Representatives of Arab business associations met in Cairo last week to discuss how to increase exports and investment flows. Mona El-Fiqi attended Investment inflows to Arab countries represent barely one per cent of the global investments, while Arab investments abroad are estimated at $1 trillion. These are some of the figures cited by Egyptian Minister of International Cooperation Fayza Abul-Naga, as she addressed a seminar entitled "Financing and Guaranteeing Exports and Investment". Held last week, the seminar aimed at encouraging local and foreign investment flows to Egypt and the Arab countries. Financing investments and export guarantees top the list of obstacles hampering increased inter-Arab investment and trade. Also attended by Ziad Bahaaeddin, chairman of the General Authority for Investment, and hundreds of businessmen and experts, the conference aimed at maximising investors' benefits from the services provided by regional Arab financing associations. Abul-Naga warned that it is crucial to improve the moderate investment inflows and inter-Arab trade. "The coming years will be sensitive for the Arab world unless the Arab joint economic cooperation is developed." Fahd El-Ibrahim, executive manager of the Arab Institution for Investment Guarantee, said the reason behind Arab investments escaping to foreign countries is the lack of political stability, investment incentives and laws that guarantee investors' capital. Moreover, the administrative procedures and bureaucracy remain a hindrance to investment. "However, I believe that the efforts being exerted by the governments of Arab countries will succeed in attracting Arab as well as foreign investments," El-Ibrahim added. In Egypt, the new pro-business government is actively courting investment and seeking to provide an environment that enables investors to operate profitably in Egypt. A comprehensive reform plan including reduction in taxes and customs rates is being carried out as well. The new system slashes corporate taxes by 50 per cent to a rate of 20 per cent, while tariffs fall sharply from an average of 14.6 to only nine per cent. Aiming at attracting local and foreign direct investments, the role of the General Authority for Investment was transformed from a regulator to a facilitator, by creating a one-stop shop capable of incorporating a company within 72 hours. However, Egypt is among 17 African countries that saw a decline in foreign direct investment inflows in the last year, according to the World Investment Report 2004 issued by the UN Conference on Trade and Development. Estimates put Egypt's inflow at $1 billion for 2005. El-Ibrahim added that the private sector should make the most of the privileges provided by the government and financing companies.
