

UNHAPPY MEALTourism police authorities were awakenedin the wee hours of March 26 to learn thata man had climbed to the top of TheGreat Pyramid of Cheops and was threat-ening to jump unless someone brought hima plate of French fries. He was eventuallycoaxed down from the ancient landmark,though it is unclear whether he got hisFrench-fry fix. Unfortunately, he facescharges for his unorthodox fast-food deliv-ery methods.

Al Ahram, March 26

Media Lite

A Glance At The Press

“This isn’t just anyblackout—it’s the

anniversary of last year’sfirst blackout.”


outof - amcham-egypt.org · april 2014 volume 31 | issue 4 12 14 16 20 inside editor’s note...

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