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Green pastures
Published in Al-Ahram Weekly on 19 - 10 - 2006

Mona El-Fiqi reports on the government's extensive efforts to open up new markets in the East
During the past few weeks, the government started a move to boost bilateral relations with China and Russia into stronger and active economic footing. The Ministry of Trade and Industry has a new strategy which aims at opening new markets and investment opportunities for Egypt by shifting its emphasis from traditional focus on Western economic partners to the Eastern countries.
Rachid Mohamed Rachid, minister of trade and industry travelled to Moscow from 11 to 13 October to meet high-level government officials and Russian businessmen to boost bilateral trade and investment ties between the two countries.
The visit also aimed at pursuing bilateral negotiations currently underway for an Egypt-Russia Free Trade Agreement. A high level official meeting is scheduled to be held to continue negotiations of the Free Trade Agreement by the end of October. Moreover, President Hosni Mubarak is expected to visit Russia and China during November to boost the economic relations between Egypt and China as well as Russia.
According to Rachid, his visit to Moscow reflects Egypt's extensive efforts to "create new trade and investment opportunities by shifting its emphasis from the traditional focus on Western economic partners, towards exploring economic opportunities with Egypt's long-standing partners to the East."
In a press release issued by the Ministry of Trade and Industry, Rachid explained: "The time is now right to take the Egypt- Russia relationship onto a much stronger economic footing. We can be Russia's gateway to the Middle East and North Africa."
However, the current volume of trade between Egypt and Russia is modest and in favour of Russia. According to figures of the Ministry of Trade and Industry, Egypt's imports from Russia currently stand at $1.1 billion, dominated by products such as wood and wooden products, iron, steel, wheat and paper while Egyptian exports to Russia is estimated at $77 million of which $65 million consist largely of agricultural exports. These items include fresh fruits and vegetables, cereals, oil seeds, herbs, spices and essential oils. Egypt also exports carpets and other home firings as well as chemical products to Russia.
Rachid added: "these figures do not reflect the full economic potential of the bilateral relationship. Egypt's goal is to increase bilateral trade with Russia to $2.5 billion, by 2011."
Over the next five years, the ministry plans to increase Egyptian exports to Russia to $500 million, led by a quadrupling of trade in agriculture and foodstuffs.
Moreover, the ministry plans to create a third leg for Egyptian exports to Russia emphasising a diversification towards medium-technology exports such as white goods. "We believe we can achieve an increase in Egypt's exports of white goods to Russia from its current level of $3-4 million to $30-40 million by 2011." said Rachid.
Boosting the Egyptian exports to Russia is a current framework of different governmental and private sector entities. Mohamed Mansour Fahmy, director of Egypt's Export Promotion Centre said that the centre has a strategy to raise the volume of Egyptian exports to Russia on top of which are vegetables and fruits.
During Rachid's visit to Russia, he discussed with his counterparts the necessary sanitary and phyto-sanitary requirements for Egypt's fresh fruit and vegetable exports in order to finalise plans to create a Green Corridor between Egypt and Russia. The Green Corridor is a system which permits the application of all inspection procedures to be done in the Egyptian ports by representatives of the Russian control authorities to ensure that Egyptian exports are according to Russian specifications.
Fahmy explained that in a positive step, the two countries previously approved to establish a Green Corridor which "will be the engine to increase the Egyptian agricultural exports to Russia since it will facilitate the exports measures particularly for fresh vegetables and fruits," added Fahmy.
As for investment, the government aims at attracting more Russian investments to Egypt. Rachid announced that within the coming five years, the ministry plans to boost Russian investments from its current level of $45 million to $250 million particularly in heavy industry sector by building the country's first industrial park for this sector.
Rachid's visit to Russia comes three weeks after a similar visit to China during which China and Egypt agreed to raise bilateral trade from $2.1 billion to $5 billion by the year 2010. The two countries also pursued joint investment projects exceeding $2 billion in sectors such as textiles, computers, aluminum and other building materials.
Following his visit to China, Rachid announced the establishment of a new department aimed at boosting Egyptian exports to China. The new department will be affiliated to the Exports Development Centre. There will be an office in China and another one in Cairo.
Moreover, in preparation for President Mubarak's coming visit to China which is expected next month, Rachid met members of the Egyptian Chinese joint business council to discuss ways of boosting bilateral relations.
Rachid announced that Egypt will participate in the African-Chinese Fair which will be held in China in November. The fair will be a good opportunity for the Egyptian businessmen to gain benefit from the successful Chinese strategy ofthat attracting foreign direct investments, marketing the industrial zones and modernisation of the industrial sector.
During Rachid's visit to China last month, he signed a protocol with his Chinese counterpart which stated the establishment of a series of joint projects in Egypt with Chinese technology such as a cement factory, aluminum complex and petrochemicals factory at the value of $2 million. Moreover, they approved some projects funded by the Chinese government such as the establishment of a big industrial zone for small and medium enterprises worth $1.1 billion and a Fair Ground at $500 million. The protocol included $600 million to support the Egyptian exports to China particularly the agricultural products and $600 million for technical cooperation to promote the marbles and textiles industries.
Sherif El-Maghraby, chairman of Egypt's Agricultural Export Council and a leading exporter of fresh agricultural products, said that the annual average of bilateral trade with China is increasing by 35 per cent but the council's objective is to start building new levels of relations with China. El-Maghraby said there is a list of products which will be added to Egyptian exports to China, such as cotton, marbles, carpets, seeds oil and pharmaceuticals.


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