A new approach to promoting foreign investment in the country is taking shape. Sherine Nasr reports For years, the Egyptian concept of investment promotion involved no more than an endless series of overly optimistic speeches to entrepreneurs at international gatherings. Such is no longer the case, as a new vision for promoting Egypt to the international business community is now emerging. "There is a shift in the philosophy of propagating Egypt to the outside world, as we are trying to move from what is general to targetting certain nations, groups and corporations," said Ziad Bahaa El- Din, who was appointed chairman of the General Authority for Investment and Free Zone (GAFI) seven months ago. As a manifestation of this new trend, a group of senior officials will fly to Saudi Arabia and the UAE on a two-day visit to Riyadh, Jeddah, Abu Dhabi and Dubai early next month. "The purpose is to hold direct negotiations with certain banks, investment funds and multinational companies in different sectors," noted Bahaa El-Din, adding that the visit is part of a series of tours targetting specific audiences in an attempt to attract more investment to Egypt. Another mechanism that has been adopted lately is the initiative taken by GAFI to work closely with the Egyptian commercial representation service in different countries to facilitate trade operations and provide more information on trade opportunities that may exist. Moreover, GAFI is currently embarking on a new policy, namely partnering with local financial and legal agencies and other business- related services that may be significant to foreign investors looking to see how business is done in Egypt. "We believe that this is one of the most important facilities that may be provided to a foreign investor who is still investigating matters in Egypt," commented Bahaa El-Din. He said that GAFI can arrange meetings for would-be investors with bankers, lawyers, accountants and insurance and shipping companies. According to Bahaa El-Din, a strong optimism in the possibilities of the Egyptian economy is tangible. "A record increase of 62 per cent in the companies' issued capital in 2005 compared to 2004 is recorded. I believe, on the long run, better indicators, due to a package of facilities entwined with transparency, will soon become noticeable," he said. In fact, many steps have lately been taken by the government to facilitate the process of doing business in Egypt. Last week, for example, Prime Minister Ahmed Nazif inaugurated the investors service centre where all business-related governmental agencies are located under one roof. "For years now, it has been the norm to spend weeks, if not months, chasing after official approvals. Such is not the case any more," said Bahaa El-Din. Investors will no longer need to seek approvals from 36 different government departments and agencies to establish a project, he explained. "GAFI is empowered to negotiate and sign contracts on behalf of all governmental parties. It can also apply for licenses and approvals on behalf of the project owners and can accept incorporate fees in any currency." Since the mid-1970s, the government has implemented a series of laws to increase the country's openness to foreign investment. In March 2004, the People's Assembly approved amendments to Law 8/1997, which aimed at facilitating the establishment of new companies. The main amendment was to make GAFI a one-stop shop through which investors can deal with all matters related to their projects. A protocol was recently signed between GAFI and two full-fledged business communities, namely the Alexandria Businessmen's Association and the 10th of Ramadan Businessmen Association. By virtue of the protocol, members from both associations will receive the necessary training to be able to acquire all the licenses and approvals needed to advance a project to its final stages before GAFI gives its approval. "In other words, facilities provided by GAFI can now be obtained in both sites so that businessmen do not have to go to Cairo and waste their time," said Bahaa El-Din, clarifying that similar protocols will soon be signed with other business associations. A proposal to establish specialised commercial courts to settle business disputes has been discussed for some time now. "To reach a just, but more important, a fast settlement to commercial disputes is a must to improve the investment climate in Egypt," said Bahaa El-Din who added that, at the moment, a dispute settlement committee headed by the Minister of Justice is the only body concerned with looking into disputes between investors and government agencies. Despite efforts to attract investment in all areas through generous incentives, foreign direct investment (FDI) to Egypt remains modest outside the petroleum sector. Although Egypt is not a major oil exporter, the petroleum sector is estimated to account for more than 70 per cent of the total FDI in the country. Tourism, however, continues to attract significant amounts of FDI, although it can be vulnerable to sharp fluctuations. The government has also identified telecommunications and information technology as key areas for investment.
